Improving Productivity and Profitability of A Bioanalytical Business Through Sales and Operation Planning

Abstract

Today's bioanalytical CROs face increasing global competition, highly variable demand, high fixed costs, pricing pressure, and increasing demand for quality and speed. Most bioanalytical laboratories have responded to these challenges by implementing automation and by implementing process improvement methodologies (e.g., Six Sigma). These solutions have not resulted in a significant improvement in productivity and profitability since none of them are able to predict the upturn or downturn in demand. High volatility of demand causes long lead times and high costs during peak demand and poor productivity during trough demand. Most bioanalytical laboratories lack the tools to align supply efficiently to meet changing demand. In this paper, sales and operation planning (S&OP) has been investigated as a tool to balance supply and demand. The S&OP process, when executed effectively, can be the single greatest determinant of profitability for a bioanalytical business.