Merck receives Oliver Wight Class A certification

Pharmaceutical and chemical giant Merck KGaA has been awarded Class A certification by Oliver Wight after dramatic improvements in service levels and a €15 million reduction in inventory, at its Darmstadt pharmaceutical production facility.

Recognising the need for significant improvements in service and inventory management at its Darmstadt facility, Merck called on business improvement specialists, Oliver Wight, to benchmark the organisation's position and initiate a change programme. In a remarkable turnaround, inventory levels have reduced by 30%, customer service levels have risen to around 99.8% and Darmstadt is now viewed as a best practice site within the Merck group for sales and operations planning (S&OP), following its Class A accreditation for Managed Internal Supply.

"People are able to work more effectively and productively now that we work to a planning horizon of 18-24 months, instead of 6-12 months, and fire-fighting has been replaced by daily routines," says supply chain manager, Helmer Fredrich. "We have much better processes, greater understanding and improved communication."

Oliver Wight Class A is the industry-recognised award for organisations achieving consistent performance levels of 99% or more. Whilst Class A was not in itself the original objective for Darmstadt, it was quickly identified as a motivational target for the team. "The promise of certification, and independent verification of progress, also helped gain the buy-in of the senior management group," says Fredrich. It is the Merck group's first Class A award.

Merck, whose operating activities are combined under the umbrella of Merck KGaA, is a global pharmaceutical and chemical organisation with 40,000 employees in 67 countries. As part of the pharmaceutical business sector - which accounts for two thirds of Merck Group revenues - the 650-employee Darmstadt site produces solid and liquid oral dosage products.

Fredrich says this Class A success is only the first step and he is now considering other elements of the Oliver Wight Checklist to be assessed against. "The next stage is to focus on other activities which will continue to benefit the wider organisation," he concludes.