Streamlining Supply Chain Management of Pharmaceutical and Medical Device Printed Packaging

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1 sponsored by Streamlining Supply Chain Management of Pharmaceutical and Medical Device Printed Packaging Reduced Obsolescence Inventory Reduction Improved Lead Time Cost Savings Flexibility In today s multiple-sku world, the supply-chain-management process for ordering pharmaceutical and medical device labels, MJUFSBUVSF cartons, and other printed materials can be challenging. Buyers often wait for feedback on market demand, review inventory levels, and then place orders to fulfill immediate needs. Orders may be piecemeal to accommodate several smallvolume SKUs, preventing much cost efficiency. Rush orders may be needed to satisfy unanticipated spikes or last-minute label changes, further increasing costs. Boosting inventory levels could be seen as a potential solution, but such stock could increase the risk of obsolescence along with the cost of inventory management. About 15 years ago, CCL began helping Fortune 500 producers of fast-moving consumer goods take a different approach to supply chain management. These companies have essentially turned the ordering process over to CCL, whose Supply Chain Planning (SCP) system monitors demand and manages printing to meet customer needs and in some cases, to move to just-in-time ordering. The system automatically recommends what to make, how much to make, and when to make it in order to uphold target inventory levels. It uploads the demand forecast and monitors all inventory and demand changes in a very efficient way. ThJT proven system has helped several customers significantly reduce costs and time to market, all while meeting market demand. The approach has also shortened the supply chain for 1

2 printed goods, helping companies speed their products to market. Pharmaceutical and medical device companies can also benefit from the automated system. CCL began introducing the approach for managing pharmaceutical printing about 5 years ago, and pharma companies have already seen improvements in efficiency, cost reduction, and more. Customers want to reduce costs, inventory levels, and obsolescence, explains Chuck Campisi, VP of Sales & Marketing North America Healthcare for CCL Healthcare, Div. of CCL Industries. We have a validated system that works, and we have tools to find efficiencies. We can manage their business. Once we have visibility, it is almost like we become their buyer. CUSTOMIZED SUPPLY CHAIN PLANNING The Supply Chain Planning (SCP) System uses customized software that can work in concert with any Material Requirements Planning (MRP) software such as SAP and others to automatically manage printed materials production. The electronic system can forecast needs through analysis of purchasing Simple Process Definition On Hand Inventory Demand Report Production Schedule Demand Forecast patterns and inventory targets. The objective is to improve efficiency while reducing lead time, cost, and risk throughout the extended enterprise supply chain. The web-based system features a measurement matrix of all material orders. Printed items can be grouped by SKU families and by attributes (material, size, color, etc.) using an A, SCM Software Order Delivery & Summary Billing SAP data CCL Order Sheet Generation Order Status Report in Label Express CCL In Transit Inventory, FG s Using an automated supply chain planning system, pharma companies can meet material supply demands with the lowest possible investment in inventory B, C approach to achieve efficiencies and economies of scale. Production decisions are based on lead time, order time, and other factors, and these decisions establish order quantity, order placement date, and order ready date. Visibility into customer inventory and order behavior history facilitates such collaboration. To get started, customers send us a fi le with order data from the last 12 months, and we can plot that data into our system for visibility of all the customer s part numbers, Campisi says. CCL drafts an agreement with the customer, focusing on demand 8 weeks out or longer. The agreement covers production parameters, inventory liability, and other rules. Orders are placed according to the agreement, and the lead time for each order is based on the forecast and agreed-upon demand schedule. We can then manage and deliver orders in the most efficient manner, he adds. The collaborative approach can increase effi ciency while also reducing lead time, inventory levels, obsolescence, and cost. In addition, such managed production could increase fl exibility, allowing CCL and customers to better handle exceptions together. Here s how: Efficiency. The approach can bring effi ciency to both parties operations without sacrifi cing service or quality. 2

