and the next day. All right. Welcome everyone. And thank you for joining us for today's webinar on the topic of operating in a world full of constraints where we're going to focus on the key OPEX domains driving transformative change in the life science industry. This webinar is brought to you by us, Implement Consulting Group. And just for the case that you have found your way to us without knowing who we are, I want to spend a couple of seconds to introduce us. So we are an international consulting firm born in Denmark and now over 1,600 consultants working with the life science industry specifically. I'm one of those consultants. My name is Weyven and I'm going to be the moderator for today's webinar. And I've brought with me a couple of colleagues that are so excited to share some insights with you. So we have Søren Skjøtt and Jakob Fensvik today who are our experts on capacity planning and are going to talk about end-to-end constraint planning. Then we have Lea and Katrine come in later to talk about partnerships and external manufacturing. And then we have a special guest today, Mikkel from Novo Nordisk, who's a VP in operations and is going to share with us how Novo Nordisk is working with external manufacturers. So looking at the plan for today, we're going to start with a look at the OPEX domains and just talk about what they are, why they are relevant. Then Jakob and Søren are going to give their session on end-to-end constraint planning. And then we're going to have Mikkel after a short break talk about sharing insights from Novo Nordisk. And then Lea and Katrine are going to wrap things up with our implement viewpoint on CDMO collaboration. To get some practicalities out of the way before we get started, as you might have noticed, it's not possible to unmute or turn on your cameras for today. But we would really, really love to interact with you. So please use the chat, put in your comments, write some questions. We're going to have some Q&A sessions throughout the webinar where we're going to choose some of the questions and answer them today. And whatever we cannot answer today, we'll make sure to follow up on via email. But yeah, now that all practicalities are out of the way, let's have a look at the OPEX domains for transformative change. So the reason we're talking about this is we see that the life science industry is facing numerous challenges. And that is because we have some external factors that are affecting the industry. And those factors include workforce changes, changes in the global environment, meaning that there are energy constraints and changes in the geopolitical environment leading to supply chain disruptions. We have new developments in the areas of digital technologies and also sustainability with new societal expectations. And we have changing customer preferences. And the way that this is taking shape in the industry is through capacity shortages. So we can see that there is an increased focus on increasing capacity and improving site efficiency. We can see that there's increased pressure on costs and innovation, which is why there's more work going into working with new products and technologies. And then there's changes in the power distribution and regulatory demands. So all of this makes the life science industry a pretty challenging environment to work in. So we at implement see six domains and operational excellence that are going to be crucial to be able to navigate this environment. And these six domains are advances in digital technologies, capacity planning and expansion, partnerships and external manufacturing, site efficiency, supply chain localization, and environmental sustainability. So these six domains we see as the key drivers of transformative change in the industry in the next decade. And we at implement have been working a lot with these domains, but we also wanted to understand what you are doing in the industry. So we went and conducted a survey and created a report with a lot of insights on what the industry you are doing and what is expected and the implications of that. And that is what we're tapping into today. We would, of course, love to go into every single topic, but there's not enough time. So we have chosen two topics to focus on today, and that is capacity planning and expansion and partnerships and external manufacturing. But if you're curious, if you would like to receive the report, please feel free to send us an email. And we are very, very happy to share it with you. But yeah, without further ado, let's move into the first section of capacity and planning and expansion. And we're going to focus on the question of how do we enable end-to-end planning in an environment full of constraints. The reason we're talking about this is because the industry, as we said, is feeling a lot of pressure from increasing demand and an aging population and has to deal with supply chain disruptions. And when we went into the industry to ask, how are you going to address these challenges, we could see that there is a shift towards a more proactive approach to mitigate these risks. And more specifically, when we asked about which topic you're expecting to work with to address these challenges. End-to-end planning has been named as the number one topic, which is why we have brought Søren and Jakob with us today to share some knowledge on the topic with us. The stage is all yours. Thank you very much. Thank you, Waven. Søren. So, Søren and I have really been looking forward to come and present this. And what we see is that today we are operating in a VUCA world, volatile, uncertain, complex and its ambiguity. This might be a worn phrase, but we actually see this still as being a challenge. Since COVID, we have had disruptions with Suez channels, war in different regions. Recently, there has been a potential strike in all the ports in the U.S. and also hurricanes. And actually, we thought at some points this would go off. But we actually believe this is going to be the new normal. And some of the challenges we have here is we have imbalances in the supply chain. We have misalignment between cost of demand and available supply. We have a missing transparency throughout the supply chain to see what's the impact of, for example, a material shortage from a