End-to-End Optimization and Management of Storage Infra & Distribution Network for a Pharmaceutical Distribution CompanyEnd-to-End Optimization, Distribution Network

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The Client

A growing pharmaceutical distribution company based in Gurugram deals in supply of medicines to chemists, hospitals/nursing homes as well as individual doctors. Presently, the distribution coverage area is confined to 20 km diameter within the city. Our client acts as a distributor for  most major pharmaceutical companies operating in India. Along with regular distribution cycle every day, the customer delivers on urgent/emergency basis whenever required, adding more value to its distribution operation.

Assignment & Challenges

The customer is keen to go for business expansion thereby increasing the existing turnover. In the current scenario, the company caters to 50K SKUs. Since this no. is bound to rise, the present business processes may not yield the desired goals. The existing challenges faced by the company are –
• Unorganized storage infrastructure
• Inventory issues
• Traditional order processing methods
• High density of pilferage
To overcome these challenges, our client wanted us to remodel their existing facility, align their processes with the best practices to enhance the efficiency.

Designed Holisol Solution

Holisol analyzed the complete process of the client, thoroughly. Based on end to end inspection of the client’s operations we came up with AS-IS reports, pointing out the loopholes in the operations. Our experts team in pharmaceutical operations discussed these shortcomings with the client simultaneously taking note of client’s inputs. This way Holisol came up with the final TO-BE report highlighting the key actionable items. Remarkably, considering the delicacy of running operations, solutions were implemented step by step not affecting client’s business.
• Site planning – Process wise mapping
Existing facilities of the customer were remapped to maximize the output of each key operation. Infrastructure improvements were planned to standardize each process for the sites with a focus on reducing the pilferage.
• Process redesign
We identified the bottlenecks responsible for losses in important processes and listed down the capabilities which were underutilized. This is how processes were reengineered –
1. Restructuring the inbound operation to align with ERP system in a better way eradicating the scope of pilferage
2. Location mapping for storing inventory (ambient as well as refrigerated) in an orderly manner, better space utilization
3. Redesigning the Pick line for faster pickups in a scientific manner
4. Replenishment process based on maximum and minimum stock analysis rather than reactive order basis
5. Standardization of dispatch process – checkpoints inserted both at pick line and dispatch
• Time & Motion Study – Max. Capacity Utilization
Each of the storage site as well as pick line is separated by a significant movement time at customer’s facility. A thorough time & motion study was conducted to reduce the unnecessary and recurring movement across the sites which not only enhanced the efficiency but also led to lesser pilferage and losses.
• Distribution network designing and implementation
1. Max. utilization of existing vehicle fleet
2. Route optimization for reducing the delivery TAT
3. Reduction of multiple distribution cycles within a day
• Resource planning
Deployment of resources in the most optimum manner for cutting down extra costs

Key Benefits Achieved

• End-to-end storage and distribution process management in a professional manner led to enhancement in efficiency
• Reduction in pilferage – losses and theft of costly drugs
• Better utilization of manpower
• Better vehicular utilization
• Reduction in transportation costs with better route mapping

Future/ Recommendations

• Business Expansion
The customer intends to expand into other cities, wherein Holisol will enable the client to go live from Day 1 after conducting a feasibility study for the whole operation. This will involve –
1. Determining optimum warehouse location
2. Cost-benefit analysis
3. CapEx & OpEx analysis
4. Market Research
• Packaging Solutions
During dispatch process, a lot of plastic bags are used for distribution. Considering the huge volume of dispatch during the day, Holisol recommends using returnable and reusable PP boxes which would not only be a cost-effective solution in the long run but would reduce the carbon footprint to a great deal. Initial investment might be higher but benefits are there to reap by saving on OPEX.

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