Manufacturing & Supply

Our vision is to be the most trusted and competitive supplier of pharmaceuticals, animal health products, vaccines and biologics to the world’s patients and customers.

Our company is committed to providing patients and customers with a reliable supply of high-quality, safe and effective medicines and vaccines. Our global supply strategy leverages both our internal manufacturing capabilities and those of external manufacturers that provide specialized skills, expertise and various types of manufacturing services.

We manufacture, package and distribute products to more than 140 markets around the world. Our facilities, along with our external contractors, suppliers and partners, make up an integrated, interdependent global manufacturing network that is committed to delivering compliant, reliable supply to customers and patients on time, all the time and every time.

Through our manufacturing division, we strive to deliver uninterrupted, unconstrained, highest-quality supply at the lowest cost and with the shortest lead times.

We have entered into manufacturing and supply agreements with local manufacturing partners to broaden access to our products in local markets. We strive to forge relationships with partners that meet our standards for quality manufacturing and distribution, and today we have 144 external manufacturing sites, 35 Corporate Alliances and 98 Regional Alliances that we engage with to provide access to our products.

In 2018, we manufactured approximately 8,000 SKUs (stock keeping units), approximately 213.7 million doses of Human Health vaccines and approximately 102 billion doses of Animal Health vaccines.

Our global supply chain is designed to ensure that we are operating a lean and efficient network while complying with rigorous quality, safety and environmental standards. Through “end-to-end supply planning,” we conduct efficient and balanced planning decisions to maximize business results and deliver medicines and vaccines to customers, which include hospitals, retail outlets and patients, when and where they need them. We partner with distributors, warehouses and freight forwarders on air, land and cold-chain supply methods.

We remain committed to the development and commercialization of our products and to ensuring that we are a reliable global supplier of quality vaccines and medicines. In 2018, we launched new products in major regions with eight filings and 20 launches. We are implementing continuous manufacturing for small-molecule products with planned submissions in 2019 and beyond.

We continue to optimize our manufacturing capacity for most vaccines, including, as appropriate, redundancy in our supply chain for certain vaccines, so that we eliminate supply disruptions when temporary issues arise in manufacturing.

photo of an MSD scientist working in a lab

 

We have made significant progress since the launch of the “Manufacturing the Future” strategy in 2016. We have improved stability of supply through investments in our people, processes and by enhancing our Quality, Compliance, Technical and IT infrastructure. We continue to improve our value chain risk management with dual sourcing of key nodes and markets, strengthening our raw material sourcing and optimizing use of strategic inventory.

Our divisional service performance is at a 10-year high. Looking ahead, we see the opportunity for substantial growth and, in response, have begun the process of significantly shifting our asset base to expand or build new capacity to meet this demand.

In 2018, we refreshed our manufacturing and supply chain strategy—recognizing the transformation required to address challenges that come with growth and the shifting pharmaceutical base. With the significant advances made in stabilizing our business over the past two years, we have now pivoted toward a greater focus on responsiveness and innovation and have initiated four workstreams addressing our primary strategic elements for manufacturing and supply chain.

Stability: We are continuing to ensure our supply stability by strengthening our core capabilities in safety, regulatory compliance and reliable supply.

Responsiveness: We are preparing our facilities, processes and people to respond to the changing needs of health care by internalizing select products, improving asset utilization, reducing product cost and assessing innovative manufacturing technologies.

Innovation: We are transforming the way we transact in manufacturing through establishment of foundational data systems and use of innovative digital and analytics technologies.

Diverse talent: We are fundamentally changing how we work, building an exceptional workforce of skilled, diverse talent—uniquely equipped to “Manufacture the Future”—for our company and for our patients and customers around the globe.

We continue to focus on internal and external strategies that reduce cost and increase capacity to meet growing supply needs around the world.

Supply challenges: commitment to our patients and employees

Enterprise Resiliency and Modernization is a multiyear program aimed at modernizing and making more resilient our manufacturing site technology infrastructure in support of operational success. A set of activities is currently being implemented to ensure that we protect our systems, data and network from external threats and incidents such as cyberattacks, natural disasters or other outages across our manufacturing sites network.

Since program inception we have addressed over 30 percent of the targeted assets and moved over 30 percent of our manufacturing assets behind our Shop Floor Network.

We are on track to address 65 percent of the targeted assets by the end of 2019, and 100 percent by the end of 2020.

Performance

MANUFACTURING & SUPPLY SUMMARY2014 2015 2016 2017 2018
Number of local and regional manufacturing partnerships to enable access104 179 179 153 144
Number of products available through local and regional partnerships499 1,157 941 765 700