Inventory Optimisation
We completed a supply chain assessment of the demand planning and scheduling functions for a pharmaceutical organisation. The aim was to improve how inventory was purchased, controlled and managed throughout the manufacturing operation.
The pharmaceutical supply chain is highly regulated, with strict TGA or FDA controls for many companies. As raw materials or sub assemblies can only be supplied by TGA approved vendor sites, the amount of inventory that flows across multiple supply chains requires micro management by skilled logistics manufacturing personnel.
The ERP system is the primary hub for managing inventory investment, releasing orders for manufacturing and despatching the final order to a customer. This does sound quite simple and is a standard process for any organisation. The complexity for a pharmaceutical operation increases for a number of reasons:
- The bill of materials structure for an end product or a semi finished product is quite complex with multiple layers down to a raw material.
- Complex routings that flow inventory through all stages of production need to support both internal and external manufacturing.
- Long product leadtime places pressure on the planning function to manage working capital and cash flow to meet customer expectations.
- Batch production is driven by the highest goods manufacturing practices for every manufacturing site within the supply chain.
- Older ERP planning and scheduling systems are not constraint based, which makes it a challenge to plan accurately for customer order requirements. Changes to safety stock levels, time fence and lead time parameters are made to smooth out demand and supply.
- Production vessels, their number and capacity, are planned based on capacity and utilisation. Customer demand requirements are difficult to achieve when an organisation runs lean. Raw material or semi finished inventory level are typically higher to provide flexibility for filling.
- Inventory optimisation initiatives such as multi echelon inventory can be complex, making it more difficult to control or reduce inventory cost.
Core Problem
- Back order levels and high & customer service below acceptable target level.
- Demand management including forecasting and execution needed attention.
- Production planning and scheduling required alignment and precision.
- Inventory write off's were excessive and amounted to millions of dollars.
- Planning parameters in Movex ERP not working correctly due to lack of systems knowledge.
Problem Resolution
- Complete development of an AS IS current state workflow plan of the entire supply chain.
- Developed a future state model covering all workflows, documents, data and cost controls.
- Developed a centralised data management system for sales and operations planning.
- Implemented new sales and operations planning process to bring together all functions.
- Work groups established to refine planning parameters, resulting in more accurate projections.
- Cleansed Boms and Routings to increase planning integrity for production.
- Provided Movex ERP training to up skill personnel in MRP and DRP planning
Next Steps:
A Turn Key Solution offers your organisation the same opportunities to improve the health and direction of your supply chain, logistics function or warehouse operations.We provide supply chain assessment modules, process simulation, warehouse automation, business integration and quality supply chain resources for project management or interim support to build a sustainable supply chain for your organisation.
Supply Chain Assessment Modules
Select from our range of supply chain assessments and take the opportunity to validate your supply chain and logistics processes, practices, metrics and technology systems. We offer flexibility with our modular approach, content area focus at the right cost for your business. Our supply chain consultants, logistics consultants and warehouse consultants are experienced and will work through these assessments at your pace.
- Supply Chain Strategy Assessment (Develop a supply chain strategy that balances cost, service and efficiency within a dynamic market place)
- Supply Chain Planning Assessment (Sales forecasting, planning and execution for managing inventory investment for the business)
- Inventory Management Assessment (Manage inventory investment with the right tools and controls within your warehouse or distribution centre)
- Warehouse Management Assessment (Warehouse operation can increase throughput and efficiency with the right layout, storage and processes)
- Performance Measurement KPI Assessment (Supply chain capability increases with regular performance measurement focussed on the right areas)
- 3PL Outsourcing Assessment (Moving to an outsourced 3PL is a significant step & requires careful consideration, planning and implementation)
- Supply Chain Technology Assessment (The right supply chain technology mix will drive performance across the core areas of your supply chain)
Process Simulation
Our supply chain consulting practice uses advanced 2D or 3D simulation modelling tool's to provide our clients with the latest process based integrated solutions to improve supply chain performance in real-time, identifying issues and bottlenecks within a virtual environment. Take a look at our supply chain simulation, logistics simulation, warehouse simulation and distribution network model.
Quick process wins are delivered much faster, while structural supply chain changes require capital investment in warehouse automation and distribution solutions for your operation. Advanced supply chain optimisation is the aim by integrating ERP, WMS or Manufacturing systems to achieve real time visibility.
Warehouse Automation
Supported by a strong industry specialist network, we are able to meet the supply chain challenges your company is facing today. Strengthen your supply chain, distribution centre, warehouse or manufacturing facility with integrated warehouse automation systems and distribution solutions. Custom made materials handling, storage and retrieval systems range include: Conveyors, Fulfillment, Robotics, Packaging, Sortation, Shipping Systems, Software and safety equipment.
We also offer a comprehensive review of your warehouse operation to make sure that the right solution is identified, planned and implemented. Depending upon the outcome of the review, we also offer a range of services that support the final automation solution, namely: a warehouse layout and design service, warehouse process modifications, warehouse systems or a warehouse layout design for a specific area.
Business Integration and Consolidation
We assist organisations to create a "Right Sized Supply Chain Model" for their business. This may involve consolidating your supply chain network, merging multiple businesses, establishing a new warehouse facility or assessing 3PL viability and outsourcing options. Our experienced has contributed to delivering a range of quality supply chain solutions for our customers.
Project management | Interim management support
We provide a project management service or interim management support to assist any supply chain initiative. Qualified and experienced supply chain managers, warehouse managers, distribution centre managers and project managers are available to meet your interim project requirement needs or long term resource placement strategy.