Once you have had the great idea and elaborated a novel product, it´s all about coordination. Companies today have established broader business processes with a transversal focus, such as product development, sales generation, and sales satisfaction. The key question that remains is, how to integrate these processes? How to assure that customer demand, both on novel products and existing ones, can be met by timely and cost-efficient supply? And, how to assign scarce resources to different products and markets?
Thursday the 16th of October 2014 EADA hosted a conference on Sales & Operations Planning (S&OP), from the point of view of Almirall, a Spanish multinational pharmaceutical company with a sales volume of approximately 800 million Euros of which more than 70% stems from international sales. Almirall develops and commercializes therapeutic solutions in four key fields: respiratory diseases, dermatologic diseases, gastrointestinal diseases, and pain. Aiming to launch an ever increasing number of new drugs, and to proceed in the internationalization process, S&OP has become of vital importance for Almirall.
Antoni Sort, the Head of Global Demand Planning explained the monthly “wheel” that Almirall moves in order to match supply and demand in a financially sound way. Key stages in this iterative cycle are development of (a) the product plan; (b) the demand plan; (c) the supply plan; and, (d) the integrated reconciliation. Different scenarios are elaborated, where the company pro-actively identifies potential VULnarabilities as well as OPPortunities, for the different kind of products. Consequently, VULOPPS have become common terminology across the different areas of Almirall and the company prepares itself for the different scenarios. This is in line with risk management programs in companies that establish alternative courses of action, for worst case, best case, and intermediate (hence most feasible) case scenarios.
A key challenge experienced during the implementation of S&OP at Alimirall was change management. The traditional way of working had to change drastically; i.e. people and their behavior had to adapt to this integrated way of working and they had to stick to the new process over time. Other challenges were the upgrading of tools, the identification of thresholds (i.e. what´s the margin to take decisions that deviate from a given budget), accountability, and the creation of trust. In the latter respect, people are fostered to clarify their assumption behind the different plans and numbers. Consequently, debate takes place on the assumptions rather than the numbers which helps the organization to improve the process over time. Top management commitment proved vital to overcome the stated challenges and arrive at a fully-fledged S&OP-process.
Overall, Almirall provides us an excellent example of a company that integrates the different business processes in order to prosper and facilitate growth, both in terms of new products and new markets.