medicinman august 2015 issue
TRANSCRIPT
MEDICINMANField Force excellence
TM
August 2015 | www.medicinman.net
Since 2011
In August 2011, the dream of creating a digital magazine to foster field force excellence in Indian Pharma became a
reality and MedicinMan was born.
The response was tremendous. MedicinMan had identified and met an urgent need in the industry for a learning and development platform and a forum to discuss pressing issues pertinent to Medical Reps, Front-line Managers and the pharma industry as a whole.
Today, MedicinMan annual events – Field Force Excellence (FFE) and BrandStorm – are must-attend for industry professionals and see attendance from Medical Reps right up to CEOs.
MedicinMan social media network is now the most prolific and visible voice of Indian Pharma on Facebook, LinkedIn, SlideShare, Google+ and Twitter.
Our reach has gone beyond India and, as Editor, I can count friends in more than 50 countries in Asia, America, Europe, Africa and Middle East where Indian Pharma is present.
As MedicinMan steps into the 5th year, it is a time for us to thank all those who gave us unstinting support in this journey.
People still ask us – “What is your business model? How do you manage to put out such good quality magazine month after month?”
MEDICINMAN STEPS INTO YEAR FIVE
The initial design of the magazine when it was launched in 2011. (Below)
In 2013 the design of the magazine was revamped to give it a more mod-ern look and feel. (Below)
1 | MedicinMan August 2015
Editorial
Connect with Anup Soans on LinkedIn | Facebook | Twitter
Anup Soans is an Author, Facilitator and the Editor of MedicinMan.
Write in to him: [email protected]
Meet the editor
The closest we can come to by way of an answer is “Wikipedia”. Our model is one of co-creation and collaboration. Issue after issue, we compete with ourselves as there are few precedents or benchmarks for us to look up to.
MedicinMan gratefully acknowledges the enormous contributions of K. Hariram, our chief mentor, and Prof. Vivek Hattangadi. Many others have pitched in with their time, shared their experiences and contributed articles and ideas. We can only mention a few – Salil Kallianpur, Amlesh Ranjan, Deep Bhandari, Satya Mahesh and Hanno Wolfram.
As we step into the 5th year, we at MedicinMan look forward to your continued support by way of contributing articles and widely sharing each issue with your colleagues and friends.
We are enjoying the ride. Tell others if you are enjoying it too. If not, tell us and we’ll make sure there’s something for you in our issues.
Thank you all and keep it coming... -MM
1. Is Your Field Force Regulation-Proof? ..............5
The only way to ride the incoming tide of regulations and guidelines is for pharma to invest in field force learning and development.
Daxesh Patel
2. Leadership Training that Makes a Difference
..................................................................................6
How to design and deliver a leadership training program that has tangible impact on participants.
Gopal Kishore
3. Catching Them Young ........................................8
Grooming the next generation of pharma sales professionals can be taken up by first and second line managers as an ‘industry cause’.
K. Hariram
4. Getting Sales Contests Right ...........................10
How to design a sales contest that brings in the desired results at the right price.
Amit Jain
5. To Coach or Close Sales? ................................14
Many Front-line Managers are too busy chasing sales targets to spend time coaching their MRs for sales excellence. This needs to change.
Sunil Bajaj
6. Production Planning for the Brand Manager .....................................................................................17
As sales forecaster, the brand manager plays a very important role in production planning and material management strategy of the company.
Vivek Hattangadi
(Click to navigate)
CONTENTSMedicinMan Volume 5 Issue 8 | August 2015
Editor and Publisher
Anup Soans
CEO
Chhaya Sankath
Chief Mentor
K. Hariram
Editorial Board
Salil Kallianpur; Prof. Vivek Hattangadi; Shashin Bodawala; Hanno Wolfram; Renie McClay
Executive Editor
Joshua Soans
Letters to the Editor: [email protected]
(click on the book to purchase on flipkart)
CAREER PROGRESSION RESOURCES
NOW AVAILABLE ON
(click on the books to purchase on flipkart)
SuperVision for the SuperWiser Front-line Manager is a tool to help pharma professionals transition from super salesmen to great front-line managers and leaders. The book will equip front-line managers to Manage, Coach, Motivate and Lead their teams to deliver outstanding performance. An engaging read, filled with examples and illustrations, SuperVision for the SuperWiser Front-line Manager has been used by thousands of managers across the industry.
