Strategic Supply Chain Investments at Pharmaceutical Company

A global pharmaceuticals company wanted to evaluate future supply-chain options for a group of drug products.

In a series of workshops held with knowledgeable personnel over a six week period, the team (comprising the modeller and all workshop attendees) developed a simple simulation to help understand the likely implications of organisational change involving a significant capital investment. The model centred on several aspects of the change, including co-location of a number of pharmaceutical production facilities and the possible impact of changes in the structure of the organisation on the ability of the supply chain to satisfy future customer demand while reducing overall stock levels. It had been thought that a simulation of the possible impact of moving from the AS-IS to the TO-BE organisation would help the decision-makers but that the traditional simulation approach used by the organisation would not be able to report in time for a major decision point in the investment project. The model’s results were reviewed at each stage and amendments made to reflect feedback from participants.

Final scenario runs included sensitivity analysis and presented the possible performance range of selected Key Performance Indicators.

The model was able to demonstrate the likely improvement in performance between the AS-IS and the TO-BE scenarios, both in stock reduction and in the reducing manufacturing cycle times and the conclusions were presented to senior decision-makers during their next meeting on the subject.

The work was completed in a short period of time and was vital to the correct investment of many millions of dollars that would not have been evident from conventional analysis.

The success was due to an effective synergy between the client and modeller; the former having the relevant expert knowledge and enthusiasm, the latter having considerable experience of pharmaceutical industry modelling.

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