Australia is described in literature as a “wide, brown land.” It is a sparsely populated country of some 20 million people, geographically about the size of the United States. Some of its cities, such as Perth, Broome and Darwin, are among the most isolated in the world.
But being vast and sparsely populated presents unique problems when it comes to supplying people with the essentials of life – a supply chain challenge of vast scale. And few products are more essential for health and well-being than the pharmaceutical drugs so many people depend upon.
Delivery with 24 hours
Sigma Pharmaceuticals, the nation’s leading manufacturer and distributor of pharmaceutical and complementary medicines, is charged with solving this equation. The company faces a strict regulatory environment with no room for error. Sigma is legally obliged to deliver to any outlet Australia-wide, within 24 hours.
Success has earned Sigma, which is almost 100 years old, its market position inside the top 75 companies on the Australian Stock Exchange. Sigma moves 250,000 orders Australia-wide from 15 distribution centers.
“Our aim is to achieve excellence in performance as judged by the market,” says Jackie Toh, general manager of Healthcare Logistics at Sigma. “But we aim high, we never sit still, and that requires constant focus on increasing efficiency.” Indeed, Toh says Sigma has made at least one major acquisition every one to two years, including brands and businesses.
But back in 2002, Sigma was facing a very real impediment to progress. Its supply chain management system was fragmented and unwieldy. For 35 years Sigma had relied on the legacy enterprise resource planning (ERP) system. “It lacked functionality across the spectrum,” says Toh. “To stay with it would have meant using blunt shovels to dig our own grave.”
So Sigma went to the marketplace in 2003 and, in one of the most rigorous selection processes possible, said to solutions providers: Prove yourselves. It took a full 12 months to execute the selection, in which 18 systems were pared back to four and then two. In October 2004, Sigma signed off on an enterprise system from IBS.
“We looked at functionality and fit,” says Toh. “Just as important, though, was the cultural fit of the company we would choose to work with. For us, it was necessary that the vendor could support our current and future needs. We wanted an effective, long-term relationship. We were not buying a packet of biscuits.”
For IBS, winning the business and implementing the IBS solution was a project executed on an international scale. It involved IBS headquarters in Sweden, IBS PHARMA competence center in Germany, IBS Australia, an international sales team and an R&D team. IBS had been told that any form of failure was not an option.
“We wanted the best, most cost-effective solution in the industry,” says Toh. “And we got it.”
Sigma needed the implementation process fast-tracked. It began in November 2004. By April 2005 the financials, purchasing and pricing modules were in place nationwide. The last location went live in May 2006. “IBS was slick, on time, on budget – very impressive.”
Toh says the IBS system is performing to expectations. “We have achieved our ROI target. Our mantra is delivery in full and on time. Reliability and speed are essential – to be efficient, responsive to customer needs at every level. IBS gives us that edge.”
Visibility has been key, she says. Productivity management, data analysis, inventory management, electronic ordering and tracking, financial management, system responsiveness, speed, flexibility – all of these factors are reeled off by Toh as clear advantages delivered by IBS. In short, a highly complex supply chain streamlined.
“Beyond the excellent ERP system, we particularly like the IBS culture and its people. They are highly responsive, not highly regimented. We have seen the same faces all the way through. I’m sure they see me as pushy but our relationship is great. I can call at 2 a.m. and IBS is there.”
Toh forecasts a growing relationship. “IBS constantly pumps out new functionality. We are watching eagerly to see what’s coming next that we might adopt.”
In addition to the successful ERP implementation, Sigma established a number of priority requirements for a high-volume integration solution. Requirements included the ability to handle large volumes of suppliers, SKUs and orders, quick turnaround of orders and a secure, stable solution that never compromises day-to-day business operations. These stringent prerequisites placed serious demands on an application. Sigma evaluated IBS INTEGRATOR, and it more than met the company’s needs.
IBS INTEGRATOR allows Sigma to integrate data processes, applications and systems quickly and efficiently. It has the power to fully model and integrate business-to-business processes with suppliers, customers and other business partners.
Sigma uses IBS INTEGRATOR for all sorts of integration, with large-volume processing of files (incoming and outgoing) as well as all picking and pick confirmations through an interface with Sigma’s automated warehouse.