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Ensuring pharmaceutical supply chain effectiveness – cost reduction in finishing & packing operations

The issue:

The Pharmaceutical industry is constantly looking at ways to drive cost from its supply chain whilst recognising the need for robust customer service, high quality product and overall compliance.

Our client is looking to reduce the cost base of its finishing and packaging operations where an aggressive target has been set to remove up to $180m from the gross margin.

It has been recognised that adopting a continuous improvement methodology will not work in isolation. The team is therefore challenged to explore all supply chain strategies that may be able to deliver the benefit required whilst providing high levels of customer service to partners in their development and commercial groups.

Even though many peers are embracing emerging markets in India and china, complete outsourcing of the manufacturing function is not the only strategic option that needs to be assessed.

Approach needed:

  • Understand and analyse general trends in the pharmaceutical industry that are driving the need for this change and bring best in class thinking from within the pharmaceutical industry combined with leading edge thinking from other industry sectors to articulate the opportunity for change.
  • This analysis will provide the basis to support options analysis
  • Design and execute an Accelerated Solution Design workshop bringing together key executives from across the business to work collaboratively on the future operating model options, driving consensus and momentum to change.
  • Develop the key messages to support the communication of the strategic options to the COO and his management team.

The outcome:

Our research and analysis from across the pharmaceutical industry and other cost sensitive industries has provided our client with a platform to develop various strategic models. The output of this activity also included a peer review of pharmaceutical finishing and packaging strategies and a review of supply chain techniques from other industries to address margin erosion.

The accelerated solution design provided our client with the correct environment to build these strategic models, discuss options and challenge the status quo.

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