3 Most buyers know what they re buying by SKU, but they don t always know all the specifications and other details, Campisi explains. There are a lot of common sizes or other attributes that could be combined for more-efficient production. With our software we can see all the 2 x 4-in. labels they re ordering, he adds. For instance, if a customer is in need of a label for a 75-cc bottle, it takes a specific size, he says. The system searches for demand for all labels that fit that profile. We can achieve efficiencies by combining multiple orders that meet that profile or have similar attributes and common production, which reduces our set up time. The only variable is what we re printing. Efficiency can also be increased by automating certain non-value-added steps, such as materials management and other administrative processes. Just in time ordering/reduced lead time. The automated SCP system can help compress the supply chain. Using a customer s forecast data, it can automatically manage material supplies, printing, and production. Cartons, labels, and other printed items are delivered when needed. Customers can also order what they want, how much they want, when they want. Efficient programs can be devised to manage frequent label changes because of regulatory updates or new market demands. Reduced inventory levels and obsolescence risk. Because the SCP system can automatically streamline the printing process to support just-in-time ordering and reduced inventory levels, the risk of outdated, obsolescent labels is minimized. We can take inventory levels down by 10 times, Campisi says. Most customers will carry some safety stock, but we can eliminate it in most cases. For instance, if a customer typically needs a total of a million units annually but places several small orders for them throughout the year, the entire run could be printed at once and released weekly. The system can also provide ongoing reports of inventory levels, including days-on-hand and nonperforming inventory, for further decision making. Flexibility. The SCP system allows supply to be more responsive. Traditionally, CCL would need to wait for a customer to provide a PO, but by plotting customer demand through its SCP system, we can react a lot faster than they can, says Campisi. Ultimately, we have more visibility into their printing needs than they have. Th collaborative approach consults with customers on a weekly or even daily basis regarding ordering behavior. With the SCP system automatically searching for spikes, we can capture them and be ahead of their demand, says Campisi. Ordering becomes dynamic and process-driven, not from PO to PO. Some users, in fact, are eliminating individual purchase orders. These customers are letting system demand drive label orders. Demand itself becomes the purchase order, says Campisi. Supply Chain Planning Case Study Inventory Trends CCL Inventory based on Weeks On Hand CCL s supply chain planning approach can help pharma companies optimize inventory after calculating weeks-on-hand fi gures and analyzing inventory trends. 3

4 Exceptions can also be better managed. An emergency item can be handled within the same costs structure as routine orders, says Campisi. Cost reduction. The cost of ownership becomes less expensive for a number of reasons. Reducing inventory levels and eliminating obsolescence are key reasons, but so is the greater efficiency achieved with larger printing runs. For instance, the bigger the family, the greater the efficiencies, says Campisi. We can amortize set up over a bigger volume in one run. With a full picture of a given customer s demand schedule and forecast, CCL can also negotiate better contracts with its materials suppliers. By adopting an automated approach to supply chain management, customers can accomplish desired delivery times and fill rates utilizing the lowest possible investment in inventory. HOW PHARMA AND MEDICAL DEVICE COMPANIES CAN GET STARTED CCL s Supply Chain Planning system is available for all printed materials. Cartons, labels,, and other printed items are delivered when needed, and there is no compromise in product quality or safety. Getting started is easy. For one pharmaceutical customer, CCL analyzed 12 months of PO history, including when each PO was placed and received. We analyzed where we could achieve savings and whether we would have placed any orders differently, says Campisi. Campisi understands that it takes a leap of faith for customers to share forecasts and allow us to manage order production for them. The result, however, is improved supply chain management from customer demand forecast through consumer consumption. As healthcare markets become increasingly complex through cost pressures, expedited delivery requests, and market-specific requirements, competition is no longer just between companies. Competition is between supply chains, and the faster, moreresponsive one, succeeds. 4

5 CCL Label is the global leader in healthcare printing and packaging. With over 65 years of experience in the healthcare packaging industry, CCL provides our customers with a single source packaging supplier solution that delivers innovative high quality products that meet the most challenging packaging requirements. Healthcare packaging is a highly competitive market with narrow margins and high demands. Companies must find new ways to differentiate their products, improve supply chains, and meet the growing market demands all while reducing costs and improving work efficiency. It is important to work with suppliers and vendors such as CCL that have both the experience and capabilities to keep up with an evolving marketplace. Boosting over 100-cGMP manufacturing facilities world wide, CCL offers a versatile product line and solution driven services to meet the strict quality standards of the healthcare industry. 5