HardKnocks for the GreenHorn is a specially crafted training manual to enable Medical Representatives to gain the Knowledge, Skills and Attitude needed to succeed in the competitive arena of pharma field sales. Medical Representatives joining the field are often not aware about the key success factors of their job and as a result they get discouraged when things don’t go as planned. HardKnocks for the GreenHorn is a powerful learning and motivational tool for field sales managers to build their sales teams.
GET YOUR PHARMA CAREER OFF TO A FLYING START!
5 | MedicinMan August 2015
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IS YOUR FIELD FORCE REGULATION-PROOF?The only way to ride the incoming tide of regulations and guidelines is for pharma to invest in field force learning and development.
Pharma industry is driven by personal selling. In the recent past, there have been many regula-tory pressures like MCI guidelines and UCPMP
that prohibit doctors from accepting perks and privi-leges from pharma. This has forced many companies to focus on scientific activities instead of high-value gifts to doctors.
Since the sales and marketing budgets of pharma companies remain the same, the question is where to spend the money which was earlier invested in high value inputs or junkets in the name of CMEs?
The best area to invest the money is in developing the field force. Why do some territories outperform others when the promotional resources, competition and product portfolio are the same? The answer is - field force makes the difference.
If the customer-facing field force has sound knowl-edge about product, competition, customer and channel partner, then they will score over others. Investment in developing the personality of Medical Reps and making them presentable will pay off in the long run. Regular interventions to improve the knowledge and skills of the field force, will ensure that people are retained and become more produc-tive in terms of building rapport and relationship with customers, leading to higher productivity. -DP
Daxesh Patel is an Asst. Product manager in a Pharmaceutical Company based at Mumbai.
Daxesh Patel
6 | MedicinMan August 2015
A leader is made and not born. Few will
disagree with this statement. There are
many qualities that make a good leader.
Some of them include leading by example, cre-
ating a vision, motivating the team, enabling the
full potential of their team and encouraging their
team to think differently.
Most, if not all of these leadership traits can be
taught. A leader is responsible for educating his
or her team. Managing knowledge is the first step
toward becoming a successful leader. In such
a scenario, how does one go about creating a
successful leadership training program?
Training programs are a perishable and limited
asset. The information provided in the training
program needs to be constantly updated and
aligned with the company’s goals and strategy. A
successful leadership program does not just hap-
pen. It is the result of planning and innovation.
Here are the key characteristics of a successful
leadership training program:
Making it Relevant: One of the biggest con-cerns that participants have is how relevant the leadership training program is for them, and what is in it for them. Yes, the agenda may be to learn a few things and reaffirm old notions on leadership. However, participants need to know how soon can they apply this learning in real situations at work and how much it will benefit them. Hence it is essential to get them motivated about the lead-ership training program right at the beginning by demonstrating the RoI of the program.
Learning-by-Doing: Nothing can replace hands-on learning that comes from doing a task or achieving a goal. Many experts believe that this, in fact, is the only way of learning. It can be a simulation-based learning where you use technology to create a real life, safe learning environment, or an outdoors challenge that can test the limits of physical and mental endurance. The most important aspect to keep in mind is that there needs to be a goal and a sense of achieve-ment sprinkled in between learning outcomes.
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How to design and deliver a leadership training program that has tangible impact on participants.
LEADERSHIP TRAINING THAT MAKES A DIFFERENCE
Gopal Kishore
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Making it Fun: Learning-by-doing will only work when the person is completely engaged in the training program. If given a choice to indulge in a day-long movie marathon, watch a game of cricket or participate in a training program, it is most likely that the majority would choose the first two options. If your leadership training program can become the top choice because it is fun, engaging and produc-tive, you then have a winner in your hands.
Enabling Sharing of Experiences: Most leadership training programs are geared towards an audience that is on the verge of taking over a new role or responsibility. They bring an immense wealth of experience and knowledge. If the training program can tap into this rich resource and enable the participants to learn from each other as well as from the program itself, then it is most likely that the training program will be a success.
Keep Them Connected: A leadership training program does not end once the program is over. If the program followed the above guidelines, then it is likely that the participants made strong bonds. The organization can tap into this and create an environ-ment that enables continuous learning experience and incorporates the functions of social learning so that the participants, as well as the organization can reap maximum benefits. -GK
Gopal Kishore | Leadership Training that Makes a Difference
”
Training programs are a perishable and limited asset. The information provided in the training program needs to be constantly updated and aligned with the company’s goals and strategy.
