Michael Kennamann 0:00:09.1:

Thank you all for sticking around and letting us present today on Merz Aesthetics. We're going to talk a little bit about Anaplan magic with Merz Aesthetics. First, before we jump into that, we will give you a little background who we are. I've been with Merz for about a year and a half now. You see a number of different industries I've been in and the academic career. So I've been in supply chain for over 20 years, in all different aspects of this industry. Harald. 

Harald Soyka 0:00:56.1: 

My name is Harald. I have been with Merz now for five years in two different positions. From the picture, you can see what five years of supply chain can do to your hair, so be careful. Even if it's an aesthetics industry company, they can't fix everything. I don't have that much experience as Michael does. I basically went to Merz after university. I have a background in global logistics. 

Michael Kennamann 0:01:25.3: 

That's perfect. So what we're going to cover first is who is Merz Aesthetics. How many people know who Merz Aesthetics is, outside of a few people who work for Merz that are in the audience? So we're going to cover a little bit of who Merz Aesthetics are. I thought this was important to know who we were. Then we're going to talk about our way to Anaplan, how it looks today and then where we're going next. So a little bit about Merz Aesthetics here. Oh, go back. Can we get that video? 

[Video plays 0:02:04.4 to 0:05:45.4]

Michael Kennamann 0:05:45.6:

So hopefully that gives you an idea of who Merz Aesthetics is. We are a global company. We are located at regional headquarters in Raleigh, North Carolina. We do have regional headquarters in Mexico City, Frankfurt and Singapore. About 2800 employees globally, around the world. You can see we are across all regions. We sell in about 80 or 90 countries, with over $1 billion in revenue in the aesthetics business. We manufacture out of two locations. Europe, we have a manufacturing and shipping location, as well as Wisconsin in the States with that. This is our heritage. We've been around since 1908. We are still, to this day, family-owned through our Merz holding board, which you see here. They basically have three pharma businesses: aesthetics, therapeutics, lifecare. They have three additional business units as well that they manage. When we look at the timeline for Merz, you can see we started in 1908, a whole bunch of different pharma things there. Over the past two decades, we've really been pushing and focusing in on the pharma, on the aesthetic side of the business and expanding our aesthetics portfolio to where now we are the world's largest dedicated aesthetics business. With that, I'm going to turn it over to Harald, he's going to go through the [?fun/fine 0:07:43.3] details. 

Harald Soyka 0:07:46.7:

Our way to Anaplan. So let's start 2019, that's when I joined Merz. This might or might not be real footage of our S&OP team back then. So there wasn't really a team. We did not really take sales and operations planning that serious back then. So Michael just said we now have over $1 billion revenue, back then the aesthetic business had less than 500. So we doubled our revenue in five years without having a sophisticated S&OP process. I believe you can understand that was quite painful in many situations, especially when in 2020 Covid came. For many industries, it was a shock. They had a decrease of demand. For us, it was also a shock, but it was an increase of demand. So we didn't know that we had the first lockdowns in Germany in March, April 2020, and we thought, oh no, our business is going to go down the drain, as for all the other industries, but the opposite happened actually, because our customers, clinics, doctors, physicians, they were still open. People couldn't go traveling, couldn't go out for dinner or anything.  

Harald Soyka 0:09:05.7:

They had a lot of money and they thought, maybe I can spend that on my body. We had a huge peak on demand, which we were not prepared for. Now you could say, well, during Covid, a lot of companies, even with more sophisticated sales and operations planning processes had issues. We kept having issues and issues and painful situations over the last couple of years. So we had supply constraints quite soon after Covid started, because the whole aesthetic industry started to become way more dynamic, because the people who started with aesthetic treatments, they stayed with that. Once you start with an aesthetic treatment, you hopefully like what you see and then you will have another one. So what we understood quite soon was, okay, we've got to change something, we need to get better. What we did is we started an in-house project to see, okay, we need to have a process, we need to have an organization built. Once we started working on those two, we also understood that process and organization is good in the first start, but it's not enough.  

Harald Soyka 0:10:17.7:

We will also need a tool to support the process we designed. We had an RFP with different vendors. I mean that's the reason why we're now here. It became Anaplan. Soon after, with our implementation partner Valantic, in May '23, we kicked off the implementation or we started the implementation project. Yes, shout out to our Valantic colleagues which are here as well today. We had very great support from them. Just seven months after we started the project in May '23, we went live in one big bang. No pilot, just global, one big wave in December, with our demand planning modules and Anaplan. So how does it look today? So as I said, we went live in December '23. So it's been roughly a year and that's how it currently looks. So right now we have four different apps. I'm not going to go into all the details. We don't have the time and I don't think that it's of much interest. I want to just highlight three major benefits we basically leveraged from day one, once we got live in December. The first one is the stat forecasting.  

