Pharmaceutical Consolidation Strategies in Third-Party Supply Chain Networks
Restricted (Penn State Only)
- Author:
- Cocco, Katelyn
- Area of Honors:
- Supply Chain and Information Systems
- Degree:
- Bachelor of Science
- Document Type:
- Thesis
- Thesis Supervisors:
- Robert Alexander Novack, Thesis Supervisor
John C Spychalski, Thesis Honors Advisor - Keywords:
- Pharmaceutical
supply chain
inventory - Abstract:
- When analyzing the most efficient ways to ship, store, and deliver inventory, there are a multitude of factors that dictate success. Considering the complexities found within the pharmaceutical industry, it is pivotal that companies strive to further optimize processes to reduce costs and increase customer satisfaction. This thesis analyzes potential strategies a large manufacturer of pharmaceutical products – referred to as “Company A” – can pursue to consolidate inventory more effectively in one of their third-party distribution centers (DCs) located in Pennsylvania. The company that owns this storage location is referred to as “Company B.” In order to fully grasp the magnitude of the project, several actions were taken. First, a tour of Company B’s Pennsylvania facility was executed to pinpoint areas of opportunity. Then, a stagnant inventory report was analyzed to assess quantitative pain points, internal benchmarking was conducted to compare the two companies’ facilities, and various meetings were completed to clarify objectives and feasibility of solutions. Through the culmination of these actions, various recommendations were distinguished to increase cost savings and inventory optimization. If Company A reduces the amount of stagnant inventory held in Company B’s Pennsylvania DC, upwards of ten million dollars could be saved annually. In addition, pre-ordering of trial kits can help mitigate a primary bottleneck in the receiving process. Together, these recommendations will enhance the partnership between the companies and further optimize inventory levels.