Gopal Kishore is the Experiential Learning Evangelist at KNOLSKAPE. He has over nine years
of experience in the industry and his articles have been published in some of the world’s leading HR
and IT publications.
Connect: in.linkedin.com/in/gopalkishore
8 | MedicinMan August 2015
In the current context, seldom do students of phar-macy/ life sciences look at Pharma Selling as a career opportunity. Most often, it is the last option, thrust
upon them by CHANCE and not by CHOICE, and that too with a very small number of students. Time and again this is confirmed when I am invited to address the final year students of pharmacy/ life sciences courses.
There was a time when one would look with envy at a person in medical sales in a pharmaceutical firm; more so, when he was well-dressed, carrying a well-kept leather bag and riding the latest two-wheeler. His confi-dence and enthusiasm was palpable.
Over a period of time, with the proliferation of ge-neric players and ‘me-too’ formulations, the quality of pharma selling has taken a back seat. Added to this is inadequate training and poor ‘role model’ front-line managers. This mediocrity has eroded the social image of medical reps, almost pushing it to a pitiful nadir.
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CATCHING THEM YOUNGGrooming the next generation of pharma sales professionals be taken
up by first and second line managers as an ‘industry cause’.
K Hariram
K. Hariram is the former MD (retd.) at Galderma India.
He is Chief Mentor at MedicinMan and a regular contributor. [email protected]
9 | MedicinMan August 2015
“Opportunity is where you find it and not where it finds you.”
I strongly believe that this can be converted into an OPPORTUNITY. Whenever I have addressed stu-dents, I have highlighted the opportunities and the bright chances of career progression in the pharma sector through presentations and interactions. I have also been able to clarify myths and misunder-standings about pharma selling.
Like in any other job, if one has the right attitude and works hard at it, the sky is the limit. I have shared my own experience of climbing up the ladder from a Medical Rep to Managing Director. Having spent four decades in the industry, I am thoroughly convinced that next to the IT sector, pharma sector is a knowledge sector and should attract the right people.
Somewhere we are missing this pull.
In my opinion, grooming youngsters for the med-ical sales profession has to be a concerted effort and become a movement. Second line managers/ regional managers of established pharma players could take this up as an ‘industry cause’. If they take it upon themselves to address at least 10 colleges in their geographical area, one can imagine the multiplying effect in getting entry level candidates (given the number of managers from even 50 pharma companies). One may not get great results overnight. However, if there is a consistency in this approach, perhaps over a period of time the lost glory of medical selling profession may be restored.
This can certainly be one of the ways by which a talent pipeline might be built, positively impacting the future of the industry. -KH
K. Hariram | Catching Them Young
”
In my opinion, grooming youngsters for the medical sales profession has to be a concerted effort and become a movement. Second line managers/ regional managers of established pharma players could take this up as an ‘industry cause’.
10 | MedicinMan August 2015
Sales Contests and SPIFs are a powerful tool to accomplish specific short-term sales goals. They can be quite effective if used well because of the ad-
ditional cash/ non-cash based incentives over and above the regular incentive compensation (IC) plan. Team-based sales contests can also bolster salesperson teamwork by encouraging healthy competition. However, sales contests should not be used as a method to account for gaps in the base IC plan. Also ensure that there aren’t too many contests running for a particular salesforce within a year as they may act as a distraction to the base IC plan. Some scenarios where contests are a good tool are:
1. To temporarily motivate salespeople to react appropri-ately to external market events. For e.g: In case of launch of a new competitor, focus should be on maintaining market share.
2. Give sales performance a shot in the arm. For eg. Sever-al companies run contests mid-year when performance to budget needs to catch up.
3. Provide temporary focus to a lagging product line.
4. Sometimes sales SPIFs can be used as a base IC plan for a new product that went to market very quickly and the base IC plan is still playing catch up.
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GETTING SALES CONTESTS RIGHT!How to design a sales contest that brings in the desired results at the right price.
Amit Jain
”Amit Jain is Co-founder and Director
of Operations at Aurochs Software, an incentive compensation solution specifically
designed for the pharmaceutical industry.
