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Building cost competitive operating models to drive growth and innovation

Expanding value networks to enhance patient outcomes

Overview

Life sciences companies face fierce cost pressures as they try to move into new markets or develop new products. Changing reimbursement models and an expanding set of buyers and influencers increase complexity, while operating cost constraints remain. However, gaining the agility to better compete in this industry is not a one-time exercise, and it is not just about reducing costs. Taking the right actions to structurally reduce operating expenses can free up cash for R&D, new-product introductions and market research. This, in turn, fuels growth and innovation to help create a sustained competitive advantage and profitability.

Life science companies can gain the agility to compete by:

  • Creating a more efficient operating model that frees up resources to invest in growth through research and development

  • Embedding process excellence throughout the organization to drive effectiveness

  • Building leading-edge capabilities to create differentiation from competitors

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PROCUREMENT PROCESS EXCELLENCE

Why procurement is good medicine for Life Sciences

A strategic and collaborative procurement function is necessary for the life sciences industry to stay competitive and restore growth. Most companies do not realize the full value of procurement processes in supporting the development of new products, creating new markets and exploiting new sales methods. Rethinking the front-middle-back office procurement organization can help drive process standardization and efficiency, shifting a variety of strategic thinkers to the forefront of business. Life sciences players need to recognize and foster procurement’s strategic potential to foster innovation and growth.

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SUPPLY CHAIN CONTROL TOWER

Push to pull—from supply chains to patient-centric value networks

The traditional life sciences linear model of supply chains cannot keep up with the emerging challenges and opportunities of the industry and must transform to enable a “value network”—a set of chains that is patient-centric, dynamic and responsive to market demands. The focus should shift from pushing supply to the “pull” of the needs and wants of patients and healthcare providers. The use of analytics and digital technology in supply strategies will not only improve efficiency and effectiveness, but it can also protect a company’s brand and corporate image by ensuring predictable, compliant and secure supply, when and where buyers’ and, ultimately, patients’ needs are.

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Closed-loop cost management

Closed-loop cost management: An engine for growth

This approach helps life sciences companies build the finance and procurement capabilities they need to sustain and improve savings over the long term. Closed-loop Cost Management involves helping to achieve full visibility on all operating spend—across business units, categories and geographies to a detailed level—and exploring how the money can be spent more wisely to add value and help drive sustainable growth.

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Reimagining ZBB

Reimagining zero-based budgeting: Strategically managing costs to drive competitive advantage and growth

Zero-based Budgeting (ZBB) is very different from traditional budgeting that tallies the last year’s budget and adds a percentage. ZBB forces the organization to build the budget from scratch each year and justify each dollar spent. Then cultural change delivers ongoing efficiency savings that can be continuously recycled into growth initiatives. This provides life sciences companies with the agility to respond to changing market conditions.

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LOGISTIC EXCELLENCE

How logistics excellence can change the fortunes of pharmaceutical and medical device companies

For most life science companies, sustainable and profitable growth is a real challenge. They often overlook the importance of longer-term fundamentals required to fuel such growth, such as excellence in logistics and supply chain management. Supply chain improvement opportunities are extensive and attainable and can help companies increase revenue, improve margins, minimize risk and reduce costs. Opportunities for mastering logistics in life sciences can be found in the following categories:

  • Logistics strategy

  • Compliance Mastery

  • Distribution management

  • Inventory and order management

  • Global transportation

  • In-market optimization

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