CASE STUDY

Algorithmic Logistics Route Optimization Helps a Pharma Company to Enhance Line Haul Network Efficiency by 3X

Apr 29, 2020

About the Client

The client is a market leader in the preventive healthcare products segment and a major contributor to the healthcare value chain for more than a decade. Based out of Norway, the client has numerous manufacturing and distribution units spread across Europe and is also one of the biggest pharmaceuticals manufacturers that are known for its stellar efforts toward making pharmaceutical products and drugs easily available, affordable, and acceptable across several low to middle-income European countries.

Logistics Route Optimization Engagement Summary

logistics route optimization

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Business Challenge

Running a complex pharma supply chain, the Norway based company faced several disruptions and logistical challenges due to the ongoing COVID-19 crisis-led supply chain disruptions. Also, it was observed that logistics management was a crucial aspect of the client’s business structure since they handled temperature-sensitive pharma products that required a temperature-controlled environment to ensure drug safety while being transported. Complying with these requirements and government regulations proved to be costly and resulted in a spike in shipping costs, which in turn, adversely impacted their margins and enhanced the complexity of the already complex distribution and logistics processes.

To meet the dual objectives and adhere to the regularity needs amid the crisis was crucial, and the pharmaceuticals manufacturer required a powerful logistics route optimization solution to meet the dynamic needs and tackle the supply chain disruptions. This is when the client approached us looking to leverage our supply chain analytics capabilities to optimize their logistics processes considering the real-time events including traffic, equipment availability, and market needs.

The challenges faced by the client included:

  • Increase in need for temperature-controlled transportation trucks to pick up cargo from different locations and deliver it to hubs
  • Restricted use times for trucks due to the ongoing crisis
  • Rise in product demand
  • Raw material shortages due to the supply chain disruptions
  • Changes in customer expectations regarding delivery times

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Solution Offered

A detailed analysis of the client’s challenges revealed the underlying root causes of the challenges faced by the client. An inefficient logistics route optimization strategy coupled with the crisis-induced supply chain disruptions were creating an irreversible impact on their supply chain operations. To help the pharmaceuticals company, Quantzig put together a team of advanced logistics route optimization experts, analysts, supply chain network optimization specialists, and digital architects who adopted a comprehensive two-phased approach that focused on collecting and analyzing supply chain data.

Phase 1: Data Collection and Standardization

The first phase of this logistics route optimization engagement revolved around collecting information from disparate sources across the organization’s operations, documented data on customer locations, and existing and potential hub locations to determine improvement opportunities at each node in the supply network.

Phase 2: Logistics Route Optimization Model Implementation

The second phase, also the most crucial phase of the engagement revolved around the development and personalization of a logistics route optimization model to help the client generate schedules based on real-time insights and market conditions. Deploying such a system proved to beneficial in several ways, helping them manage factors such as travel times, transport utilization costs, and delivery time.

Supply chain management in pharma is crucial considering the disruptions caused by the ongoing crisis. Request a free demo for comprehensive platform insights.

Value Delivered

The logistics route optimization solutions provided granular insights into the supply chain processes, enhancing visibility into logistics route planning and transportation workflows. Optimizing logistics routes following a systematic approach helped the client to meet the demand surge induced by the COVID-19 outbreak. Quantzig’s customized logistics route optimization solutions also enabled the client to analyze potential transport options to meet the dynamic demand without compromising on SLAs.

The logistics route optimization solutions also enabled the pharmaceuticals manufacturer to:

  • Evaluate multiple scenarios & optimize spend
  • Improve OTIF delivery rates by 48%
  • Analyze demand patterns in real-time to make crucial logistics decisions
  • Improve margins by 32% with no compromise to the quality of products
  • Enhance the efficiency of its line-haul network by 3x

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How Logistics Route Optimization Enhances Pharma Delivery Schedules

Logistics route optimization plays a pivotal role across industries. In the pharma industry, it makes your last mile operations effective by helping you plan the logistics route and delivering pharma supplies based on real-time insights. Adopting a holistic approach to pharma logistics route optimization can also help you set delivery schedules so that you can cater to timely delivery requests from your customers. Also, it lets you travel a maximum number of stops covering minimum distance, thereby making the delivery process much smoother and cost-efficient.

We have been supporting many clients across a range of industries in their COVID-19 response and planning efforts. Based on our experience and interactions with clients from the pharmaceutical industry, we suggest that businesses must focus on enhancing logistics and transportation workflows to cater to the dynamic needs of their customers. While the pharmaceutical industry is refining its strengths in transportation and distribution, advancements in logistics route optimization and supply chain analytics helps in balancing their usual and sudden surge in demand for deliveries. Also, it helps reduce manual work, logistics costs, supply chain visibility costs, thereby preserving the quality of pharma products scheduled for the last-mile delivery.

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