Q. What are your responsibilities?

I joined Zai Labs 18 months ago and today lead a team of 12 responsible for sourcing, contracting and managing all direct and indirect procurement for everything from R&D to corporate services. We’re responsible for all goods and services across the entire organization, as well as ensuring compliance, quality and efficiency in our procurement processes.

Q. How is procurement enabling Zai Laboratories’ growth?

Zai is similar to other China-originated biotech companies, and its mission is to become the global pharmaceutical leader by meeting patients’ needs. We are 10 years old, have already launched 6 products with another 8 planned before 2028, and have been listed on both the U.S. and Hong Kong stock exchanges. Our three corporate priorities are to maximize revenue, drive efficiency and effectiveness, and develop our therapeutic drugs pipeline.

Procurement and our supply chain play a central role in achieving our priorities beyond just cost savings. For example, to maximize revenues, we're helping our commercial team differentiate our drugs in this complex, highly regulated and competitive market. We help secure market access by negotiating with payers, which are often governments who are running large segments of a country’s health care system.

Another example is in the health care provider space (HCP). China, which is a highly competitive market, requires a lot of governance of HCP and patient engagement. We source and work with the right supply partners to not only generate key content but to differentiate our product and demonstrate our brand value.

Beyond tactical activities, we focus on increasing awareness among Zai’s executive management team about how procurement is playing an essential role across the business beyond process, governance and cost saving.

Q. What are the key KPIs you use to measure progress?

This is a question I always like!  The number one measurement is, to no great surprise, delivering savings and cash.

Measuring non-financial value is trickier. We do it through two methods. First, we conduct an annual survey among our top 100 internal stakeholders, who evaluate us and tell us their priorities going forward. We treat the procurement survey very seriously. Summarizing our stakeholders’ needs helps us set our goals. We don’t treat this survey as a report card, telling us whether we’re doing good or bad. Instead, it shows us where we can work with business stakeholders in a way they want.

Second, because in health care speed is everything, we’re measured by not only bringing the right resources but by operating efficiently. So, we’re actively looking at ways to simplify our processes, improve our policies and bring greater efficiency and effectiveness to accelerate our business.

Q. How are you elevating procurement responsibilities?

We’re conscious that procurement’s value needs to be continually demonstrated. Because we’re in an operational role, securing and managing suppliers, it’s very easy to fall into the trap of assuming that we’re delivering value. But by focusing only on operational responsibilities, your strategic influence with an organization gets diminished over time. We’re really playing the enabling role as well as just the functional role. We invest our energy in both aligning with our key stakeholders around our category strategy, and then collaborating and co-creating projects with key execs to achieve corporate priorities together. The other key way is to enable strategic corporate imperatives by advancing diversity, ESG and third-party risk management.

A unique measurement for our team is that I also regularly check in and ask key stakeholders how they feel about our contribution. If we receive an amber or red response, we initiate a coaching conversation with the team to calibrate what the team needs to do better.

Q. Which procurement categories are the most important to biotech?

Supporting our company’s work, enriching our global pipeline and making sure the clinical studies are conducted in an effective way are our top priorities.

The second is enabling our commercial team because of the high number of new launches we are planning in the coming years. We provide seamless collaboration with essential corporate functions, like government affairs and market access to the marketing team. We are not just focused on supporting the launch of products, but on having a good outcome six months after launch.

Q. You’ve stated that your goal is to become a best-in-class procurement function. What are the key challenges?

A common challenge for procurement, whether in big pharma or small biotech, is our struggle to continuously articulate and demonstrate our value. Procurement has been defined by default as a tactical function focusing on procure-to-pay. People in general believe procurement is about helping to source suppliers and making sure the business follows our process and delivers some savings. That's it. One of my biggest challenges is to win awareness from the C-suite that we can do more.

People are generally reluctant to make changes. So, after 10 years of very fast growth, the number of suppliers to Zai has proliferated exponentially, leading to huge complexity. For our business right now, the most significant way we can contribute is to consolidate the number of key suppliers and streamline our processes because speed to market is paramount.

Above all, creating a world-class team is key to success. Unlike the big pharma companies that are better able to pick and choose talent, companies like Zai must work much smarter to build a high-quality team. Moreover, because our team has been so focused on operational and tactical goals, we may have lost a little connection to the outside world. As a result, I initiated a business-centric dialogue with my team to help ensure we’re approaching procurement from the outside world in.

