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| Client: | A global leader in the pharmaceutical industry with worldwide product distribution. Division of a leading multinational pharmaceutical company. | |||||
| Problem: | Assess the optimal number of distribution centers for Europe and the U.S. markets in order to maintain an optimal inventory level, and evaluate impact on customer service and cost. | |||||
| Approach: | Use CAPS Supply Chain Designer to analyze the distribution network and Extend software to simulate variations on inventory levels. Create baseline scenarios for Europe and the U.S. with current levels of inventory, transportation modes and sites. Develop optimization scenarios for each evaluated market. In the U.S. and Europe, both multiple and single DC scenarios were developed and evaluated. Level loading and postponement strategies were also analyzed. A comparative analysis of operations savings was conducted. | |||||
| Results: | Implementation
of the optimal distribution network and inventory levels will lead
to: • Inventory reduction of up to 40% in the U.S. and a reduction of up to 33% in Europe • 99.9% customer fulfillment in the U.S. and dramatic improvement in fulfillment in Europe • Reduction in DC network from five to two DCs in the U.S. and from seven to three in Europe • Total transportation costs reduced up to 34% compared with baseline |
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