The Most Commonly Used Supply Chain Software Tool Is…..

EXCEL. This may sound surprising, but based on my most recent discussions with supply chain executives reveals a surprising reliance on spreadsheets. This is happening in light of increasing complexity in operating environments, making this even more of a problem.

In a set of recent interviews with supply chain managers in the biopharma industry, this was proving to be a REAL PROBLEM. In all of my interviews, managers identified increasing complexity as a fact of life. Customers are experiencing more globalization of their supply base as they are being pushed into supplying products into emerging markets with immature supply chain infrastructures. Because there are not as many single blockbuster products, the dynamics of product supply needs are changing. An escalation in mergers and acquisitions is further muddying the planning capabilities, due to greater numbers of legacy systems, mis-aligned planning capabilities, and new inherited products. Regulatory requirements are coming down the pipeline with trace and trace, and serialization. On top of this, the threats of counterfeiting, reimbursement fraud, patient safety concerns in multiple government milieus, and raw material origin concerns, has created an unprecedented situation. People in the supply chain are being challenged at a level that hasn’t seen before. This has made the old systems of communication and communication (email, fax, and phone) not only inefficient, but a major threat to business continuity in the face of this complexity. This was reflected in a number of comments.

“Our customers are experiencing complexity that has never been seen in the history of the industry. The way we work with our customers today is a labor-intensive, ad hoc method of phone, fax, email, and face-to-face, with large amounts of data transfer through spreadsheets and CSV files. Because this is the way we’ve always done it, everyone thinks it is acceptable. Quite honestly, it is not. We have to find ways to communicate data in a more efficient and timely manner, and for the data to be shared and communized to both entities at the same time.” [Leading CMO]
“Our planning process desperately needs more discipline. It was being managed on a tight cash flow basis. That is well and good when you have high forecast accuracy and consistent demand, which we did with two mature products in three countries. But in the last 5 years, our product portfolio has increased and we have nine or ten different SKU’s per presentation, and massive expansion into new markets with poor forecast accuracy, with considerably smaller sales volumes. And then you overlay parallel trade in our European markets, and it becomes even more difficult. [Manufacturer]

With the merger mania that has been occurring with many big customers, they are encountering major issues as they try to get their cultural blending in line, and figure out how to run their supply chains. This has caused a greater degree of unpredictability in the channel. The need for collaboration mechanisms that align with electronic systems, not just static spreadsheets, has never been greater…