Identifying Contingency Plans for Supply Chain Risks to Ensure On-Time Deliveries
A large pharmaceutical company produces a drug that is an antibody to prevent repository complications in infants. This product has a global customer base, three different manufacturing and filling facilities, and three global distributions centers. The largest challenge with this product is how to identify and quantify the risk elements in the supply chain in order to build a resilient supply chain network that eliminates drug shortages.
In order to avoid drug shortages the pharmaceutical company used LLamasoft® Supply Chain Guru® to build an end-to-end model of the drug’s supply chain network across all three manufacturing facilities. They then used Supply Chain Guru to simulate inherently known and unknown risk factors to identify the processes and nodes in the supply chain with the most risk in order to recommend changes or modifications in the network.
The project team tested several risk mitigation strategies for known risk elements and found only slight improvements were possible to ensure successful customer delivery. However, they realized that the largest impacts on delivery timing were around unknown risk factors such as unexpected lot failures at any node from natural disasters or any non-normal event. The company used Supply Chain Guru to run forward-looking sensitivity and risk modeling scenarios to create contingency plans enabling fast response to unplanned supply chain disruptions and ensure there are no drug shortages.
The large pharmaceutical company can now reschedule their production plan to largely reduce known risk.
Through Supply Chain Guru scenario simulation and analysis, they were able to identify and analyze potential delivery issues and develop a production plan that could withstand the effects of known and unknown risk. This will lead to significant improvements to on-time deliveries across the globe. The new production plan would ensure nearly 100 percent on-time delivery of products in 2015 and 2016 while evaluating for risk. They were also able to quantify the impact of risk on each process area in each echelon of the supply chain as shown in the graph above.
For more information on how LLamasoft can help you mitigate risk and ensure on-time deliveries through breakthrough supply chain design, email us or call 866-598-8931.