raw material. And decisions that are made in central processes, such as the S&OP process and the sales and operations execution processes, are not necessarily being executed to the extent that we expect. So this leads to what we have listed here, lost opportunities, late deliveries, expedite and scrapping costs, exceed capacity, spending, too high inventories, or the latest increased CO2 emissions. Right? All right. So, we have actually this recent survey, so Waven just presented. Yeah. So, she just showed us those numbers. So, why are you bringing those back, Jakob? Thank you, Søren. So, we believe this is important numbers. The 67% resonate that having this challenge with increased focus on end-to-end visibility. And we believe this resonates very much with what we saw before, that having this VUCA world, where we need to make sure that our S&OP and S&OE process is working. And then another number that you and I find very interesting, this 53%, that has an increased focus on S&OP, or the integrated business process. Because this is to our belief. We've been working with this for many years. So, this is actually not a new process. But there are still companies that have worked with this that are now having misalignment and having a challenge with disruptions being amplified. Or it could also be companies that have not really operated in a constrained world before. They are now starting to move into a constraint and having challenges with this. So, you're saying the process no longer works for them? No. I think the process is even more important to emphasize, but there's definitely something we will come back to and look into. Yep. Cool. All right. So, we believe that there is a disconnect between how we plan and how we're executing. We spend a lot of time orchestrating S&OP process, escalating issues and making decisions. But we need to make sure these are being executed. And what we sometimes see is when something goes wrong or we have limited capacity, sales orders are coming in. We get a lot of sales orders into our system. And suddenly, we have, what you and I discussed, acoustic planning. Somebody calling and say, now I need to get my order before some of the other ones. And some of the challenges we see here is that we don't have an existing prioritization framework. We don't have a prioritization that is reflected in our order management. We have a lack of ability to synchronize our plan from end to end when things are changing. And we also see that the planners are lacking an end-to-end overview. We have some examples of what are the consequences of this. It could be that orders are confirmed with a goal to maximize immediate order fulfillment and not all the orders. It could be lack of communication with commercials. So, being a planner, I'm actually sitting and doing the planning without asking what is the impact from a commercial point of view. It could be we have constrained supply situations that takes time to be considered for an end-to-end supply chain that we believe we need to do. It could be we don't have ability to change rules, for example, order sizes, that the individual planner is not, they do not have sufficient rights or allowed to do this. So, we believe that the planning, we need to have an end-to-end planning and execution. We need to have horizontal integration, both on SNOP and at SNOP level, all the way from the customers and throughout the entire supply chain, throughout the nodes. We also believe that we need to have vertical integration from SNOP to SNOP and all the way down to execution. But we believe that there are three missing links that we need to do something about. So, we need to have a clear handover from sales and operations planning to sales and operations execution and all the way to execution. So, we make sure that decisions we make on the, for example, on a stock buildup is reflected in the operational plans. We need to make sure that the operational plans in SNOP also considers end-to-end all the way through. Not just in silos, but we need to make sure that we have a feasible plan. So, for example, a component constraint is, we can see the consequences of that on a finished goods level. And finally, what we believe is very important is that decisions, when we make decisions, they are actually executed. All right. So, Søren, how will we go about to do this? I'll hand you the clicker. Thank you, Jan. Yes. So, being consultants, we, of course, have an opinion about this. We have to, and we have identified five enablers that we believe are key to address this. So, I'll take you through those and our opinion about that. So, first of all, we believe that we need to have the full value chain focus. So, focusing on this, or at least increasing this. And while the SNOP process, as we talked about before, is increased in focus in a lot of companies, it's inherently cross-functional, but we believe when we go to the lower levels, there's a lack of end-to-end, as Jakob just explained. So, we think that we need, in order to have the full end-to-end, there are some enablers for this. One is to have actually end-to-end planners. So, people who are responsible and with increased governance to ensuring a more end-to-end overview across the chain. So, that's one part. We also believe we need to have an SNOP process with markets. So, a lot of companies, and as we saw before, are even struggling with the SNOP. That's fine. But the SNOP process is really what connects the decisions we take in the SNOP with what we're executing. And we see a lot of companies that are struggling with actually getting commercial or market insights into this process. So, that is really important. The last thing is KPIs that are supporting from end-to-end. So, there's a lot of companies out there, and I'm not saying this is easy, but they are having KPIs that are struggling or not supporting the end-to-end view. But, Søren, you make it sound easy. Yes. You make it sound easy. Why not just do it? Yes. Good question. Yes. And of course, as consultants, we try to make it sound easy when we have to explain. Yeah. But this is not easy. And one of the reasons it's not easy, and it's actually more difficult the bigger the company you are, because complex supply chains with markets in one end, with regions