Connected Planning supports healthy growth at Penumbra

At medical device manufacturer Penumbra, healthcare is not a sector or an industry – it’s a calling. The company’s over 4,000 employees design, develop, manufacture, and market novel products to address challenging, unmet neurological and vascular medical conditions. Penumbra’s products are available in more than 100 markets globally, and the business is growing rapidly.

Alex Reeves, Penumbra’s Senior Director, Corporate Strategy & Finance, joined the company about a year after Penumbra went public in 2015. He remembers facing a swelling workload with the finance team: “It took an entire day just to pull one month's worth of data for the company,” Reeves recalls, “and that was when we were doing a third of the revenue and transaction volume we do now.” More people wouldn’t speed things up because the company’s ERP system limited the number of records that could be pulled at once. “We were losing days of time. It was a significant challenge,” Reeves says, and the company chose Anaplan to address that challenge.

New tools create new possibilities

Global revenue forecasting was the first Anaplan use case implemented at Penumbra. “Replicating the existing spreadsheet framework in Anaplan was a huge win,” Reeves recalls. “Having data in real time saved us days at the beginning of each month.” But Reeves and the team quickly realized that even bigger wins were possible by reinventing processes to leverage Anaplan’s capabilities, so they launched two additional use cases concurrently: global demand planning and workforce planning.

Global demand planning is primarily driven by revenue, but it incorporates data on “consigned inventory” — that is, Penumbra products that hospitals keep on hand for immediate use when needed. The demand forecasting model, which handles 3,000 SKUs, leverages Anaplan’s native statistical forecasting functionality and extends it using Penumbra’s business activity data. “We're launching new products all the time, so it's not always possible to just go off stats,” Reeves explains.

Automated data flows move transactional data from Penumbra’s SAP S4 HANA ERP system into a data warehouse. From there, it’s loaded into Anaplan using Boomi for ETL. Select outputs are loaded into Tableau for visualization. “Anaplan facilitates that visibility,” Reeves says. “Because of that, we’re better able to manage our business resources.”

Workforce planning in Anaplan supports Penumbra’s sales and manufacturing teams. Sales-side workforce plans are driven by company revenue, with each rep supporting a specific number of accounts. Production labor is similarly linear (based on the demand plan) because Penumbra’s production staff makes a certain number of products in a given period of time. “Our products are made in California,” Reeves says. “It's pretty labor-intensive, and given we are producing medical products that go in the body and are highly regulated, the employees building them are highly trained. But at the end of the day, it’s still a manufacturing business.”

The workforce solution improves Penumbra’s analytic capabilities and HR processes. “We didn't have basic workforce analytics, and certainly not planning capabilities, before Anaplan,” Reeves recalls. Now, workforce plans in Anaplan are connected to Penumbra’s Lever recruiting system and UKG HRIS to create a six- to nine-month headcount plans. In fact, the new-employee requisition process starts in Anaplan.

Building better alignment

Reeves credits Allitix with helping the Penumbra team get the most from the Anaplan platform. “It’s been great having a partner like Allitix who can talk through what we might do differently than we would have done with our old tools,” he says.

“Penumbra is a great Connected Planning story,” says Jon Pause, Director of Connected Planning at Allitix. “They first talked revenue planning, which accelerated their ability to conduct regional realignments and global product rollouts in hours instead of weeks. They then leveraged this process to drive alignment with the demand team down to the SKU level. The level of alignment between finance and S&OP is awesome.”

Reeves says the automated data flows they built save Penumbra’s FP&A team time every month. “Getting back two or three days of your month, particularly at the beginning of your quarter or your earnings cycle, is huge,” Reeves says. “With Anaplan, we can actually do the work on day one.” He notes that the demand planning team saves even more time than finance.

But the value doesn’t end with time savings. “We've been able to more accurately plan new product launches, which has tightened up our revenue forecasting and inventory builds,” Reeves says. “Our overall forecast accuracy is better — certainly on the top line, but also on gross margins and operating margin.  And that ultimately impacts what we communicate to public investors and analysts.  Moreover, demand planning — the start of the supply planning chain of events — links up with revenue and uses the same data, so we can very quickly understand how everything aligns.”

Matching tools to strategy

The Penumbra team takes maximum advantage of Anaplan’s flexibility. “With Anaplan we have built a system that reflects our business to a T,” Reeves says. “We didn’t have to take someone else's solution and modify it.”

And ultimately, that means better service for patients. “In one recent quarter we launched two major products that have seen incredible demand,” Reeves concludes. “We’ve worked hard to keep up with that demand, and at the end of the day, that comes down to planning — and that’s why we plan with Anaplan.”