A supply chain “make-over” - the case of a global pharmaceutical manufacturer

A supply chain “make-over” - the case of a global pharmaceutical manufacturer

Pharmaceutical supply chain

Background and Challenges

A leading global pharmaceutical manufacturer is expecting to face an upcoming intense competition during the next years, due to its blockbuster product patent protection time expiration. 

The company asked Tefen to examine its end-to-end value chain and processes, in order to identify opportunities for risk mitigation, performance improvement and cost savings.

Moreover, through this examination company’s goal was to be able to compete with the increasing number of generic versions, as well as possible demand reduction and lower prices.

the path of supply chain

Fig. 1: The path of the supply chain

Tools & Methodologies

The project included interviews with applicable process owners and subject matter experts in different sites around the world, as well as a review of relevant policies, procedures and several workflows in the sites around the world. 

In addition, the following areas of data were collected and analyzed: strategic and operational KPIs, demand forecasts, delivery performance data, production and supply capacity, production performance and efficiency, lead times, QA&QC performance, shipments and distribution, and cost structures.

The project reviewed the existence of relevant procedures and standards in each field and for each subject, analyzed the level of adherence to those procedures’ standards and checked opportunities for improvement, based on relevant experience and benchmark.

Outcome and Results

The project found and pointed out that:
1. The pharmaceutical company suffered a non-adherence with stock levels policy of several materials, which may potentially risk meeting demands fully and timely
2. Lack of problem-solving capabilities, methodologies, and tools leads to reoccurrence of manufacturing deviations & waste of resources
3. Lack of formalized SLA with the packaging primary single source supplier. This may introduce the company to supply chain risks, such as an inability to meet increased demand, lack of security of supply, or product quality issues.

Supply chain - a man holding a box in a warehouse

However, the project found a number of improvement opportunities that the pharma company may implement:
1. There was a lack of Communication & Knowledge sharing between different sites around the world. Improving their cooperation could result with quicker resolution of common issues as well as enhancing production efficiencies
2. Other alternatives for packaging allocation planning were examined and were found to have potentially better results and improvement of resources utilization, production performance, cost per unit and supply reliability
3. Production efficiency potential improvements: OEE, cost reduction, shorten lead time and material waste reduction



Eli Pelleg

Partner, Chief Operating Officer

Multidisciplinary Performance Improvement Expert

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