CASE STUDY

Supply Chain Analytics Reduces Inventory Costs For an Established Healthcare Provider

Jun 21, 2017

Pharmaceutical companies face intense competition from both domestic and global players and are under tremendous pressure to revamp their supply chains and operations efficiency. Outdated IT systems and infrastructure cause lack of visibility into inventory and distribution processes. Also, due to a fragmented sourcing process, the overhead costs for inventory are higher than expected. The expired patent protection on products has led to excessive inventory, and the industry is looking for every possible opportunity to improve the efficiency of their supply chain system.

Government involvement and FDA approvals in the healthcare industry have changed the dynamics of the pharma industry. The pharma executives have realized the need to optimize their supply chain functions and enable them to manage market pressure. Quantzig’s supply chain analytics engagement enables inbound supply chain visibility for cost reduction, inventory optimization, and improved supply chain planning. The study also offers insights on cost optimization, efficient inventory and distribution management, and better supply chain visibility.

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The Business Challenge

An established healthcare provider in the US, owning a chain of hospitals spread across 15 states, had a fragmented supply chain with hospitals operating independently from each other. Due to outdated IT systems and infrastructure, there was a lack of visibility into the inventory and distribution process. The client approached Quantzig to perform a supply chain analytics assessment for cost optimization, efficient inventory and distribution management, and better supply chain visibility.

Our Approach

By diving deep into various supplier profiles, order history, invoices, inbound logistic data, inventory data, and operations data, the analysts extracted data for the supply chain analytics study. With the collated data, the team identified SLA deviations across different inbound delivery stages and inventory levels at various facilities. The analytics team calculated the costs incurred across departments and medical supplies.

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Supply Chain Analytics Key Findings

  • Integrated their internal data with purchasing and requisition systems
  • Streamlined the order processing to enabled easier access to valuable supply chain information
  • Improved inventory management across central and regional warehouses
  • Effectively managed safety stock levels for critical SKUs and supply chain costs

Predictive Insights From the Supply Chain Analytics

  • Improved the existing integrated delivery networks
  • Based on supplier performance, helped negotiate better long-term contractual agreements
  • Monitored the delivery times of materials from suppliers to out-patients for cost reimbursements
  • Tracking and update of data based on supply chain monitoring
  • Improvement in the Administrative Cost Savings and reduction in inventory replenishment cycle time

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