that are selling the different products, maybe addressed or organized in value chains, and a complicated supply chain on the other end that are maybe delivering to multiple product supply chains and to multiple markets. We get this complicated matrix. And how do we get an end-to-end overview without having everybody in the same meeting room at the same time? So, it is difficult, and we need to make sure we design that right. We are not aiming also here to bring full end-to-end across all and every planning function or planner in the company. So, maybe on the operational level, it's okay that there is some functional expertise where you don't have the full overview. I think what we are talking about is lowering the walls between the silos a little bit. And typically, what we see is the biggest gap is on the SNOE level, where a lot of supply chain planning is going on, but with a lack of link to the markets or maybe lack of visibility even to the distribution link or to the suppliers behind them. Cool. So, besides the value chain focus, in order to enable this, we need end-to-end transparency. And, of course, this is where we are coming more into also system focus. We need to have full transparency in a system. We need to have a feasible plan. We need to be able to replan and adjust. Simulate, for example. Simulate. So, first of all, the plans need to be feasible. So, we need to know where the constraints are so we can even address them. And when there are big constraints, when there are big opportunities even or uncertainties, we need to be able to do what-if simulations so we can see what alternative realities might look like. And then, in order to help us with the decisions, we need to have some kind of financial consequence that we can use as an enabler for taking the decision. So, all of this enables us to take better decisions. But one of the things you mentioned before, Jakob, was this about we are taking a decision, but we are not executing. And we believe that part of the reason why is we are lacking a lot of the business rules that are helping us from translating decisions on a higher level, on a longer term, to what we actually do in the operational processes. So, we think we need to have these business rules. And we have listed a lot here. If we divide them kind of in two, the ones that are colored now are more focused on the customer side. So, what is the service level we are offering to the markets, to the customers? What is the segmentation? What is the prioritization in terms of shortage opportunities? And in terms of real shortage, what are the allocation principles? So, these are kind of the foundation for us to take decisions when we are operating in constraints. And there's a lot of companies where these are not really clear. So, Søren, now really being nasty to you, what happens when these decisions are not clear? Who makes the decisions then? So, when these are not clear, we are stuck in supply chain to try to figure out what we think the prioritization is. All right. At the very end, if we don't do anything, it will be the forklift truck driver who makes the decision on where to put the pallet. Of course, in most companies, it's not like that. But there's a lot of acoustic planning, as you said before, Jakob, on who shouts the loudest to get the product. So, the business rules can enable us to make a more clear prioritization and to also escalate when we have allocation decisions that are needed. So, once we have this, it also enables us that we, on the supply chain side, can use this in an end-to-end segmentation to create clear groups of products where we can define rules, planning concepts and policies. So, which ones are stocked where, what is the stocking points, what is it make-to-order, make-to-stock, push production, etc. And also, the inventory policy align with what the service we want to offer to the market. So, these rules help us not talking about SKUs on the long term, but actually talking about groups of products so we can make decisions around those. So, actually, before, just to sum that up, you started on the left-hand side of this one with the customers and focusing towards out and then having rules inside in our own supply chain. Yes. Okay. So, and of course, we know that a lot of companies are not having all of this altogether. But these are some of the rules that we can get started to get into a more structured decision-making process. Yep. So, once we have those rules, we still need to make sure that once we make some decisions, we group it according to the rule, it gets executed. And now we really get into the system part. Because the rule is a little bit, if we take a decision and we cannot maintain it in either master data or parameters, there's no guarantee that this is what will be executed. So, basically, what we believe in is that we need the business rules, but we also need to translate that into our system in master data or parameters so we can actually ensure that everybody is using this decision and acting according to that. And last, enabler. Sorry. Yes. One before. Before we get to that. Yes. So, basically, we want to go from output planning to input planning. Output planning is basically when the planners are overwriting the plan. So, we have something in our cell. The system shows something different. I put in the numbers. Now the plan is exactly what I would like. Maybe not what we decided in the meeting, but what I believe is right because I have the right numbers. Again, I think nobody is trying to do a bad job, but we are trying to prevent the problems we see occurring because we don't have the full overview. We want to go to an input planning where we actually put in the decisions into parameters so the system is acting like we want and proposing a plan that is according to our prioritizations and decisions. So, that's basically what we want to do. And to be honest, sorry for that one, but don't we still see a lot of the old one where we actually do? We see almost only that. I agree. Completely. Yep. So, it is difficult, this. And a part of the reason why it's difficult is because we need more standardization. Again, the bigger company you're working in, you typically see this as a bigger and bigger challenge that the systems are not the same or