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Pharmaceutical Industry: Strategic Decision Services

Capability

Operational Improvement

Client

A rapidly growing tier-two pharmaceutical company

Problem

The company had grown more than ten-fold in sales over the past two years. Having relied on a manufacturing outsourcing business model during the launch of the business, it was now time to re-examine the breadth of the product supply chain—from API sourcing through final product distribution—to determine the best sourcing strategy for the coming five years of anticipated growth. Several existing cost reduction projects were underway. Did these projects still make sense in the face of the expected growth?

Approach

Tunnell worked with the client to lay out the real options the company had for each step of the manufacturing process from API supply to the distribution of final products. Tunnell’s subject matter experts provided the critical expertise to get the real possibilities on the table for the client. By determining the economic value of each step’s capacity and the value of flex capacity (additional capacity sources and optimizing existing sources), Tunnell identified the optimal capacity by source and volume across the entire product supply chain. Tunnell’s financial model tailored specifically to the client’s situation accounted for the breadth of issues and risks (e.g. business continuity disruptions, competitor product launches, volatility of sales) facing the client over the next five years and beyond. Existing projects were integrated with the new roadmap in order to right-size capacities across the product supply chain.

Results

The outcome?  In six weeks the executive team had a clear, precise manufacturing capacity plan with optimal flex capacity commensurate with the risk and uncertainty of future sales. Board of Director approval was immediate due to the clarity and rigor in evaluating the many options before pinpointing the best strategy for the client.

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