Read the Conversation
EF: What have been the lessons learnt through 2020?
JJA: One of the biggest lessons we have learnt is to be flexible, companies must learn to move with the times and react to whatever is going on. When a company is young and family owned snap decisions are taken and things move very fast and fluently. Our company has been moving over the past years into a more corporate mindset, we have done this consciously with strategy and planning but now faced with the current situation we have had to react with speed and quick decisions in our different segments: pharmacies, distribution and manufacturing plants, overriding corporate decisions to ensure the safety of our workers and the continued operation. In the manufacturing plant things had to be done differently from the pharmacies, for example in the pharmacies the challenge was to stay open and functioning while keeping the workers and clients safe, whereas in the manufacturing plant we have a completely different set of rules. I think we have shown good leadership in this crisis, going from a corporate lead to being more flexible, with a very responsive team, with the head of each segment doing what needed to be done, showing what they were made of and proving we made the right choices when hiring them. Managers pushed forward ideas for solutions and brainstorming kept coming from the bottom up, which was very helpful in the decision making as well as making us revalue a lot of our employees. Now we have all these channels of communication for feedback, which before we only had on the commercial side and has made us grow. Incidentally the last time borders were closed was in wartime, WWII actually, and then last March in a couple of days the whole situation changed and we all had to face a different reality. Now borders have been opening again for trade and shipments of delayed APIs. Basically we learn as we go, looking to how other countries are dealing with the situation and trying to stay at least half a step ahead of what’s coming.
EF: How are you ensuring security of supply and continuity of your products?
JJA: The first of our challenges were the APIs as they are at the beginning of the chain, and we solved that by going back to doing business with brokers, something we had been moving away from because we get better prices and conditions going direct to manufacturers. As a result of the pandemic the government has been more lenient in bureaucratic matters since we usually have to register the supplier of APIs and it´s a long and complicated procedure but they allowed us to register brokers and the brokers have their own suppliers registered. To ensure the security of supply in the rest of the chain we worked on logistics creating new protocols for security, making sure we never stopped working. On the administration side we had people coming to the office on different schedules, marketing on Mondays, sales on Tuesday, etc., and those who could, would do home office. In operations however we needed all our employees so we organized a special scheduling working around the Covid-19 issue, where people preparing the shipments would come in early and leave and the people delivering the shipments would come in later. After all this is over we might use the new system and changes around the scheduling, like for example having some employees working at night leaving everything set up for the employees coming in in the morning which would improve our efficiencies, fuel consumption, electricity and so forth.
EF: How do you think the future will look like?
JJA: I think there has been a big shift. Before sometimes we used Skype for international conferences but nowadays even though we are at the ‘office’ we have zoom meetings which are short and very efficient, no time wasted getting together, or sitting down for long meetings. All these new technologies and platforms help for more efficient ways of working, it allows to work remotely especially for certain departments and there are savings involved for things like electricity, food in the cafeteria which we supply, to the extent that office space could be minimised and we would still work efficiently. This does not apply to the segment of distribution which needs for our employees to be present in the manufacturing plants. In certain areas I think there will be a shift although there will be plenty of space for personal interaction which I consider very necessary. There are many advantages to what we have learned, for example we have learned to emphasize the results of our employees work, the company needs a certain result and the employees can arrive at that result with compromise and responsibility working however they prefer, weekdays or weekends, nights or days whatever they are most comfortable with.
EF: Did your KPIs change with the pandemic? How do you manage them to define success?
JJA: Our company objectives are very much fixed although maybe a few indicators might have shifted, like not pushing a couple of products with profitability margins due to the pandemic as now people need things like face masks. We have sold about 30 or 40 thousand face masks which are low profit articles but we are willing to keep it that way, instead of selling antibiotics we sell face masks, we sell plastic cover sheets which we have never sold before. Our KPIs hardly shifted at all, although what did shift a bit is the control indicator of our policies which included all the risk factors, testing employee´s temperatures, starting by doing randomized tests and then as we got more tests we tested everybody. Summarizing we have adapted with speed reassessing our product portfolio and increasing the quality control setting standards on what is needed to operate. As from the beginning of the year we have shifted from the government and public sector to the private sector commercial strategy and then in February everything started falling apart with Covid-19, patients stopped going to treat themselves on other ailments so it was a very challenging time.
EF: How do you see the future of distribution and pharmacies post Covid-19?
JJA: In Mexico there is a very restricted process for pharmacy delivery, it can’t be done for any products that weren’t done by OTC trucks; the other products have to be picked up at the pharmacies and this activity is very closely monitored for things like the cold cycle. But now the government has loosened up a bit and delivery can be taken up for a bigger part of the sector, drugs for diabetes or blood pressure could go direct to the patient’s homes in the future, but these days we are seeing not so much delivery as a lot of people going to pharmacies to treat any kind of ailment. Since last month we are getting very good numbers of people using our pharmacies, a lot of them to make sure they haven’t got Covid, the same thing happened ten years ago with the influenza. In Mexico we don’t have a health prevention culture and this means people don’t go to the doctor until they feel really sick but now due to Covid they are going to the doctor or pharmacy even for the slightest throat ache, and this has helped our sales. We have also taken steps in our pharmacies to ensure our customers are safe by having disinfected mats, sanitiser, face masks, plastic masks and gloves for attendants to encourage them to come and feel secure. It’s about safety and trust.
EF: As you are in the distribution business for pharmacies and medicines what would be your advice to ensure the delivery of a vaccine or two dose vaccine if necessary, in Mexico?
JJA:AstraZeneca is pairing up with the Slim Foundation to bring the vaccine to Mexico and the important thing is to get the product here. Last year the government practically dismantled the public sector distribution chain so to get the vaccine distributed in a fast and efficient way they will have to rely quite largely on private pharmacies because we already have a point of sales and people come to us. Even if the government had a vaccine they do not have the capabilities to do the distribution and get it to their clinics and hospitals, at least not to the whole country and especially not to the more remote areas, like small villages of 80 people in the jungle of Yucatan who need the product. To get the product worth 800 pesos to an inaccessible village might cost 5 times as much in fuel and transportation; the government thinks the distributors make a product expensive but Mexico's geography makes it an expensive country to distribute goods. We have established a whole array of distribution methods which we rely on with small distribution warehouses in Chiapas that distribute to even smaller distribution warehouses and from there people will pick up the products, sometimes on horseback as they live in the jungle. We even have people distributing products on horseback. To cover distribution for maybe 80% of Mexico all these small steps are necessary, which are costly and time-consuming but I think we are in a very good position to help the government get the vaccine or treatment to be available to the most secluded and remote corners of Mexico.
EF: What would you like 2020 to be remembered for, when you look back on your tenure how would you like this year to be remembered?
JJA: I hope 2020 will be the year where the pharma industry shows their huge commitment to the benefit of the people. Yes, we are an industry and yes we have to show profitability but we also have an important social objective and we are very proud of helping out. During these last months we have all been out there, working and exposing ourselves because we have a huge responsibility with the people and the country and it is important to us to help find solutions.