The CPFR Process at Bayer Consumer Care raw materials and ingredients, plus uncertainty created by in the EU irregular product trends, seasonality, and promotions. In Since its development of aspirin in 1899, The Bayer Group order to remain competitive Bayer guarantees its customers has grown into a company with a global workforce of close to a 100% service level, and thus, it seeks an inventory 110,000, over 5,000 products, and sales exceeding 27.380 level that will meet this goal, which decreases as its forecast million Euros. Bayer HealthCare, one of the three opera- accuracy increases. Initially, the company discovered that tional subgroups of Bayer AG, with 34,000 employees forecast errors resulted from the number of different fore- worldwide and sales exceeding 9,430 million Euros, re- casts that were being used by different supply chain mem- searches, develops, manufactures, and markets products for bers (including finance, logistics, marketing, and sales) in the prevention and diagnosis of diseases. Bayer HealthCare, each country. To resolve this problem, monthly round table in tum, encompasses five divisions, one of which the con meetings were established to develop a consensus forecast in sumer Care Division, is one of the world's largest marketers each European Union country. To determine forecast accu- of over-the-counter medications such as Aspirin, Aleve, racy three performance measures were used absolute per- Midol. Alka-Seltzer, Milk of Magnesia, and One-A-Day and cent forecast error (for a three-month horizon); percent Flintstones vitamins. Forecasting is an important function at forecast error, and standard deviation of percent forecast Bayer Consumer Care because of the competitiveness in the error Forecast accuracy in most countries is around 80% and over-the-counter pharmaceutical market and the seasonality forecasting bias approaches 0% of its products. The supply chain in Bayer's Consumer Care division in the European Union is based on the Collaborative A forecast accuracy of around 80%" still seems somewhat Planning, Forecasting, and Replenishment (CPFR) process high. What things do you think Bayer must do within its in which cach country consumer forecasts its future sales for supply chain to guarantee a customer service level of 100%? the next 18 months and shares this information along with What things can you suggest Bayer do to achieve a higher forecast accuracy? inventory information) with Bayer. Bayer uses this informa- tion to develop its production plans, generate customer or- ders, and establish shipment schedules. This approach to H. Petersen, "Integrating the Forecasting Process with the Supply Chain: supply chain management is a necessity because the phar- Bayer Health Care's Journey." The Journal of Business Forecasting." 22 maceutical industry is characterized by long lead times for (4. Winter 2003-04), pp. 11-15