This is a global pharmaceutical company with manufacturing in the US, Europe, and Asia. They have a reputation for being high-growth, innovative, and change-orientated.
Challenge
The CFO was new to the company and was undertaking a wide-ranging review of operations. The business had enjoyed unprecedented recent growth and had ambitious expansion plans. However, the supply chain was struggling to fulfill orders on time and in a cost-effective manner.
On closer inspection, the supply chain cost base seemed high, but there was a lack of granular data to understand the true cost or total cost to serve at a product level. Without a deeper understanding of cost and dynamics, the organization could not resolve current issues sustainably and re-platform the supply chain for growth.
Proxima was asked to undertake an initial health check and recommend options to optimize the supply chain operationally and commercially.
Approach
Proxima deployed a small team of commercial and operational supply chain experts to undertake a rapid four-week review. The team analyzed a large amount of data, looking at commercial terms, operational processes, and the supplier mix across 3PL, air, sea, road, import/ export, domestic and outsourced distribution. They also undertook stakeholder interviews, benchmarking, and “should cost” modeling and end-to-end “walkthroughs,” following the product as it progressed through the client’s operation.
Then ran collaborative workshops with stakeholders to create a vision for change; identifying operational process improvements, building a supplier strategy, and profiling the financial opportunity. This was summarised into a report for the CFO and Chief Supply Chain Officer as a set of actionable ideas, a strategy, and an implementation program.
The report was well received, validating some of the C-suite fears and identifying new opportunities the organization had not considered. Above all, it created a roadmap for the organization to optimize a key part of its operations.
RESULTS
The supply chain optimization process consisted of five key work streams to be driven by Proxima:
- Inbound freight globally into the US; raising commercial focus and creating market tension while seeking to optimize the balance between air and sea according to total cost/benefit considerations
- Optimizing the incumbent outsourced distribution partnership through process improvement, visibility, and data flows. This would subsequently be re-tendered to capture further benefit from the market
- A review of outbound, looking into processes, rates, and load balancing across LTL, TL, and Small Parcel carriers, as well as optimizing workflow through warehouses
- A Supply Chain structural review looking at how the relationships at the start of the manufacturing process could be harnessed to drive efficiencies through the business
- Increasing visibility of spend and data to allow the organization to understand cost to serve at high and line level
If you want to start your supply chain optimization journey, simply get in touch.