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Industries »Pharmaceuticals & Health Care
Pharmaceuticals & Health Care
Pharmaceutical companies today are aggressively launching new products frequently and expanding into new geographies globally.
Some of the key issues concerning the pharmaceutical industry supply chain are:
· New Product Development (NPD): One of the most important issues of the pharmaceutical industry globally is the time-to-market of new drugs. This can be handled by a standardized new product development process which will help reduce investment costs significantly and decrease time to market. Proper planning of the product development cycle and choosing the right kind of drugs to develop form the two most important drivers in a standardized NPD process.
· Capacity planning: The uncertainty of the clinical trial process and competitors activity brings in a lot of uncertainty in gauging the future demand for the product. Also capacity planning needs to be done at a much earlier stage compared to other industries as it takes some time for the capacity to be effective. The long cycle time to develop a product further adds to this uncertainty. This leads to a capacity planning issue.
Typically the pharmaceutical manufacturing stage works on a “push” based model, which makes the supply chain less responsive to demand changes and sometimes leads to a “bullwhip” effect. The direct effect of this is high inventory level pile-up across the chain. Secondly short term opportunities are missed.
· Network Planning: With increasing exports the length of the supply chain increases. Global supply chain increases the span of the whole chain resulting in sub-optimal decisions being taken at each of the different global nodes. This results in a lack of supply chain visibility.
Secondly, for generic drugs margins tend to be wafer thin. Firms need to rationalise their supply chain to reduce costs without affecting the customer service levels.
Last Updated On:10/22/2008 12:43:17 PM
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Industries »Aerospace & Defence
Aerospace & Defence
Aircrafts are complex beings. A typical aircraft could use five million spare parts : both rotable and non rotable parts. Airlines are focussed on increasing market share. On the hand they face margin pressure due to emergence of low cost airlines and falling ticket prices.
Aqua MCG team of experts can help in procurement of chemicals (engine oil, cleaners, paints, dopes etc), tires, rotables needed for running and maintenance of aircrafts, forecasting, inventory classification and management, warehouse storage facility selection, JIT, safety and storage processes for hazardous items, total supply chain cost studies resulting in cost benefits and service level improvements.
Aerospace and Defence industry major focus is on building a diligent supply chain with emphasis on stringent quality control measures. With economy opening up and cost of flying becoming cheaper, the rise of the low cost carriers is ever on increase. As the capacity reaches maximum utilisation, the need to have an agile supply chain becomes more pressing. Similarly, Defence industry objective is to provide the warfare equipments at the right place and at the right time in order to successfully complete a mission, thus, a responsive supply chain, maintaining the quality of the warfare goods becomes critical.
Aerospace sector is characterized by manufacturers that not only construct aircrafts, engines, space vehicles but also provide repair and maintenance services. There has been a shift in this industry in the past years from a goods providing sector, to one that provides a complete package, including both services and goods. The Aerospace sector has traditionally incorporated Six Sigma measurement processes which are concentrated on product quality and not JIT lean manufacturing. Although
Last Updated On:9/19/2008 2:22:48 PM
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Services »Capabilities »Change & Performance Management
Change & Performance Management
In an evolving business scenario, changes are inevitable. However, a change within the enterprise or the supply chain may negatively impact customer service, resulting in loss of brand equity. Our consultants have a rich experience of planning and structured execution towards change management. We leverage this experience to help businesses adapt their supply chains to internal or external changes to ensure consistent customer service, increased profitability in addition to gaining a competitive edge.
Performance Management
"I often say that when you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind." - words of Scottish physicist and mathematician Lord Kelvin are so relevant when it comes to performance management.
The key challenge is offcourse in "What" you measure and "How" you measure it. "What" you measure comes first and managers have to be very clear about what they want and think through all aspects of the way the performance is going to be perceived by everybody - users who are measured on the performance. The "How" is also important because it has to be a true reflection of the "performance" of the behaviour. It is also important to maintain consistency in the way the performance is measured.
How many performance metrics should be there? There should be enough to tell what is happening and for serving the basic purpose of improving performance. But too many leads to a loss of focus and the effect on behaviour is diluted. Ideally, we believe there should be not more than 5 metrics for any department or individual of
Last Updated On:10/16/2008 2:46:30 PM
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Services »Impact »Revenue Growth
Revenue Growth
A tighter supply chain brings down logistical costs and increases efficiency. In the upstream, it leads to more predictable demand forecasts leading to an optimum level of inventory and lesser wastage. In the downstream, it helps to create accurate supply schedules for retailers and end consumers. Aqua MCG looks at ways to streamline your supply chain and boost revenue growth.
