Executive Briefings

How Thermo Fisher Tackles Risk Management

Lee Young, director of supplier quality at Thermo Fisher Scientific, explains the company's approach risk management, and how it copes with issues such as sole sourcing and supplier qualification.

Thermo Fisher Scientific is an $18bn biologics company, with 92 percent of its material concentrated in the laboratory space in North America, Asia and the Europe-Middle East-Africa (EMEA) regions. Its supply chain covers more than 8,000 vendors across four continents. The company sends out more than 32,000 shipments a day.

Challenges to its supply chain include the Ebola epidemic, political unrest and economic crisis in Russia and Ukraine, and continuing problems in North Korea. All have the capability of affecting global manufacturing and fulfillment, Young says.

“We are challenged with understanding risk in a very quick-paced environment,” he says. Thermo Fisher deploys software that provides notification within three minutes of an event that might have implications for risk and company revenues.

Following that, Thermo Fisher must be able to quickly assess the level of risk, based on natural and geopolitical events, and take the necessary steps to mitigate it. The consequences of failing to act properly can be dire, Young says. The complexity of its supply chain affects areas that the company might have considered safe from the impact of such events.

The software draws on inputs from both of the company’s enterprise resource planning systems, as well as intelligence from two tiers of suppliers. The latter source required the opening of a portal for a third party that could query the supply base. In the first six months of use, the company had to input an “incredible amount of data,” Young says, adding that the system has been in effect for about 18 months.

Intelligence from the application has led the company to make certain changes to its supplier base, including the diversification of some sourcing, to make the supply chain more resilient against multiple types of risk, he says.

To view the video in its entirety, click here

Thermo Fisher Scientific is an $18bn biologics company, with 92 percent of its material concentrated in the laboratory space in North America, Asia and the Europe-Middle East-Africa (EMEA) regions. Its supply chain covers more than 8,000 vendors across four continents. The company sends out more than 32,000 shipments a day.

Challenges to its supply chain include the Ebola epidemic, political unrest and economic crisis in Russia and Ukraine, and continuing problems in North Korea. All have the capability of affecting global manufacturing and fulfillment, Young says.

“We are challenged with understanding risk in a very quick-paced environment,” he says. Thermo Fisher deploys software that provides notification within three minutes of an event that might have implications for risk and company revenues.

Following that, Thermo Fisher must be able to quickly assess the level of risk, based on natural and geopolitical events, and take the necessary steps to mitigate it. The consequences of failing to act properly can be dire, Young says. The complexity of its supply chain affects areas that the company might have considered safe from the impact of such events.

The software draws on inputs from both of the company’s enterprise resource planning systems, as well as intelligence from two tiers of suppliers. The latter source required the opening of a portal for a third party that could query the supply base. In the first six months of use, the company had to input an “incredible amount of data,” Young says, adding that the system has been in effect for about 18 months.

Intelligence from the application has led the company to make certain changes to its supplier base, including the diversification of some sourcing, to make the supply chain more resilient against multiple types of risk, he says.

To view the video in its entirety, click here