Supply Chain Improvements for a Medical Company
How long is our Supply Chain Cycle Time?
A leader in the field of blood sugar monitoring systems and related testing equipment, wanted to improve their market position and increase their speed to market.
In some cases the initial estimates for the total cycle time exceeded 120 days and it was believed that there was over 100 days of finished goods inventory located in the warehouses.
The initial phase of the project was to accurately measure what the total cycle time actually was for the supply chain. Including defining existing data sources as well as developing data gathering process for continually monitoring the process.
Products were mainly manufactured in the Asia-Pacific region and then shipped to multiple packaging facilities in the Asia-Pacific region, the United States, and Europe. Then from the packaging facilities they could potential travel to additional packagers and then on to finished goods warehouses before being delivered to the final customer.
The elements included in the cycle time were:
- The initial planning process
- Inland transportation (in and out)
- Drayage and ocean shipping (in and out)
- Customs clearance (in and out)
- Receipt and processing
Identification of the problem and potential solutions.
The ‘as-is” supply chain network was mapped out including cycle time with costs, volumes, key decisions, process/cost constraints, and data/system integration inefficiencies. In some cases the actual supply chain cycle time was in excess of 190 days, well above the initial estimates that were thought to be too high.
The elements of the cycle time were then categorized based on the degree of influence on the overall supply chain and the potential improvement opportunities.
A detailed cost/benefit analysis was developed to categorize the potential improvement opportunities identified, and were categorized based on ease of implementation, cost of implementation, and overall impact on the supply chain.
Improvements were identified that had the potential to reduce the overall supply chain cycle time by up to 50%.