In the past, firms simply used their supply chains as a means to control costs by improving efficiencies but now, they are using their supply chains as a mechanism to boost revenue and improve customer satisfaction through reduced turnaround times and better management of highly customized products. Shorter life cycle products, global competition and rising commodity prices have posed challenges for the firms to grow their revenues and increase product’s market share but at the same time, product development, better management and more integrated services provide huge opportunities.
Some of the supply chain domains where revenue growth can be achieved are:
Domain
Capabilities
Decision Drivers
Product Development
New product introduction
Economies of scaleo Capital investment analysis
Planning of capacity with the new product introduction and existing infrastructure
Last Updated On:10/16/2008 2:48:48 PM
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The copyright in all materials provided on this Site is held by Aqua MCG or by the original creator of the material. Except as stated herein, none of the materials may be copied, reproduced, distributed, republished, downloaded, displayed, posted or transmitted in any form or by any means, including, but not limited to, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Aqua MCG or the copyright owner. Permission is granted to download one copy of the materials on this Site on a single computer for your personal or internal business use only provided that you do not modify the materials and that you retain all copyright and other proprietary notices contained in the materials. This permission terminates immediately if you breach this Agreement. You may not "mirror" any material contained on this Site without Aqua MCG’s express written permission. Any unauthorized use of the materials contained on this Site may violate copyright laws, trademark laws, the laws of privacy and publicity and/or communications regulations and statutes. All content and
Last Updated On:10/22/2008 1:03:43 PM
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Other Cost Reduction Areas
This section gives an insight into other areas in the supply chain where there exists tremendous scope of cost reduction specifically in the Indian market context.
Inventory Management
More than Rs 1, 00,000 crores is tied up in industry inventories in India. One of the main reasons for the huge pile-up of inventories is the separation of the inventory strategy from the S&OP planning. The lack of a holistic overall approach results in locally optimal inventory decision and in turn higher inventory holding costs with frequent stock-outs. To add to the industry woes, 84% of inventory replenishment processes in the Indian manufacturing sector are push based (according to a report published by FICCI in 2004).
Thus, there is a clear need of integration between the inventory optimization process and the S&OP. This will help solve not only the inventory holding costs but the over-arching strategic problems that link into other issues. Also, moving from a push based system to a pull based system helps drastically reduce inventory across the supply chain. Efficient production planning and an integrated, responsive supply chain network are all critical to reducing inventories. Inventory segmentation for decisions into service levels, is another popular approach to reduce inventory and retain customer-centric focus on the key products.
In addition to this, the 2007 benchmark report on Working Capital Optimization (WCO) surveyed 400 corporations from across the world and found that for more than 65% of them, WCO was a high-priority at any given point of time. The need to focus on WCO is primarily driven by financial stakeholders who continually urge companies to improve their financial metrics. However financial & inventory strategies are not enough to mitigate this; technology platforms to cushion the impact of inventory, by enabling better access to funding, and helps stream-line & automate various processes.
A
Last Updated On:7/23/2010 4:12:30 PM
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Sales and Operations Planning Process for a leading Indian Cement Manufacturer
Title: Designed and Implemented the Sales and Operations Planning process for better supply chain performance
Business Scenario:
Operations involved selling multiple brands which were transported through a multimode logistics network(rail, road, sea) , either directly to customers or to 200+depots which served the customers
A very loosely defined non-uniform Sales and Operations Planning process with limited involvement of all stakeholders. Planning done at a very aggregate level.
Limited visibility and buy-in of the current process outputs. Did not drive the supply chain.
Incorrect Sourcing decisions(source, mode) to meet demand. Increased logistics costs
Reduced ability to react to changes in supply chain(e.g.: reallocation of material due to changes in demand over a month). Capacity Constrained Situation. Affected service levels
Threat from regional players providing superior service levels and entry of MNC’s
Our Solution:
An integrated and well defined Sales and Operations Planning process was defined and implemented. It involved all the key stakeholders including the Territory Sales Managers, Regional Heads, Zonal Heads and the Central Planning team. It was designed to work at more granular level than before.
