Inventory drivers in a pharmaceutical supply chain

In recent years, inventory reduction has been a key objective of pharmaceutical companies, especially within cost optimization initiatives. Pharmaceutical supply chains are characterized by volatile and unpredictable demands –especially in emergent markets-, high service levels, and complex, perishable finished-good portfolios, which makes keeping reasonable amounts of stock a true challenge. However, a one-way strategy towards zero-inventory is in reality inapplicable, due to the strategic nature and importance of the products being commercialised. Therefore, pharmaceutical supply chains are in need of new inventory strategies in order to remain competitive. Finished-goods inventory management in the pharmaceutical industry is closely related to the manufacturing systems and supply chain configurations that companies adopt. The factors considered in inventory management policies, however, do not always cover the full supply chain spectrum in which companies operate. This paper works under the pre-assumption that, in fact, there is a complex relationship between the inventory configurations that companies adopt and the factors behind them. The intention of this paper is to understand the factors driving high finished-goods inventory levels in pharmaceutical supply chains and assist supply chain managers in determining which of them can be influenced in order to reduce inventories to an optimal degree. Reasons for reducing inventory levels are found in high inventory holding and scrap related costs; in addition to lost sales for not being able to serve the customers with the adequate shelf life requirements. The thesis conducts a single case study research in a multi-national pharmaceutical company, which is used to examine typical inventory configurations and the factors affecting these configurations. This paper presents a framework that can assist supply chain managers in determining the most important inventory drivers in pharmaceutical supply chains. The findings in this study suggest that while external and downstream supply chain factors are recognized as being critical to pursue inventory optimization initiatives, pharmaceutical companies are oriented towards optimizing production processes and meeting regulatory requirements while still complying with high service levels, being internal factors the ones prevailing when making inventory management decisions. Furthermore, this paper investigates, through predictive modelling techniques, how various intrinsic and extrinsic factors influence the inventory configurations of the case study company. The study shows that inventory configurations are relatively unstable over time, especially in configurations that present high safety stock levels; and that production features and product characteristics are important explanatory factors behind high inventory levels. Regulatory requirements also play an important role in explaining the high strategic inventory levels that pharmaceutical companies hold

A hierarchical approach to multi-project planning under uncertainty

We survey several viewpoints on the management of the planning complexity of multi-project organisations under uncertainty. A positioning framework is proposed to distinguish between different types of project-driven organisations, which is meant to aid project management in the choice between the various existing planning approaches. We discuss the current state of the art of hierarchical planning approaches both for traditional manufacturing and for project environments. We introduce a generic hierarchical project planning and control framework that serves to position planning methods for multi-project planning under uncertainty. We discuss multiple techniques for dealing with the uncertainty inherent to the different hierarchical stages in a multi-project organisation. In the last part of this paper we discuss two cases from practice and we relate these practical cases to the positioning framework that is put forward in the paper

IoT-enabled planning, control, and execution in ETO manufacturing: dynamics, requirements, and system architecture: a case study of Brunvoll AS

Confidential until 18. May 202

The design and implementation of a WLC system incorporating time buffer signalling: an action research study

The purpose of this paper is to explore the particular issues concerning the design and implementation of workload control (WLC) in the management of a customised high touch time MTO (Make to Order) environment involving rotary moulding. The system embraces key workload control features, including order acceptance and controlled release incorporating time buffer management for priority control. The design and implementation over a two year period has offered opportunity to determine the applicability of S-DBR based WLC. The resulting system is integrated with a Sage ERP system and specifically designed to support operational decision making whilst providing visibility to the owner manager

A hierarchical approach to multi-project planning under uncertainty.

We survey several viewpoints on the management of the planning complexity of multi-project organisations under uncertainty. A positioning framework is proposed to distinguish between different types of project-driven organisations, which is meant to aid project management in the choice between the various existing planning approaches. We discuss the current state of the art of hierarchical planning approaches both for traditional manufacturing and for project environments. We introduce a generic hierarchical project planning and control framework that serves to position planning methods for multi-project planning under uncertainty. We discuss multiple techniques for dealing with the uncertainty inherent to the different hierarchical stages in a multi-project organisation. In the last part of this paper we discuss two cases from practice and we relate these practical cases to the positioning framework that is put forward in the paper.Choice; Complexity; Framework; Hierarchical models; Management; Manufacturing; Methods; Multi-project organisations; Planning; Project management; Project planning; Uncertainty;