11 | MedicinMan August 2015
At a high level the process below should be fol-lowed to ensure that contest is effective:
Define a clear contest objectiveDefine the contest objective clearly along with the desired business goal. As far as possible, try to define the business objective in numeric terms as well. This helps judge the success of the contest more objectively. For eg. Increase market share for the brand by 2 percentage points.
Budget, Budget, Budget!Next, decide on the budget for this contest. What is the investment you are willing to make to achieve this desired business goal? The success of a contest is defined as achieving the desired business objec-tive while remaining within budget.
What are the details?Once the problem statement is defined, the next step is to design various aspects of the contest:
1. Design methodology – As far as possible the SPIF/contest should complement the base IC plan and should not send out a conflicting mes- sage
2. Performance Metric – Pick a performance metric that is clearly aligned to business objective along with definition of data sources being used for calculations
3. Period – Communicate the effective start and end date of the contest and the payout timelines for the contest/SPIF
4. Applicable Rules – Define the rules in as detailed a manner as possible. Specify at least:
- Eligibility – Who is eligible to win the contest and who is not
- Competing pool – In case of competitive con- tests clearly define the pool within which your performance will be compared
- Number of winners – Define the number or percentage of winners from each pool
- Reward – Cash, Non-Cash, Recognition, Com- mission per unit
How much is this going to cost us?Perform cost sensitivity analysis based on various sales performance scenarios to get a better under-standing of cash outflow and to avoid the risk of facing cost-overruns. Use this model to tweak the contest parameters so as to achieve acceptable spend.
Amit Jain | Getting Sales Contests Right!
”
As far as possible, try to define the business objective in numeric terms as well. This helps judge the success of the contest more objectively.
12 | MedicinMan August 2015
This model can also help you build a business case for contest implementation. This model should also be used to ensure that the performance metric is unbiased to any specific geography/ group and that the contest will not create any undesirable be-haviour from the participating salesforce.
CommunicationThe most critical step for the success of a sales contest is communication. There should be clear messaging about the underlying business objective, eligibility, associated business rules, the competing pool and the reward associated with the contest. Participating sales team should have clear under-standing of the performance metric (sales perfor-mance or activity based) and should perceive the metric as fair. Be open to offer additional training especially for new launch products to engage the broader salesforce.
Your contests will be more effective if they are exciting!Ensure that you generate excitement in your con-test communications as well. Using sports or enter-tainment analogies in contest communications can help here. The aim should be to get your salesforce excited about your contest. Create a buzz around the program by utilizing multiple communication channels:
- Second line manager – direct communication
- First line manager
- Company Intranet
- IC Scorecards (via notes/comments)
- Email blasts
- Social Media
How are we doing?Along with the contest detail communication, focus should be on creating effective reports and dash-boards to communicate feedback:
- Dashboard with performance measurement and clear contest standing
- Ranking Report
- Additional section in existing IC Scorecards or sales performance reporting
Let’s build and run this thing!Ideally you should use your existing Incentive Com-pensation Management system to implement your sales contests. This will ensure that data sources and rules applied for your contest are consistent with the base IC Plan definition of those rules.
Amit Jain | Getting Sales Contests Right!
”
The most critical step for the success of a sales contest is communication. There should be clear messaging about the underlying business objective, eligibility, associated business rules, the competing pool and the reward associated with the contest.
13 | MedicinMan August 2015
Timely progress reports to management as well as participating employees on the contest standings and projections will help maintain salesforce focus on the contest.
Ok! Was it worth it?Once the contest period is over, go back to contest objective and desired outcome identified in the first step. Measure success in comparison to the assigned business objective. Analyze improved sales performance and success metric and cost of contest as compared to the budget allocated. Slice your contest winner performance many ways to analyze the overall impact of the contest. As part of this step, it’s also important to seek feedback from the participating team on their experience so that contests can be made more effective in the future. In this post, we talked about how to make the contest design and management process more streamlined and effective. Below is visual frame-work of designing and managing sales contests for your organization. - AJ
Amit Jain | Getting Sales Contests Right!
”
Timely progress reports to management as well as participating employees on the contest standings and projections will help maintain salesforce focus on the contest.
