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The $90bn merger of Pfizer Inc. and Warner-Lambert Co. in 2000 was just the beginning of an effort to achieve global demand planning visibility by the pharmaceutical giant. The super-sized Pfizer needed a system that would extend across all of its markets and lines of business, creating a coherent set of performance metrics while allowing for replenishment based on actual demand.
Pfizer's global supply chain, including processes for forecasting and inventory control, had previously been driven by a mishmash of local systems. That approach squared with the company's broad range of products and markets. Following the merger with Warner-Lambert, Pfizer had a major presence in three distinct areas: human pharmaceuticals, animal health and consumer health. Brands included such familiar names as Viagra, Zoloft, and Listerine.
It was time, however, for a change. Pfizer sketched out multiple objectives, including the ability to view worldwide market demand, analyze trends, synchronize the global supply chain, plan for the rollout of new products, establish key performance indicators (KPIs), and streamline the sales and operations planning (S&OP) process.
The challenges were as long as the "to-do" list. Pfizer had to address the needs of a complex, multinational user base across three distinct lines of business, incorporate market knowledge from globally distributed sales and marketing teams, integrate geographically dispersed supply chains, and gather timely information for the S&OP process.
Pfizer chose the forecasting software of Atlanta-based Logility Inc. It gave Pfizer a tool that could operate by multiple units of measure, including distribution center, brand and individual item. Plants could use the forecast data to prioritize manufacturing against other market requirements. Marketing and sales, meanwhile, was freed up to concentrate on better demand planning and forecasting.
Pfizer ended up with a centrally managed system that supports local market processes according to global best practices. In addition, the company has achieved a set of coherent performance metrics; the timely reporting of KPIs; the synchronization of demand, supply and production, and improved internal collaboration. Pfizer considers the resulting access to more timely information to be a competitive advantage.
Implementation of the system was in three phases, beginning with the seven countries and markets that accounted for 75 percent of sales. Phase three will be wrapped up around the end of 2007, covering 99.9 percent of sales. The project took an unexpected turn when Pfizer sold the Consumer Healthcare unit to Johnson & Johnson last year. The Logility system now covers human pharmaceuticals and animal healthcare.
The software has addressed multiple issues, says Joe Gilligan, senior director of strategic data management. "Logility has enabled Pfizer to implement a single statistical forecasting system globally, one that allows for marketing and sales input to improve the accuracy of individual market forecasts, along with standard global forecast creation and management processes across all markets," he says.
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