Sigma Healthcare Reduces Inventory and Boosts Service with SAP IBP

At the recent SAP NOW ANZ event, which took place on the 6th August 2024 in Sydney, Sigma Healthcare shared how its rollout of SAP Integrated Business Planning for Supply Chain (IBP) is enabling better healthcare services across Australia.

The pharmaceutical wholesale and distribution organisation explained how it previously relied on manual supply planning processes, which were time-consuming and prone to human error.

To address these challenges, Sigma partnered with Ernst & Young Australia to implement SAP IBP, a solution that integrated with Sigma’s existing SAP S/4HANA system.

As a result, Sigma cut its inventory levels by 20%, achieved through minimising waste and improving stock management.  

Customer service and satisfaction levels also increased across its global network of pharmacies, along with the ordering of over 16,000 products from nearly 400 vendors worldwide, driven by a 5% boost in product availability.

“Since implementing the Response and Supply module of SAP IBP, we have seen improved metrics across the board, including reduced inventory, increased availability and greater efficiencies,” Sigma Healthcare CIO Martin Hawkins said.

“This transformation could not have been achieved without the hard work and dedication of both the EY team and our Sigma Operations Planning Team.”

Hawkins also pointed out that the new system improved Sigma’s inventory forecast accuracy by 5%-10%, enabling the organisation to make better decisions and plan ahead for events such as supplier closures and public holidays.

Additionally, since the implementation of SAP IBP, Sigma has seen employee satisfaction levels increase. The planning team now spends just two to three hours per day on supply planning tasks, freeing them to focus on refining processes and other value-added activities.

EY Oceania Chief Technology and Innovation Officer Katherine Boiciuc described Sigma’s transition to SAP IBP as a “game-changer”.

“Sigma has not only streamlined its supply chain processes but also set a new standard for operational excellence in the pharmaceutical industry. This project exemplifies how technology can drive significant business transformation and deliver tangible benefits,” she said.