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

In the corporate context, some equate postponement to wasting time. Yet 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.

From my experience of working with companies to plan and implement postponement strategies, it is important to consider four key aspects of strategy design and implementation before embarking on a pilot.

Find out more

MANUFACTURING TRENDS

6 REASONS FOR POSTPONEMENT OR WHY THE RUSH?

Supply Chain & Logistics

When we were little, many of us would enjoy lying in a field somewhere gazing up at the sky, watching the white clouds scudding by. Sometimes our mothers would scold at us for time wasting, and it was usually very difficult to convince her of the benefits of procrastination.

Convincing the organization about postponement can sometimes feel just as challenging. In our headlong rush to be productive and ‘get things done’, it’s easy to forget there may be some very good reasons for putting things off, for delaying the next activity.

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