Major division of a global (20 countries) pharmaceutical manufacturing company was experiencing rising supply chain and logistics network costs.
- Realize 3 million (1.5%) in cost reductions.
- Achieve a minimum customer service level of 98% complete and on time.
- Reduce inventory levels by 20%.
- Saved $10 million (5%) annualized.
- Reduced packaging inventories by 75% and finished goods inventory by 40%.
- Achieved targeted customer service level.
Optimize Supply Chain, Improve Customer Service & Reduce Inventory
A major division of a global (20 countries) manufacturing company, experiencing rising supply chain and logistics network costs, engaged The Highland Group to understand customer requirements, define service levels, reduce inventory and defragment the organization.
The Highland Group began by surveying the market to gather customer requirements, then worked to realign the global supply chain organization around the “Customer Demand to Branch Replenishment” process to improve communication, remove functional barriers and support the optimized value chain solution. The team piloted Lean tools to reduce inventories and to illustrate the benefits of demand-pull compared to existing push methodologies.
- Designed and conducted a customer survey to define specific marketplace requirements for the supply chain then prioritized opportunities for improvement.
- Designed and implemented a global S&OP process to coordinate operational planning and facilitate team decision making.
- Implemented a Lean pilot on one of the major production lines to initiate a pull process from the branch through the plant and to the vendors.
- Defined and installed a common set of global metrics as part of the monthly planning process.
- Categories included customer service, inventory, sales, forecast accuracy, capacity analysis, production attainment and vendor performance.
- Completed a detailed logistics network analysis including lane modeling and value chain mapping. Defined opportunities to optimize distribution freight costs and reduce cycle time from customer demand to branch replenishment.
Realized cost reductions of