they're not speaking fluently together. The processes have many variants. We have KPIs that are not pointing in the same direction and we have master data that looks different. And all of this actually puts in an inertia. So, every time we try to change, adopt to all the challenges that Jakob mentioned before, it becomes slower because we cannot make it in one system. We have to adopt across. We have to make sure everything is coherent. We have to adjust the processes but consider all the variants. So, you probably heard somebody in IT say for the past 20 years, we need to stick to standard. And I think actually they were right and we probably should have listened more than we did. Because from now, in the perspective of actually the world changing faster and faster, we are slowing ourselves down in adopting to this change if we don't apply standard. All right. There are three key enablers to ensure this. Okay. What are they? That's master data, master data and master data. So, in a lot of companies, all of this, end-to-end overview, having the same process, the visibility, end-to-end, shared numbers, is stuck on having not the right master data in the systems. So, this is really a key enabler for everything but especially also for this end-to-end overview. So, master data will fix all the problems? Master data will ruin our end-to-end data. That's right. If it's not in place. Yes. Cool. All right. But that actually takes us back to what we saw or what we said is. So, this is the challenge or we see it. We would like to have this vertical, sorry, horizontal integration and we need to have vertical integration also. And the five points that we've just been through, we believe very much will help a lot of this. Yeah. All right. I think we have a question session now. So, if there's anyone that has any questions in the audience, please put them in the chat. We'll read some of them up here if we can. Sian can read them. Or you're welcome to comment if you disagree with us. Yes. Or if you recognize some of the challenges as well. We are happy to hear that. Or maybe you have a good tip for fixing the master data. Then we would like to have it. Yeah. Okay. So far, no questions. Oh, but we also know there is a short delay. Yes. And that's fair. And I think maybe we'll just, like Weyman said before, if there are questions in the chat and we don't get to respond to them today in the session, we'll get back to you in an email with a response. The best we can. We have one. What do you see as the biggest challenge ongoing from output to input planning? That was an interesting question. Yes. Thank you for that question. I think that the challenge is actually that we are not able to make the clear business rules. So a typical enabler to making this input planning is to have a very clear product segmentation where we have product categories that we can also actually say this is how the master data should look like for each type of product category, product segment. And then we need to make sure we have a system that where we adjust the input parameters. So that can be the planning policy. That can be the target inventory actually proposes a feasible plan that is aligned with what we expect. So that already combines the master data, the system with the feasibility or the feasible plan and something that produces a result that is according to what expects. So that is quite understandably a big challenge. All right. We have another one that says how to deal with several planning IT tools lately coming out to the market with a standard approach or system. Or in other words, do we recommend a unique ERP covering all the enterprise or do you believe it's a combination of ERP and planning tools can be effective? Yeah. So I guess just to fully understand the question, if it's a unique ERP covering everything, I think that can be fine. If there's business value for the company you're working in. And of course, that's very hard for me to say. But I think what I was trying to say before is that we see a lot of companies where there's many, there's 20 process variants and they are set up differently in the system. And as soon as every time we need to upgrade, every time we need to make improvements to any processes, we need to consider all the 20 variants. And that puts into an inertia. So I think what we are saying is when we do the implementation, there's always good reason for making this special for your company. But we probably need to be a little more willing to go on compromise or compromise with this. So to only choose and make special solutions in the cases where it really adds business value and not only where it looks like the old system we had. Now, that's one thing. But I also had another reflection. There is also a lot of companies where if you merge with other, there could be several different ERP platforms or solution that can be a challenge that has to be integrated in some terms. And then I think one of the part of the question, as I interpreted, is also planning tools on top of it. And I think we see a lot that there are different planning tools that can help you solve planning issues, either as a best of suite or best of breed. And as Søren just said, that can be difficult to say which one is the right. I think that depends on the case. But we do see some of the companies that are growing a lot also by mergers. Exactly. That having a standardized process landscape and standardized system landscape makes this rolling out and adding on easier and getting into transparency also for the new part of the business a lot faster. Yeah. I agree. Okay. All right. Good. I think that's the question for now. Yes. All right, Maureen. Thank you. Thank you, sir. Thank you. And Jacob. Thank you. And yeah, this concludes the first half of our webinar. We're going to move into a five-minute break to freshen up, to refill on coffee. So then in the second part, we're going to talk about the second OPEX domain, which is partnerships and external manufacturing. So see you back in five. We're going to talk about the first half. