By Paulo Viola, NeoGrid North America CEO
The pharmaceutical supply chain, without a doubt, is one of the most complex of any industry. With continuously changing regulations, the rise of over-the-counter and generic products, and the shift from local to global supply chains, pharmaceutical manufacturers are gaining a greater understanding of the value of sales and operations planning (S&OP). This business function is vital for accurate demand planning and forecasting that enable supply chain-wide synchronization.
To manage their S&OP processes, many pharmaceutical companies are quick to turn to their enterprise resource planning (ERP) systems. This may seem like a good idea upfront since companies have already invested time and resources implementing ERP. However, these companies end up spending even more effort customizing ERP for S&OP. Yes, it is possible to customize ERP for S&OP, but it is not easy. Those who try to do so will find that ERP systems are just too inflexible by their very nature. Even once ERP is configured for S&OP, the company will discover that additional customizations are required in the future due to shifts in technology, the introduction of new products, and corporate mergers and acquisitions. It becomes near impossible to keep ERP ahead of the curve.
Further issues stem from the fact that ERP systems are designed to connect business functions inside an organization. For effective S&OP, pharmaceutical companies must be able to promote collaboration among all players and partners in the supply chain — both inside and outside of the organization. Instead of enduring the headaches of customizing ERP for S&OP, pharmaceutical companies should step out of their ERP comfort zone and consider a cloud-based S&OP solution. By decoupling S&OP from ERP and opting for a cloud-based S&OP solution, pharmaceutical companies can achieve the following benefits:
- Supply Chain-Wide Collaboration: True demand planning and forecasting are unattainable without collaboration with external business partners. Unlike ERP systems that only connect business functions within the enterprise, a cloud-based S&OP solution ensures that everyone is accessing the same data in order to make better, more informed business decisions.
- Flexibility & Adaptability: The pharmaceutical supply chain can be unpredictable. Mergers and acquisitions, regulatory mandates, and new product launches seem to occur left and right. A cloud-based S&OP solution provides the flexibility to help pharmaceutical companies keep up with the speed of business and tackle the challenges these changes present — it just takes a few simple reconfigurations of the system.
- Cost-Effectiveness & Quick Time-to-Value: Pharmaceutical companies are constantly under pressure to cut costs. Fortunately, cloud technology is inherently cost-effective — there is no need for additional IT infrastructures or maintenance and upgrade fees. Likewise, a cloud-based S&OP solution is quick and easy to deploy and manage, so companies can uncover ROI faster and more readily demonstrate the system’s worth to upper management.
- Accessible, Demand-Driven Data: Without access to standardized data, it is extremely difficult for players across the supply chain to gain insight on the same information for accurate planning. A cloud-based S&OP solution not only standardizes demand-driven data, but makes it available and accessible from anywhere, anytime, to create real-time supply chain visibility.
- Integration Capabilities: A cloud-based S&OP solution has numerous integration points, meaning that bringing in data from ERP systems and other line-of-business applications is a simple task. This allows pharmaceutical companies to further align their operations, better manage Big Data, and gain a more holistic view of all processes.
While no one can predict what the pharmaceutical supply chain will look like in the next few years, it is clear that it will only continue to become increasingly complex. Therefore, now is as good a time as ever to prioritize S&OP efforts. By investing in a cloud-based S&OP solution, pharmaceutical companies not only improve their demand planning and forecasting today, but also position themselves for a competitive advantage in the future.