How Roche Diagnostics’ CEO Tackled A Covid-Crash Supply Chain Overhaul

At our recent Smart Manufacturing Summit in Indianapolis, supply chain disruption was very much top of mind among the CEOs that were on hand from across the country. In a presentation from Roche Diagnostics, we heard how they’ve embarked on dramatic overhauls of their supply chains that were prompted and accelerated by their response to Covid.

The onset of the pandemic in early 2020 created an “all-hands-on-deck moment” across the North American headquarters for the world’s largest biotech company, headquartered in Switzerland, said Matt Sause, president and CEO of Roche Diagnostics North America. He leads more than 3,000 people in Indianapolis who develop and make diagnostic products for cancer, cardiac health and other conditions—as well as infectious diseases.

Suddenly, Roche was being called upon to supply six times its previous volume of polymerase-chain reaction (PCR) tests for the coronavirus that comprised the front line in health authorities’ arsenal. “This had been a low-volume business,” Sause told the summit. “One of our instruments that does Covid-19 testing has 23,000 individual parts and takes seven to 10 days to assemble—it’s the size of a small SUV.”

Yet, Sause said, the company “went from the first knowledge of the Covid-19 [genetic] sequence to [federal] authorization of our tests within six weeks. We did some manufacturing scale-up at risk of knowing we were still just validating the product, but we were well aware we had to get the test out as soon as possible.”

Some of his top tips from the experience:

1. Corral a team: Sause pulled in a small, highly dedicated team for pandemic response consisting of “the best talent from anywhere in the organization,” he said.

2. Spread the risk: Roche boosted its global supplier network, squeezing a typical 18-month process into as little as nine months, and created supply-chain redundancies “across items we knew were absolutely critical.”

3. Tighten the chain: Roche learned the importance of creating full collaboration and transparency with suppliers and of disengagement from the company’s previous just-in-time inventory focus: When customers needed PCR tests, they had to be available.

4. Leverage purpose: Roche hired hundreds more people in Indianapolis and a New Jersey manufacturing site to scale up PCR test output. That included a big push to quickly add managerial and executive talent, which was assisted by the searing importance of the work that Roche was doing. Talk about corporate purpose. “It really focused on the proposition of working for an organization with a mission and an ability to impact the health-care environment in the U.S. and globally,” Sause said. “We were able to recruit talent from competitors.”

5. Care enough: Simple thoughtfulness also helped Roche’s team get through: The company gave flight upgrades and free dry cleaning to field engineers whose roles demanded they be in hospitals and clinics as the pandemic raged.

As a leader, Sause learned about “when there isn’t sufficient data to make decisions with adequate certainty to the outcome. You have to use past experiences to plumb up future decisions. When do you obey your gut; when do you look for more data? Having to constantly toggle between those two things has been an absolute challenge.”

Dale Buss: Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other business publications. He lives in Michigan.
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