14 | MedicinMan August 2015
With a little over three decades of work experience in the pharmaceutical arena, more than half of it in the domains of Sales
& Marketing, I have come to the conclusion that the most critical role to be played by the most critical layer of the Sales & Marketing wing of any pharmaceutical establishment, is often under-played due to the con-stant dilemma of “To Nurture or Not To Nurture”.
I am referring to the role of Front-line Managers to nurture their team of Medical Representatives.
Please don’t get me wrong; I am not by any means accusing FLMs. My intention throughout this article, is to share the environment in which the FLM has to operate and how the “needs of the hour” almost al-ways come in the way of the FLM carrying out his/ her responsibilities when it comes to the “people” area.
No FLM will deny the fact that the Medical Represen-tative is the face of the organization, responsible for creating the right image of his/ her company, brands and self as a professional service representative, in the minds of the “customers”, especially KOLs. However, during joint field work with the MR, most FLMs prefer to “compensate” for the lacunae in their MRs by step-ping into their shoes during the call and “converting” the customer, rather than spending quality time with their MRs to identify and mutually agree upon the areas of improvement and work towards bridging the knowledge/ skill gap, through mentoring, training or coaching.
To a newly promoted FLM, the demonstration of a superior “in-clinic performance” by the FLM boosts his/ her ego and also gives him/ her tremendous “job” satisfaction. But is stepping down into the shoes of the MR, the “job” of the FLM and does he/ she willingly do so?
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Sunil Bajaj
TO COACH OR CLOSE SALES?Many Front-line Managers are too busy chasing sales targets to spend time coaching their MRs for sales excellence. This needs to change.
Sunil Bajaj is Proprietor at Krafterrz
Sunil Bajaj | To Coach or Close Sales?
15 | MedicinMan August 2015
The absence of a proper induction in the role of a FLM and the lure of immediate gain of prescriptions (short-term goal) from the customers being jointly called upon, to meet up the sales targets for the running month, leaves little or no room for any long term thinking towards the capability building of the Medical Representative, which in reality, is the “job” of the FLM!
The spectrum of the ‘job responsibilities’ of the FLM towards people, starts from the right recruitment of team members, and ends with the grooming of the deserving personnel for the next level; and in between two extremes lies the zone for continuous coaching, cultivation, development, encouragement, grooming & refining of people, based on personal observations and feedbacks from senior managers.
The absence of an environment which promotes proac-tive thinking, inadequate interviewing skills, insufficient involvement of the senior managers, and the “pressure” for filling up the vacancy, often lead to a compromised selection of MRs. Justifications such as, “this person is okay for that territory” are then often given by the FLM/ selectors who are keen to have at least, the customer coverage regained at the earliest, so as to arrest any fur-ther loss of sales in the vacant territory. This is a classic example illustrating lack of long-term focus by many managers in this industry.
With all good intentions of ensuring at-the-earliest resumption of brand exposures to the customers in the erstwhile vacant territory, FLMs often “push” the newly selected personnel into the “field/market” without pro-viding them the desirable extent of induction/training.
Aligning the efforts of each team member in accor-dance with the ongoing promotional strategies is a very critical job of the FLM. To be able to do justice in this area, the FLM should be good at identifying the gaps in understanding, clarifying doubts, and providing timely constructive feedbacks. However, to be able to do so, the FLM himself/ herself should be having a thorough understanding of the strategies and the way the inputs are meant to be used. In most of the cases, the PMT briefs the FLM & MRs in the same forum and the “field” is then expected to implement the strategies from the very next day. In some cases, the currently-used promo-tional tools are destroyed then and there to ensure that the new material is put to use immediately.
I can’t help but empathize with the situation of the newly promoted First Line Managers. In most cases, his/ her state is similar to that of a couple bestowed
”
During joint field work with the MR, most FLMs prefer to “compensate” for the lacunae in their MRs by stepping into their shoes during the call and “converting” the customer, rather than spending quality time with their MRs to identify and mutually agree upon the areas of improvement and work towards bridging the knowledge/ skill gap, through mentoring, training or coaching.
Sunil Bajaj | To Coach or Close Sales?
16 | MedicinMan August 2015
with the responsibility of bringing up their child. Neither the expertise in selling (in the prior role of MR), nor any academic excellence comes to use, when it comes to dealing with people in real life scenario. Just as the ‘new’ parents have had no exposure to a course on “Parenting”, the new FLMs too have no prior acquaintance of dealing with a diverse set of people who are now “team members”! It calls for a humun-gous effort on the part of the FLM to be able to swiftly gain acceptance from his team, understand them and connect with them at an emotional level, which is the prescribed mandate of the day!
