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Supply Chain Design for the Healthcare Industry

LLamasoft Customer Example
A medical device manufacturer with a single distribution center wanted to determine how many additional DCs may be needed and where in order to meet service levels. Using what-if scenarios to model Greenfield options, the company found that their single DC model was too costly and that a network of two DCs and six pool points was optimal. The new model would also reduce annual transportation budget by $1 million.

Nineteen of the Gartner Supply Chain Top 25 for 2015 Have Utilized LLamasoft Modeling Technology
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Source: Gartner, Inc., The Gartner Supply Chain Top 25 for 2015, Stan Aronow, Michael Burkett, Kimberly Nilles, Jim Romano, May 13, 2015.

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Supply Chain Optimization and Simulation on a Unified Platform
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Supply Chain Design for the Healthcare Industry

For nearly 15 years, LLamasoft has provided software and expertise to help large healthcare organizations design and significantly improve their end-to-end supply chain network operations. LLamasoft® Supply Chain Guru® enables companies to model, optimize and analyze supply chain and transportation network operations, leading to major improvements in cost, service, sustainability and risk mitigation.

Use Modeling Technology for Successful Merger and Acquisition Strategy

Mergers and acquisitions (M&A) in the healthcare industry are becoming more and more common place. With these mergers come many challenges. Mergers and acquisitions (M&A) present an incomparable number of options for the design of the new organization’s supply chain, so it’s not altogether surprising that so many of these projects fail to meet executive and shareholder expectations. Depending on which report you consult, M&A initiatives have a failure rate of anywhere between 50 and 85 percent!

Supply chain design technology enables healthcare companies to model their supply chains, evaluate alternatives, optimize the network structure and simulate multiple scenarios in order to predict the resulting operational performance of the merged organizations. There are opportunities to leverage modeling across all stages and types of M&A activity, including:

  • Pre-Merger
  • Post-Merger
  • Divestiture/Spin-Off

Supply chain design models include all of the potential inter-related operations and incorporate time and variability for precise strategy and operational planning. Using modeling technology, companies can determine how to best manage customer and product overlaps, new products and merging transportation networks.

Design Healthcare Supply Chains to Respond Rapidly to Changing Government Regulation

New government legislation and increasing regulation is rampant not only in the United States but around the world. Every country’s regulations are different, and what works in one country may not work at all in another. Supply Chain Guru offers powerful multiple scenario analysis within a single model database with the ability to adjust any combination of key cost or model elements. Use scenario analysis to understand how your company’s supply chain will react to new legislation and gauge your readiness to enter new geographies.

Supply Chain Design for Managing Risk in the Healthcare Industry

From understanding exactly how much each product costs to contingency planning, LLamasoft has enabled some of the world’s leading healthcare companies to turn common industry challenges into a source of competitive advantage.

  • Cost-to-serve: What is the real cost to meet my customers’ needs? With fewer new “breakthrough” healthcare products hitting the shelves and narrower margins, now is the time to uncover inefficiencies in the existing supply chain and optimize for improved performance. LLamasoft enables businesses to quantify and analyze all supply chain activities and costs incurred to fulfill a customer’s product demand by modeling all the supply chain activities in the network and properly allocating fixed and variable costs.
  • New product introductions: How do we determine the best geographies and timing? Healthcare companies are continually introducing new products and opening new regions for sales and distribution. Through demand analysis and network optimization, LLamasoft can help determine the optimal launch plan.
  • Supply chain risk management and contingency planning: LLamasoft modeling technology enables companies to mitigate risk by visualizing current inefficiencies, analyzing the impact of changes to the supply chain through scenario analysis, and being able to react quickly and intelligently to unplanned events such as fires or floods. Built-in global risk indices help companies understand and predict the likelihood of supply chain disturbances.

Why Healthcare Companies Choose LLamasoft

LLamasoft occupies a unique place in the market as the only commercial software vendor dedicated solely to supply chain design. Some of LLamasoft’s key strengths are:

  • Mixed Mode Solving: The only network design application that integrates network, transportation, inventory, and simulation algorithms into a single tool to help healthcare companies manage the entire end-to-end supply chain.
  • Automatic Scenario Generation: Powerful multiple scenario analysis within a single model database offers the ability to adjust any combination of key cost or model elements to do sensitivity analysis, simulate impact on the supply chain over time, and make the optimal decisions.
  • Cloud Solving and Collaboration Tools: On-demand cloud solving to offload large and complex solving problems and generate faster results. Web-based centralized maintenance of all model data and outputs for internal and client collaboration.
  • Product Development: LLamasoft invests greater than 30 percent of annual revenue in research and has the largest dedicated development staff of both software developers and operations research scientists in the industry. We stay ahead of the industry so we can stay ahead of your competition.
  • Solutions Services: From hourly support to fully outsourced project delivery, LLamasoft offers customers a variety of engagement options. More than 100 solutions consultants are available worldwide and LLamasoft has supported more than 1,500 supply chain design projects across industries.
  • Customer Success Program: LLamasoft offers three primary functions to help you harness supply chain modeling for transformative business benefits:
    • Global Support: LLamasoft’s dedicated global support team offers technical expertise across LLamasoft solutions, as well as monthly webinars and the Support website and knowledge base.
    • Coaching and Training: We’ve added new training courses and new global locations, and we don’t stop there – we can help you afterward too, so you can put your learning into practice.
    • Customer Success Team: We now have a dedicated team focused on customer happiness that manages the relationship throughout the customer lifecycle.

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