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Pharmaceutical Industry- Procurement Consulting

Pharmaceutical Industry – Supply Chain & Procurement Consulting

Achieve competitive advantages and savings through transparency and your own standards.

The pharmaceutical industry has been experiencing profound changes for years, with mergers and acquisitions dominating the industry. At the same time, demographic trends show the growing importance of the pharmaceutical industry. The ever-increasing complexity of multinational corporations and their global logistics concepts often present a challenge for pharmaceutical companies. Government regulations to reduce costs in the health care sector affect businesses of all sizes, from corporate groups to medium-sized businesses.

We support our clients, national pharmaceutical companies and international pharmaceutical groups, in their global procurement, achieving transparency across the entire supply chain. As a result, companies are set up for dynamic, new market situations for the long term and can achieve sustainable savings and secure competitive advantages.

 

How do we do it?

Analysis and benchmarking

Before we can develop a ‘roadmap’ for performance optimization and cost reduction, we first identify and prioritise existing potential. We will show you where this potential is in your procurement organization. In a short quick scan analysis, we go through your procurement data, conduct interviews with departments and buyers and evaluate your procurement processes. We take these results as a benchmark, so you know where you stand within the industry and where there is potential for optimization. On this basis, we make clear recommendations for your business. Following this, we support you to implement the optimization measures.

1. Cost reduction in direct and indirect spend

Production or contract manufacturing often dominate procurement in pharmaceutical companies. Spending on items that are not directly incorporated into the value creation process is often neglected. This conceals indirect spend costs amounting to approximately 16% of turnover.

In our experience, the greatest savings potential lies in marketing, logistics, facility management and IT. The challenge is that purchases in these areas are often made by the departments themselves and the procurement department is included in the procurement process either too late or not at all, and inadequate procurement resources make things even more difficult. We help you to reduce your purchasing costs for the long term and act as an interface to aid cooperation between procurement and other departments.

We will support you to implement your new processes and/or transition to new suppliers. The results of our projects are contracts with suppliers, which permanently secure your target savings and optimum quality standards.

On average, we have achieved 15% savings for our pharmaceutical industry clients. As our fees vary depending on the savings we achieve, making savings ensures budget-friendly financing.

The results:

  • Sustainable, measurable savings on the entire procurement volume
  • increasing your profits


Case study: Media procurement by a manufacturer of generic drugs
We made savings of around 18% on the media procurement of a German generic drug manufacturer,while increasing the quality of service. This was achieved through the clear separation of quantitative (e.g. procurement conditions of the agency) and qualitative (e.g. media strategy consulting) decision criteria. Essential criteria to make an objective, qualitative assessment of agencies were pharmaceutical expertise and the range of services offered. INVERTO succeeded in getting the most out of the media budget by implementing a multi-stage process with clients’ employees from the marketing and procurement departments.

2. Developing your own standards for strong procurement positioning

Creating your own standardizations and specifications for products to be purchased and technical facilities is a significant way for your procurement to achieve strong positioning and reduce your dependence on suppliers. We analyse which specification limits of materials can be used by your facilities and how these can be purchased both efficiently and cost effectively throughout the procurement process. Having your own standards and specifications can considerably increase the procurement volume of individual materials, resulting in significant cost savings. INVERTO uses its specialist client project expertise to create the necessary steps between technology and procurement. Our many years of experience mean that we not only know the technical and product-specific challenges you face, we also know the solutions.

The results:

 

  • Strong positioning of your procurement in relation to suppliers
  • Introducing your own standards and specifications gives you a competitive advantage
  • Linking procurement and technology
  • Reduced procurement risks

 

Case study: Packaging optimization for a medium-sized company
The strategic orientation of packaging procurement significantly lowered production costs at a traditional pharmaceutical company. Through tendering total demand across all sites, standardization and the implementation of specialized suppliers, the procurement conditions for folding boxes, labels and instructions were considerably improved. Working with the customer services teams from the production, quality assurance and procurement departments, we achieved savings of over 20% while simultaneously improving quality. INVERTO took over project management and supported operational implementation up to effective delivery.