Harald Soyka 0:11:49.3:

Now, some of you might think, well, we heard a lot from Zalando about AI and also from Anaplan about PlanIQ, but the truth is we didn't have that forecasting ten months ago. So for us, it's more about the baby steps actually. It is a great advantage now that we have that. Yes, of course PlanIQ, AI, that's the future for us right now. We are happy that we just launched the stat forecast. I know that's 2024, but it is what it is. Another thing, what is a great advantage, and I'm going to show you now how that was designed on the screen for us in Anaplan, the planning workflow. So let's have a look at this. This is a screen where we basically developed the workflow, the process for the demand planning we came up with while we were designing the process. It might seem simple or profound, but we realized that this is giving us as, an organization, so much value. We have right now 80 users in Anaplan in all of different countries where we do have business, and this being their start screen helps them to understand, okay, when is it my turn? When is it my turn to deliver input? How many days do I have left and when do I need to be ready? Because adherence to the cycle, super important for us. We had a lot of discussions and fightback to get a four-week cycle, so this is just a demand planning.  

Harald Soyka 0:13:28.6:

The second half is blank because that's the supply planning. So we have the same screen for the supply planning part of it. This is just a huge help for everybody to be aware, where are we right now? When can I expect the next local sales forecast to be released? When is my regional manager expecting me to be ready with my current inputs? It also allows us, from the management side, to trigger people. So if I'm not happy or I don't see that Russia is done, I can just send the trigger through Anaplan and say, hey, you got 24 hours left, you know that right? So please, do you need some help? Let me know. There's also some nice portion of public shaming because everybody else sees, okay, you're the last one. You might be the one holding up the cycle. So it seems simple, but we found, especially from a change management perspective, it was a huge step forward to make the whole organization aware of, okay, how is the cycle structured?  

Harald Soyka 0:14:34.2:

The next one. Also, it's from my point of view. It might not seem as rocket science, but this is a little bit the engine of our demand planning right now. So you have a graph on the top and the table on the bottom. What is super new for us at Merz Aesthetics, because we didn't used to do that, we started to split the forecast into different - we call it building blocks. I also heard the word drivers today. So we can call it building blocks, drivers whatsoever to understand what actually is driving our current local stat forecast, to get a better understanding, why is demand or why is the forecast changing like it is? Where is the spike coming from? It's not only that, it's also a nice visualization, as you can see on the top. I have hit the budget or the YE4 or the T-1 final consensual demand forecast, but you can benchmark quite easily as we have all this data now in one single source of truth in Anaplan and see on one view, okay, I am on top of the budget, I am below the budget. You can do that for all kind of dimensions as well. Our colleague from [?Lindan 0:15:45.2] talked a lot about dimensions.  

Harald Soyka 0:15:47.9:

We also have so many different dimensions we can drill down to. So this could be an SQ. This could be a market. This could be a brand. This could be a brand in a market. This could be global. This could be regional. So it really depends on how I slice and dice it. So I can immediately see okay, this is how it's looking. It could be pieces. It could be dollars. It could be euros. It could be syringes. So all these changes which if you try to do it in Excel takes you probably hours and even more hair. If you try to do that then that will take time. We have that now quite real - well, we have it real-time in Anaplan on one view. So, yes, and with that, back - I think back to Michael, yes.  

Michael Kennamann 0:16:37.8:

Back to me. So talk about where we're going next. So what you're seeing is we did a lot of work on the demand side. We also, what we uncover, we did rough cut capacity in the same timeframe we did demand plan. So we got rough cut capacity, we got demand planning pretty much up and running, working. Is it perfect? No. Do we have opportunities for continuous improvement? Hell, yes we do. Will we ever get to perfect? I don't know. I don't know what perfect looks like in forecasting. What we do know is we have to work on supply. So our vision is really to put a digital twin process in Anaplan. We are going to do all of our supply planning, production planning, inventory optimization, all in Anaplan. Then they basically push it back through all of our planning up here, then push it back down into SAP for implementation and the tactical side. We are working with Valantic Höveler Holzmann on this, but basically as we talk about our digital twin concept, what do we want, really is to develop a single integrated planning process to connect demand and supply. I want seamless integration.  

Michael Kennamann 0:18:32.2:

I want shipment plans and constrained sales forecasts. I need to have scenario planning. Those are must-haves. So if we don't get these, we don't succeed with how we're looking at it. Really, it is to drive the digital twin and site with AI eventually, and drive our value where we want to go. How are we doing this without Anaplan? Well, our green was our Anaplan 1.0 focus. Our executive S&OP process, our staff forecast, our demand planning, our consensus planning. That was really 1.0, throw me a rough cut capacity in there. You can see where the focus is right now in the red. It's all in the supply side and production planning. This is where the bread and butter is right now for us, that we have to get right. Product planning, we want to get involved in that as well. That might come at 2.5, but right now our primary focus is going to be right here and getting that right, so I have a connected planning process for demand and supply for the business. With that, are there any questions? I got you back on time.