JDA Software helps pharmaceutical companies enhance supply-chain management

Sep 3 2009

Successful supply chain management, including managing demand, planning API and formulation production, packaging and distributing, is a goal shared by all pharmaceutical manufacturers. According to PharmaTech.com, effective supply-chain management is particularly important as the pharmaceutical industry seeks ways to reduce costs, maintain regulatory compliance, and adhere to quality and safety standards.

The challenges affecting pharmaceutical manufacturers, distributors and retailers are among the critical topics to be addressed by leading industry professionals at the Pharma Manufacturers Arena’s first global virtual event on September 9 and 10, 2009.

During the conference, David Johnston, senior vice president, manufacturing and distribution, JDA Software, will discuss how pharmaceutical manufacturers can embrace supply chain solutions and innovative strategies to grow a diversified global business, achieve collaborative visibility, reduce costs and improve profitability. Johnston’s presentation, entitled “Diversification and the Important Role that a Highly Efficient Supply Chain Plays in Driving Profit,” will be held on Wednesday, Sept. 9, from 12:20 to 12:50 p.m. EDT. JDA will share insight on how expiring patents, globalization of the pharmaceutical products markets and increased competition are all factors that can affect the bottom line. By leveraging advanced technology solutions and growing diversified, risk-balanced product portfolios, pharmaceutical manufacturers can deliver more products of value, streamline operations and deliver shareholder value, as well as sustain profitability during economic uncertainties.

Prescription for Supply Chain Success

JDA recognizes that even successful pharmaceutical corporations are not immune to the ever-increasing demands and expectations of the highly competitive pharmaceutical industry. For example, Merck Serono International S.A., an internationally known biotechnology leader, understands the value of leveraging processes and solutions that drive one synchronized view of demand. After creating one centrally managed supply chain driven by advanced supply chain optimization solutions from JDA Software, the pharmaceutical giant benefited from a 20-percent reduction in global stock levels; having a single view of demand across the supply chain; a decrease in manufacturing costs; improved demand forecast accuracy; and optimized production across the company’s supply chain network.

To help pharmaceutical companies achieve one synchronized view of demand, JDA offers the following five strategies based on industry best practices that can enable them to improve forecast accuracy and manufacturing planning, as well as drive production efficiency and optimize business operations for maximum ROI and profitable growth:

• Diversify product portfolios: With approximately 100 pharmaceutical patents set to expire in 2009 alone, the pharmaceutical industry will see over $60 billion of annual income washed away by 2014 due to patent erosion. To maintain a competitive advantage, pharmaceutical manufacturers need to diversify their product portfolios to deliver more value to existing and emerging markets. And although diversified product portfolios usually require more financial reviews to make profitable tradeoff decisions, a diversified and risk-balanced product portfolio will help to build stability into the business models of pharmaceutical manufacturers.
• Implement robust demand management: To achieve strategic business objectives, pharmaceutical manufacturers need highly precise sales forecasts to pinpoint and predict demand with the highest level of accuracy, effectively driving the production and distribution of their products in an optimized way. With robust demand management processes securely in place, pharmaceutical manufacturers can improve sales forecasting accuracy, drive production efficiencies and minimize inventory carrying costs, resulting in more profitable decisions.
• Embrace collaborative visibility: Required for consensus demand planning and growth through partnering, collaborative visibility is the new business model for expansion in the pharmaceutical industry. With a shared visibility between demand planners, sales, marketing and business partners, you will better understand your operations and effectively coordinate your business activity with partners, suppliers and customers. With a comprehensive understanding of business performance and a better plan for collaboration, pharmaceutical manufacturers can maximize revenue and expand through collaborative partnerships with other companies.
• Right-size your inventory: To ensure costs are managed as product portfolios grow, pharmaceutical manufacturers need to focus on right-sizing their inventories and improving service levels. With the ongoing recession, many companies were caught off guard with the sudden downturn of business and inventory excess. Manufacturers need to understand the role that their pharmaceutical products play in terms of revenue and potential growth, carefully examining how to leverage that inventory to meet strategic objectives.

• Leverage the power of an integrated sales and operations planning (S&OP) solution: For today’s dynamic global market, a robust S&OP process is a must for pharmaceutical manufacturers to gain the ability to integrate time-phased revenue, cost and margin plans with operational plans to gain market share, increase profit and achieve significant improvements in overall business performance. An integrated S&OP solution provides significant benefits by reducing resources spent collecting data, analyzing reports and building spreadsheets, as well as provides forward-looking views of the business to support the appropriate product, demand, supply, financial and management reviews in a graphical format that quickly identifies business impacts, allowing for rapid and informed decision making.

www.jda.com