Egis Gyógyszergyár Zrt. is a Hungarian pharmaceutical company. Its activities range from original research and generic development to the production of active pharmaceutical ingredients and finished products, and sales. With annual sales of more than HUF 170 billion, the company has 3 manufacturing units in Hungary and sells its products in 50 countries around the world.

BUSINESS PROBLEM

Detailed planning (and effective execution) is the key to sustaining business success. How can a pharmaceutical company - active in international markets -, create reliable production and sales forecasts not based only on the professional experience of its sales force? In the ERP system used in the company, colleagues manually filled in sales calculations without any data analysis, so calculations were more like estimates. The solution would be an analytics platform based on analysis of relevant information over the years and market modelling.

SUMMARY

As a result of the developed solution, the error rate of 19.1% measured on manual forecasting of business expectations, has been reduced to 7.6% as a result of the new automated process. The natural and positive effect of the new process is a drastic reduction in the time spent on the creation of sales forecasts.

SOLUTION

The project managed by Clementine was a part of the consultancy and planning project to transform the entire company. The solution was developed in several stages using the SPSS Modeler product.

1. Data structuring
   Establishing correlations and regularities for each stage of the financial year by organising and merging available production and sales data.
2. Modelling
   Predictive forecasting models were developed based on the correlations identified. The company is now able to produce monthly/annual sales forecasts for each product and target market (country) looking ahead up to 12 years.
   Given their long-term nature, such forecasts cannot predict with complete accuracy the volume of future sales. However, forecasts based on the observation of seasonal trends do not only have an impact on the business operations in terms of sales: they also effectively support the planning of the company's production capacity to meet market needs.
• Application areas of the models produced with the solution:
• 2-3 year models: to support production planning;
• 12-year models: for strategic planning.