For desirable changes to happen at the FLM layer, changes have to happen at various other levels to en-able FLMs focus adequately on their people and their development; only then would the right recruitments, non-compromised nurturing, and pertinent promo-tions be the realities of the otherwise, splendid and opportunity-filled pharmaceutical sales & marketing arena. -SB
”
I can’t help but empathize with the situation of the newly promoted First Line Managers. In most cases, his/ her state is similar to that of a couple bestowed with the responsibility of bringing up their child. Neither the expertise in selling (in the prior role of MR), nor any academic excellence comes to use, when it comes to dealing with people in the real life scenario.
17 | MedicinMan August 2015
Production Planning and Material Control is the devel-opment of a plan to meet demand for a product over a period of time: what to make, when to make it, how much
to make, where to make it and what materials and resources are required. Production planning takes the guesswork out of planning material requirements and plant capacity.
One can predict how much and when manufactured and purchased products will be required, and accurately schedule work centers according to your established capacity by utilizing manual, forward or back-scheduling. If any unforeseen changes occur the plan can be modified easily and instantly. Effective production planning is a key issue in pharmaceutical manufac-turing. Its purpose is to minimize production time and costs, and simultaneously organize the use of resources to maximize efficiency. The manufacturing environment is dynamic - condi-tions change daily or sometimes even hourly; emergencies, ma-chine breakdowns, and quality issues - the list can be endless. These changes do not happen at definite time periods - they are bound to occur many times in the production planning cycle.
Production planning is an intricate course of action that covers a wide range of activities that ensures that material, capacity and human resources are available when needed. To plan effectively, there should be an efficient process to generate a production plan or production-scheduling document. More than 110 differ-ent methods have been proposed to improve the manufactur-ing cycle.1
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Vivek Hattangadi
PRODUCTION PLANNING FOR THE BRAND MANAGERAs sales forecaster, the brand manager plays a very important role in the production planning and material management strategy of the company
Vivek Hattangadi is a Consultant in Phar-ma Brand Management and Sales Training
at The Enablers. He is also visiting faculty at CIPM Calcutta (Vidyasagar University)
for their MBA course in Pharmaceutical Management.
Vivek Hattangadi | Production Planning For The Brand Manager
18 | MedicinMan August 2015
The production planning document typically begins with a sales forecast, or sales plan prepared by the marketing team, the brand manager playing a pivotal role in this process. The accuracy of the sales forecast made by the brand manager goes a long way to op-timize the process of production planning. From the sales forecast, all other processes start. The produc-tion planning document should include materials re-quirement planning, converting planned orders into purchase requisitions, production orders or process orders and many more. The document should also have a backup plan should things go wrong. Each area of production planning is dependent on the oth-er and must therefore be done in unison. It makes no sense to procure material if production cannot pro-duce, or plan production if materials are not available or marketing is unable to create prescription demand. Production planning is a collaborative effort amongst different departments like marketing, distribution, production, quality assurance, purchase and finance to effectively bring all aspects of the course of action together.
The factors which go into effective production plan-ning and material control include:
1. Accurate sales forecasting by the brand manager.
2. Material requirements planning.
3. Inventory reduction/ optimization.
4. Quality assurance.
5. Financial management
We shall now discuss each of these.
Accurate Sales Forecasting by the Brand Manager The central tenet of forecasting in the pharmaceutical industry is that collaborations lead to better insights and results.2 The brand manager has a central role in this important function.3 Although predicting the future is difficult, nevertheless, accurate sales fore-casting is a key factor in any company’s success, and should include demand forecasting, trend forecast-ing and sales and marketing plans.2 Accurate sales forecasting allows a company to effectively control inventory, production facilities, labor, inventory levels and logistics, and is the basis of which most all other operations within the company function.
Perfect sales forecasting allows the company to have better negotiations and contracts for raw material, logistics and vendors. An accurate sales forecast provides for a smoother running operation with less last minute rushes to fulfill customer requirements.
”
The accuracy of the sales forecast made by the brand manager goes a long way to optimize the process of production planning. From the sales forecast, all other processes start.
