Roche Pharmaceuticals Operations Planning.
Roche essentially deals in pharmaceuticals many of which are life saving drugs. Hence, Research and Development plays the most significant role in its product development. …
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Sales & Operations Planning
At Roche an efficient sales & operations planning is used in order to balance demand and supply, to align mix and volume and for integrating financial and operating plans. This has been facilitated by using of Enterprise Resource Planning systems discussed in later sections. At Roche, the top management takes ownership of the sales and operations planning process. The management considers it a source of delivering business plans and strategies. The medium to long term decisions are taken by the top executives while the short term decisions are taken by the middle management. Various products at Roche pharmaceuticals are divided into families which makes it easier for management to review them for planning. Roche believes in proactive management rather than reactive crisis management. Hence, the sales and operations plan are designed well ahead of time.
The sales and operations planning process also encompasses risk analysis and mitigation. The various possible scenarios in the planning horizon are studied and plans are made to tackle sudden rise or fall in demand and resources. After the plans have been decided at the top, they are communicated throughout the organization for smooth and accurate implementation.
Broadly speaking, 5 steps are followed by Roche for Sales and Operations Planning. In the first steps, all new product development programmes are reviewed with the help of Research and Development Department. The information obtained acts as input for the sales and operations planning process. The concerned risks and assumptions are also documented. In the second step, a new sales and demand plan is created. The forecasts made here are dependent upon inputs from various stakeholders in the meeting. Roche accomplishes forecasting with the help of SAP ERP tools. The system generated forecasts are shared with all stakeholders. Any changes suggested are incorporated after discussion and the final forecasts are developed. These forecasts act as input for demand planning meeting. The concerned risks and assumptions are documented. In the third step, an operations plan is prepared in order to fulfill demands for each time period. For this the old operations plan is studied and the differences are noted. In the new operations plan, these differences are adjusted keeping in view the various resource constraints and inventory levels. The operations plan is multiplied by bill of materials required for each product family to arrive at total required resources. The required resources are compared with available resources. If there are significant differences, solutions to fill those gaps are identified and documented. In the fourth step, the impact of operations plan on other departments such as Accounts, finance, IT and sales is studied. Reconciliations and corrections are done to address concerns of various departments. Finally the key recommendations and potential scenarios are studied to from an agenda for the final Sales and Operations Planning meeting. The agenda is shared before the meeting for everyone to understand. In the fifth step, final Sales and Operations meeting is conducted. In the final meeting, the progress on previous sales and operations plan is studied, plan for each product family is reviewed, approvals are made and new proposals are decided. The minutes of meeting and action plans are then communicated to various stakeholders (PHS, 2006). 5.3. Aggregate Planning Strategies Roche pharmaceuticals uses aggregate planning for achieving its medium term objectives. The activities are planned at various
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