Life Sciences & Health Care

Postponement: the key for an agile, cost-efficient supply chain

 

The deliberate decision to delay activities along the value chain and execute them later on, downstream in the supply chain, can have very powerful benefits. Typically, postponement results in lower costs, a more agile supply chain, or much better customer service.

Postponement in the Life Science and Health Care Sector

A key trend in the life sciences and healthcare (LSH) sector, postponement allows your organization to delay project investment activities until you have more information about customer demand. For example, you may decide to transport products in bulk primary packaging to a local hub, closer to end customers, and only then add distinct secondary labels as required by local legislation. This decreases complexity at the manufacturing plant, enables customization and faster response to fluctuating demand, and lowers inventory costs.

Strategic hub location & transportation cost modeling

To shorten order-to-delivery lead times and reduce freight costs, a leading global pharmaceutical company wanted to establish a secondary packaging hub in APAC.

DHL Consulting was asked to determine the best location, and started by ranking 18 shortlisted countries against specific criteria such as infrastructural maturity, logistics cost, political environment, and more. To obtain an internal perspective, we also conducted surveys and Q&As with employees located in the shortlisted countries to collect their feedback on location preference and requirements.

These objective analyses helped the company to select Singapore. In addition, we undertook transportation cost modeling for this new hub, discovering the customer’s initial estimate of potential future freight cost was overly conservative; the DHL Consulting models revealed potential for a 40% reduction in freight costs, equating to annual high six-digit savings.

Contact Matthias Vollmert

Vice President and Partner DHL Consulting

Blog Articles on Postponement

Our expert on postponement, Matthias, regularly contributes with his expertise on our blog. Here are his latest articles:


Postponement Essentials

What to look for? The 4 essentials of postponement

Supply Chain & Logistics
Manufacturing Trends

6 Reasons for postponement or why the rush?

Supply Chain & Logistics

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