®




     Clinical Operations Planning
Building a Critical Platform for the Clinical Trial Supply Chain


 ExL Pharma’s 3...
What is this critical platform?
 • In Commercial Operations…
    • Sales & Operations Planning is the cross-functional pro...
The Need for a Common Definition

               Goal: Make the financial budget. Tops-down Focus.
               Desires ...
The Core Elements of the Demand Driven Value Chain


                                                Business &
    Custom...
Maturity of S&OP Processes in Life Sciences
                           I                       II                        I...
S&OP process definition changes
         1990s                     Early 2000                 Demand Driven Leaders

 1.  ...
Bottom Line
  • S&OP is…
       A Process to Translate Business Strategy to Execution…
       …and Projected Demand to Sup...
®




S&OP Best in Class –
What does good look
like?
What Good Looks Like
• Executive sponsored planning and review cycle
• Focused on driving achievement of business plan
   ...
Planning Cycle

                            Measure and communicate
                                     the plan         ...
Integrated Business Planning Flow
 (Med Devices Client)
                                                                  ...
®




Clinical Operations Planning
  The Clinical Transformation
Workshop Time!
 Assess Clinical Trial Scenario
 •   Review clinical trial case example
 •   What does the hierarchy of cli...
Groups

 •   Project Manager
 •   Program Manager
 •   Forecasting & Planning
 •   Clinical Supplies
 •   Logistics




  ...
Report Back
 Process Overview
 • Briefly describe process
 • Participants, meeting frequencies, key metrics, systems & too...
Using the Hierarchy – Example #1



(Strong)                               CT
                                    Demand
 ...
Example #1

• CT Forecast Accuracy is poor; however, Clinical Operations is
  getting kits to the right place at the right...
Using the Hierarchy – Example #2



(Strong)                               CT
                                    Demand
 ...
Example #2

• CT Forecast Accuracy is poor; however, Clinical Operations is
  getting kits to the right place at the right...
Using the Hierarchy – Example #3



(Strong)                                CT
                                     Demand...
Example #3

• A classic example of thinking all is well…except that costs are
  too high and development timelines are too...
Using the Hierarchy – Example #4



(Strong)                                CT
                                     Demand...
Example #4

• Clinical trials run by accountants…all costs look good, but the
  clinical sites are not happy
• Supplier is...
Using the Hierarchy



(Strong)                                CT
                                     Demand
            ...
®




CPG Industry Example
S&OP Process Background
 •   Industry:            Consumer Products
 •   Business Model:      Make to Stock, Make to Order...
S&OP Pre-work
 • Gathering Sales & Marketing Input
     • Information is gathered during S&OP Demand Planning Meeting on
 ...
S&OP Consensus Meetings Structure
  • S&OP Demand Planning Meeting
     • Business Unit Involvement: Planning, Sales, Mark...
S&OP Consensus Meetings Structure
 • Pre-S&OP Meeting
     • Business Unit Involvement: Planning, Sales, Marketing, Engine...
S&OP Post-work
 • Metrics that Drive S&OP
    • Product Availability
    • Inventory vs. Planned Inventory (DOS, related f...
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Workshop

