Pharmaceutical & Chemical

For a long time, the pharmaceutical and chemical industry has evolved in a relatively stable environment.
But recently, it has gradually been seeing its profits shrink.

Citwell, accelerators of transformation

The main chapters of this page:

The challenges of the sector

A market dichotomy between mature and emerging areas
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• Mature areas are characterized by increasing pressure on margins , low growth markets , concentration progressive customers (central purchasing, logistics, etc.).
• Emerging zones are experiencing a strong growth in markets and demand , regulatory constraints requiring the establishment of joint ventures or local productions, and the implementation of new distribution methods .
Complexity and instability of the portfolios produced
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• For pharmacy, blockbusters generate margin, but also income instability , because of the fall of activity related to the fall in the public domain or the withdrawal of product.
• For chemistry, more and more specific products and packaging for each customer.
Increased pressure on sales prices
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• Increased competition (especially for generic and OTC drugs) and economic pressure from mature states (streamlining of public health systems, disbursements) , calls for tenders) for pharmacy .
• While specialty chemistry retains significant margins , commodities are under direct competition from China and India.
Cost inflation linked to...
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• Increasing R&D budgets to develop new molecules and new research techniques that are becoming increasingly sophisticated.
• The direction of the strategy towards the Mass Market (need to position oneself first in a market, promotion budgets in inflation).
• Regulations that increase the number of controls and systems .
A need to change organisations
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• Concentration of actors through mergers, acquisitions or equity investments
• Refocus on their core business, with the outsourcing of certain activities (R & D, manufacturing, distribution, etc.)
• Search for size effect to amortize R&D, marketing and commercial costs and generate industrial and logistical synergies
• Globalisation of production capacities to adapt to the development of emerging countries
• Reorganisation and optimization of existing industrial and logistics tools , as well as supply chain flows

Your problems and our solutions

  • Segmentation of Markets/Customers/Products

    • Set up differentiated service and flexibility policies (Service Level Agreement with the markets)
    • Streamline the product portfolio by market typology (mature/emerging)
    • Adapt the distribution strategy by market (direct distribution, partners, storage points, etc.)

  • Mastery of demand

    • Plan collaborative sales with markets and/or distributor partners
    • Integrate calls for tenders into statistical forecasts on mature products
    • Adapt a differentiated management of forecasts for promotions, launch/end of life, « switch » products
    • Set up VMI (Vendor Managed Inventory) between factories and markets, with some third-party customers and distributors

  • Industrial agility and logistics

    • Improve the responsiveness and flexibility of industrial resources (reduction of cycles, reduction of firm horizons, optimization of batch sizes, etc.)
    • Adapt the management of flows and stocks (pull / pushed flows, point of decoupling at the level of active and semi-finished principles, delayed differentiation to packaging, etc.)
    • Adapt stock policies to desired service levels and responsiveness of industrial and logistics tools

  • « End-to-end » Optimization

    • Master the long, medium and short-term balance between demand and capacity, combining a strategic vision (commercial locations), economic (budgets, margins) and customer service (service rate)
    • Synchronize sites and markets around the S&OP loop (market-oriented S&OP, production and distribution master plans, etc.)
    • Reduce total costs (purchase, trade, production, logistics, etc.)

Some references of the sector

Sanofi

Novacyl

Leo Pharma

More references
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Guillaume Allemand

Pharmaceutical & Chemistry Expert

Managing partner of the firm, Guillaume particularly intervenes in the sectors of Life Science, Pharmaceutics and Chemistry. Throughout his career, he led many transformation projects and accompanied change for large groups and smaller companies, from diagnosis to operational implementation. Guillaume recently worked with various actors of the sector such as Aguettant, BayerCropsciences, BioMerieux, Expanscience, Galderma, MSD (Merck Sharp & Dohme), Novacyl, Sanofi, Solvay or 3iNature.

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