MSD (known as Merck & Co., Inc. in the US and Canada) has a 125 year history of improving people’s health and well-being, from the discovery of Vitamin B1 to the development of the measles vaccine to the treatment of high cholesterol. The company’s focus has always been on the patient. To continue delivering innovative medicines to patients in an increasingly competitive and changing world, MSD needed a world class supply chain.
The Challenge and Benefit
MSD recognized, as many in the pharmaceutical industry do, that they were lagging behind other industries when it comes to supply chain. According to global consulting firm McKinsey & Company, supply chain management (SCM) represents 35% of the profit and loss (P&L) for businesses within the pharmaceutical industry. That’s compared to 8-12% in the consumer packaged goods (CPG) industry. So, when setting out on their transformation journey, MSD sought inspiration from the CPG industry as a way to determine where best to focus their efforts and to gain advantages through lessons learned from their CPG counterparts.
MSD’s vision is to plan more effectively, which in turn allows it to supply high-quality products to its customers at the lowest cost and with the shortest lead-time. In order to meet these goals, MSD has undertaken a supply chain transformation initiative spanning global demand planning, global supply planning, distribution requirements planning (DRP) and sales and operations planning (S&OP) – using RapidResponse at its foundation. Unique RapidResponse algorithms are being leveraged to perform rough cut capacity planning (RCCP) and attribute-based planning. Multi-level expiry planning is also being deployed.
It was great to see the more our RapidResponse solution developed, the more our business partners started to show more and more interest. We were also receiving many different requirements from the business as well and they started to ask if we could speed up some of the timelines to make certain functionality available earlier