  1. 1. ® Clinical Operations Planning Building a Critical Platform for the Clinical Trial Supply Chain ExL Pharma’s 3rd Clinical Supply Forecasting Summit April 6, 2009 Wayne McDonnell – Research Director, Healthcare & Life Sciences
  2. 2. What is this critical platform? • In Commercial Operations… • Sales & Operations Planning is the cross-functional process that translates market opportunity into an optimal, actionable operating plan. • Leaders use this process as a platform on which they build capabilities to trade-off opportunities and risks, allocate resources according to business priorities, and capture value creating business opportunities. • In Clinical Operations… • This platform is a MUST for companies that need to align clinical supply and demand, decrease new product development time, decrease costs, etc. • Leading life sciences companies are employing “S&OP-like” processes for clinical trials…is your company? ®
  3. 3. The Need for a Common Definition Goal: Make the financial budget. Tops-down Focus. Desires control and wants predictability of operations. Forecast definition: The budget Finance Goal: Goal: Factory Maximize optimization, enrollment & improve costs treatment, Clinical and minimize wants Clinical demand Trial Demand-side Supply-side Supply guaranteed uncertainty product Operations Operations availability Forecast definition: Forecast Supply Manufacturing definition: Chain Plan Enrollment Forecast Goal: A feasible plan. Bottoms-up focus. Wants to minimize risk and disruption Forecast definition: The demand plan ®
  4. 4. The Core Elements of the Demand Driven Value Chain Business & Customers and Consumers Risk Tradeoffs Demand Visibility Supply Visibility Suppliers The Downstream Data Architecture Model Operations Innovation Business Commercial Reliable, & Implications (Planning) Profitable Product Supply & Tradeoffs (Finance & Tax ) Demand Customer Segmentation Demand Opportunity Downstream Data/ Application Stack Model Sensed Supply Supply Demand Capability Demand Capability Translation 3rd Party ERP MES “Turntable” Innovation Shaping Translations Distributor Forecast Response from Demand Management Supply Based Inv Reliable Reliable Visibility Flexible Flexible Agility Agility & Insights Responsive Responsive by Compliant by Compliant Design Design Repository “Profitable “Profitable Master Data Perfect Order” Perfect Order” Common Process Platforms Analytics & Processes (eg S&OP) on Demand Demand Translation Visibility and collaboration are key, but risk/opportunity tradeoffs are inherent ®
  5. 5. Maturity of S&OP Processes in Life Sciences I II III IV Stage Reacting Anticipating Collaborating Orchestrating Balance: S&OP OP OP OP OP S S S S Goal Alignment Development of an Demand and supply Profitability Demand sensing, operational plan matching shaping and a profitable demand-response 41% 32% 27% 0% Metrics -Manufacturing costs -Total supply chain -Company profitability -Network inventory measured -Asset utilization costs -Cost to serve -New product launch -Customer order line -Perfect order as -Perfect order at receipt success fill rates shipped from your by the customer -Program profitability of dock -Customer scorecard marketing and sales -Days of inventory on improvements tactics hand -Market Share 18% 36% 27% 18% Process level Focus on Focus on the The constrained plan is There is balance manufacturing load development of a visible and used to take between the input on leveling feasible plan customer orders operations and sales team 14% 41% 27% 18% ®
  6. 6. S&OP process definition changes 1990s Early 2000 Demand Driven Leaders 1. Develop a demand 1. Collect sales input 1. Collect sales and market input forecast 2. Develop a forecast 2. Develop a demand plan 2. Balance demand with 3. Shape demand 3. Demand consensus refinement supply consensus refinement 4. Shape demand based on what-if 3. Consensus meeting 4. Develop a constrained analysis on demand for supply 4. Publish the plan supply plan 5. Develop a constrained plan by 5. Review and gain supply agreement through a 6. What-if analysis by supply to Consensus meeting determine trade-offs on the 6. Publish the plan measurements and identify demand-shaping opportunities 7. Review and gain agreement through a consensus meeting 8. Publish the constrained plan 9. Measure and communicate the plan ®
  7. 7. Bottom Line • S&OP is… A Process to Translate Business Strategy to Execution… …and Projected Demand to Supply Cross-functional, Continuous, Forward Looking Punctuated By Executive Review • Those Who Win Commit to Process, Metrics Discipline – build in incentives Invest in Clean Data Create a Culture of Safe Harbor For “The Truth” Make it Action-Oriented Start Simple • Those Who Fail Lack Executive Commitment Game the System Under-invest in Data Integrity ®
  8. 8. ® S&OP Best in Class – What does good look like?
