DCAT Archives: Programs & Events




Risk Mitigation in the Supply Chain
Kim Cauchy, Director, Global Sourcing, Hospira

Presented on Thursday, November 5, 2009 as part of the Senior Sourcing Executive Roundtable at the Hyatt Regency Hotel, New Brunswick, NJ.


Cauchy began with an introduction to Hospira’s 70-year history in the industry, an overview of the state of the industry, and the types of risk companies face.

The best way to manage risk, said Cauchy, is through knowledge. Knowledge based risk management spanning from your own company, suppliers and competition to the markets, geopolitics and cultures and languages.

The sourcing function is ultimately responsible for supplier selection. Prevention of product shortages and failures begins with good sourcing.

The ingredient quality/risk management process starts with supplier qualification, which can help to prevent unethical behavior by weeding out questionable companies. Cauchy discussed supplier qualification and risk management tools, and the importance of sourcing being engaged in the inspection process.

Sourcing professionals tend to focus on API’s and excipients, but Cauchy advised attendees to look closely at their intermediaries.

Excipients are always a problem because pharmaceutical industry use is such a small percentage of total use. Do the best you can, advised Cauchy, keeping the process possible and practical.

As part of the qualification process, Cauchy emphasized the importance of looking closely at the supplier’s management and quality team. Is the process sustainable, or is just
for the audit.

Cauchy ended with the following observations:
    > Greed, deceit and fraud know no boundaries 
    > Be careful what you ask for 
    > Cost cutting or supply enhancement in undesirable ways 
    > Watch out for downward compliance creep 
    > Have local eyes and ears in emerging markets 
    > Suppliers can disappear for unexpected reasons 
    > Put more resources into quality agreements 
    > Have vibrant alternate source programs 
    > Look for and don’t ignore warning signs 
           Business practices 
           Instability (credit, supply, quality, pricing)