SUPPLY CHAIN
CASE STUDY

Biotech Manufacturing site adopts Digital Transformation, which leads to 20% improvement in Cycle Time and 25% reduction in Inventory.

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TABLE OF CONTENT

Overview

Diagnostics

Methodology

Results

Conclusion

Overview

We were challenged with improving the end-to-end supply chain processes across the pharmaceutical manufacturing plant. The site had gone through significant growth over the previous couple of years, however, the legacy systems and processes required a lot of manual activities, e.g., email approvals of Purchase Requisitions from senior management.

S&OP process did not exist, as the site had mainly been focused on firefighting to meet the huge growth in demand. Now that the demand was slowing down, the business was struggling to understand how to align Supply with Demand.

Inventory was becoming a major issue since the site had ordered too many raw materials, PPI, and packaging components during the peak of Covid. The business consisted of 3 business entities, which were consuming and purchasing identical materials under separate codes, leading to warehouse storage being wasted.

Diagnostics

After gathering initial information from our client, carrying out analysis using our in-house data analysis tool and carrying out several interviews with first line leaders and senior associates, we discovered many more process issues, which were leading to low morale across many teams.

Lack of warehouse space meant that the Receiving Team had to move several pallets and cages from the isles to be able to store in-coming materials. There was no process to identify and destroy expired materials, which was also a causal factor.

Manual activities related to Master Data set up, Customer Order processing, Planning, Scheduling and Procurement were leading to extended cycle times, and ultimately long lead time for clients. This is something the clients wanted to see improved so that the business could serve the changing clients requitements more quickly.

Methodology

We presented the initial analysis to our client and agreed to split up the Digital Transformation Programme into 3 separate projects, so further analysis could be carried out and the right level of focus could be given to each area:

ERP Implementation: We partnered with our client to find a suitable ERP system based on the budget available and the potential for scaling up in the future. We represented our client to ensure the ERP system delivered improvements in relation to all the pain points captured during the diagnostics stage. Super Users from each team were selected to be part of the implementation project, which meant the business had their own experts to rely on in the longer run. In the scenarios where the ERP system could not support the processes, SmartSheet and other automated solutions were put in place in order to reduce Paperwork and email traffic, to drive efficiencies.

S&OP process: It was crucial for the business to understand what the clients required in the coming 18-24 months. We involved all stakeholders in building the process, including Sales, Production, Engineering, Quality as well as R&D. Initially, we focused on 5 clients that were driving more that 70% of the revenue. This allowed the business to load finished goods forecasts in the ERP system and churn out the volume and value numbers. The Demand and Supply plans were put together and presented to the SLT on monthly basis and anomalies were discussed to adjust capacity and resources where needed. After 3 cycles of S&OP, the forecasts for remaining clients were also added to the mix.

Inventory Optimization: We used the Pareto analysis along with our in-house tool to analyse the inventory of Raw Materials, Packaging components, Semi Finished goods as well as the Expired materials. Min and max inventory level were agreed with each planner/buyer for the top 20% of materials and customized reports were built to ensure that future orders would not exceed the Max inventory levels. A weekly expiry report review process, using the Power BI tools was built to enable the supply chain teams to proactively review expiring materials and take appropriate actions.

Results

During this 10-month journey, the business teams together with Change Agents and Super Users achieved tremendous results. We ensured the right KPIs were in place for the teams and stakeholders to review status and trends.

The ERP system and other digital tools such as SmartSheet enabled the site to ensure processes in teams such as Customer Service, Planning, Scheduling and Procurement were completed in hours instead of days, which led to a 7-day improvement (20%) in the cycle time within 3 months of Go Live. The S&OP process built alongside the new ERP system enable the site leadership team to foresee the volatility in demand and adjust the capacity from 24/7 shift pattern to 24/6.

Using the monthly inventory review process and by driving meaningful actions, the business managed to reduce their inventory by $10M at the end of the year.

The business is continuing their digital transformation journey by engaging with some of their top clients to explore connecting directly with their customers systems using EDI and other options.

Conclusion

During this 10-month journey, the business teams together with Change Agents and Super Users achieved tremendous results. We ensured the right KPIs were in place for the teams and stakeholders to review status and trends.

The ERP system and other digital tools such as SmartSheet enabled the site to ensure processes in teams such as Customer Service, Planning, Scheduling and Procurement were completed in hours instead of days, which led to a 7-day improvement (20%) in the cycle time within 3 months of Go Live. The S&OP process built alongside the new ERP system enable the site leadership team to foresee the volatility in demand and adjust the capacity from 24/7 shift pattern to 24/6.

Using the monthly inventory review process and by driving meaningful actions, the business managed to reduce their inventory by $10M at the end of the year.