How can purchasing drive innovation, strengthen supply chain resilience and accelerate sustainability?
For Bihag Shah, Group Purchasing Director at SGD Pharma, the answer lies in building strategic supplier partnerships that go beyond traditional purchasing relationships.
In this interview, he explains how closer collaboration with suppliers can improve competitiveness, support innovation and create long-term sustainable value.
SGD Pharma's Supplier Days in Europe and China reflect this approach. They bring partners together to share expertise, address common challenges and identify opportunities for joint development.
From Transactions to Strategic Supplier Partnerships
The pharmaceutical industry is moving towards greater integration. What does this mean for your relationship with partners and suppliers?
It means working with suppliers as long-term partners, rather than simply buying from them.
Our 2024 EU Supplier Day placed shared responsibility at the heart of this relationship. We discussed ethical sourcing, emissions data transparency and climate risks. We also explored joint action on decarbonization, biodiversity and environmental impact.
At our 2026 China Supplier Day, themed “Intelligent Sourcing, Green Future”, we took the conversation further.
We looked beyond price to explore how closer collaboration can strengthen competitiveness, resilience, sustainability and innovation. Digital technologies and artificial intelligence (AI) were also part of the discussion.
Above all, our goal is to move beyond commitments and develop measurable joint improvement plans.
How Supplier Collaboration Drives Innovation
How are supplier partnerships helping SGD Pharma innovate and improve competitiveness?
The real value comes from combining our manufacturing experience with suppliers' technical expertise.
This collaboration covers several areas, including energy-efficient equipment, AI-enabled inspection, lower-impact packaging and logistics. Together, these solutions help us improve cost, quality, resilience and sustainability.
We want partners who offer more than competitive pricing. We look for suppliers who challenge our thinking and bring forward new ideas.
Our focus is on turning those ideas into joint pilot projects with measurable benefits.
For example, we have worked with key suppliers on hybrid furnace designs that use more electricity and oxygen enrichment. We have also collaborated with refractory and mould suppliers to improve service life and quality.
In addition, we have established joint ventures where they make business sense. We are also exploring future AI applications with machinery suppliers.
These partnerships create opportunities that would be much harder to achieve independently.
Strengthening Supply Chain Resilience
How do you strengthen supply chain resilience and ensure reliable supply to pharmaceutical customers?
Resilience starts well before a disruption occurs.
We use supplier evaluations, audits and our Code of Conduct to assess capabilities, identify risks and address potential gaps.
However, long-term relationships are just as important.
Open communication helps us identify emerging issues earlier. It also allows us to work together on practical solutions.
Moreover, joint improvement plans help us strengthen supplier performance over time.
Together, these actions support operational continuity and help us maintain reliable supply to our pharmaceutical customers.
AI and Digital Transformation in Procurement
How is the adoption of AI, advanced analytics and automation influencing purchasing decisions at SGD Pharma?
We have already started using digital tools in purchasing. These include contract management software, Power BI and generative AI.
These technologies give us better visibility of our contracts. They also help us analyze spending patterns and supplier trends.
In addition, we can prepare summaries, comparisons and negotiation materials more quickly and efficiently.
For me, the real change is how we use information.
Instead of spending time gathering data, we can focus on making better decisions.
Of course, these tools support purchasing judgment rather than replace it. They give our teams more time and better insights to manage risks and create value with suppliers.
Sustainable Procurement and Supplier Evaluation
Sustainability is at the heart of SGD Pharma's strategy and now accounts for 20% of supplier evaluation. How are suppliers responding?
It's a journey in progress.
By giving sustainability a 20% weighting in supplier evaluation, we make our expectations clear. Responsible business practices matter alongside quality, service and cost.
Of course, suppliers are at different stages of maturity. As a result, some face greater challenges than others.
Our role is to encourage progress, not simply set requirements.
We use EcoVadis assessments and joint improvement plans to help suppliers turn commitments into practical actions and measurable results.
We are among the front runners in our industry. However, we know that continuous improvement requires collaboration.
Ultimately, we want sustainability to become a source of shared pride for SGD Pharma and its suppliers.
Building Long-Term Value Together
Finally, what is your key message to partners and suppliers today?
Let's move beyond transactions and build lasting partnerships that deliver innovation, resilience and sustainable value together.