DHL Consulting has been recognized for excellence in supply chain management consulting. On November 21, the German business news magazine Wirtschaftswoche announced its ‘Best of Supply Chain Consulting 2017’ winners. This is the second consecutive year in which DHL Consulting has won a finalist award in these annual ‘Best of Consulting Awards’.
Best of Consulting Awards
Every year, consulting companies are invited to submit detailed descriptions of a customer project for evaluation by specialist advisors and a jury. Each submission is evaluated using qualitative and quantitative criteria and key figures are analyzed. Confidential customer data is protected.
To secure this 2017 award, DHL Consulting submitted details of a significant project undertaken for one of the world’s biggest pharmaceutical companies. This project involved optimizing the global transportation, handling, and storage of high-value, complex and temperature-sensitive biotechnology products.
“As an independent management consultancy, we are dedicated to creating value not just for Deutsche Post DHL Group but also for external companies wanting to improve supply chain performance,” explains Matthias Vollmert, Partner Life Sciences & Healthcare, DHL Consulting. “This particular pharmaceutical company published a competitive RFQ, and we responded with a compelling offer that combined proven operational expertise and consultancy professionalism with unparalleled access to the DPDHL Group’s global footprint.”
Expertise, professionalism & global access
The customer had decided to implement a stronger central function for distribution, replacing localized decision making and procurement with centralized management and control. In addition, the customer had recently acquired another pharmaceutical manufacturing organization and hoped to realize anticipated synergy benefits of integration.
While saving money was an important objective, the customer’s critical requirement for strategic supply chain optimization was maintaining product safety. This customer manufactures its products to exacting quality and safety standards so distribution must be GDP compliant, even to some of the most remote locations on the planet.
To optimize the global supply chain, we analyzed the distribution center footprint and transportation flows, taking into account country-specific constraints in real-world scenarios. One small example is shipment routing – while the customer may save cost by sending products through, say, a tropical desert city, it’s important to factor in any additional risk to product integrity. We needed to think about what would happen if pallets were delayed on an airport apron in 50°C heat.
Another real-world concern was continuity of service. Doctors and patients depend on the availability and timely delivery of these products, and yet demand can be highly seasonal. It was essential to establish a flexible, responsive global distribution model to enable service level customization and avoid peak-time capacity issues.
Fact-based, reality-checked recommendations
All of the DHL Consulting recommendations had to be fact-based and reality-checked to ensure they were truly implementable. It was therefore important for the DHL Consulting team to work very closely with the customer. Idea generation workshops, brainstorming, problem-solving and similar initiatives enhanced cooperation; our customer described this as “a great collaboration with DHL Consulting”, noting that the team provided “valuable expertise and remarkable professionalism throughout the project”. The DHL Consulting team also reached out to all parts of DPDHL organization in order to leverage their specialist knowledge, solutions, and global reach.
Distribution cost reduction of 22%
Ultimately our team created an optimal ‘to-be’ model, which includes a total logistics cost, and tailors distribution to specific segments with similar commercial requirements. These requirements were defined during the project and reflect demand and supply characteristics as well as product type.
Through this segmentation approach, our DHL Consulting team was able to refine cost/service optimization and reveal opportunities for cost reduction. Our deliverables identified levers with the potential to cut distribution costs by nearly 22%, equivalent to savings of approximately €10 million. In addition, the recommended global distribution network can reduce CO2 emissions by 36%.
These significant reductions do not compromise safety or service. According to our customer, “The outcome of the project is without any doubt a very important input and a basis for the future development of the company.” Added to this, the project has served to strengthen the strategic relationship between this organization and DHL. The team continues to collaborate with the customer; currently, this pharmaceutical company is implementing DHL Consulting’s recommendations.
If you would like to discuss optimizing your company’s distribution network, please contact me.