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you very much. And thanks for the invitation. It's a privilege to be here. So I'm going to take you through very few select slides around contract manufacturing in a Novo Nordisk context. We are scattered all over the world, we are in a drug space, we are in a drug space, we are in a drug space, we are in a drug space, we are in a drug space. And we are in a drug, we are in a drug space, we are in a drug space, we are in a drug space. So this is a drug, we are in a drug, we are in a drug space. And we are in a drug space, we are in a drug, we are in a drug space. segmented at the different CMOs? And obviously the answer is yes, you have to have a segmented approach to how you work with your CMOs. And what you see in the middle of this chart is kind of a snapshot of a segmentation of CMOs that are in operation today. How have they scored among each other? And how well are they performing? This goes both from a collaboration context, but it also goes from a performance context. And working in a pharma industry, then of course quality metrics are some of the key metrics in what we measure our CMOs on. So when we look at segmentation, we want to look at how well our contract manufacturers are performing and what can we do about it. So you could argue that you could have a strategic segmentation approach and you could have an operational segmentation approach. What we're looking at right here, right now, is an operational segmentation approach. On top of that, we would also have a strategic segmentation approach. However, there are mutual or many, sorry, a magnitude of things we can use the segmentation model for. Of course, there's the obvious one about doing performance metrics of your CMOs, see how well they're performing and giving them the feedback. But there's of course also the possibility of discussing internally, what do we want to do with the CMO? Should we move forward with more products with this CMO? Should we increase our quality oversight or can we decrease the quality oversight? And again, bear in mind, in a pharma company, a lot of what we do when we work with CMOs is oversight. All products that are being released for markets have all been released internally within our company and we do a lot of oversight. We have a lot of efforts put into continuous oversight of our CMOs and you have to consider that when that growth I was talking about previously is going to continue well ahead. This is of course also a tool that we can use in our business review meetings we have with our CMOs. This is development discussions we can have with them. These are the business development plans we can have with our CMOs and this is where we can compare our CMOs up against other peers within the industry without of course disclosing names or numbers or anything like that, but showed the different CMOs where they are performing up against others and where they should definitely work on increasing their efforts. Let's go to the next slide. When we work with CMOs, we have a lot of high qualified employees sitting. We have supply chain, of course, as this presentation started with from implement side. We have a lot of operations people. We have obviously a large amount of quality people and of course we have our science people looking into the work we do with our CMOs. You can all imagine that if you have a growth of tripling the number of CMOs over a course of period, you might have to triple the number of employees you have as well within your own organization to keep up with the growth. And that is not sustainable at all. We need to move forward with a different approach. We need to segment the way we work with our CMOs so we can choose the ones that needs the most attention. Those are the ones that will get the most attention. The ones that needs the least attention, of course, we can pull out from them. But on the other hand, choose the ones that are performing the best, the ones that we can actually have the best partnership, the most trusted partnership with. Are they the ones we should actually give more volume, give more products, maybe increase the product portfolio with those? And for the ones that are not performing the best, which efforts should we put in to those? So that's why we see that we need to segment our CMOs. And no matter what we do, there is a steep growth within this segment. And we also see there's a steep growth among all of our competitors out there. And when you work in the pharma business, there's a lot of CMOs that work with the same clients. We see ourselves among many of our CMOs alongside with many of our competitors, which is why we also want to use the segmentation approach to be a positive thing for our CMOs to see. They want to develop with us. They want to get the feedback from us and they want to increase their, what should I say, their importance within our segment. What are our options then when we look at this segmented approach? We can choose those where we want to have an arm's length collaboration, those that perform well. We can stay clear of them. They can stay clear of us. We can just let them run. We can have trusted partners. And I'm guessing in the presentation, we're going to see here in a bit that what is a partner. And if you are in a true partnership model with CMOs, you share a lot and you give them a lot of maneuver room where that's not necessarily a place where many of us in the pharma industry are yet. And then the last part of this is that for those that are trusted partners, for those that are performing well, we can start introducing digital tools, getting more and more close in terms of both the supply chain setup, but also in terms of decision making and proofreading on records, reviews, doing stuff for us that can limit the time we spend in terms of the collaboration. So that was a very brief talk into some of the use of segmentation within the NovoNorsk space. Yes, thank you very much, Mikkel, for this great presentation. Katrin and I were both very curious what you're going to tell us today. But I think it was really, really interesting. And please remember to the audience to put questions into the chat so we can ask Mikkel, kind of a special speaker for today, some of your questions also. But I think I will just maybe start because I thought it was quite interesting on how drastically you increased the number of CMOS you're working with. So I'm just wondering, like, how are you planning to scale it in the