Do you have the right prescription for global demand planning visibility?

Karin Bursa, vice-president, marketing, Logility inc., describes how a demand planning solution can assist pharmaceutical companies to improve operational performance and streamline complex supply chain networks.

As manufacturers continue to grow and expand organically as well as through acquisition it brings tremendous financial, marketing and competitive advantages. However, it also magnifies the business challenges a company faces and many global manufacturing companies across all industries are turning to technology to help drive global demand visibility and synchronise supply chain operations.

In the recent Supply Chain Innovators Technology Footprint benchmark report from AberdeenGroup, the companies surveyed ranked inventory management and demand management as the top two areas of technology application investment to meet their primary supply chain objectives of lowering costs and meeting customer demand. According to the AberdeenGroup report, these supply chain innovators are looking for demand management software that supports specific product-level, customer and channel forecasts, enabling forecast collaboration with customers and/or suppliers. These leaders are prioritising investments in technology to support specific product-level, customer and channel forecasts.

The need for demand planning solutions is echoed by supply chain leaders in the pharmaceutical industry, where manufacturers are increasingly challenged by steady growth, heightened competition, increasing regulations and pressures to lower costs to the consumer. Leading pharmaceutical companies are jockeying to be the dominant player in the market and with acquisitions expanding product portfolios and global reach, they are looking for ways to improve operational performance and streamline complex supply chain networks. As major pharmaceutical companies look to improve operational efficiency, they are finding that it is even more critical to look at specific market demand, as well as demand across markets, to improve forecast accuracy, monitor how specific products are performing and help shape demand through various marketing and sales programs.

By investing in a demand planning solution that automates the entire planning process, pharmaceutical companies gain a comprehensive overview of demand, including demand history, customer orders, point-of-sale data, market forecasts and a host of vital knowledge. With the cost to manufacture certain drugs measured in billions of dollars, a small improvement in forecast accuracy can make a big difference in inventory investments. Technology that models the business to forecast future demand and considers the specific conditions of each drug in each marketplace provides a valuable snapshot of demand patterns, forecasts and plans that can be totally attuned to the market, allowing for more effective inventory management and more cost-effective customer service. It also enables a pharmaceutical company to better manage the lifecycle of a drug which can be crucial especially when the drugs success late in its lifecycle may be affected by the availability of a generic version.

One of the worlds largest pharmaceutical companies recognised this need to improve global demand visibility and forecast accuracy by investing in a demand planning solution from Logility. With a complex, multi-national user base that was stretched across three distinct lines of business, the company wanted to be able to incorporate market knowledge from internationally distributed sales and marketing teams, integrate geographically dispersed supply chains, and gather timely information necessary for the sales and operations planning process. Without a common demand planning process in place, the company had no global visibility of worldwide market demand and put a plan into place to establish a globally integrated statistical forecasting solution that would be consistent across all markets, establish best practices, drive the replenishment process and serve as the basis for measuring and improving forecast accuracy. They also looked for a solution that would facilitate collaboration with marketing, sales, demand planning and the companys manufacturing plants.

The company chose to implement Logility Voyager Solutions worldwide for global demand planning. With Logility, the pharmaceutical manufacturer now has a comprehensive solution that is managed centrally, flexibly supporting both local market analysis and enabling global best practices. By aggregating forecasts across markets in multiple units of measure, the company gains visibility into global demand forecasts for its pharmaceutical products, which allows for synchronised manufacturing and production processes.

The company learned a lot from their project to improve global demand visibility. By putting a centrally deployed and managed solution into place, global differences were quickly overcome. As they launch new products, market-by-market and country-by-country, demand planners can monitor and learn from each rollout no matter where it occurs. The Web-based solution lets users take a snapshot of forecast data and work offline to model and analyse specific market conditions and demand drivers. When they are ready, users can log in to Logility through the Internet and update their forecasts. The global pharmaceutical company achieved greater collaboration among sales, marketing and demand planning managers, enabling more timely communication and effective consensus forecasting. The access to timely global information is a source of competitive advantage that has improved synchronisation with manufacturing operations and accelerated the companys sales and operations planning process.