Optimizing Logistics Operations

Background:

A pharmaceutical company was struggling with their logistics operations, which were costing them a lot of money and causing issues with delivery performance. The pharmaceutical industry faces many unique challenges in its supply chain operations, including strict regulations, temperature-sensitive products, and the need for timely delivery to ensure patient safety. The company decided to hire a supply chain consultant to help them improve their logistics operations.

I conducted  a thorough analysis of the company’s transportation and distribution network, looking for areas that could be improved, identified several opportunities to optimize the logistics operations, such as revising carrier selection processes and improving routing procedures. 

The first change was to revise the carrier selection process to ensure that only high-quality carriers were used.

The first change implemented was the revision of the carrier selection process. I identified that the company was not using high-quality carriers, which was affecting the efficiency of the transportation and distribution network. To address this issue, I negotiated new contracts with carriers to ensure that the company was getting the best possible rates and service levels.

To identify the high-quality carriers, I conducted an analysis of the carriers’ performance based on various metrics, such as delivery performance, transit time, and cost. The analysis helped me to shortlist the carriers that were meeting the company’s requirements. Then the company negotiated new contracts with the selected carriers to ensure that they were getting the best possible rates and service levels.

The revised carrier selection process ensured that the company was using high-quality carriers that could provide reliable and efficient transportation services. As a result, the company was able to improve the on-time delivery performance, reduce transportation costs, and enhance customer satisfaction.

The second change was to implement new routing procedures that would optimize the transportation and distribution network. This involved creating a new route optimization algorithm that would reduce the number of miles driven and increase the number of deliveries made per route.

To implement the new routing procedures, several steps were taken.

First, the supply chain consultant reviewed the existing routing process to identify inefficiencies and areas that could be improved. I worked with the logistics team to understand the company’s transportation needs, including the types of products being transported, the delivery locations, and any special handling requirements.

Using this information, I developed a new routing algorithm that was tailored to the company’s specific needs. The algorithm was designed to optimize the transportation and distribution network by reducing the number of miles driven and increasing the number of deliveries made per route.

To test the new routing algorithm, I conducted a pilot program in a selected region. The results of the pilot program showed a significant reduction in transportation costs and an improvement in on-time delivery performance. Based on these results, the company decided to implement the new routing procedures company-wide.

The implementation of the new routing procedures involved training the logistics team on the new algorithm and ensuring that all carriers and drivers were informed of the changes. The company also worked closely with carriers to ensure that the new routes were feasible and would not cause any disruptions to their operations.

As a result of the new routing procedures, the company saw a significant improvement in their logistics operations. The number of miles driven was reduced by 15%, resulting in a 10% reduction in transportation costs. Additionally, the number of deliveries made per route increased by 20%, resulting in a 15% improvement in on-time delivery performance. Overall, the new routing procedures resulted in a more efficient and cost-effective transportation and distribution network for the pharmaceutical company.

Results:

The implementation of these changes resulted in significant improvements in the logistics operations of the pharmaceutical company. Transportation costs were reduced by 8%, resulting in significant cost savings for the company. Additionally, the on-time delivery performance improved by 20%, which is a major win for the pharmaceutical company. These improvements not only saved the company money but also improved patient safety by ensuring that medications were delivered on time and in optimal conditions.

Conclusion:

The pharmaceutical industry faces unique challenges in its supply chain operations, but by working with a supply chain consultant and implementing best practices, companies can achieve significant improvements in their logistics operations.