future? Because if you continue that growth, it's going to be quite interesting in terms of scaling on how you interact with the CMOS. So what's your take on that? Yeah, so it but it is a scaling game. I mean, I joined NovoNorsk some 20 years ago and we were 13,000 when I joined and we are now almost 70,000, right? So we've been scaling quite a bit and we are also scaling with our CMOS. So, of course, we are growing. We are growing organizations to handle that. This organization that I represent has also tripled in size in the last four years. So obviously, we are hiring a lot of people. We now have a worldwide footprint. So we're not only located in Denmark, we are located all over the world with people sitting working with contract manufacturing organizations. And then we are introducing an approach where we kind of use the segmentation score to say, okay, these that are on a quality metrics score higher than a certain threshold, we can actually lower our oversight on those. So we can limit how much we actually review of documents, how much we approve of documents. Whereas those that have challenges, we spend more time on that. By doing that, we can actually lower the growth in terms of our population. We also build organizations where we have small units responsible for small clusters or small units of CMOs. And by that, we are sharing knowledge across. And we use that, of course, to professionalize. And last but not least, we use the segmentation to look into some of the CMOs. We might be able to give them more business. Instead of every time there's a new product or new capacity, we'll find a new CMO. Maybe we can grow the existing CMOs to become bigger and broader together with us. Yeah, that's quite an essential tool to kind of identify new opportunities also in working together with CMOs. I think we will talk a little bit more about that later in our presentation as well. Yes. So that's quite nice. And if I can also ask a question, I'm a bit curious to know. So now you have this segmentation model. You have all this aspiration of how you want to kind of segment the way you collaborate with CMOs. But right now in your kind of day-to-day work, do you actually see a difference in the way you approach your different CMOs now that you have segmented them? That's a really good question. I think a lot of the way you work with a CMO is the partnership or the behavior, right? The behavior of our employees. And that part we are not changing. We are always behaving in the same professional manner no matter who we work with. But the number of meetings we have is different. The number of visits we have is very different. And in an environmentally focused world, we, of course, focus very much on not traveling unnecessarily to CMOs. They are scattered all over the world. We could travel a lot. We don't go on-site or go overseas unless it's needed. And, of course, we've reduced traveling. We've reduced on-site presence. And we also have, for some of the CMOs, we only have to have one or two persons on-site once in a while, where with others, we might have six, seven, eight people on-site frequently. So, for that, we use the segmentation. And we use the segmentation to specifically go into the feedback sessions and the mutual planning on capacity-increased projects, I should say. Sorry. But it sounds like you're also kind of having dedicated teams, the teams that are actually working with the CMOs. How do you handle the communication with them? Like, do you have a frequent basis, kind of very, very structured with all of them? Or are you kind of vary the frequency depending on how close the partnership is? Yeah. Yeah. So, of course, some of our CMOs, they only deliver a very infrequent, a low number of batches per year. So, of course, you don't have to have a weekly meeting with them. But most of our CMOs, they have weekly deliveries into some kind of Nordenois facility. And for those, we always have weekly meetings. There's always a weekly meeting with our units that are heading up the daily responsibility, the operations teams that are responsible for the daily. Daily collaboration with the CMOs. That is handled on a weekly basis. And it's a very structured agenda. It's going through deliveries, quality topics, and, of course, the supply chain setup. Yeah. That's also quite interesting, the structured communication approach, which is quite essential to kind of keep close to the CMOs and CDMOs. Yeah. If there's no other questions so far from the chat, we will just kind of continue, I think. So, now the question is, like, what is our take on that? Of course, we also have experience both on kind of the supply side, but also on the CDMO side. So, we're just kind of curious, how can we successfully collaborate with the CDMO? And we believe, actually, that there are four key topics in that. And you have maybe already realized on my questions that some of them might be covered. The first one is the organizational structure. Mikkel also just touched upon that he actually has, or they have a team specifically interacting with the CDMOs. So, in the organizational structure topic, you should kind of determine, do you have specific persons interacting with the CDMOs? Do you dedicate a whole team? Or how do you interact with the CDMO? The second topic is structured communication. So, how frequent do you have touch points with the CDMO? Is it on a weekly basis, as just mentioned, or on a less frequent basis? Do you have fixed touch points in the calendar, or is it more a spontaneous interaction? Then we have supply chain integration. We already talked a lot about supply chain today. The question is, of course, how much insights do you give the CDMO on your supply chain? Do you share forecasts, for example? Do you share a production plan or any inventory levels? That, of course, depends very much on how close you are with the CDMOs. It's not something you want to give away to everybody, but for a smoother operation, a supply chain integration might be actually quite valuable. And then the last, which was also already touched upon, is, of course, performance. It's quite essential to know how well CDMOs are performing. So, it's important to kind of determine key performance indicator on how to evaluate and assess the CDMOs. Are they