Distribution Network assessment for a medical device manufacturer

Challenge

Strong product demand for the company’s devices and reagents created order fulfillment backlogs, long lead times, and excessive re-handling costs and damages. Given these presenting issues, senior management sought a five-year plan for providing the business with the distribution capacity to meet expected increase in device models, reagent SKUs, inventories and outbound shipments.

Approach

• Data collection: Combined historical demand and shipment data by device type and consumable product category with the company’s five-year product rollout and strategic business plans.
• Network model development: Configured the modeling tool and baselined cost and service performance.
• Scenario-based analysis: Working in collaboration with the operating and product management departments, formulated alternative DC location and inventory deployment scenarios and flow paths.
• Action plan: Identification of milestones, resources and investments required to move forward.

Results

• Clear roadmap for re-configuring the distribution center network to match the concrete product plans and growth aspirations in the 5-year strategic plan.
• Optimization of the cost to serve.
• Knowledge transfer to enable the organization to re-rerun scenarios and modify plans as the business evolved.