19 | MedicinMan August 2015
An independent group should be set up to deal with the sales forecasting process and is essential for a truly collaborative effort. This group must be inde-pendent of all other departments and should be held accountable for the sales forecasting process and final accuracy.3 Because this group is independent of all departments it will be able to work with all groups without worrying about conflicting agendas or goals.
Many organizations that are successful in accurate sales forecasting share a common structure of fore-casting parameters:
1. An independent group is formed which would be accountable for the sales forecasting program.
2. The final sales forecast would include demand forecasting, trend forecast, future sales and mar-keting plans in the final sales forecast.
3. Excellence in communication throughout the organization on the sales forecasting process and results.
4. A collaborative and effective effort from all de-partments for greater accuracy in sales forecast.
5. The sales forecast is measured, measured, and measured again and again for even greater accu-racy in the future.
Material Requirements Planning Material requirements planning (MRP) involves get-ting material on hand when required for production and sales. The material requirements planning docu-ment should provide four basic items of information:
1. When to place order.
2. How much to order.
3. Whom to order from.
4. When the items need to be on hand.
While some companies do not use MRP, but rely on expediting to accomplish this, some companies use the minimum-maximum stock level. Both these methods are costly and often fail to meet production or sales needs that a good material requirements planning process can provide. The only practical way to provide material requirements planning is by de-veloping a program or software on material require-ments planning. Material requirements planning can plan, schedule and reschedule materials as far into the future as required.
Vivek Hattangadi | Production Planning For The Brand Manager
”
An independent group should be set up to deal with the sales forecasting process and is essential for a truly collaborative effort. This group must be independent of all other departments and should be held accountable for the sales forecasting process and final accuracy.
20 | MedicinMan August 2015
Every company has a strategy for achieving that goal, but within the company there are groups whose focus may apparently seem to be in disagreement and in contradiction to the Materials Requirements Planning process.
The production department for instance is interested primarily in long production runs to minimize unit manufacturing costs, even though the results may be high inventory costs. In contrast the finance team wants a minimum of funds tied up in inventories. The marketing team may want to make sure that the entire range of products is available at all distribution points so that prescription demand is not wasted.3
If the accounting group keeps quiet, the marketing team will demand an increase in inventory. If the marketing team keeps quiet, the finance accounting group will want to know what could be the reason for such a high inventory. Uncoordinated conditions like these hamper the flow of products that is not congruent with the goal of the organization.3 A good Material Requirements Planning system will help the inventory group balance both requirements – provide product for customer requirements and keep inven-tory levels at an optimum level.
The ultimate goal of this document is to supply information that will enable the organization to have enough inventory on hand to just fulfill demand - and no more - available only when needed, (and no soon-er) at a quality level that meets specification, (but can also exceed it) and at the lowest price. A good material requirements planning program can provide the basic needs of keeping inventory levels low and fulfilling customer expectations for on time delivery.
Inventory Reduction/ OptimizationInventory reduction is all about eliminating sur-plus inventory, improving inventory turnover rates, increasing inventory turnover, and meeting on-time delivery. Surplus inventory blocks up cash-flow and needs to be reduced in order to free up cash for in-vestment in revenue-growth activities such as brand management, advertising, brand building, sales promotion, training, customer relations management and many more activities.
What could be the driving factor in poor performance in inventory reduction? One of the major problems to inventory reduction is the mistaken notion that improved inventory control management is all that is required to improve inventory rates, increase inven-tory turnover and provide an ongoing inventory reduction program.
Vivek Hattangadi | Production Planning For The Brand Manager
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If the accounting group keeps quiet, the marketing team will demand an increase in inventory. If the marketing team keeps quiet, the finance accounting group will want to know what could be the reason for such a high inventory. Uncoordinated conditions like these hamper the flow of products that is not congruent with the goal of the organization.
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Most of the times, lack of control contributes to exces-sive inventory.4 But often the marketing team reacts negatively to material shortages and does not look for ways to improve inventory turnover.
Many efficient organizations have achieved inven-tory reduction and improved on-time delivery by implementing systems such as Enterprise Resource Planning (ERP), Just-in-Time (JIT), Kanban, and other approaches to inventory management, and these systems do reduce inventory and improve inventory turnover, but there is still room for improvement.