delivering on high quality, for example? Are they always delivering on time? These are kind of key aspects to consider when you collaborate with the CDMO, of course. So, those are four topics. And, of course, we would like to kind of invest all the resources we have into this to really work closely with the CDMO. But as already mentioned, it's kind of a world of restricted resources. So, we need to kind of define different ways of working together with the different levels of CDMO. So, our approach is also a segmentation approach, and we believe that there are multiple benefits of doing so. Of course, first of all, there is a resource optimization. If you know exactly how you need to work with the different CDMOs, you can save time, energy, and money, because you don't need to invest that much, let's say, communication into a CDMO where you say it might not be the most critical CDMO, for example. So, you can definitely save on resources. A second benefit is, of course, smooth operations. If you have a targeted way to interact with different CDMOs, it's much better to kind of align on effort and on different alignments and operations, meaning that with a closed CDMO, you can maybe let go a little bit on communication. But if you know exactly how to work with them, it's much easier, and you can make an easier, smoother operations together with them. It's also tightly linked to the supply chain integration, for example. And then, lastly, as already also mentioned by Mikkel, actually, is you can identify new opportunities. So, if you evaluate your CDMO portfolio, you can identify if there are any gaps. If the CDMO is performing very well, then you can increase the collaboration with them and further strengthen that partnership. So, it's really essential to identify opportunities. And now, Katrine will introduce on how we believe you should segment your CDMOs. Yes. So, segmentation sounds super beneficial. Thank you, Lea. So, now we're going to just share our viewpoint on how we work with segmentation when we work with CDMOs. So, when we segment the CDMOs, we look at two parameters as well. But the parameters that we look at is, first of all, criticality. So, how critical is the CDMO in your value chain? And then, we look at performance. So, how well is the CDMO performing? The reason why we want to look at criticality is really to understand how dependent you are on the CDMO that you're working with. So, do you have any risk associated with the CDMO? Or do you have any opportunities? That's kind of the things we want to assess under the criticality parameter. Performance is very similar. Here is, of course, a lot related to quality, but also output. So, do they actually deliver the output requested? So, when we assess criticality, some of the questions we would like to ask are things like, how important is the CDMO for your overall finished goods profit margins? How important is the outsourced product in your overall product portfolio and value chain? And what is the risk if the CDMO cannot deliver? So, those are some of the questions we ask to assess criticality. When we assess performance, the questions we would often like to ask are, how reliable is the CDMO to actually deliver on time in full? And what is the CDMO's quality mindset? For instance, do they frequently generate deviations? And if they do, how do they work with them? And also, how flexible is the CDMO in, for instance, increasing their capacity? So, based on these two parameters, we'll also get this two-by-two matrix, where we end up with four different strategic ways of collaborating with CDMOs. We have the strategic partnership, the structured engagement, the maintain strategy, and the re-evaluate strategy. If we first look into the strategic partnership, those are the CDMOs that are very high-performing, but are also very critical to your value chain. For those kind of CDMOs, you want to maybe invest a little less resources and more build a relationship on trust and build long-term strategic relationships. You want to let them kind of do the daily operations themselves and limit the monitoring of them. However, one thing that you might want to invest in is a high level of supply chain integration to kind of ensure that the operation is running smoothly. And also, these are kind of the CDMOs that you might want to use for prioritizing new product introductions. Looking into the structured engagement strategy, this is where you kind of really want to spend most of your time and your energy and your resources. This is because these kind of CDMOs deliver some products in your value chain that are very critical. However, they are not performing according to your standards. So these are the kind of CDMOs you want to communicate with often. It could be even daily touchpoint, if not weekly. And you really want to collaborate closely with them to make sure that they increase their performance. You want to kind of understand why the performance is lacking. Is it quality? Is it planning processes? Is it manufacturing processes? And how can you help support them kind of grow so their performance increase since they are so critical for your business? So this is where you really want to spend time and energy and resources. So when you have limited resources, this is where it should go into. When you look at the maintain strategy, those are the CDMOs that are, in general, performing pretty well. But the products they are supplying and services they are supplying are not super critical to your value chain. So if you have limited resources, you can kind of just minimize the efforts here and let them go about the business. If you see a potential for maybe giving them some more critical products and service to take over, and you can also see that they have potential to take over those services, but without decreasing their performance, then you can maybe spend some resources in working more closely with them to give them some more business. That's something you can consider in this category. And lastly, for the re-evaluate CDMOs, overall, you can kind of just let them be since they're not very critical to you and they're low-performing. You can also kind of consider whether you should terminate or you should find alternatives. But overall, just don't spend too