Lupin Limited

Accenture helps Lupin drive procurement excellence for ambitious growth.


OVERVIEW

Headquartered in Mumbai, India, Lupin Limited manufactures and distributes generic formulations and bulk drugs through operations across India, Japan, Europe and the United States. Lupin employs approximately 16,000 people and its FY16 revenues amounted to INR 13,701 Cr ($2.1 billion).


Opportunity

Lupin, like many manufacturers of generics, wanted to grow its business rapidly. Over the course of the last five years, it had been growing at a compound annual growth rate (CAGR) of 21 percent. Over the next five years, Lupin set itself an ambitious target to grow at a CAGR of 28 percent, while maintaining its earnings before interest, tax, depreciation and amortization (EBITDA) margins above 28 percent.

“Project APEX has been able to help us institutionalize systems and processes in our procurement organization positively impacting the functional efficiency and responsiveness to business requirements. The transformation journey has culminated in the restructuring of our procurement team into a ‘Global Sourcing and Contract Manufacturing’ function that blends a mix of category expertise and scalability to meet the challenging needs of our rapidly growing global organization. Accenture’s procurement expertise combined with the collaborative approach of its team are two critical factors in the APEX success story.”

Mr. Nilesh Gupta, Managing Director, Lupin

SOLUTION

Accenture Strategy delivered a comprehensive procurement operating strategy to help achieve business excellence, comprising key aspects of value realization through strategic cost reduction initiatives; and infrastructure build through process optimization, organization restructuring, technology enablement and capability development.

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RESULTS

Accenture Strategy's deep understanding of the life sciences industry, coupled with its expertise in procurement cost reduction, process optimization and capability development, helped deliver optimal value. Additionally, prior engagements and knowledge of Lupin's business further strengthened the team's ability to deliver. Specific results included:

Value realization

  • Cost savings of approximately 6-8 percent were identified through various technical and commercial initiatives across both direct and indirect categories.
  • Lupin has already started to see benefits for various initiatives, with approximately 50 percent of identified savings implemented and 25 percent already accrued.

Infrastructure build

  • Optimization of data management and requisition to payment processes has resulted in a 10 percent improvement in procurement on-time-in-full (OTIF)—a key metric for the procurement function
  • Interventions in procurement strategy processes have enabled accuracy in budgeting and long-range planning activities.

The success of the value realization workstream led to the solution being extended to another large Lupin entity in Japan to help identify raw material cost reduction opportunities. Savings opportunities of approximately 8-10 percent of the cost base were identified and are under currently being implemented. Furthermore, the success of the infrastructure build workstream led to its extension to seven additional plants in India to help optimize all procurement processes.

Collaborating with Accenture Strategy has helped Lupin establish a high-performance procurement function that provides it with a strong foundation to achieve its growth targets.


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