  9. 9. What Good Looks Like • Executive sponsored planning and review cycle • Focused on driving achievement of business plan • Goal clarity (profitability? market share? cash to cash?) • Time horizon: 1-18 months (rolling). Horizon depends on • Budget cycle • Lead time of long lead time supply commitments (e.g., capacity contracts) • Calendar…most often monthly, but varies based on demand cycle • Monthly review • Forecasting and tactical planning • Metrics: Profitability, customer service, inventory, forecasting, and revenue • Quarterly or semiannual review – Long-term integrated planning • Network design and flow manufacturing • Product rationalization • Customer rationalization • Supported by continuous tactical “pre-S&OP” activities ®
  10. 10. Planning Cycle Measure and communicate the plan Measure and communicate the plan Publish the constrained plan Publish the constrained plan Executive plan review Executive plan review What if by supply for Trade-offs What if by supply for Trade-offs Constrained plan by Supply Constrained plan by Supply Demand consensus refinement Demand consensus refinement What if for Demand What if for Demand Develop a demand plan Develop a demand plan Collect enrollment forecast Collect enrollment forecast Week 1 Week 2 Week 3 Week 4 Week A Week B Week C Week D ®
  11. 11. Integrated Business Planning Flow (Med Devices Client) Strategic Business Planning 3 Year Annually SOF Annual Budget Process Quarterly Quarterly Budget Reforecast Tactical Planning Product Family Level Product Line Monthly Exceptions Portfolio New Activities Based Risk/Opportunity Review Review Proposals MANAGEMENT Demand Demand Financial BUSINESS Inter- Consensus Review Reconciliation REVIEW on cil iati Regional ec on Calls te dR Strategy Map and Supply Supply gra Inte Aligned KPIs Consensus Review ®
  12. 12. ® Clinical Operations Planning The Clinical Transformation
  13. 13. Workshop Time! Assess Clinical Trial Scenario • Review clinical trial case example • What does the hierarchy of clinical trial supply chain metrics tell you about the example? Define a Clinical Operations Planning Process • Define stakeholders • Define process stages • Define participants, by stage of the process • Define roles and responsibilities • Define key expectations and metrics • Define key reports, outputs, etc. • Propose meeting and process frequencies, meeting agendas, etc. • Identify key systems, tools, etc. Propose a Solution for this Case Example • How would you use Clinical Operations Planning in this case? Propose Next Steps for your Company • Make it real! • What if you were responsible for implementing COP in your company? • What’s in place today that would facilitate COP? • What would be the hurdles and challenges? ®
  14. 14. Groups • Project Manager • Program Manager • Forecasting & Planning • Clinical Supplies • Logistics ®
  15. 15. Report Back Process Overview • Briefly describe process • Participants, meeting frequencies, key metrics, systems & tools Identify Current Barriers • Organizational • Business Process • Technology Identify Opportunities • What would be the biggest benefit to your company? ®
  16. 16. Using the Hierarchy – Example #1 (Strong) CT Demand Forecast Assess CT Perfect CT SCM Order Cost (Weak) New Product Time-to-Market Concept to Prototype to first First Diagnose production Prototype production to launch Supplier Supplier Return Return Quality On-Time Cost % Production Inventory Order Perfect Correct Cost Plant RM + WIP Schedule Cycle Order Detail Utilization + FG Variance Time Detail ®
  17. 17. Example #1 • CT Forecast Accuracy is poor; however, Clinical Operations is getting kits to the right place at the right time by holding too much inventory • Operations is not happy; their schedule variance is high and utilization is low • Returns and inventory losses are high ®
  18. 18. Using the Hierarchy – Example #2 (Strong) CT Demand Forecast Assess CT Perfect CT SCM Order Cost (Weak) New Product Time-to-Market Concept to Prototype to first First Diagnose production Prototype production to launch Supplier Supplier Return Return Quality On-Time Cost % Production Inventory Order Perfect Correct Cost Plant RM + WIP Schedule Cycle Order Detail Utilization + FG Variance Time Detail ®
  19. 19. Example #2 • CT Forecast Accuracy is poor; however, Clinical Operations is getting kits to the right place at the right time by holding too much inventory • Operations is not happy; there are a lot of supplier issues • Clinical Operations is not happy either; order cycle times are lengthy • If changes are not made soon, Finance grown concerned with blown financial budgets ®
