“With headquarters in Basel, Switzerland, Novartis has a global reach of approximately 129,000 associates worldwide and sells products in 155 countries. The company offers a diversified portfolio consisting of medicines, generic and biosimilar pharmaceuticals, and eye care.

The Novartis supply network for the Innovative Medicines division is composed of 16 sites. Not long ago, on-time-in-full delivery reliability was 40 percent, with about 400 stock keeping units (SKUs) out of stock from a total portfolio of 10,000 SKUs. This, in turn, led to a 97 percent customer service level, which impaired patient access to medicines and damaged business performance.

Trust eroded between commercial and supply operations — each blaming the other for poor forecasting or undependable supply. Functional silos were common and firefighting was the norm.

“People had lost connection to how the supply chain was designed to operate,” says Ian Anderson, Novartis Operational Standards for Supply Chain Excellence global program head. “Planning competencies had degraded, leading to the supply chain becoming more reactive.”

Novartis leaders responded by committing to a transformation project that would improve operating efficiency and enable higher levels of service. The primary program goals were to ensure patients always have access to medicines and maximize business success.

Decision-makers based the transformation on APICS Certified in Production and Inventory Management (CPIM) education. In the end, this initiative was so successful that it was honored with the 2018 APICS Award of Excellence — Transformation.

In addition to CPIM courses taught to reinforce learning and education on-site, core CPIM principles were adapted to the specific needs of the Novartis business and documented in a set of internal standards: Novartis Operational Standards for Supply Chain Excellence (NOSSCE). The processes were defined in a manual and measured via 23 key-performance indicators (KPIs). In addition, Novartis created a checklist to help each site measure progress against the defined standards.

“APICS CPIM is a foundation to gain a common understanding and a common language about how a supply chain is designed to operate,” Anderson explains. “This is so important; it is vital that people understand the supply chain theory and then use this knowledge to implement sustainable processes in each local business unit.”

Key results of the overall educational effort at Novartis included:

• On-time in Full (OTIF) delivery reliability improved from 40% to an average of 91.6%
• Customer service has improved from 97% to 99.8%
• The number of products out of stock reduced from around 400 a week to an average of 24 a week
• Across six sites, customer lead-times were reduced on average 22%
• Increased employee engagement and collaboration, with 93% of respondents reporting a significant/ very significant improvement in role clarity and in decision making

To read more on the above case study and additional customer success stories, go to: https://www.ascm.org/corporate-transformation/customer-success-stories/.