Business strategy driven IT systems for engineer-to-order and make-to-order manufacturing enterprises

This thesis reports research into the specification and implementation of an Information Technology (IT) Route Map. The purpose of the Route Map is to enable rapid design and deployment of IT solutions capable of semi-automating business processes in a manufacturing enterprise. The Map helps structure transition processes involved in “identification of key business strategies and design of business processes” and “choice of enterprise systems and supporting implementation techniques”. Common limitations of current Enterprise Resource Planning (ERP) systems are observed and incorporated as Route Map implications and constraints. Scope of investigation is targeted at Small to Medium Sized Enterprises (SMEs) that employ Engineer-To-Order (ETO) and Make-To-Order (MTO) business processes. However, a feature of the Route Map is that it takes into account contemporary business concerns related to “globalisation”, “mergers and acquisitions” and “typical resource constraint problems of SMEs”. In the course of the research a “Business Strategy Driven IT System Concept” was conceived and examined. The main purpose of this concept is to promote the development of agile and innovative business activity in SMEs. The Road Map encourages strategy driven solutions to be (a) specified based on the use of emerging enterprise engineering theories and (b) implemented and changed using componentbased systems design and composition techniques. Part-evaluation of the applicability and capabilities of the Road Map has been carried out by conducting industrial survey and case study work. This assesses requirements of real industrial problems and solutions. The evaluation work has also been enabled by conducting a pilot implementation of the thesis concepts at the premises of a partner SME

The responsive reply chain: the influence of the positioning of decoupling points

Manufacturing supply chains have been challenged by high competition, dynamic, and stochastic conditions. They have to be constantly responsive in today’s ever-changing manufacturing environment. The proper positioning of decoupling points for material flow and information flow has a significant potential for increasing responsiveness in a supply chain. Positioning the material decoupling point as close to the end consumer as possible whilst the information decoupling point is positioned upstream is the key to the industries’ ability to reduce lead time and enhance performance in the dynamic behaviour of the supply chain. [Continues.

Towards a collaborative MRP for supply chain coordination

The necessity to increase collaboration in nowadays supply chains is emphasized both by academics and practitioners, but most of the supply chains are still managed through cascades of classical MRP/MRP2 systems. Interviews in the aeronautical sector have shown us the existence of many hidden practices aiming at satisfying local constraints which would be better addressed through collaborative processes. We suggest in this communication to define a "collaborative MRP" which would not only provide a better global performance than purely local planning, but take into account the autonomy of the involved partners which is not always respected by centralized pproaches using APS (Advanced Planning Systems)

SUPPLY CHAIN INTEGRATION WITH DEMAND DRIVEN MATERIAL REQUIREMENTS PLANNING SYSTEM - Case: Wärtsilä 4-Stroke

This study investigates how the case company Wärtsilä 4-Stroke could implement in its supply chain new material management system called as demand driven material requirements planning (DDMRP). The previous DDMRP literature is focused on single company implementations where benchmark company LeTourneau Inc. have been capable to increase its return on invested capital from 4% to 22% in four years by taking the DDMRP in use. This study aims to investigate how the DDMRP system could be extended for controlling also the supplier network since the production of Wärtsilä 4-stroke products is performed into great extent by external suppliers. Previous supply chain studies show that supply chain synchronization leads to lower inventory levels and improved responsiveness. This study strives to investigate if the case company could achieve similar results by integrating its supply chain with the DDMRP. The investigation is performed by using supply chains of three example case components supplied to the Vaasa factory located in Finland. First part of the research results is dedicated on illustrating the DDMRP system for three example cases. Second part shows how the implementation could be done in collaboration with suppliers. In the first part is shown calculated results how, with the DDMRP integrated supply chain, the total inventory holding of first example could be reduced by 47%, which would mean 809 000 euros reduction in working capital. At the same time the responsiveness could be improved by having shorter component delivery lead time. For two remaining example cases the total inventory reduction potential should be investigated with the suppliers in collaborative DDMRP implementation project. The second part of results presents a project proposal how such collaborative DDMRP implementation project could be performed. Objective of the project would be to create integrated supply chain which purpose would be to improve profitability, reduce total inventories and improve supply chain responsiveness.fi=Opinnäytetyö kokotekstinä PDF-muodossa.|en=Thesis fulltext in PDF format.|sv=Lärdomsprov tillgängligt som fulltext i PDF-format