JG COWPER MSc. Bio Medical Eng UTI Strategic Services BI Supply Chain Specialist

1. Harnessing the competitive advantage of South Africa’s direct pharmaceutical distribution model in Europe using SCOR “Lite”. JG COWPER MSc. Bio Medical EngUTI Strategic Services BI Supply Chain Specialist

2. ABSTRACT SAPICS 2007 International pharmaceutical manufacturers desire, both at a strategic planning and execution level, that their primary logistics supply chain partners offer an integrated services platform to gain visibility and derive insights into their distribution channels. This presentation will detail how a simple rendition of SCOR has been used to encourage adoption of this direct distribution business model abroad and will show case how such a supply chain visibility tool can enable order responsiveness, the management of inventory levels and the mitigation of financial risk.

3. South African Pharma direct distribution value proposition • Direct to pharmacy channel model • Ability to adapt to scale • Maintain product integrity • Migrate from a trading focus to a fee for professional service • Accurate sales and marketing detail • Responsive supply chain performance

4. Multi-nationals delivering direct in South Africa

5. Migrating a direct distribution business model abroad

6. Pharmaceutical Supply Chain Model Deliver Return Return Return Return Return Return Plan Source Deliver Make Deliver Source Make Deliver Source Make Source Return Return Supplier Manufacturer Channel to Market Customer Consumer Pharmacy Hospital Doctors Retailer Chemical Supplier Direct Distributor Pharmaceutical Multi-National Patient Wholesaler

7. SCOR enables business model description across different European countries Italy – Due Diligence Greece -- Convert a wholesaler into a direct distributor Germany – Separate Product and Information Flows UK – Response to RFP Slovakia – Integrated Service offering packaged into a Control Tower

8. Italy – SCOR handles the language barrier to facilitate a due diligence assessment. PLAN (P1-5) SOURCE (S1) MAKE (M1) DELIVER (D1) RTSource (SR1) RTDeliver (DR1,3) ENABLE

9. Greece- SCOR assist in defining the roles enabling a wholesaler to become a direct distributor PLAN (P1-5) SOURCE (S1) MAKE (M1) DELIVER (D1) RTSource (SR1) RTDeliver (DR1,3) ENABLE LSP

10. Channels to Market (Germany 2005)

11. Germany - SCOR shows the value of separating product and data flows.

12. UK – SCOR gives context to a RFP 1 2 3 4 5 6 7 8 9 10

13. Network design opportunity exposed through SCOR Mapping – Propose HUB building sequence

14. Slovakia – SCOR exposes the need for an integrated logistics services platform meeting strategic requirements

15. Pharmaceutical Supply Chain Model Deliver Return Return Return Return Return Return Plan Source Deliver Make Deliver Source Make Deliver Source Make Source Return Return Supplier Manufacturer Channel to Market Customer Consumer Pharmacy Hospital Doctors Retailer Chemical Supplier Direct Distributor Pharmaceutical Multi-National Patient Wholesaler Pharmaceutical Supply Chain Control Tower

16. International pharmaceutical manufacturers desire, both at a strategic planning and execution level, that their primary logistics supply chain partners offer an integrated services platform to gain visibility and derive insights into their distribution channels. This presentation will detail how a simple rendition of SCOR has been used to encourage adoption of this direct distribution business model abroad and will show case how such a supply chain visibility tool can enable order responsiveness, the management of inventory levels and the mitigation of financial risk.

17. Prof Langley 2006 – Georgia Tech

18. IT capabilities are a key success factor for client bids Strategic/ Planning Director of Account Solutions 60% of clients specifically assess a 3PL’s IT capabilities when selecting a provider (Capgemini Survey, 2006) Relationships Operational Manager Transactional Visibility Clearing & Forwarding Warehousing Supply Chain Engineering Distribution Single service Multiple services

19. Prof Langley 2007 – Georgia Tech Visibility Tools - Web-Enabled Communications - Transportation Man (Execution) - Warehouse/DC Management - RFID - Transportation Man (Planning) - Collaboration Tools - Supplier Relationship Man - Transportation Exchange - Supply Chain Planning - Customer Relationship Man - Customer Order Management - Yard Management - Must Haves Emerging Needs Source: 2006 Third-party Logistics – results and findings of the 11th annual survey

20. Clients are requiring an integrated systems offering supporting a range of logistics services Emerging Needs PLANNING & OPTIMISATION Must Haves Relationships VISIBILITY & CONTROL Single service Multiple services

21. Integrated Supply Chain Services Portfolio Logistics Services Logistics Services Planning and Optimisation ------------------------------------- Visibility & Control

22. How does the Pharma Control Tower map to client strategy? PHARMA LOGISTICS STRATEGY DIRECT TO PHARMACY ADAPT TO SCALE

23. What supports the Pharma Control Tower Functionality ? Pharmaceutical Control Tower

24. Clients have outsourced the logistics function so hide the detail and offer the insights.

25. Management of inventory – Pipeline Visibility

26. Order Fulfillment Accuracy • Orderline completed versus orderlines requested

27. Sales Growth • Orderline completed versus orderlines requested

28. Mitigation of financial risk – DSO Analysis • Debtors age analysis

29. Lessons learnt to date, this project has illustrated that: - SA is a beachhead for supply chain innovation - SA logistics solutions can be world firsts - International pharma companies are looking at logistics partners to offer them competitive advantage - Visibility and control platforms offer a compelling value proposition that differentiate. - Migrating innovation “overseas” requires significant investment.

30. QUESTIONS ?