1 (CASE STUDY) Read the following case study and answer the following questions. IMPERIALS END-TO-END SUPPLY CHAIN SOLUTION BOOSTS BAUSCH & LOMBS SALES AND SERVICE LEVELS When Imperial Heath Sciences client Valeant Pharmaceuticals International acquired vision care company Bausch & Lomb, it was faced with the complex challenges that mark this testing pharmaceutical category. Bausch & Lombs product range includes contact lenses that are distributed through optometrists; lens care and solutions that are sold through retailers and pharmacies; and surgical products and equipment, including intraocular lens implants. The Problem Valeant initially placed its South African division of Bausch & Lomb into the Linbro Park facility of local subsidiary, iNova. Focused on developing and marketing a range of professionally endorsed healthcare products to South Africa and other selected African countries, iNova was well placed to grow the product range and create demand for Bausch & Lombs products but was not equipped for the logistics and distribution challenges associated with this vast product range. These challenges include the fact that Bausch & Lombs product range is immense. For the one condition of astigmatism, for example, there are some 350 different contact lens prescriptions, depending on the patients specific needs. Exacerbating this challenge is the fact that every stock item is serialized; consignment stock must be efficiently managed; and with Bausch & Lombs products going into retailers, pharmacies, optometrists, eye specialists and hospitals, there are multiple distribution channels. Faced with inventory management problems, stock write offs, expiring consignment stock, back orders that could not be fulfilled and call centre inefficiencies that were resulting in a high rate of abandoned calls, Valeant needed a different solution. The group partnered with Imperial Health Sciences, Africas leading partner in the healthcare supply chain, to turn around Bausch & Lomb South Africa, and transform the operation into a successful, efficient profit centre. Imperials greatest challenge was meeting the testing time frame. In just three months, the company had to have the infrastructure and systems in place to take in 30 000 Bausch & Lomb (stock keeping units) SKUs and go live with a full, end-to-end solution for Bausch & Lomb, from order to debt collection. Imperial Health Sciences usually runs at some 5 500 active SKUs in total. The Solution Since vision care is a completely new and different product set for Imperial Health Sciences, a new division was established to meet Bausch & Lombs needs. Infrastructure The new, customized infrastructure that was developed to accommodate Bausch & Lombs 30 000 SKUs in a new 600m2 area at Imperial Health Sciences includes innovative new racks and plastic shelf containers with adjustable dividers, providing for the storage of many small units. They ensure easy access for fast and efficient batch picking, optimize space and ensure operational efficiency. The unique racks and shelves were designed by Resolve Capacity. The build of the new warehouse started on 4 August 2014 and was completed on 10 October 2014. Stock Move Imperial Health Sciences moved approximately 24 000 SKUs in 10 days. Dedicated checking teams were placed on site at the Bausch & Lomb warehouse in Linbro Park to do the checking of the physical stock, and stock was packed, moved and ready to be received at Imperial Health Sciences. Stock receipt sheets were manually captured by the operations team to ensure electronic uploads and receipts of the stock moved from Linbro Park. Call centre On 9 October 2014 the Bausch & Lomb call centre relocated from the Linbro Park premises to the Imperial Health Sciences call centre environment in Centurion. The Bausch & Lomb call centre structure was ringfenced in the Imperial call centre, dealing initially with the vision care telephone calls, orders and queries. The cluster was allocated its own Sharecall telephone number and Sharecall fax number, as well as orders distribution queue. On 13 October 2014, the new Bausch & Lomb vision care call centre went live. When it became evident that a four-person cluster was not sufficient to handle the volumes being received into the Bausch & Lomb vision care cluster, Imperial increased the agent complement to eight. In addition, all Imperial call centre agents are now trained on all Bausch & Lomb vision care products. Courier Imperial Health Sciences partnered with a new courier, Mercury Couriers to do the vision care deliveries, which are twice daily. Mercury has fully integrated with the Imperial system and Imperial has full traceability of consignments from point of handover to delivery and returns. The courier implementation and interface was undertaken in just three weeks. IT Utilizing SAP, Imperial Health Sciences rewrote its systems around the requirements of Bausch & Lombs lens and surgical items. A new receiving process was designed to upload purchase orders electronically. RF device picking with full batch and serial number control was implemented. A consignment stock process was designed. The IT development started on 4 August 2014 and was completed on 6 October 2014, when the final testing was done. A new replenishment process was implemented to convert a patient pack to trial units, with automated transfer from material to material and replenishment trial packs based on mapping table and batch job. New OPS teams Imperial has established a full warehouse team that focuses solely on the receiving, inventory control, picking, packing, invoicing and dispatch of the vision care products. The team invoiced the first orders on 13 October 2014. The Outcome Since partnering with Imperial Health Sciences, Bausch & Lombs business has grown astronomically, with sales volumes up 22% - in just six months. It is estimated that up to 40% of calls to Bausch & Lombs old call centre were being abandoned. The new call centre at Imperial has abandons of less than 1%. Call volumes have increased by 148%, and calls are answered within six seconds. Back orders (up to three months) which Bausch & Lomb was unable to fulfill have been eliminated by Imperials world class systems, which ensure batch transparency and include back-order release. Bausch & Lomb is also no longer dealing with stock write offs. In November 2014, Imperial Health Sciences achieved a service level of 99.97% for Bausch & Lomb. This significant project has yielded an ultra-efficient, unique, new infrastructure system that Imperial Health Sciences will utilise for other clients going forward, including new clients in the aesthetics and corrective dermatology sector. This new business was won based on the success of Imperials partnership with Bausch & Lomb. Case adapted from: http://www.imperiallogistics.co.za/case-studies/imperial%E2%80%99s-end-endsupply-chain-solution-boosts-bausch-lomb%E2%80%99s-sales-and-service-levels QUESTION 1 (40 MARKS) 1.1 With reference to the case study discuss the challenges faced by the Valeant Pharmaceuticals International, particularly in their South African Division of Bausch & Lomb. (10 marks) 1.2 Developing a solution for the challenges faced by Bausch & Lomb was the main priority for Imperial Logistics and this required the adoption of new logistics strategies and processes. Critically discuss how an emphasis on warehousing, transportation and information technology communications provided a solution to these challenges (20 marks) 1.3 Discuss the importance of logistics for a pharmaceutical company like Bausch & Lomb (10 marks) SECTION B (ESSAY QUESTIONS) Question 2 (20 marks) The ability to pass information between supply partners via mobile devises, satellite systems and electronic data interchange is being exploited by more and more companies daily. The advent of mass access to the internet has sparked off a boom in home and office-based shopping, to say nothing of the use of email as a means of communication with friends and business colleagues around the globe Discuss the information technology systems or innovations that can be implemented in aiding supply chain and logistics planning. Question 3 (20 marks) Discuss the factors that need to be taken into account when planning for distribution and logistics among organisations Question 4 (20 marks) Customer service is anything that touches the customer. This includes all activities that impact information flow, product flow and cash flow between the organisation and its customers Critically discuss in detail the dimensions of customer service from a logistics viewpoint. Your response should make use of any examples of your choice. Question 5 (20 marks) Answer the following questions based on the diagram provided 5.1 Define reverse logistics and discuss the role that it plays within the product returns management process. (5 marks) 5.2 Unilever South Africa has since made a commitment to grow their business, while decoupling their environmental footprint from their growth at the same time increasing their positive social impact. This will be achieved by ensuring that they invest in an efficient reverse logistics framework. You have been requested to provide a discussion of the impacts of reverse logistics for Unilever