Novartis AG Defines The Pharmaceutical Industry Best Practice For Global Sales Forecasting

Novartis has implemented Futurion's FUTURCAST as their forecasting solution to support both Global Sales and Operations and Strategic Planning processes.

Dr. Karel de Bruijn, Head of Global Sales Forecasting at Novartis, in an interview states, "We first considered Futurion's forecasting system because of its success in our US market and its promised simplicity of implementation. Here we are in September 2001 and I would have never believed that today, after only two and a half months, we would have a fully operational forecasting system that provides a 72-month unit forecast for all of our products, for each of the 65 CSOs (country sector organizations). Not only does the system calculate average selling prices and convert the units to local currencies, but it also aggregates to Swiss francs at actual and budget rates, or in kilograms of drug substance to support Global S&OP. What the Futurion people have accomplished in less than 3 months is impressive. The system has already supported important decisions in reference to plant expansion for one of our critical active ingredients. This is incredible and refreshing."

Novartis knows how to research, develop and market leading-edge medicine. Its success has placed it amongst the 10 largest selling pharmaceutical companies in the world with its pharmaceutical division realizing over 13 billion dollars in sales for the year 2000. The move from a multinational corporation to that of a global organization presented the challenge of implementing a worldwide forecasting and Global S&OP process that would drive the entire corporation.

The first step Novartis took toward supporting Global S&OP was to set up an international coding system. They then put the proper infrastructure into place to gather, electronically, monthly sales and forecast data for all the products sold in each CSO. Finally, they chose a global forecasting and analysis tool that met their requirements.

For Novartis, working with FUTURCAST at the corporate level meant going against the current practice of some of the largest pharmaceutical companies. These companies have invested millions of dollars in supply chain solutions that focus on forecasting at the SKL (stock keeping location) level rather than at the SKU (stock keeping unit) level. At Novartis, Global Sales Forecasting works closely with Finance and is tied to the Marketing brand review process. It provides supply chain with the demand forecasts for over 10,000 pack presentations to plan production and distribution. "In our company, business and marketing decisions have now started to drive the supply chain. We are defining the future best practice in the industry," adds Dr. de Bruijn.

Implementing FUTURCAST at Novartis has meant eliminating multiple internal forecasts and getting rid of the costly hesitancy in decision making that can paralyze companies. Instead of having several departments working on separate forecasts, shortly everyone at Novartis will work within a global process that reconciles demand unit forecasts with marketing, financial and strategic plans to produce one unified forecast for the next 72 months.

There are several projects that are currently under review. Some involve the use of FUTURCAST real-time JAVA forecasting. As for the top ten CSOs, they are looking at implementing the FUTURCAST-PHARMA system in each country. Stay tuned for the next phase!