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| AVAILABILITY |
| RISK MANAGEMENT |
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| Efficient risk management is critical as unavailability of medicines could mean risk to patients' lives. We have undertaken several important interventions to ensure continual availability of our medicines including a business continuity plan, alternate vendor development programme, and a de-risking cell with dedicated team members. |
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| BUSINESS CONTINUITY PLAN |
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| In FY14, we initiated a pilot business continuity plan to identify potential risks, determine how those risks will affect operations, and implement safeguards. It is a structured mechanism to manage concentration risks and customer demands to assure continued supply. The pilot covers one formulations and one API plant. A Biologics unit too is on the anvil and is scheduled to be completed in FY16. |
| Environment liability insurance is planned to proactively inculcate discipline and build a responsibility culture on environmental risks. |
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Alternate Vendor
Development |
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AVD is a strategic initiative taken up to meet the continuous demand of material for production of medicine at Dr. Reddy's. The strategy also helps de-risk business, improve cost competitiveness and provide protection against supply disruption. Our AVD programme mandates that end-to-end qualification of each vendor be whetted by CFTs. |
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| Vendor Risk Assessment |
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| Dun and Bradstreet India Information Services Ltd. performed vendor risk assessment within three months of induction of the vendors. The assessment is carried out for critical suppliers based on two risks: Organisational Risk and Supplier Sustainability. |
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| De-risking Cell |
| Since inception of the de-risking cell, the team has been able to de-risk a significant portion of our business. Below is a synopsis of a few achievements. |
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North America Generics' Molecules
(Above ₹665.5 mn Sales) |
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API source de-risking is completed for 2 molecules (Budgeted revenue ₹2,462.35 mn) whereas 12 molecules' (Budgeted revenue ₹28,683.05 mn) projects have been initiated and are under execution. |
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De-risking was completed for more than 150 excipient SKUs in the past 2 years whereas another 100 excipient projects are under execution and should be completed in FY16 pertaining to the top 10 NAG molecules and other Business continuity issues. |
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Formulation source de-risking was completed for 5
formulations (Budgeted revenue ₹12,977.25 mn) whereas
12 formulations' (Budgeted revenue ₹24,157.65 mn)
projects are
under execution. |
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| Our proactive de-risking initiatives have helped avert various supply disruptions since we already had alternatives sources. E.g. FDA alerts on supplier's non-compliances for critical supplies of Benzapril-Ranbaxy (₹465.85 mn budgeted sales), Canton supplier dependent based formulations and other sudden supply issues like Mannitol-Roquette etc. |
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Emerging Markets' Molecules
(Top 10 Molecules by Sales) |
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API source de-risking is completed for 5 molecules
(Budgeted revenue ₹11,779.35 mn) whereas 2 molecules'
(Budgeted revenue ₹2,196.15 mn) projects have been initiated and
are under execution. |
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Formulation source de-risking is completed for 2 formulations (Budgeted revenue ₹5390.55 mn) whereas 8 formulations'
(Budgeted revenue ₹10,648 mn) projects are already under execution. |
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