3. Comprehensive supply chain optimization

Supply chain optimization is usually driven by improving internal processes. However, in our experience as a successful supply chain management consultancy, the most significant improvements are achieved through intensive cooperation between respective partners. This is why we systematically involve existing and potential suppliers in the optimization of supply chain processes. With our supply chain performance check, you will know where you stand in virtually no time.

We determine your current supply chain performance based on a set of criteria, placing particular focus on supply chain integration, using IT solutions to analyse your overarching strategy and the interlinking of the planning process, quality of cooperation and process support. From early involvement in development projects to outsourcing entire production stages, INVERTO designs models of integration, which cope with your company’s challenges and turn your suppliers into active value creation partners. From supplier-side inventory planning and management to cooperative planning, INVERTO communicates with your employees and suppliers to ensure the successful implementation of optimization concepts.

The results:

 

  • Reduced process costs and continually improving value creation
  • Sustainable improvement in supply chain performance
  • The ability to respond quickly to market developments

Case study: Supply chain performance optimization in a pharmaceutical firm
We restructured the supply chain of a global pharmaceutical company. International acquisitions meant new requirements for logistics and supplier management. Our detailed analysis achieved transparency in terms of the strengths and weaknesses of the existing operational and organizational structure. We then defined quantitative supply chain targets (e.g. lead times, complaint rates) and an implementation plan and implemented them using workshops. INVERTO oversaw the analysis of the procurement organization, concept development and implementation, right up to monitoring the quantitative targets.

 

Do you want to be prepared for dynamic and new market conditions in the pharmaceutical sector, achieve sustainable savings and secure competitive advantages?

Our experts Dr. Frank Wierlemann (frank.wierlemann@inverto.com) and Frank Albrecht (frank.albrecht@inverto.com) are at your disposal for any questions regarding cost-reductions and performance improvements in the pharmaceutical sector.

Projects

Project: Pharma manufacturer Patheon cuts packaging costs despite rising raw material prices



What our clients say about us


Thomas Pfeiffer, Head of Product Development at willhaben.at

„Together with INVERTO, we have achieved a result that we did not think possible at the beginning of the project. The overall package of tender preparation, service provider workshops and rounds of negotiations at top management level has raised our hosting landscape to a new level of price performance. I thoroughly recommend working with INVERTO.“

Dr. Jürgen Wickl, Managing Director of Styria Media IT

„By preparing a functional specification, we managed to advertise requirements in a tailored way. INVERTO’s orientation towards precise customer requirements and benchmarks as well as professional negotiations has contributed significantly to the success of this project. The close involvement of employees in this structured tender process is an additional bonus, and something which will benefit us in years to come.“

Siniša Mitrović, mag.oec., Managing director, Styria Tiskara Zagreb

„Due to the flexibility of the team, we managed to receive additional offers from suppliers and hence increase competition between existing suppliers. Through centralization of our former pick-up locations in Croatia and Bosnia-Herzegovina we managed to reduce the operational work for our employees. Furthermore, this centralization led to a huge additional revenue from our waste paper business. The project work with INVERTO was very professional and made this great result possible.“

Marc Lamure, Director, Montagu Private Equity Associates LLP

„INVERTO has helped D.O.R.C. with the professionalization of the procurement organization and accompanied the supplier negotiations for various products and services. By implementing new processes and working with procurement staff, the achieved savings enhance sustainability and will result in a more profitable organization.“

Erwan Quemener, Purchasing Director, Chassis Brakes International

„INVERTO helped us in raising undreamed-of sources of savings in both direct material and indirect material areas. They did not only identify these potentials but they supported us in the implementation phase with a great professionalism.“

Nick Gerrard, CFO, MID Essex Hospital Services NHS Trust

„INVERTO’s market and product knowledge have been invaluable in helping the Trust deliver substantial cost savings in a short space of time. They have the ability to talk the clinicians language, optimise the procurement process and deliver a result the trust could not have achieved itself.“

Bart Stubbe, Vice President of Purchasing LINPAC Group

„INVERTO are assisting LINPAC since early 2008 in transitioning from a decentralised to a category purchasing structure, bringing sourcing expertise, skilled resources, technology and methodology to recognise, create and release value to the company.“


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We deliver results.