A Roadmap to Optimizing Marketing Operations

Pharmaceutical CommercePharmaceutical Commerce - September/October 2011

Unifying a company’s approach to marketing fulfillment activities could provide innovation while delivering cost savings

Even through the consolidation of companies, acquisitions, regulatory changes, and the re-organization of sales forces, the pharmaceutical marketing supply chain has largely stayed the same—fragmented. The industry has always been very good at driving down costs on manufacturing and the marketing strategy, but it is behind in evaluating the processes that actually execute campaigns—and is missing out on key ways to eliminate waste and cut costs.

Other industries have consolidated their marketing supply chains to provide marketing materials and samples from a single source, but the pharmaceutical industry is sticking to what has worked in the past, the status quo. Pharmaceutical marketers continue on this way because there are so many other objectives to focus on, and the existing process seems to be working. In fact, in a recent study conducted by Forrester Research, pharmaceutical companies rate their marketing effectiveness higher than it actually is. Sixty-six percent of the marketers surveyed say they have the right marketing fulfillment capabilities to create strategic advantage, yet the study showed that only 14% have the processes in place to accurately make that claim.

Benefits to optimization

A mature, optimized marketing supply chain provides a smoother and faster marketing execution process, visibility into marketing programs, and the ability to remove millions of dollars in hard and soft costs along the way. The entire process improves with:

• A better prepared and satisfied sales force

• Improved customer experience and brand interaction

• Reduced total cost of marketing execution through process improvements and efficiencies

• Time and resources reallocated to focus on marketing

• Improved visibility to better understand inventory levels and user activity.

Building a roadmap

With the complex, moving pieces of a disjointed, and under-evaluated supply chain, how do you begin to bring discipline to the marketing operations process? How do you close the supply chain loop? Here are some tips to help you down the road to increasing your speed to market and eliminating waste.

1. Evaluate Current Processes

Begin by conducting an audit of your current marketing operations process. In your assessment, include how your processes are currently executed (from creative, printing, fulfillment, delivery, and program analysis) and identify possible pain points and cash leaks. This audit will help pinpoint redundancies and wasted effort, and allow you to start seeing the whole process and not just its parts. Key questions to answer include:

• Is demand planning part of the fulfillment process?

• Does it make sense to use print-on-demand tools?

• How do your sales reps order materials?

• Do I have the right metrics in place to get meaningful, actionable data?

• Are you and your fulfillment vendor ready to quickly respond in the event of a recall?

Also, ask your sales force about the process from their perspective. How easy is it for them to get materials? How is the quality upon arrival? What pain points are they experiencing? This instant information will help you identify areas of the process affecting the end-customer’s interaction with your brand that you may have previously missed.

Need help assessing your company’s processes? Experts provide supply chain assessments and will do the work for you, at no cost and no obligation to you. Also, taking surveys or self-evaluations (such as Archway’s Fulfillment Maturity Self-Assessment at http://archway.com/survey.aspx) can also help companies identify their current level of program maturity and zoom-in on areas that need help.

2. Gain executive sponsorship

Before you create an action plan to tackle the pain points you just identified, you must first gain executive sponsorship. According to the Forrester Research report, fifty percent of companies manage between 10 to 25+ vendors, so there are too many touch points to manage without some kind of executive sponsorship. Sharing findings from the assessments or deep dives you’ve conducted, and sharing the potential to reduce costs will help shareholders understand the value in making changes. With buy-in, companies can begin to collaborate cross-functionally to develop a supply-chain initiative.

3. Create an action plan

Prioritize areas of improvement and build a plan to tackle issues. Make sure you address:

• Visibility. Increased visibility allows you to deeply dive into marketing analytics, and evaluate which marketing mix is working. Without proper visibility companies can have a very hard time with simple demand planning.

• Analytics. The right partner will offer you actionable recommendations based on your program data to help reduce waste, time-to-market, and overall spend.

• Vendor Compliance. Your vendor should work with you to determine applicable and measurable service level agreements to ensure they are meeting compliance levels.

4. Select the right partners

Two out of the three main problems marketers report have to do with their vendors. Vendor compliance and the vendor’s ability to quickly react to changing needs are of utmost concern among marketers in Forrester’s study. So what makes a great vendor? One who:

• Views the relationship as a partnership, versus being just a commodity vendor

• Aligns strengths to optimize resources and work toward your business objectives

• Provides a breadth of services to fill the gaps in your marketing mix and can scale up or down to meet your changing needs

• Identifies areas of opportunity and gives actionable recommendations beyond the scope of responsibilities.

Consolidation benefits

If multiple outsourcers manage similar tasks, consolidating those vendors saves money and establishes a direct chain of responsibility. Consolidating vendors reduces the resources required to manage multiple vendors and leverages a larger spend for discounted rates. To get the most benefit from consolidating vendors, you must consolidate with a scalable partner who can quickly react to the changes in your marketing campaigns. A true business partner will apply best practices and create cost efficiencies in the execution of your marketing fulfillment programs, thereby freeing up valuable resources in both dollars and manpower that can be deployed elsewhere in the marketing program.

RFP process

Asking vendors to bid on your current process though RFP will drive down some cost, but you will only be replicating what you have today for a cheaper price. Instead, ask vendors to develop a proposal based on an analysis of your expected outcomes. Switching your RFP mindset from eliminating cost to finding innovation or value in a provider could end up saving you millions and substantially reducing the total cost of execution.

Determine metrics

Forrester’s study found that in general, pharmaceutical marketers perform at about the same level as other industries when it comes to measurement, but they may be missing key measurement areas in the last mile of marketing execution, such as delivery accuracy within parameters and orders fulfilled within a timeframe. To capture the most accurate picture of your program, use a variety of metrics to continually track your progress, demonstrate improvements, and identify areas to improve. These metrics should include inventory, order and delivery accuracy, and inventory receiving. Also, to more closely monitor vendor compliance, you should determine service level agreement metrics with your vendors. These agreements should include metrics surrounding timeliness, quality and accuracy, as well as the uptime of your order management system.

If the pharmaceutical industry can refocus some effort to evaluate and access the complete marketing supply chain, numerous gains can be made, reducing waste and improving the bottom line. Once marketers receive executive sponsorship and evaluate their supply chain roadmap, they can begin to implement solutions that provide a smoother and faster marketing execution process, key business intelligence and visibility into all marketing programs, and the ability to remove millions of dollars in hard and soft costs along the way. These enhanced solutions will finally propel pharmaceutical marketing operations forward, where it should be. PC


Mike Moroz is the President of Archway Marketing Services, Inc., a provider of comprehensive marketing fulfillment services, including samples, products, marketing collateral, literature, premium materials, displays and discount cards to consumers, physicians, sales reps and conventions. His prior experience includes senior level positions at Target Corp., ClickShop Direct, Inc., and Damark International. For more information about Archway visit http://archway.com/clients-industries/pharmaceutical-life-science.aspx.

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