MSD (Merck & Co.)

The Challenge and Benefit

MSD recognized, as many in the pharmaceutical industry do, that it was lagging behind other industries when it comes to supply chain management. According to global consulting firm McKinsey & Company, supply chain management accounts for 35 percent of the profit and loss for businesses in the pharmaceutical industry — compared with 8-12 percent in the consumer packaged goods industry. That’s the industry MSD looked to for inspiration and lessons learned when it set out on its transformation journey.

MSD’s vision is to plan more effectively, which in turn allows it to supply high-quality products to its customers at the lowest cost and with the shortest lead time. To meet these goals, MSD has undertaken a supply chain transformation initiative spanning global demand planning, global supply planning, distribution requirements planning (DRP) and sales and operations planning (S&OP) – using Kinaxis RapidResponse at its foundation. Unique RapidResponse algorithms are being leveraged to perform rough cut capacity planning (RCCP) and attribute-based planning. Multi-level expiry planning is also being deployed.