  20. 20. Using the Hierarchy – Example #3 (Strong) CT Demand Forecast Assess CT Perfect CT SCM Order Cost (Weak) New Product Time-to-Market Concept to Prototype to first First Diagnose production Prototype production to launch Supplier Supplier Return Return Quality On-Time Cost % Production Inventory Order Perfect Correct Cost Plant RM + WIP Schedule Cycle Order Detail Utilization + FG Variance Time Detail ®
  21. 21. Example #3 • A classic example of thinking all is well…except that costs are too high and development timelines are too long. • Who or where is the culprit? Initially this company thinks the issues are all with their suppliers… • However, if this company cannot meet target timelines or budgets, how long can they sustain business as usual? ®
  22. 22. Using the Hierarchy – Example #4 (Strong) CT Demand Forecast Assess CT Perfect CT SCM Order Cost (Weak) New Product Time-to-Market Concept to Prototype to first First Diagnose production Prototype production to launch Supplier Supplier Return Return Quality On-Time Cost % Production Inventory Order Perfect Correct Cost Plant RM + WIP Schedule Cycle Order Detail Utilization + FG Variance Time Detail ®
  23. 23. Example #4 • Clinical trials run by accountants…all costs look good, but the clinical sites are not happy • Supplier issues are creating issues with perfect order and inventory • Time to market metrics seem OK, but does this company know what good looks like? ®
  24. 24. Using the Hierarchy (Strong) CT Demand Forecast Assess CT Perfect CT SCM Order Cost (Weak) New Product Time-to-Market Concept to Prototype to first First Diagnose production Prototype production to launch Supplier Supplier Return Return Quality On-Time Cost % Production Inventory Order Perfect Correct Cost Plant RM + WIP Schedule Cycle Order Detail Utilization + FG Variance Time Detail ®
  25. 25. ® CPG Industry Example
  26. 26. S&OP Process Background • Industry: Consumer Products • Business Model: Make to Stock, Make to Order • Geographic scope: Support all Global Needs (NA, Europe, Asia) • Timing: Monthly • Benefits: • Each business unit becoming more aligned with business plan • Increased visibility to state of business on a rolling 18 month calendar • Opportunities: • S&OP technology. S&OP is still mostly Microsoft Excel Based • Using many systems (SAP, DP, WMCS, Epic) for certain pieces of information; would like one system to track all information ®
  27. 27. S&OP Pre-work • Gathering Sales & Marketing Input • Information is gathered during S&OP Demand Planning Meeting on upcoming promotions and new product introduction from marketing. • [Note: How would this translate into Clinical Operations?] • Development of Demand Plan • Gather sales field input and then running statistical forecast based on history • Development of Constrained Supply Plan • Manufacturing: Run both Operational Forecast (Next Month) vs. finished goods inventory and raw material banks on critical components. Run Statistical Forecast (3-6 months out) vs. raw material critical components. • Contract Manufacturing: Run Operational Forecast vs. In-house Inventory and supply lines. Run Statistical forecast vs. contract manufacturing production plans. • Procurement: Actual usage of material vs. Planned usage of material – associated variances • What if? Activities • Currently not mature enough yet to determine. ®
  28. 28. S&OP Consensus Meetings Structure • S&OP Demand Planning Meeting • Business Unit Involvement: Planning, Sales, Marketing, Finance, Logistics • Discussion Points • Product Category Trends (Upcoming Forecast) • Upcoming Promotions • Forecast Accuracy • Reconciliation of Back-orders by product category • S&OP Supply/Capacity Meeting • Business Unit Involvement: Planning, Operations, Procurement, Logistics • Discussion Points • Production volume increases/decreases • Supply and Manufacturing Constraints • Excess Finished Goods (Slow Moving Inventory) • Excess Raw components ®
  29. 29. S&OP Consensus Meetings Structure • Pre-S&OP Meeting • Business Unit Involvement: Planning, Sales, Marketing, Engineering, Operations, Finance, Logistics • Discussion Points • New Product Introduction and timing • Resolving and Capacity or Supply Issues by changing demand • Development of Executive S&OP Agenda with Top 5 concerns • Executive S&OP Meeting • Business Unit Involvement: Executive Leadership Staff • Discussion Points • Review YTD performance • Final approval of changing demand (according to Pre-S&OP) • Review New Product Introduction and Timelines • Final Decision of Top 5 Concerns and delegate associated leads. ®
  30. 30. S&OP Post-work • Metrics that Drive S&OP • Product Availability • Inventory vs. Planned Inventory (DOS, related financials) • Trade Partner Scorecards • On-time Shipping • Perfect Order Ship • Shipment Compliance • Forecast Accuracy • New Product Introduction • Timing • Potential Failure Modes • Incentives for S&OP Excellence • Business unit performance ratings ®

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