In the fast-paced and competitive world of Life Sciences, agility and operational efficiency are not just nice to have; they’re essential for thriving and staying ahead. Our client, a leader in pharmaceutical delivery, consumer product dispensing, and active material science, found themselves at a crucial turning point. As their manufacturing landscape evolved, so too did the need for a fresh approach to their supply chain.
The Challenge
Our client is celebrated for their efficient approach to manufacturing and distributing products right next to their production facilities. Yet, in an industry where change is the only constant, a significant shift in manufacturing locations posed a pressing question: How could our client adapt their supply chain to these new conditions without compromising on cost-efficiency or the high service levels their customers had grown to expect? The idea of introducing “mixing centres” surfaced as a potential transformative solution, offering to inject significant value into the business.
The Approach
Faced with this challenge, it was clear we needed an innovative tool for supply chain design. Optilogic Cosmic Frog was the chosen tool; a cutting-edge platform with comprehensive modelling algorithms and powerful, scalable cloud computing, all backed by significant expertise in supply chain design. Our collaboration with Cosmic Frog enabled us to:
- Reimagine costs: Together with our client, we delved into the cost implications of the manufacturing shifts, aiming to establish a new, realistic cost baseline that reflected the changing production landscape
- Explore network strategies: We laid out various options for optimising the distribution network of finished goods, all with an eye on minimising costs while elevating service levels
- Analyse financial impacts: A deep dive into the financial nuances was crucial. We compared the cost differences between the traditional direct distribution model and the innovative mixing centre concept, providing clarity on the financial implications
- Model the network: We built a detailed network model that allowed for extensive evaluation through sensitivity analyses, ensuring the strength and resilience of our strategic recommendations
- Recommend network changes: After thorough analysis, we presented a strategic plan for an overhauled network, pinpointing specific product segments and outlining the anticipated enhancements in cost savings and service levels
The Result
Our strategic intervention led to a more agile and cost-effective supply chain for our client:
- Revolutionised network design: A new network design was born, aligning distribution centres with the new manufacturing realities, thereby boosting efficiency
- Strategic regional DCs: We advised the establishment of strategically placed regional distribution centres to ensure service levels remained high or were improved across all customer segments
- Optimised distribution methods: Through careful analysis, we identified the most efficient shipping schedules, harmonising customer demand with manageable lead times
- In-depth cost analysis: We undertook a thorough review of the landed costs for products at each DC, which informed targeted pricing strategies
- Robust business case: Armed with data-driven insights, we solidified a compelling business case, lending strong support for this strategic pivot
This case study highlights the transformative impact of strategic foresight and data-driven decision-making in modernising complex supply chains within the Life Sciences industry. By redefining their distribution approach, our client not only adapted seamlessly to manufacturing changes but also achieved notable cost efficiencies and service improvements, solidifying their competitive edge in the Life Sciences landscape.
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