FREDERICK Q.

Bacang | PCU-MBA E (Modular) | Philippine Christian University

OPTIMIZING SUPPLY CHAIN EFFICIENY FOR A PHARMACEUTICAL COMPANY
CASE STUDY
Problem Statement:
A leading pharmaceutical company is facing challenges with its supply chain. The
company has multiple manufacturing facilities across the world, and its supplies medicines to
different markets. However, the company is struggling to optimize its supply chain, resulting in
high costs, long lead times, and stock-outs. The company needs to improve its supply chain
efficiency to ensure timely and cost-effective delivery of its products to the markets.
SWOT Analysis:

STRENGTH WEAKNESS
 The company has multiple  The company is struggling to
manufacturing facilities across the world, optimize its supply chain, resulting
and its supplies medicines to different in high costs, long lead times, and
markets. stock-outs.
OPPORTUNITY THREAT
 Company could continue to produce  The business may lose the ability to
product and with the addition of consistently hit the lead time targets
overtime could extend operating hours and this can impact its relationship
to cover most, if not all, of the with important customers.
production not available from other
facilities.

Solution:
The pharmaceutical company decided to implement an operational management solution that
involved the following steps:
a. Increase Supply Chain’s Visibility – The first step is to improve company’s ability to track
each and every component of its product as it moves its way from the suppliers’ hands
to the company warehouse.
b. Automate Where It Counts — and Keep All Necessary Parts Well-managed – Company
will have a conversation with the planning teams, warehouse managers and higher-ups.
It will ask the right questions about the future and communicate whether or not their
goals are possible for the company under its current process. If and when changes are
made, company will do due diligence to ensure that all automated parts are well-
managed and maintained. This usually requires extra training and further education on
the parts of suppliers, warehouse managers and planning teams. Although it might not
be directly under the job description of a supply chain manager to guarantee that
 automated parts are taken care of, making regular check-ins and inquiries might take
away some growing pains from the transition process.
c. Engage IT Department – Company IT departments will be consulted directly by
management when it either comes time for new software implementation or something
goes awry with the current system. Company will take the time to check in with them
periodically about potential changes to software that could streamline its supply chain
processes. These are the folks who have the most holistic understanding of changing
technologies in the supply chain management field — and what the company can do to
stay ahead of the rest.
d. Assess Training Programs - Company will look internally, specifically at the efficacy of its
in-house training programs. It will schedule its time with the heads of each department,
specifically ones that oversee the most manpower. Also, company will review all training
materials and procedures to guarantee that they are all up-to-date and productivity
focused. Lastly, it will take time to assess supply chain morale; sometimes bad apples
promote unachievable or exhausting goals which can, over time, have the opposite of
the intended effect on the ones who put the hard labor into your products.
Results:
The implementation of strategy resulted to the following benefits:
a. Improve Inventory Planning – Company can promote good visibility by giving its
suppliers the ability to check its inventory in real-time so that they can better
understand its current situation — and plan ahead to fulfill future demand.
Internally, it allows key members of its team to access details about its counts that
might help them strategize autonomously, without risking too much distracting back-
and-forth.
b. Increase Efficiency – Company can streamline the customer experience across the
entire retail ecosystem—from point of sale (POS) in-store and for online orders to
fulfillment, delivery, returns, and customer support.
c. Advance Project Plan – Company can have advance project plan as it guides them in
making strategic investments in supply chain capabilities, developing a distribution
strategy, establishing communication channels, identifying risks and opportunities,
and facilitating cross-functional decision-making and supply chain improvement
projects. Their advance project plan will also provide a central point of reference for
all initiatives. It will be used to ensure that their decisions and investments are in line
with their supply chain goals as well as the broader corporate vision.
Conclusion:
The implementation of this strategy will give the company a better collaboration with
supplier and better-quality control. It also optimizes its shipping, reduced inventory and
overhead costs, improved risk mitigation and stronger cash flow. It will be more agile business
with better visibility and data analytics.
Frederick Q. Bacang | PCU-MBA E (Modular) | Philippine Christian University

REDUCING INVENTORY COSTS FOR A FOOD AND BEVERAGE COMPANY

CASE STUDY

Problem Statement: A food and beverage company is facing challenges with high inventory
costs. The company has multiple warehouses across the world, and it stores finished products
and raw materials in these warehouses. The high inventory costs are affecting the company’s
profitability and are resulting in cash flow issues. The company needs to reduce its inventory
costs without compromising on its service levels.
SWOT Analysis:

STRENGTH WEAKNESS
 The company has multiple warehouses  The high inventory costs are affecting the
across the world, and it stores finished company’s profitability and are resulting
products and raw materials in these in cash flow issues.
warehouses
OPPORTUNITIES THREATS
 Reduces Product Shortages and  Excess inventory can create storage
Inventory Risks issues.
 Can provide customers access to  Excess inventory can tie up cash flow.
curbside pickup and warehouse visits  Excess inventory can lead to stock
obsolescence.

Solution:
The manufacturing company will implement the following solutions:
a. Leverage Data to Optimize Inventory Management – The first step is company needs to
optimize its inventory on hand. Since optimizing inventory is more difficult since COVID-
19 disrupted the “last-minute” supply chain. Company can no longer operate with the
“just-in-time” method to order goods and reduce inventory cost.
b. Improve Company’s Data, improve your inventory management – Company data will
have to sit within a central repository shared by as many functions of the business as
possible to eliminate the silo effect, where different systems hoard their data and others
can’t use it. Data must be able to be parsed quite quickly – at a glance is best if possible.
That means the different data points should be uniform in how they are displayed.
 c. Forecast True Inventory Demand – Company will run inventory forecasts and will use
not just historical data but also include any emerging trends seen in its various sales
channels or with its competitors. Then company run multiple scenarios so it will not be
caught off guard by a sudden dip in revenue.
d. Sell off Dead Stock - Company will see its dead stock as it impacts cash flow, and it can
increases carrying cost.

Results:
The implementation of the solutions resulted to the following benefits:
a. Improved Accuracy of Inventory Orders – Company improves its accuracy of product
orders, status, and tracking are critical to good inventory management. It will have an
effective fulfillment partner will have real-time software and systems in place to make
sure no product is left untracked throughout the fulfillment process.
b. Improved Warehouse Organization – Company will have a good inventory management
strategy leads to an organized fulfillment center. An organized warehouse results in more
efficient present and future fulfillment plans. This also includes cost-savings and
improved product fulfillment for businesses utilizing the warehouse for managing
inventory.
c. Improved Warehouse Productivity – Company will have a proper inventory
management in place, less time and resources are spent invested in managing inventory
and can be allocated to other areas. Technology is often used to speed up tracking and
fulfillment operations, ensuring inventory records are accurate.
d. More Productivity – Company can save time that could be spent on other activities.
e. Increased Profits – Company will have better understanding of both availability and
demand leads to higher inventory turnover, which leads to greater profits
Conclusion:
The implementation of these solutions, the company can save time and money due to
improved ordering accuracy, efficiency, and product flow, good inventory management results in
saved time and money. It also improves its customer retention and engagement of having
effective inventory management and control protects from incorrect or damaged goods being
shipped to customers. This helps improve customer experience, protect from issues such as
refunds, and achieve more repeat buyers.