Pricing games: A technology company
Overline
For one leading pharmaceutical laboratory, success and double-digit sales growth came with a cost: an overburdened supply chain that threatened to reduce market share.
The effort vastly improved the company’s planning and execution functions, they knew that in order to succeed in this era of technology their accounting systems needed to be much more robust than what they are. They turned to Business WP to improve their accounting systems.
Challenge
The biggest challenge was that Arguzo was not utilizing technology properly. Too much of the work was still being recorded manually, which meant that the numbers took a long time to note down and then to be analyzed. Live data was also not available and decisions can only be made after all the required data and been received. This was holding Arguzo back; they knew they could corner more of the market if they had the ability to be more mobile. The work addressed three critical issues for Pharm Ltd.:
Improve sales and operations and production planning:
The teams focused their efforts on a few of the highest-value S&OP levers in order to review the current planning process, identify gaps in the planning infrastructure and analytically understand demand and supply variability.
Determine the right inventory level:
With hundreds of medications in the market, Pharm Ltd. needed a proper method to predict and manage their inventory. Using a mean absolute percentage analysis (MAPE), the teams defined appropriate levels for raw materials and finished products by mapping actual versus forecasted sales on the most important SKUs.
Optimize the supply chain for perfect order planning:
The diagnostic determined the stressors that affected sales and service levels. The teams focused on resolving issues related to higher-than-normal back-orders and lead times, which stressed the entire supply chain and led to delays in medications reaching consumers.
Solution
This allowed the workers to be involved in the job instead of feeling like they had been made redundant by technology.
The solution Business WP came up with combined cutting edge technology with real world practicality. Everyone knew that the systems had to be updated, the real challenge was updating them without disrupting the whole organization in a negative way. The solution was to introduce proper workload management done through computers, while providing mobile platforms to the stakeholders.
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Result
The effort vastly improved the company’s planning and execution functions, created and implemented a new stock policy that accounted for specific SKUs and key variables, streamlined the order preparation process and reduced distribution transport times.
Arguzo employees are now more empowered; Arguzo also has the benefit of generating reports instantaneously whenever needed. They can now make decisions on the fly based on the latest real time data.
By the numbers, the effort:
- Lowered the risk of back-order by 95%
- Reduced lead time by 43%
- Decreased variability by 50%
- Increased stock for finished goods by 10%
