Supply Chain-150

The Situation:

A major division of a global pharmaceutical company was experiencing rising supply chain and logistics network costs.  Service levels were undefined, inventory was growing, and marketplace customer service requirements for the diverse segments were unknown.  Multiple systems existed, processes were disconnected, and the organization was fragmented across twenty countries.

The Driver Goal:

Design and Implement a flexible Supply Chain structure that supports the division business plan and leverages synergies across the parent organization.

• Reduce European and North American distribution costs by a minimum of 10%
• Achieve customer service levels of at least 98% complete and on time
• Reduce inventory levels by 20%

• Designed and conducted a Customer Survey to define specific marketplace requirements for the Supply Chain. Completed a SWOT analysis and 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 to the vendors. This was used to illustrate the benefits of demand pull as compared to the existing push methodologies
• 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
• Realigned 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

• Annualized savings of $ 10.0 million against the $ 3.0 million target
• Reduced Packaging inventories by 75% for the Lean pilot
• Reduced Finished Good inventory levels by 40% for the Lean pilot