Pharmaceutical giant GlaxoWellcome has cut R3 million off its operating costs through savings implemented by applying Metify, the value-based management and budgeting tool, distributed and supported in South Africa by Global Technology Business Intelligence (GBI).
"It has also halved the time taken to fulfil its budgeting processes and boosted the functionality of its previous spreadsheet-based systems 20-fold," says Kiron Naka, cost accountant at GlaxoWellcome.
The South African arm of GlaxoSmithKline International, GlaxoWellcome produces a broad range of branded consumer healthcare products such as Ventolin, Zantac and Lucozade, and a large number of prescription medicines and vaccines.
"Spreadsheets could not provide the detail we needed to do proper costing in our increasingly diverse manufacturing environment," Naka reports.
GlaxoWellcome is rationalising its operations and making use of third-party manufacturing, all of which contributes to the complexities of budgetary management.
"We urgently needed a tool with which we could calculate which products were costing what, and which costs were too high and which too low," Naka says. Implementing Metify`s activity-based management tools soon showed up which products were profitable and which were not and allowed an insight into the cost or contribution of value-added and non-value-added operations.
"We can now obtain a global view on the spending on each product or activity, even down to the cost of meetings, and this provides a handle on the real business costs of each of our lines," Naka says. "We found that our costs were higher than the industry standards, driving some major internal initiatives which led to the direct savings.
"Metify also allows us to do what-if or scenario planning, and by adding in or taking way certain variables we can predict the business effect of proposed market initiatives before we engage in the business and time expense involved in shifting in focus," he adds.
The decision to go with Metify was based in part on the support offered by developer Armstrong Laing plc in the UK, and GBI locally. "Turnaround time for queries is never more than a few hours, and Armstrong Laing and GBI ensure that we are always kept up to date with developments and direct support."
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