Forecasting Practices in the Pharmaceutical Industry in Singapore
Choo, Louis, The Journal of Business Forecasting Methods & Systems
Doctors are the key drivers of sales of prescribed drugs in Singapore because doctors mostly themselves dispense the drugs ... forecasts are often prepared by simple extrapolation ... dedicated full-time forecasters are practically nonexistent in the industry.
Forecasting practices vary from one region to another and from one industry to another. Although a number of studies have been done in the United States as well as in Europe regarding forecasting practices, nothing is known about such practices in Asia. The objective of this article is to describe the forecasting practices in the pharmaceutical industry in Singapore.
SURVEY DESIGN AND SAMPLE
The survey questionnaire was mailed to 12 pharmaceutical companies and their distributors that carry prescription drugs in the anti-hypertensive therapeutic category. This therapeutic segment was chosen because it has the largest number of pharmaceutical competitors in Singapore. These 12 companies are fairly large with combined sales representing approximately 70% of the total patented prescription drugs sold in Singapore. List of these companies and their anti-hypertensive drugs are given in Table 1.
The survey sought at least one or two respondents from each of the 12 companies. The mailed questionnaire was followed up by a telephone call from the author. From the 12 companies/distributors, we received a total of 15 responses.
BACKGROUND OF RESPONDENTS
None of the respondents' companies has a full-time forecaster for the Singapore market, given the small organization structures to service the local market. Survey respondents are general managers (46%), followed by marketers (33%), sales (7%), finance (7%), and operations (7%).
EXTENT OF INVOLVEMENT
When asked how well they are involved in the forecasting function, 63% of them said that they were involved directly and extensively. That is, they prepare forecasts, interact with other functions regarding forecasts, and seek approval of top management on forecasts. About 31 % said that they were indirectly involved in the forecasting function. Their involvement included only providing input to those responsible for preparing forecasts.
PURPOSE OF FORECASTS
Three most important purposes of preparing forecasts are: (1) allocation of resources for promotion and staff (27%), (2) strategic planning and managing risks and opportunities (24%), and (3) setting sales quotas (22%). …