Vetter Pharma saves ~€600k a year from Accounts Payable, keeps making strides in improving Deviation Management, and is still scaling its use of Celonis.
At Vetter, innovation is a core part of their company identity. Founded in Germany in 1950, the family-owned business is now a world leader in the field of pre-filled injection systems — think the syringes and vials you know from the hospital. They employ about 5,700 people, and reported revenue of €840m in 2021.
These last few years, the pharmaceutical industry has suffered the same supply chain shortages and macroeconomic turbulence as every other industry, while also providing patients worldwide with important medications during a pandemic.
If there was ever a time and a place for efficiency, it’s here. Luckily, Vetter has spent years focusing on process optimization.
Process Excellence at Vetter – high quality & unique complexity
Dr. Samuel Kunze and his team drive process optimization for all digital and manual processes inside Vetter. But these are no standard optimization efforts. They deal with custom processes, unique systems, and hundreds of highly specialized process steps. And on top of that, they typically lack visibility into these processes.
It’s the classic case of knowing there are issues, but not knowing what’s causing them. Transparency was direly needed.
Realizing value in Accounts Payable
In 2018 Vetter decided to take their process optimization to the next level with Celonis. The first process to get the Celonis treatment was Accounts Payable (AP). “We deliberately chose AP because it’s a standard SAP process,” explains Dr. Kunze. “By using a standard process, we could draw from standard analysis functions and learn from how other companies are already optimizing AP.
This decision proved to be a great opportunity. When they were still fairly fresh in their Celonis journey, Dr. Kunze shared that they had identified they only realized 80% of their potential cash discounts. And that through targeted optimization they brought this number up to a striking 99%.
Since this initial success they also optimized payment behavior and – as Dr. Kunze shared on the Celonis World Tour stage – almost doubled the automation rate in AP from ~6% to ~12%.
And the results of all these improvements speak for themselves. “We generate about €600,000 in savings annually,” says Dr. Kunze. “So that’s a real success story, to generate so much value out of just one process.”
From standard pilot to custom solution
Seeing how much impact they were able to realize from the ‘low hanging fruits’ in Accounts Payable the team was ready for a much tougher project. It was time to analyze the Deviation Management Process.
“In the pharmaceutical industry, we use the Deviation Management process to evaluate events for deviations from the defined processes,” explains Dr. Kunze. Deviations can include manufacturing or packing process or material changes. Depending on the severity of the deviation, there are different protocols for how to evaluate the deviation, including potential testing of additional batches.
“Our agreement with customers is to close a deviation within 30 working days, so we looked to reduce our cycle times in Deviation Management.”
Deviation Management is important to ensure quality control and compliance in case of an event. And the guidelines for what pertains a deviation are, understandably, very strict. Vetter uses Trackwise®, a quality management software commonly applied by pharma companies, as the workflow system behind Deviation Management.
Last time Dr. Kunze shared Vetter’s story with Celonis, connecting Trackwise® to Celonis had already yielded a 15% reduction in cycle time and since then, Vetter have started to focus on the first-time-right rate which has already improved by 6%.
The future of business processes is digital
Vetter is a true role model for innovation, so it comes as no surprise that Dr. Kunze has big plans: “Celonis is our answer to optimizing our digital processes. We want to further optimize, connect, and control our digital processes with Celonis to achieve the maximum benefit.”
Last time we spoke, Dr. Kunze revealed he wanted to make Accounts Payable (AP), Accounts Receivable (AR), Order-to-Cash (O2C), Purchase-to-Pay (P2P) and its two Trackwise® processes — change control and deviation management — fully transparent. And from the progress his team have made, it looks like their goal is within reach.
“With every process we connect, the benefit for the company increases,” says Dr. Kunze. Looks like Vetter’s innovative spirit will continue taking them from strength to strength.
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