STADA + Celonis

Pharma company STADA has a proud track record of outperforming the industry in terms of growth and profitability. Their prescription for success? Intelligent process orchestration with Celonis. The results: significant value unlocked in Accounts Payable, stronger supplier relationships, and streamlined material replenishment.

Over 1.2 billion units sold in 2023, 20 production sites across Europe and Asia, and double-digit growth in sales and profit: STADA is a pharma powerhouse.

But as an international player selling in 120 markets, they have to navigate the complexity of unique regulations and processes, volatile supply chains, and a fragmented system landscape. “We continuously need to adapt our processes to the latest needs and challenges,” explains Deniz Simseker, STADA’s VP of Internal Audit. Easier said than done when departments, systems, and processes feel disconnected. “We had a lot of point solutions that gave us only an isolated view of our processes.”

For STADA, the missing link turned out to be Process Intelligence. With the Celonis Process Intelligence Platform, STADA can understand how their business truly runs, see where value is hiding, and unlock it, fast.

Finding the right levers for improvement

“What really intrigued me about Celonis,” says Simseker, “was that it helps us analyze our processes much faster and end-to-end, by following transactions through different systems.”

Using industry-leading process mining technology, Celonis gave STADA a living, breathing digital twin of their Purchase-to-Pay process. “Process Mining is like an x-ray for your processes,” he says. “You see all the nitty-gritty details of what goes wrong.”

https://delivery-p141552-e1488202.adobeaemcloud.com/adobe/assets/urn:aaid:aem:6976cba2-6e9c-4630-9b65-d432fb2436fb/as/ZzdoPcdanGRx7gqaS33eMV.jpghttps://videos.celonis.com/watch/ZzdoPcdanGRx7gqaS33eMV

But the power of the platform goes far beyond transparency. Combining deep process insights with a decade of process improvement knowledge and AI, Celonis delivers a clear treasure map of STADA’s business, and empowering everyone with easy-to-action insights. Or, as Simseker puts it: “With Celonis, we’ve moved from pure analytics to real change management.” Within a few months of implementation, a Center of Excellence (CoE) was formed. Led by Simseker, the CoE team quickly got to work.

Driving optimization across Purchase-to-Pay

One of the first major use cases was improving their payment behavior. “We already had a good level here, but we really wanted to make our DPO more compliant – paying not too early, but also not too late,” says Simseker.

Celonis unearthed a whole range of problems that were getting in the way:

1. Mismatches in the SLAs amongst the involved parties (STADA, their BPO provider, and suppliers)
2. Aggressive payment terms in supplier invoices
3. Lengthy approval times
4. Blocked invoices due to goods receipt/invoice receipt (GR/IR) mismatches
5. Suppliers sending invoices late

For Vladimir Grad, Process Director Purchase-to-Pay (P2P), finding the right levers to tackle these challenges felt quite daunting. “But thanks to Celonis, we could immediately start our improvement journey because we saw exactly which problems to tackle first — and how.”

https://delivery-p141552-e1488202.adobeaemcloud.com/adobe/assets/urn:aaid:aem:e3f9d383-cf49-474e-8e7f-f267a1265695/as/tGEuirPVojxNRLCJLiwKPJ.jpghttps://videos.celonis.com/watch/tGEuirPVojxNRLCJLiwKPJ

“We now use process mining as a single source of truth,” adds Simseker, “to keep a tight grip on our working capital.” On top of a centralized view of open invoices across all of their systems, STADA’s accounting team gets intelligent recommendations to prioritize critical invoices and resolve payment blocks to ensure invoices are paid as quickly as possible – enabling them to take advantage of cash discounts and improve supplier relationships. “Suppliers are not only happier to work with us, they also offer us better conditions,” says Grad.

With 15 use cases in place across P2P, Grad’s and Simseker’s teams managed to:

Significant value in P&L savings

Shorten their DPO

Reduce late payments

Increase their cash discount rate

Armed with Celonis’ Process Intelligence, STADA also uncovered new optimization opportunities they weren’t even aware of – such as GR/IR mismatches they can now preemptively identify and clear. Celonis' machine learning algorithms uncover discrepancies between expected, delivered, and invoiced volumes and give recommendations on how to prioritize account cleaning based on the age and risk of open GR/IR items. A proactive approach that has already delivered millions in value.

Vladimir Grad, Process Director Purchase-to-Pay, STADA Arzneimittel AG

Smarter inventory management, fewer stockouts

Spurred on by their success in P2P, Simseker and his team expanded Celonis to STADA’s supply chain processes. At the top of their priority list: boosting lead time accuracy to optimize stock levels and ensure a smooth production amid supply chain volatility. These days, the pharma industry is facing regular stock outs due to material shortages, often leading to production stops and lost sales.

But what they could control was optimizing their replenishment to be as accurate as possible. In the past, their material planners lacked a standardized method for managing lead time master data. Some worked with giant excel sheets, others with different planning systems – creating room for error and increasing the risk of stock outs. With Celonis, the team has already identified unfavorable planning parameters, solving this long-standing issue once and for all.

To keep it that way, Celonis sends alerts for necessary lead time updates. Planners can now seamlessly update lead times across systems through Celonis, ensuring real-time accuracy. A simple change with a strong impact on their bottom line: With a streamlined replenishment process spanning all production sites, STADA has cut down on stock holding inventory costs, stockouts, and lost net sales.

Similarly, STADA’s Procurement team uses Celonis to meticulously track and revise their quality info records, which are pivotal for ordering and storing chemicals. They encompass details on certificates, regulations, and safety measures — and come with expiration dates, adding another layer of complexity. With Celonis, STADA ensures that their ordered chemicals have up-to-date information records, effectively avoiding order blocks and stock outs.