There are some basic steps that any organization can use to improve inventory turnover:
1. Set a realistic objective for inventory levels.
2. Identify those items that are in excess of accept-able inventory levels
3. Identify obsolete and defective inventory.
4. Make an action-plan to reduce the inventory.
5. Devise new procedures to help eliminate future build up of inventory.
6. Measure the steps and actions taken, measure again and again for future considerations.
Purchasing Management Purchasing Management is about working with key suppliers to make it easier to do business by develop-ing vendor partnerships. Good purchasing manage-ment ensures the best possible cost, quality and on-time deliveries. Purchasing management might also include asking suppliers to participate in marketplace reviews, analyzing product failures, asking vendors to share information and expertise, just to name a few.5
A properly structured purchasing department can help guide our purchasing team in vendor selection and vendor relations to optimize our purchasing cost. It can provide parameters used in vendor selection such as, mandatory order size, lead time, cost and quality consistency and on-time delivery. Purchasing Management maximizes vendor participation and minimizes our company’s expense in ordering, receiv-ing, inspecting and maintaining optimum inventory.
Financial management The executive management of a company usually requires several pieces of financial information before making a decision on starting the production plan-ning process.
Vivek Hattangadi | Production Planning For The Brand Manager
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Good purchasing management ensures the best possible cost, quality and on-time deliveries. Purchasing management might also include asking suppliers to participate in marketplace reviews, analyzing product failures, asking vendors to share information and expertise, just to name a few.
What the Pharma CEO Wants from the Brand
ManagerA Book by Prof. Vivek Hattangadi
Available on Flipkart(click to purchase)
22 | MedicinMan August 2015
Materials costs, cost of wages for labor, administration costs will all be presented to executive management for their decision regarding production planning pro-cess. Financial control and risk management are crit-ical to running an effective organization. The role of finance is to ensure maximum utilization of economy. Working capital can get stuck because of over-stock-ing materials, largely due to the incorrect forecasts made by the brand manager. Finance management will have to optimize capital investment in the stock of materials and eliminate wastage.6 The finance con-troller is responsible for maintaining compliance with accounting rules and regulations within the organi-zation. Finance has to ensure sufficient cash flow to meet the brand manager’s forecast; forecast therefore becomes crucial in an organization.
Quality assurance Quality assurance of pharmaceutical products is a continuing concern. WHO has issued guidelines on this subject. Quality assurance is a wide-ranging concept covering all matters that individually or col-lectively influence the quality of a product. Since the reputation of a brand depends a lot on the perceived quality, the brand manager has to integrate this process in the production planning schedule. Quality Assurance allows the brand manager to track quality issues that are found at work order operation, at work order close, upon receipt of material, or in inventory.
ConclusionThe brand manager has to deliver superior and differentiated products - ones that deliver unique benefits and superior value to the prescriber. The brand manager therefore has to play different roles. The brand manager often serves an inter-disciplinary role, bridging gaps within the company, between teams of different expertise, most notably amongst quality assurance, financial management, production and the materials procurement teams. He is therefore the pilot who drives the entire production planning and material controls process. The best option for a brand manager is Just-in-Time production which will improve the returns on investment by reducing inventory and the associated costs. -VH
Vivek Hattangadi | Production Planning For The Brand Manager
”
The brand manager often serves an inter-disciplinary role, bridging gaps within the company, between teams of different expertise, most notably amongst quality assurance, financial management, production and the materials procurement teams. He is therefore the pilot who drives the entire production planning and material controls process.
Bibliography
1. Halevi Gideon. “Handbook of Production Management Methods”; Butterworth-Heinemann, Oxford; 2001
2. Cook Arthur G. “Forecasting for the Pharmaceutical Indus-try”; Gower Publications Ltd, Hampshire, London;2006
3. Hattangadi Vivek. “What the Pharma CEO Wants from the Brand Manager: Overcome The Tough Challenges of Pharma Branding”; The Enablers, Ahmedabad, India; Ed. II 2014
4. Janice MacLennan. “Brand Planning for the Pharmaceutical Industry”; Gower Publications Ltd, Hampshire, London;2006
5. Michael Etzer, Bruce Walker, William Stanton. “Marketing”; McGraw Hill Irvin, Boston; 2007
6. Sadiwala CM and Sadiwala RC. “Materials and Financial Man-agement”: New Age International Publishers, New Delhi; 2007