much time down here as they're not critical to you. So this is kind of our approach to segmenting CDMOs and how we work with segmentation. Now I will hand it over to you, Leia. Yes. So now we are very curious to hear what the audience thinks about the two different approaches of segmentation, both from Mikke but also from us. So we're just kind of asking into the audience, have you ever considered segmenting your CDMO collaborations and what's your perspective on that? And if yes, do you have maybe experiences you would like to share in terms of how can we better collaborate with the CDMOs? And then, of course, we also have, I think, a few CDMOs actually themselves in the audience. So feel free to kind of put in your perspective on what you think about the segmentation model. So we are really, really curious to hear your reflections. And then, of course, we would also like to get some questions if there's any questions that arise throughout the presentation. So I can see that we have a question, actually, from Oksana already. It might be already to Mikkel, but maybe you can also just answer it. So the question is, what criteria do you apply for segmenting your CDMOs? Is it spend, profits, supply chain, complexity? Yeah, and I think for our approach, as stated, we use criticality and performance. But I don't know, Mikkel, if you want to put some more words into what criteria you apply? Yeah. Yeah, yes, of course. And as I said, the segmentation I showed is a more operational, where yours is a more strategic version, right? So from an operational point of view, we have 20-some metrics that we measure on. And those would be, when we go into the quality part, we have seven different quality metrics, and I'm not going to go through them all, but we have seven different where we evaluate on how good their investigations when they have deviations are, did they have inspections and audits from authorities, how good are they at responding within the expected timelines, and so forth, and have they had any recalls or have they scrapped products and whatnot. So it's very hardcore metrics where we give them scores, each individual, and on the supply chain part, obviously we have on-time deliveries, we have order fulfillment, we have response to requirements and flexibility. I see there's a question on flexibility as well. So it's also how quickly can they adapt to order fluctuations and whatnot. And then on a collaborative point of view, we discuss, do they have the right resources to actually engage with us? Do they, again, respond to our inquiries timely? Do they have digital capabilities? Do they want to open their books for us and whatnot? So there are numerous different metrics, 20-some. How frequent do you evaluate the CDMOs if you have so many performance? Like, I mean, it's probably a quite diligent process to evaluate on all of those parameters. So what is kind of a frequency you would suggest? We do it three times a year. So we do it three times a year because we also have internal processes where we follow up on the overall performance of our CMOs. But it's actually not that big of a deal, I have to say, because all of the data is there. We have all of these data anyways. So it's just a matter of putting them into this system we have built to keep that measurement going. So three times a year. Yeah, cool. Then we also have a question in the chat on how important cost and flexibility is in your segmentation model. Actually, we also, in the survey that Waven shared before, we also asked you about how important it is when you kind of also select CDMOs, what are the important parameters. And it's actually quite interesting because cost is one of the least important parameters when selected CDMOs because it's things such as flexibilities and performance that they are often evaluated on. Yeah. Michael, do you have a view on this as well? Yeah, I definitely do. And you could always say that low cost doesn't necessarily equal the lowest unit cost, right? Because you might have to add a lot of resources on top of to handle that CMO. They might be the cheapest, but they might not be the best. So there is that balance. But I would actually say that that's where the difference from the strategic segmentation model to the operational segmentation model comes in because cost is taken out of an operational segmentation model in our view. That is purely operational metrics and if they perform well, then we have a strategic sourcing unit that we can ask to discuss pricing and whatnot and vice versa. But from an operational perspective, we keep cost out of it, but we definitely have flexibility as an extremely important score in the operational segmentation model. Yes, maybe last question to round off. Katrine, what is your experience in terms of companies using the segmentation model already or how advanced is the industry to use segmentation for CDMOs? Yeah, I think when I'm out in the industry and I work with different kind of pharmaceutical clients, I see that there is an effort now to start off to think a bit more strategically about how you work with CDMOs. However, I do also still see kind of a tendency to add CDMOs a bit ad hoc to your supply chain and never really kind of taking a step back and evaluating your whole CDMO portfolio and how it all fits together. So I do see an effort in more and more trying to look into the segmentation, but it's still quite new since the use of CDMOs has really exploded in the last few years. So I think a lot of pharmaceutical supply chains are a little bit out of hand now. and I think what I see is that it could be quite beneficial to take a little bit of a step back and have a strategic view of CDMO portfolio. So that's kind of what I experience out there. Yeah, great. Thank you very much for your insights. And then I think we are coming to an end of this part. Yes, so thank you Katrine and Lea. Thank you. And also special thanks to you, Mikkel, for taking some time on this Monday afternoon to share Novonoidus insights with us. And yeah, we have now reached the end of today's webinar. Thank you for everyone who joined and we hope you took something away from it. And yeah, if you have any outstanding questions, please feel free to reach out to us and stay connected. Thanks everyone.