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Supply Chain Case Study
Mahindra Logiquest Supply Chain Case Study Members: Shubroto Pani Rohan Desai Team Name: Dark horses Campus: NITIE Mumbai
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Executive Summary Understanding the Pharmaceutical Supply Chain
Roadmap for 3PL Evaluation in Pharma Industry Understanding the Pharmaceutical Supply Chain Business Strategy using 3PL Pharma Supply Chain Challenges for 3PL in Pharma industry AHP Analysis Opportunities for Mahindra Logistics Unique export oriented supply chain dealing with perishable products Criticality & geographic expanse has it’s own limitations & hurdles Evaluation & Selection of Optimal 3PL service provider Leveraging core competency & more importantly identifying improvement areas Manage perishable good Maintain product quality Cold Chain temperature Distribution: Minimal inter-node control Indian firms: majorly export oriented Complex distribution & logistics network High value/unit weight Inventory management: Avoiding out of stock Understanding need of pharma companies Survey of executives from Pharma companies Insight on KPIs Relative ranking & weighing of the KPIs Mathematical model to select the optimal 3PL service provider Gap analysis wrt competitor competencies Self scorecard to measure performance Need for on-time delivery Contamination free distribution Managing optimal inventory levels with demand visibility Reverse Logistics comprise 12 to 15% Scalability & Flexibility of Logistics Partner Counterfeit products FDA Legal compliance and global policy adherence Indian pharma market expected to grow at CAGR of 12.1% Benchmarking against Global Best Practices Competitor Analysis & leveraging on KPIs Customization on scalability and reliance factors as per scope Instant access to real-time updates and alerts Technology for Visibility & traceability of all handovers Pharma Supply Chain Opportunity for 3PL 3PL Selection AHP Analysis Gap Analysis
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Pharmaceutical Supply Chain
Existing Strategy Characteristics Perishable Products Maintaining Ambient Temperature (avoid loss of potency) Expiration period for critical product Monitoring standards when passing through nodes Complex Network Complex & vast geographic network design (high growth rate) Need for scalability & flexibility during crisis Need for efficient reverse logistics Out of stock is unacceptable Security Concerns 5 % Counterfeit Drugs Patents & Copyright violation Damage to products: Mishap while transportation or packaging Cost of 38 billion due to cases Apprehension Unaware of 3PL services except for transportation. More of 2PL Pilferage and security concerns Loss of control, warehousing capabilities and regulatory compliance Expansion Strategy Pharma Supply Chain Opportunity for 3PL 3PL Selection AHP Analysis Gap Analysis
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Manufacturing Footprint
Third Party Logistics Basis of selection Challenges tackled by 3PL 1) Primary needs of the company 2) Industry regulatory norms 3) Needs in terms of reverse logistics 4) Need for temperature compliance 5) Life-cycle stage of the company Benefits of 3PL Core competency management Economies of Scale Integrated IT infrastructure Better logistics network Efficient distribution channels Expansion Strategy Epansion Strategy Pharma Supply Chain Demand Forecast Opportunity for 3PL Manufacturing Footprint 3PL Selection Shelf Life AHP Analysis Stock Policy Gap Analysis
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Manufacturing Footprint
Selecting and Managing 3PL Best Practices Monitoring Performance of 3PL To select a 3PL Internal assessment of current and future needs Detailed plan for the 3PL selection process Review the checklist of 3PL capabilities for RFI/RFP Evaluate, interview, and select. To manage a 3PL: Develop Contract based on the type of 3PL relationship aimed. Select the appropriate metrics to develop a scorecard. Tactical relationships Task-based SLAs Strategic relationships Adopt KPIs where the Company and 3PL work collaboratively to achieve mutually defined desired outcomes. Establish and implement governance mechanisms to effectively manage the business with your supplier. More complex and strategic relationship more effort should be put into governance. Expansion Strategy Expansion Strategy Pharma Supply Chain Demand Forecast Opportunity for 3PL Manufacturing Footprint 3PL Selection Shelf Life AHP Analysis Stock Policy Gap Analysis
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Manufacturing Footprint
AHP Model Reverse Logistics Cost Flexibility Quality Cold Chain Regulatory Comp. IT Infra Experience 1 1/4 1/3 1/5 2 3 1/2 4 5 6 1/6 Companies Reverse Logistics 6% Cost 21% Flexibility 13% Quality 35% Cold Chain 5% Regulatory 5% IT Infra 6% Experience 9% Final Score Rank DHL 6 5 4 5.44 2 V-Xpress 4.98 3 TCI 4.96 Rivigo 4.95 GATI 5.62 1 VRL 4.79 Expansion Strategy Expansion Strategy Pharma Supply Chain Demand Forecast Opportunity for 3PL Manufacturing Footprint 3PL Selection Shelf Life AHP Analysis Stock Policy Gap Analysis
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Manufacturing Footprint
Competitive Landscape GATI Preferred by Dr Reddy & Torrent Pharma for Quality KWE Merger infusion of capital for infrastructure Raised funds for GATI Kausar, Longest established Cold Chain Company since 30 years ISO 22000 TCI Handling shipments/day for Pharma industry High rank in flexibility. Expertise in 24 hr to 36 hr service Infrastructure in 7 airportswith specialized service for next flight out shipment. Moves 2.5% of India’s GDP by value Temperature control movement & Dry Ice Shipment DHL Vast scope of services across the pharma supply chain. Best in Temp control logistics Economies of Scale enables DHL’s low Cost of Operations Advanced IT infra to enable tracking and reverse logistics Known for warehousing and order fulfilment services V-Xpress Preferred by Abbott for on-time delivery. Record upto 90% Pan India express Cargo by road, air and railway Covers 24 states serving 100+ companies Recorded 0.2% damages in 2015 against 0.5% industry std VRL Large fleet. Covers 28 states& 662 cities Considered best for last mile connectivity Lowest incidences of theft, pilferage, damage Preferred by Abbott for southern region logistics Rivigo Unique driver management model Technology for automation and route optimization Robust cold-chain frame-work and remote temperature control technology Provides lowest transit times in cities Expansion Strategy Expansion Strategy Pharma Supply Chain Demand Forecast Opportunity for 3PL Manufacturing Footprint 3PL Selection Shelf Life AHP Analysis Stock Policy Gap Analysis
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Manufacturing Footprint
Road Ahead for Mahindra Logistics Proposed Strategy Joint Venture/Partnership to improve reach and capabilities in multi-modal logistics Acquire or develop an IT arm to boost analytics Develop export competency and foreign capabilities Adopt best quality practices to ensure top class service Achieve six sigma level of safety to reduce accidents and pilferage Deploy continuous monitoring/alert systems and help service-network. Zero-error Cold-Chain Re-envision the Logistics sector to improve service levels Invest in process automation, driver analytics and network optimization Design network model and fleet strength to reach air equivalent transit times Develop Customer query handling competency Improve its Cold chain arm for cost efficiency and reliability Technology for real-time temp. monitoring and remote temp. management Cut down transit time to reduce cold storage cost Expansion Strategy Expansion Strategy Pharma Supply Chain Demand Forecast Opportunity for 3PL Manufacturing Footprint 3PL Selection Shelf Life AHP Analysis Stock Policy Gap Analysis
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Manufacturing Footprint
Expansion Strategy Expansion Strategy Pharma Supply Chain Demand Forecast Opportunity for 3PL Manufacturing Footprint 3PL Selection Shelf Life AHP Analysis Stock Policy Gap Analysis
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