Q. What are your current supply chain concerns?

While we haven’t been impacted by the shortages, the most significant impact is the development partner during the manufacturing stage. Zai, like most biotech companies, operates with a light asset model, which means that we don’t have a big appetite to build factories all over the world. We rely on the top clinical research organizations to work with our team to manufacture small- to medium-scale products for clinical studies.

The geopolitical tension has created challenges. Specifically, by making it more difficult to secure financing from the U.S., which historically has been the main source of funding. As a result, the whole supply ecosystem is struggling, leading some of the top players like Lonza to close factories.

Q. What are the key ways you are securing vendors and suppliers, whether direct or indirect?

When I joined Zai, we had a highly fragmented supplier pool. We had 2,000 employees and more than 3,000 suppliers in our system! So, in addition to streamlining our processes, we embarked on a two-step approach to consolidate our supplier base. First, we focused on simplification by working with our business partners to identify the most important suppliers.

We’re currently in our model 2.0 phase, which we kicked off at last year’s supplier day, which is to get down to the top 30 preferred suppliers. These will be our strategic suppliers who share our vision, co-create innovative ideas and undertake continuous improvement to deliver win-win outcomes for both organizations.

Second, focusing on strategic relationships and effectiveness also frees up procurement to evolve from being the process governor to a true business partner and category expert who can not only execute but ask the right questions of our suppliers and business partners about their objectives. We've still a way to go, but this road will mean we are providing better solutions to the business and creating new value beyond cost reduction.

Q. How are you responding to inflation?

Because we’re on a path of consolidating suppliers, inflation hasn’t hit us in a significant way. Moreover, the external market is shrinking, which gives us more leverage in negotiating with our partners.

Q. What new digital solutions are you particularly excited about, and why?

We haven’t yet started to use AI to automate processes, but we will be looking at chatbots and solutions like ChatGPT to automate some processes such as contracting. 

The second thing we’re looking at is market intelligence, category harmonization and standardization to support our strategy and planning organization team, so that our solutions can provide some useful recommendations.

Q. What are the biggest challenges facing procurement going forward?

What's bubbling up is the appetite for us to drive change that the organization accepts. For instance, as we streamline our supplier base, we’re down to the difficult decision of choosing the key suppliers from a shortlist of 8 in most categories. We’re now enabling the business to make some hard choices. 

The second challenge is really about the team — they’re learning to be agile and to upscale business knowledge so that they can have more meaningful conversations with the business, and that's still a gap.

Q. What are the top skills that procurement professionals need to develop?

Procurement is becoming more challenging. We have to be business-savvy. To bring timely insights into the supply market to connect our business with suppliers and market intelligence to influence demand. And that’s not easy.

We need to go beyond simply being effective negotiators. Procurement pros need both advanced interpersonal and business skills. We have to be great at connecting people and initiating productive discussions that show alternate solutions that better enable the business to achieve goals within budget. 

We also have to be self-driven. I want to know why someone is passionate about procurement. Do they have a passion to help others to be successful? Self-exploration is more and more important for us to be successful enablers.

The final piece is about being agile. It’s no longer enough to replicate successful processes and approaches. The world is complex and growing ever more unpredictable, and we need to be able to pivot and adapt quickly. We need to be more comfortable learning by doing, sharing failures and learning, and coming up with innovative ideas. To be more comfortable in the unknown by working with interesting people and influencing business in unconventional ways.

By being constantly curious, we’ll be more ready to pivot, which is a stark contrast to the conventional procurement professional who is proficient in establishing rigor, systems and policies and policing process. Going forward, in addition to a project management mentality, we need to bring a more agile mindset to adjust to business needs and dynamic markets.  

Traditionally, procurement’s mindset is “if I follow the process, I will get the right result in the future.” If you truly want to become a business-centric organization, you need to have empathy. You need to be a learning function. We need to hear people out before we can demonstrate the value of following the process. We’re not going to walk away from a process, but we can’t simply hide behind a process. We need an empathetic approach to generate innovative ideas and solutions to mobilize the service providers to make procurement happen.

Q. What is your one piece of advice to peers?

Deliver through people! We not only need to know the theory, but to trust our people. We need people-centric leaders who exhibit coaching, listening and empathy. Don’t just be a tough leader, managing the hardcore numbers. Today, sometimes people who work for you struggle. Leadership is struggling as well. We also need to demonstrate we can engage our stakeholders. If you are a department leader, it is because of our ability to engage the C-suite. We need to develop these skills in our teams. Only when you do this will people truly believe you.