The process outputs were visible to all the stakeholders and a ‘single plan’ was driving the supply chain
Metrics were put in place to measure the process compliance and output of each stakeholder
A best source-mode combination was suggested to meet demands depending on minimum and maximum level of demand to be met, the revenue realization from meeting the demand and the logistics costs
Last Updated On:7/4/2011 1:03:05 PM
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Capacity Planning Tool for a leading global Automotive Component Manufacturer
Title: Created a advanced Rough Cut Capacity Planning (RCCP) tool based on TOC methodology for achieving a product and sales channel mix for Profit Maximization for use in the monthly S&OP process
Background:
Client is a Global Tyre Manufacturer and supplies tyres to major automotive companies in India
Sales were achieved through supplies to 3 channels –OEMS, Replacement Market and Exports.
Supplies were made directly from its 2 Manufacturing Plants to OEMS, but for servicing the Replacement Market, the distribution network consisted of 26 stocking points in India
Manufacturing process in each plant consisted of 3 stages – Upstream, Building and Curing
Business Scenario:
Channels were specific to groups of SKUs. Some of the SKUs did not have all 3 channels. Hence the SKU – Channel combination was unique. Pricing was different for an SKU for each channel. The per unit GM was hence unique for a SKU-Channel combination
Capacity Complications existed in Manufacturing. A tyre could be manufactured in any machine except those whose inner dimensions were less than the size of the tyre. So as the tyre size increased, manufacturing flexibility came down.
Quality Standards were different for different channels. Due to this a certain percentage of rejects of OEM channel (percentage yield) was converted into supply for the replacement channel
Capacity for manufacturing was less than the market demand. The client hence needed for each month a scheduling tool for selecting the best product mix to maximize the total gross margin of the company
Our Solution:
We created a high level too
Last Updated On:7/4/2011 1:06:53 PM
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Pharmaceuticals & Health Care
Pharmaceutical companies today are aggressively launching new products frequently and expanding into new geographies globally.
Some of the key issues concerning the pharmaceutical industry supply chain are:
· New Product Development (NPD): One of the most important issues of the pharmaceutical industry globally is the time-to-market of new drugs. This can be handled by a standardized new product development process which will help reduce investment costs significantly and decrease time to market. Proper planning of the product development cycle and choosing the right kind of drugs to develop form the two most important drivers in a standardized NPD process.
· Capacity planning: The uncertainty of the clinical trial process and competitors activity brings in a lot of uncertainty in gauging the future demand for the product. Also capacity planning needs to be done at a much earlier stage compared to other industries as it takes some time for the capacity to be effective. The long cycle time to develop a product further adds to this uncertainty. This leads to a capacity planning issue. Typically the pharmaceutical manufacturing stage works on a “push” based model, which makes the supply chain less responsive to demand changes and sometimes leads to a “bullwhip” effect. The direct effect of this is high inventory level pile-up across the chain. Secondly short term opportunities are missed.
· Network Planning: With increasing exports the length of the supply chain increases
Last Updated On:7/4/2011 5:21:44 PM
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Approach for Logistic Network Analysis for a leading Cement Manufacturer of India
Title: Designed a high level approach for Logistic Network Analysis for a leading cement manufacturer of India.
Business Scenario:
Operations involved selling multiple brands which were transported through a multimode logistics network (rail,road,sea), either directly to customers or to 200 depots which served the customers
Threat from regional players providing superior service levels and entry of MNC’s
Incorrect Sourcing decisions(source, mode) to meet demand. Increased logistics costs
Need to review the logistics network for increased logistic efficiencies/optimum service
Our Solution:
A holistic approach was developed to analyze the logistic network for identifying opportunities
Approach involved setting up of the network analysis process at the regional and national level
Analysis areas included possible scenarios under operational as well as strategic domain
Improvements were estimated to accrue from:
-Opportunities in the existing network
-Opportunities from localized increments to the existing network
-Opportunities from strategic and transformational changes to the network
Solutioning involved baselining the current network and evaluating opportunity scenarios against the baselined network
Benefits:
Structured process for evaluation of the network on a continuous basis
Initial estimates of benefits from one region, during simulation phase, indicated a saving of ~4 crores
Last Updated On:7/5/2011 12:13:07 PM
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