Turning around a reactive pharma supply chainSurface Transport & Logistics

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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 WP consulting 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

The solution WP consulting 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.

This allowed the workers to be involved in the job instead of feeling like they had been made redundant by technology.

results

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.

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.

By the numbers, the effort:

  • Reduced lead time by 43%
  • Decreased variability by 50%
  • Lowered the risk of back-order by 95%
  • Increased stock for finished goods by 10%

Who gave you that idea? #4: The Influence of Ichak Adizes

The fourth in our blog series on “influencers” of PGS and our products centers on the work of Ichak Adizes. Adizes published his seminal work, Corporate LifeCycles, in 1988. I was late getting familiar with this work. In fact, it took several persons I respect hammering on me before I got it. But, boy, did I get it.

The book (now out of print, but replaced by Managing Corporate LifeCycles) was a stunner. I probably highlighted a third of the text. It’s most significant contribution was to define a true destination for organizational development, an illusive state Adizes called Prime. It had been my experience that most board members and a number of executives had no such clear destination. They wanted high performance, but they weren’t clear on the conditions needed to get there.

If you don’t know where you are, and you don’t know where your are going, you are lost. You need both points of reference to not be lost. My experience has been that many CEOs and board members were excited and relieved to have these two points defined. (Knowing where you are will be the subject of the next blog in the PGS “masters series” and will deal with Ichak’s former partner who developed the instruments to determine this).

Just understanding the components of the Lifecycle model (ranging from Birth to Death), i.e. even without a diagnostic instrument, leadership could understand:

lifecycle graph
  1. Their current condition, i.e. Lifecycle position
  2. The risk factors associated with that condition
  3. What was missing that needed to be developed in order to make progress toward Prime

I got so excited about the potential of this model to aid our clients that I traveled to San Diego to study with Adizes. He was more riveting in person than in print. His stories re. application of the model were very compelling.

Assessing an organization’s position on its lifecycle became an optional tool available in the Internal Assessment phase of our Vision Navigation® strategic planning process. We have deployed this model and the associated diagnostic instruments with a number of clients during Vision Navigation® with great success.

In addition to understanding the organizational lifecycle, Adizes described the four elements or forces necessary for successful change in an organization; a concept he called CAPI or Coalesced Authority Power Influence. This concept became part of the answer to the puzzle of why our early efforts with Continuous Quality Improvement were not getting results and explains why national data reveals that two-thirds of change efforts fail. Understanding these forces, diagnosing whether you have them in place, putting them in place and maintaining all the elements are keys to managing change. CAPI is now integral to our Process Advantage® approach to performance improvement.

If you have interest in Adizes’s model,

We would be happy to send you an article summarizing it and let you know options for putting the model to work for you. And if you missed our first three blog posts on “Who Gave you that Idea?”, you can find them in our blog archives.

Bill Dann

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