Since its founding in 1921, Terumo Corporation has provided products and services tailored to the needs of patients and healthcare professionals under its founding philosophy: “Contributing to Society through Healthcare.”
Today, the company operates through three core business divisions: the Cardiac and Vascular Company, the Medical Care Solutions Company and the Blood and Cell Technology Company. Terumo focuses on developing and selling innovative devices and solutions to solve medical challenges, aiming to improve both treatment efficacy and patient quality of life (QOL).
Since the 2000s, the company has accelerated its global expansion through proactive cross-border M&A. With overseas sales now accounting for approximately 80% of total revenue, Terumo supports medical advancement in over 160 countries and regions worldwide.
The road to implementation.
Even with a stable demand base, Terumo is facing a challenging era where external environmental changes, such as tariffs and exchange rate fluctuations, make future predictions difficult. This situation requires management to make faster and more flexible decisions.
Due to global M&A, the number of Terumo manufacturing sites has increased to approximately 30 worldwide and consolidated subsidiaries to about 100. The number of SKUs now exceeds 50,000, creating a challenging management effort.
Furthermore, the finance department is taking on new roles such as strengthening the financial base for growth-oriented portfolio reviews, contributing to management with an awareness of capital efficiency, and engaging in dialogue with the capital market. To achieve this, strengthening FP&A is indispensable. There was a need to transition from P&L-centric management to a more comprehensive approach, incorporating cash flow and balance sheets, while modernizing its planning and forecasting capabilities.
To meet these requirements, Terumo adopted Workday Adaptive Planning after evaluating its implementation speed, agility and scalability, and large-scale data processing performance.
Predictive accuracy enhanced by both systems and processes.
Terumo began streamlining business processes simultaneously with the introduction of Workday Adaptive Planning. A key part of this was the introduction of the RACI matrix (a method for defining roles and responsibilities). By identifying who is Responsible, Accountable, Consulted and Informed, Terumo established a foundation for improving forecast accuracy and quality by clarifying accountability.
Terumo is striving to improve accuracy using AI. By incorporating a gamified approach that compares and publicly shares AI forecasts with human forecasts, the company is creating a mechanism to increase management’s interest in reviewing forecast accuracy.
By promoting improvements from both system and process perspectives, companywide awareness of forecasting is steadily increasing.
Workday Adaptive Planning has enabled us to create forecast P&L statements in just two months from kickoff. The agility and scalability to respond to daily changing management requirements, along with the performance to run monthly rolling forecasts across more than 50,000 SKUs, were the deciding factors in adopting Workday Adaptive Planning.
Jin Hagimoto, Chief Financial Officer & Chief Information Officer, Terumo
Evolving toward an integrated management base.
The introduction of Workday Adaptive Planning is not the goal but rather the first step toward the finance department's transformation. In FY2024, Terumo established a review process for forecast accuracy; by the first half of FY2025, the company had built a foundation within Workday Adaptive Planning to integrate business forecasts across the organization as a unified guideline. In the second half of the year, Terumo plans to migrate business planning from separate systems into Workday, centralizing both forecasts and plans.
In the mid-to-long term, Terumo aims to achieve a more transparent forecast design that aligns sales and operations planning (S&OP) with sales and profit forecasts for management. The ultimate goal is to evolve from P&L-centric management into a comprehensive management system that includes cash flow, balance sheets, and inventory management.
In the medical industry, product reviews are conducted over several years so if you miss the timing, you will have to wait several years for the next opportunity. Identifying opportunities and acting quickly determines growth. We want to accurately forecast and take appropriate action by utilizing Workday Adaptive Planning.
Jin Hagimoto, Chief Financial Officer & Chief Information Officer, Terumo