How Sigma, an Australian pharmaceutical company, transformed its supply chain

EY teams began by reviewing Sigma’s existing SAP IBP Demand and Inventory Optimization modules – both of which were heavily customized and underutilized. The team realized that many planners felt overwhelmed by unfamiliar interfaces and mistrusted the system’s forecasts. To address this, EY teams streamlined the forecasting setup to mirror more intuitive workflows. By removing superfluous configurations and automating core tasks, the system began delivering credible numbers that resonated with the planning team’s experience.

Alongside these technical adjustments, EY teams provided targeted training to close knowledge gaps. “One of the main benefits of SAP® IBP is that it has allowed the planners to concentrate on high-value products instead of getting bogged down in rats and mice planning,” says Caroline Tennant, Sigma’s Supply Planning Lead. “It’s resulted in increased availability and, just as importantly, a better work-life balance for our planners who were at risk of burnout previously.” Bolstered by this renewed confidence, Sigma’s forecast accuracy improved by 5%-10% right away.

Despite progress on the demand side, Sigma’s supply planning still suffered from a heavily customized SAP S/4HANA® Material Requirements Planning (MRP) process. Unreliable purchase requisitions and frequent manual overrides were undermining the newly improved forecasts. EY teams addressed this by discarding the custom code entirely and deploying SAP IBP Supply and Response in line with standard SAP best practices. This robust approach meshed seamlessly with Sigma’s SAP HANA® Enterprise Cloud (HEC) edition of SAP S/4HANA®.

“The new system has brought us back to ‘SAP standard’ and eliminated clunky customizations,” says Diane Matheson, Head of Supply Chain Technology at Sigma. “We don’t have to worry about maintaining custom code, and it’s stable and aligned with Sigma’s IT strategy.” Throughout the project, EY teams coordinated with SAP product owners – facilitating the solution’s design aligned with SAP guidelines and received prompt technical support. By the end of this phase, Sigma had established a unified, cloud-based planning environment, laying a scalable foundation for ongoing improvements.

Following the EY team’s involvement, Sigma realized a host of tangible benefits. Inventory dropped by 20 % and planners reduced their manual requisition work from nearly an entire workday to just two or three hours. “Since the SAP IBP implementation, we’ve seen not only an increase in availability of 5% but also a large reduction in inventory of 20%,” says Marcus Williams, Planning Systems Support Manager at Sigma. “This is no small feat, and it could not have been achieved without the hard work of both the Ernst & Young LLPEY Australia team and our Sigma operations planning team.”

These gains translate directly into improved customer service. Pharmacists – who serve as the frontline of Australia’s healthcare delivery – can rely on Sigma’s elevated 93% availability rate to keep essential medicines in stock. That reliability, in turn, helps ensure patients receive timely prescriptions without needless delays. “We’re now better equipped to handle seasonal demand spikes and supplier closures,” says Martin Hawkins, Chief Information Officer at Sigma. “It all comes down to having a robust system that lets us accurately plan for real-world disruptions.”

Moreover, employee satisfaction has risen sharply. Freed from error-prone spreadsheets and repetitive manual tasks, Sigma’s planners can invest energy in strategic endeavors. They’re refining purchasing patterns, exploring more efficient distribution routes and forging stronger partnerships with suppliers and stakeholders.

“Sunsetting the custom MRP solution and replacing it with standard SAP IBP has had a tectonic impact on Sigma’s planning efficiencies, allowing the team to focus on value-added work and accelerate value delivery,” says Sandeep Ghosh, Director, Supply Chain Practice, Technology Consulting at Ernst & Young, Australia.

Capping off these advancements, Sigma’s transformation garnered industry acclaim when it won an SAP Best Run Award in 2024. The recognition highlights the power of close collaboration between the EY organization, Sigma and SAP. By leveraging proven best practices and harnessing SAP’s ecosystem, Sigma has future-proofed its supply chain against fast-evolving demands – ultimately benefiting not only its pharmacies and employees but also the patients who rely on them every day.