Equipping your Forecasting Toolkit to

Account for Ongoing Changes

Presented by: Roger Parlett Supply Chain Manager

January 23, 2014

Overview

Forecast Set-up

• Objectives of Creating a Forecast

• Identify Critical Forecast Drivers

• Forecasting Technology

Forecast Management • Integrated Technology

• Forecast Maintenance

• Benefits of Monitoring

• Why generate a forecast?

– To Develop a Supply Strategy and Packaging Plan

• Scenario Evaluation and Contingency Planning

• Budget Management

– To Reduce Risk

• Depot and Site Stock-outs

• Patient Harm / Study Integrity

– To Reduce Costs

• Achieve the right balance of supplies

• Avoid costly challenges: expiry date, stock outs

Forecasting Objectives

Forecasting

Strategic Planning

Budgeting

Critical Forecast Drivers

• Randomization Parameters

• Visit / Dosing Schedule

• Participating Countries

• Site Activation Schedule

• Local Depots

• Enrollment Rate

• Fixed or Variable Dosing (Titration; weight based)

• Drop-out Rate

• Study Completion Criteria

• Therapeutic Setting

• Bulk Drugs

• Pack Types (Primary Packaging & Kit Design)

• Label Strategy

• Shelf Life and Stability Program

• Storage Conditions

• Shipment Conditions

• Inventory Management Strategy

Study Design and Enrollment Product Design/Characteristics

Forecasting Mechanisms

> Clinical supply chain complexity has resulted in major investments in information technology.

> Forecast Management Tools: – Excel

– Forecasting/Simulation software

– MRP/ERP systems

– Interactive Response Technology (IRT; i.e. IXRS®, IVRS) .

Demand Forecasting

Forecasting Technology

> Ideally, allows the Supply Chain Manager to create clinical forecast that details material needs in time phases based on:

– Enrollment rates, site and country ramp up, drop out rates

– Protocol design – visit schedule and titration choices

– Overage, site seeding and/or safety stock

– Label Groupings

> Allows for multiple scenarios to be programmed and compared

Integrating Technology

Technology Relationship

ERP / MRP IVR/IWR

Forecast Tool

Integrating Technology

Forecasting Technology

> Forecast serves as basis for demand

> Agreed forecast mapped to MRP to allow full utilization of the Supply Chain Planning Functionality

> MRP and Forecast receive patient and drug usage events directly from the IRT via automatic data transfer

– Automatically adjusts forecast based on drug usage data

– Calculates a “net forecast “ based on available inventory and expiry dates

– Comparison reports for forecasted vs. actual usage

Integrating Technology

• Powerful Computational Tool for determining what, how much, and when material is needed

MRP – Material Resource Planning

• Blinding and Randomization

• Smaller number of manufacturing events

• Limited Drug Product

Modify for the Clinical Supply

Chain

• Requires clinical expertise to develop based on complex parameters

• Must be formatted to allow for mapping to MRP

Clinical Forecast as Source of

Demand

> MRP uses the Forecast to produce planned production orders to satisfy demand taking into account:

– Inventory on hand at Sites, Depots, and vendor facilities

– Expiry Dates

– Production capacity and operation duration

– Bill of materials/component availability and lead time for re-order

– Pending production orders

– Lead time for transfer from Vendor Sites to Depots

Integrating Technology

Technology Solution

Forecast Tool

INITIAL FORECAST

• Projected patient demand

• Visit schedule

• Protocol variables

• Scenario comparisons

NET FORECAST INPUTS

• Site inventory

• Patients dispensing events

• Expiry date

MANUFACTURING

PLAN

Detailed component

planning

MRP

Creates planned

production orders

based on:

• Forecast

• Safety Stock

• Pending production

orders

• Existing inventory

• Item Bill of Materials

DISPENSING

to Patients

Almac & Depot Inventory

considered by MRP

Inventory at or in transit to sites considered in Net Forecast

Actual patient event data

considered in Net forecast

Patient Event Data

DISTRIBUTION

Depots & Sites

Drug Orders

Data Integration with (IVRS / IWRS)

Inventory Release File

Russia

Ukraine

Italy

UK

Germany

Singapore

Hong Kong

Thailand

US

Russia

Ukraine

UK

Singapore

US

50, 50, 50, 50, 50, 50,100, 100, 100, 100, 100, 100,

Country Patients Per Month 1 to 12Each depot will have

a Forecast

Med Type Country

FG

T000001

T000001

T000001

T000001

T000001

T000001

T000001

T000001

T000001

FG00001

FG00001

FG00001

FG00001

FG00001

FG00001

FG00001

FG00001

FG00002

EU

Manufacturing

Facility

50, 50, 50, 50, 50, 50,100, 100, 100, 100, 100, 100,

50, 50, 50, 50, 50, 50,100, 100, 100, 100, 100, 100,

50, 50, 50, 50, 50, 50,100, 100, 100, 100, 100, 100,

50, 50, 50, 50, 50, 50,100, 100, 100, 100, 100, 100,

50, 50, 50, 50, 50, 50,100, 100, 100, 100, 100, 100,

50, 50, 50, 50, 50, 50,100, 100, 100, 100, 100, 100,

50, 50, 50, 50, 50, 50,100, 100, 100, 100, 100, 100,

50, 50, 50, 50, 50, 50,100, 100, 100, 100, 100, 100,

Sourcing Rules assigned for each item

Eg. Patient Kit for Russia

will be made in EU

Supply Chain Planning

Forecast Maintenance

> Monitoring Forecast Drivers – Monthly, Country Level Data Collection

– Site activation data – Enrollment:

• Actual monthly enrollment is captured and forecast updated • Estimated enrollment rate can be re-calculated for future

projection • Drop-out Rate – confirm agreement with projection or add to

forecast

– Rate of drug supply utilization • Is it in agreement with forecast? • Should assumptions be modified?

– Source of Data • How will data be collected?

– Frequency of forecast updates has to be decided upon • When do we have enough data to merit a baseline change?

Forecast Maintenance Benefits of Monitoring

• Supply Utilization / Inventory Balance

• Comparator Purchasing

• Assessment of retest/expiry date impact

• Adjustment to IRT Drug Management Settings

Adjusting assumptions allows for optimization of

clinical supply chain

• Adjust Production Schedule based on demand

• Adapt to changing lead times and demand

Supply Utilization and Inventory Balance

• Strategic Sourcing Comparator Purchasing

Forecast Maintenance - Benefits

Month

Bulk

Delivery

(Qty.)

Supply

Release

Schedule

Released

Supply

Cumulative

FS1

Projection

Material

Demand

FS1

Projection

Material

Demand

Cumulative

Projected

Balance

Actual

Balance

Actual

Demand

Actual

Demand

Cumulative

Apr-12 5000 0 0 0 0

May-12 0 0 0 0

Jun-12 0 0 0 0 0

Jul-12 9,500 4,997 4,997 0 0 4,997 4,997 0

Aug-12 4,997 2,857 2,857 2,140 2,802 2,195 2,195

Sep-12 9,497 14,494 2,594 5,451 9,043 9,442 3,054 5,249

Oct-12 9,000 14,494 4,133 9,584 4,910 5,448 3,994 9,243

Nov-12 8,997 23,491 3,426 13,010 10,481 10,991 3,454 12,697

Dec-12 1,600 23,491 3,924 16,934 6,557 7,879 3,112 15,809

Jan-13 23,491 3,410 20,344 3,147 5,746 2,133 17,942

Feb-13 23,491 2,518 22,862 629 3,533 2,213 20,155

Mar-13 23,491 1,488 24,350 -859 2,001 1,532 21,687

Apr-13 23,491 683 25,033 -1,542 1,354 647 22,334

May-13 23,491 19 25,052 -1,561 1,136 218 22,552

Jun-13 23,491 0 25,052 -1,561 1,136 0 22,552

Total 25100 23,491 25,052

Monthly Supply Need Calculations By Kit Type and Scenario

> Demand Monitoring

Forecast Maintenance - Benefits

Supply vs Demand Projection

0

5,000

10,000

15,000

20,000

25,000

30,000

Apr-1

2

May

-12

Jun-

12

Jul-1

2

Aug-1

2

Sep-1

2

Oct

-12

Nov

-12

Dec

-12

Jan-

13

Feb-1

3

Mar

-13

Apr-1

3

May

-13

Jun-

13

Time

Qu

an

tity

Released Supply Cumulative Actual Demand Cumulative

FS1 Projection Material Demand Cumulative

> Demand Monitoring

Forecast Maintenance

> Benefits of Monitoring

– Assessment of Retest/Expiry date impact • Calculate site loss and replacement demand

• Manage multiple expiry date events

– Adjustment to IRT Drug Management Settings • Monitoring of Shipment Quantities and Frequencies

• Updating Strategies applied at the site level

Forecast Maintenance - Benefits

> Shipment Monitoring

Month May Jun Jul Aug Sep Oct Nov Dec

Active Sites (Cumulative) 3 4 7 11 12 13 17 19

Shipments 1 7 7 11 6 6 10 4

Shipments / Site 0.33 1.75 1.00 1.00 0.50 0.46 0.59 0.21

Pts Randomized 0 4 3 8 7 7 7 3

Shipments/Site/Month 0.73

Shipments/Site/Month

since Aug

0.55

Summary

Create a Forecast to develop a strategy, identify and reduce risks, and manage costs

Identify Forecast Drivers – determine those that will be critical to the success of your trial

Select an appropriate forecasting technology – fit for purpose

Integrate Technology – this can provide an end to end view of the supply chain

Monitor forecast drivers and adjust forecast and strategy as necessary

Measure performance: Projected vs Actual to optimize results

QUESTIONS?

Contact: Roger.Parlett@almacgroup.com