A severe allergy season in parts of the country is pressing providers to get the right medicine to the right pharmacies at the right time.
There’s Big Data behind that antihistamine on the shelf. This spring has been an unusually severe allergy season in parts of the U.S., with the drought in the West and light precipitation in the Northeast leaving allergans in the air. But planners at pharmaceutical companies and pharmacies believe they are winning the battle. Logistics planners see it as another test of a technology-driven supply chain. Anuj Agrawal, vice president of product marketing at Orchestro says the company helps firms mine big data and better anticipate future demand. In this case, that means combining information from thousands of stores and cross-referencing it with weather forecasts and other trends. Bayer AG, which makes Claritin, says it is not waiting for customers to start sneezing before supply chains respond. Says Mike DeBiasi, vice president of Bayer’s U.S. allergy business: “There are much more advanced modeling tools that we use now…to project and predict weather trends and allergy suffering.”
“Traditionally about 6% to 10% of retail sales are lost because of out-of-stock problems,” said Anuj Agrawal, vice president of product marketing at McLean, Va.-based Orchestro. The company has a team of scientists that help companies mine big data and better anticipate future demand. The company provides Web-based software that allows clients to look at data reports, and to analyze and customize the data every day.
“It used to take [vendors] a week just to aggregate and organize the data before they could look at a report and figure out any insights,” he said.
“If it’s taking you a week to organize the data and to see you have an out-of-stock somewhere, you’re losing.”
Bayer AG, maker of over-the-counter allergy medicine Claritin, said it has been using data to get ahead of seasonal trends. Mike DeBiasi, vice president of Bayer’s U.S. allergy business, said his team started preparing the supply chain for spring six to nine months before the allergy season actually hit, using third-party software that looked at global warming information and modeled allergy and weather trends.
“There are much more advanced modeling tools that we use now…to project and predict weather trends and allergy suffering,” said Mr. DeBiasi. He said allergy suffering has been particularly bad on the West Coast and in the Northeast this year because there has been relatively less rain, leaving more pollen particles in the air. “We had signs that were projecting heavier allergy suffering this year than we saw last year,” Mr. DeBiasi said.
The allergy season typically starts in the south and moves north, the executive said. So as the season progressed in its usual pattern, Bayer closely monitored data coming in from retailers in the south to make sure the company was well stocked in regions to the north, to make sure inventory was plentiful going into the season, and winding down coming out.
The use of data in that way is critical to retailers as they try to operate lean supply chains and work with consumer goods that sell quickly.
Ash Patel, chief information officer at a Chicago-based data analytics firm Information Resources Inc., said his firm can use real-time data sources like Google Inc.’s flu index, temperature forecasts and even social media chatter to predict heightened demand for products like cough medicines Mucinex and Robitussin.
Still, the results aren’t always simple. Mr. Patel said cold weather may drive up demand for cough medicine, but brutally cold weather drives sales down. “On the flip side, when the forecast is for 20 inches of snow, that drove stock-ups and people made extra trips to get everything they needed,” he said.
“We never get it exactly perfect…it’s more of an art than a science,” said Mr. DeBiasi of Bayer. But “we’re fully supplied in the U.S. marketplace for the most severe allergy season in recent history.”
Source: WSJ Logistics Reporter Loretta Chao