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Business processes

Capital and procurement
The Capital Project Technical Review process was successfully launched in 2003. The process ensures that GlaxoSmithKline considers environment, health, safety, security and loss prevention in the design of new facilities and processes. By identifying environment, health and safety (EHS) issues early in a project, we can engineer facilities and processes that are efficient and safe for workers and the environment while still being cost effective.

The Procurement department uses the Sourcing Group Management (SGM) Process to manage their activities. This process provides a series of tools to help procurement professionals ensure that our business requirements are understood by vendors, so they can be met or exceeded whilst ensuring GSK obtains best value and continuity of supply for goods and services.

A tool called a SGM Action Pack was launched in 2004 to help Procurement identify EHS business requirements. The Action Pack is designed to be used by non EHS specialists to help them identify the EHS risks associated with procurement activities, to determine significance and to decide if they can help eliminate, minimise or better manage the EHS risk(s). The outcome of this process determines whether they should take action themselves or seek the support of EHS specialists. This is particularly critical in areas such as containment, noise control, ergonomics, machine guarding and energy management.

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New product development and supply
A business process called the EHS Milestone Aligned Process (EHS MAP) was created in 2002 to help scientists identify and pro-actively address EHS issues during routine new product development and supply activities. It was extensively reviewed and revised in 2003 by corporate, research & development and manufacturing EHS professionals, and the key business stakeholders who are primarily responsible for carrying out EHS MAP activities. EHS MAP was approved and implemented was begun in 2004.

EHS MAP is helping to ensure that:

• there is a better understanding and appreciation of EHS activities that should be conducted throughout a product’s life-cycle;
• new products and processes are developed that do not harm people, property or the environment;
• best practice is implemented throughout the GlaxoSmithKline network;
• staff are engaged and committed to making EHS integral to new product development and supply.

As GlaxoSmithKline translates its high potential research & development pipeline into new products, we believe EHS MAP will help identify opportunities, such as improvements in process efficiencies and elimination of waste, that will ultimately facilitate and speed up the new product development and supply process.

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Suppliers
Our supply chain is complex. It includes contract manufacturers that manufacture drugs for us and key suppliers that supply bulk chemicals. GlaxoSmithKline uses contract manufacturers in a number of countries to supply certain products for local markets, some intermediates and active pharmaceutical ingredients and, in a few cases, for specialist processes or technology. Initial agreements for new contract manufacturers include EHS requirements based on the applicable standards. As existing contract manufacturers renew their agreements, GlaxoSmithKline’s EHS requirements are included.

To ensure that contract manufacturers are managing EHS risks and impacts responsibly, the internal EHS audit team conducts audits to assess conformance with GlaxoSmithKline requirements and with legislation. They also conduct assessments of identified key suppliers. Areas for improvement are highlighted to the contract manufacturer or key supplier and progress is monitored.

In audits and assessments of existing contract manufacturers, EHS performance was found to be above 30% and as high as 92%. A few audits of prospective contract manufacturers turned up scores under 30%, which are considered unacceptable, and therefore we will not source from these unless substantive improvements are made.

The overall EHS Third Party Management Process was further developed in 2004 to reflect changes in the business management of third parties. The process covers all EHS aspects related to selection through to the ongoing management of contract manufacturers and key suppliers. We also collect and report EHS data from selected suppliers. We aim to increase the number of suppliers that provide EHS data but this is proving difficult and will take several years.

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Emergency response and crisis management
The discovery, development and manufacture of pharmaceutical and consumer products involve the use of hazardous materials and processes. GlaxoSmithKline manages the risks associated with these materials and processes using sound engineering principles and robust EHS programmes. All sites also incorporate emergency response and crisis management programmes into their management plans. These programmes ensure that accidents would be effectively managed and that any impact on the site, community, environment, or business would be minimised. Each site does an annual review of its internal emergency response programmes as well as the technical capabilities of the community emergency response organisations and develops action plans to address any areas needing improvement.

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Acquisitions and divestitures
As part of business due diligence, GlaxoSmithKline employs an EHS due diligence business process to ensure that EHS aspects are fully assessed and integrated into decision making and the resulting provisions of contracts for transactions. A number of assessments for acquisitions as well as divestitures were conducted during 2004. Acquisitions and divestitures were all within core business areas and would not be expected to materially change GSK’s EHS footprint.

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