PharmaCo Introduction

PharmaCo Background

PharmaCo is a large, highly profitable manufacturer of prescription drugs that serves thousands of retail pharmacies and primary care physicians nationwide.

PharmaCo's product line can be grouped into two categories with very different distribution requirements. They have an extensive array of shelf$-$stable products, sold primarily through retail pharmacies like CVS and Walmart. These customers tend to order in large quantities in very stable patterns and are relatively easy to forecast accurately. The other category consists of vaccines. These are ordered primarily by independent physicians, clinics and large hospitals. Vaccines have very stringent shipping requirements including temperature controls and transit time limitations$.$ Vaccines are typically packed with dry ice and shipped from distribution centers $($DCS$)$ located near the customers to minimize the total shipment time and risk of product degradation.

Team and Project Introduction

As the business analyst with PharmaCo, you're responsible for analyzing existing processes within PharmaCo's US network, as well as exploring potential cost saving opportunities.

Barb, the new Vice President of Supply Chain at PharmaCo, joined the organization six months ago with a primary initiative to find cost saving opportunities in order to tighten up the bottom line. Barb knows that the network's design has been heavily influenced by the requirements of vaccines $($temperature and transit time$).$

In initial meetings with Barb, you both determined that there were significant redundancies in the network that could be remedied by reducing the total number of distribution centers.

The six key takeaways you and Barb have documented follow:

PharmaCo's network of $13$ distribution centers developed over time via a combination of acquisition and geographic expansion.