Supply Chain Design for the Pharmaceutical Industry

LLamasoft Customer Example

A medical testing company was facing a potential three-fold increase in business volume and needed to redesign critical aspects of its service network. Using LLamasoft Supply Chain Guru, the company constructed a model to represent all the operations involved in collecting, sorting and transporting testing material as well as details of lab capacity and staffing and equipment needs and cost. The analysis helped determine the best locations for new labs as well as their capacities to create a network that could meet required service levels at lowest possible cost.

Download PDF

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 their annual transportation budget by $1 million.

LLamasoft: Supporting Public Health Efforts Around the World

LLamasoft has been actively involved in public health projects around the world with partners such as JSI, The World Bank, USAID, SCMS and World Health Organization. LLamasoft technology and employees have worked in various developing countries to redesign transportation networks to maximize service levels and minimize costs, plan and coordinate volume and frequency of shipments of supplies and predict future supply chain needs based on changing disease patterns, costs and warehouse and clinic locations.

Supply Chain Design for the Pharmaceutical Industry

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

Model, Optimize and Analyze Pharmaceutical Supply Chain Operations

LLamasoft has enabled some of the world’s leading pharmaceutical companies to turn
common industry challenges into sources of competitive advantage:

How can I clarify merger and acquisition decisions? LLamasoft enables users to model their supply chains, evaluate alternatives, optimize the structure, and simulate multiple scenarios in order to predict the resulting operational performance of the merged organizations. Using modeling technology, companies can determine how best to manage customer and product overlaps, new products and merging transportation networks.

Cost-to-serve: What is the real cost to meet my customers’ needs? With fewer new “breakthrough” pharma 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 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. Use scenario analysis to understand how your company’s supply chain will react to new legislation and gauge your readiness to enter new geographies.

New product introductions—how do we determine the best geographies and timing? Pharmaceutical 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.

Understanding synergies across prescription and over-the-counter supply chains is essential. Are OTC and prescription customers the same in terms of how and where they buy? Supply chain design analysis can identify synergies across disparate product lines in order to increase network efficiency and provide the highest level of service at the lowest cost.

Third-party logistics (3PL) considerations—should everything be outsourced or should facilities be run by the company? Using proprietary DCs could mean much higher fixed costs but perhaps a lower variable cost overall. Companies may also choose to outsource on a project or product basis; for example, because vaccines are small and easily ship parcel, one manufacturer used Supply Chain Guru to tailor facility use, mode, and sourcing by product type and/or service requirement.

Long-term capacity planning—Using production modeling, companies can regularly review demand forecasts as the information becomes available so that they can best balance limited production capacity with demand volumes that often exceed this capacity.

Model, Optimize and Analyze Pharmaceutical Supply Chain Operations

LLamasoft customers often identify 10 to 20 percent cost savings while maintaining or
improving customer service levels through strategic supply chain design projects including:

Supply Chain Network Design • Transportation Network Design • Inventory
Optimization • Flow-Path Optimization • Long Term Capacity Planning • Inbound
Consolidation • Greenfield Analysis • Cost-to-Serve Optimization • Merger and
Acquisition Rationalization • Risk Analysis and Contingency Planning


LLamasoft Is Here to Help

LLamasoft is dedicated to helping businesses build optimized supply chains that help them thrive even in changing market conditions. Partnering with LLamasoft ensures you’ll have more than just software and technical support, but a growing community of supply chain design practitioners, workshops, training and coaching to guide you as you progress. To learn more, email or call 866-598-9831.

Ready to learn more? Click to request a live demo with the LLamasoft team.

Request A Demo