Network modelling: Taking the guesswork out of optimising your supply chain

Doing business in the African pharmaceutical sector is tough, but network modelling can help take the guesswork out of significantly reducing cost and improving performance.

The challenge
In Africa, the pharmaceutical sector faces several challenges, says Riaan Burger, Solutions Architect at Barloworld Logistics. “While costs pressures and legislation changes are on the increase, companies must cater to pockets of demand while battling sparse infrastructure.”

“We face a volatile environment coupled with regulated production and storage activities, strong competition and significant shelf life considerations – all of which demand a sound supply chain strategy,” says Kirk Nash, Aspen Pharmacare SA - Supply Chain Manager.

The good news is the pair have succeeded in beating the challenges thanks to a smart network modelling approach, the highlights of which they will present in a workshop entitled: Reducing the cost to serve through strategic supply chain modelling: An African perspective at the SAPICS 2015* conference, taking place from 31 May - 2 June at Sun City.

Why network modelling?
Network modelling is one of the most effective ways to quantitatively and qualitatively define the impact of an investment decision and logistics strategy on an organisation.  

“It gives one a holistic view of costs within the supply chain to realise the total cost saving, bearing in mind that the sum of the individual parts may be greater than the whole,” says Nash. He says the network modelling project Aspen recently embarked upon allowed the company to have a holistic view of its total front end supply chain costs in order to best use its existing fixed network infrastructure, reduce total costs and improve customer service.

Network modelling is essentially about the appropriate use and deployment of capacity to serve a market with a particular service offering at the lowest cost.

“Legislation, company policies and investment decisions dictate how that capacity will be used and established over time to serve the market within the competitive advantage drivers of the organisation.  Various levers are available to protect and enable that competitive advantage but it is evident that in an ever-changing market the continual review of these investments decisions are needed, specifically around logistics,” adds Burger.

In particular, the dynamic of third party providers versus in-house logistics, even hybrid models, are to be evaluated to find the best service offering to market at the lowest cost.  

“But, employing a network modelling strategy doesn’t mean that you have to reinvent your entire network,” says Nash. “We have discovered that small, incremental changes within your existing network may have a significant benefit to customer service in terms of speed to market and in full. It also means a reduction in total costs and reduced business risk.”

Some useful advice
“The key challenges that need to be paid attention to in supply chain modelling is data, the definition of relevant and appropriate inputs into the model in addition to finding, building and operating supply chain network modelling software appropriately,” says Burger.

Nash agrees: “When network modelling, it is critical to understand the data fully and to convert it to useful information. The old saying ‘Garbage in-Garbage Out’ applies.”

He also recommends that when choosing a business partner and respective tool, it is important to ensure that it is scalable and is able to use the captured data to run unexpected scenarios that one might not have anticipated at the start of the project.

“Lastly, I’d say: be brave, think boldly and try many permutations,” Nash concludes. “Then, challenge the answers presented and push back to take your model to the next level.”  

Want to find out more? Catch Nash and Burger at SAPICS 2015*.
The presentation by Kirk Nash and Riaan Burger at SAPICS 2015 is entitled: Reducing the cost to serve through strategic supply chain modelling: An African perspective.

For more information on the 37th Annual SAPICS Conference & Exhibition, being held at Sun City from 31 May – 2 June 2015, please visit http://conference.sapics.org/

EENDS
_______________________________________________________________________________________________________

MEDIA CONTACT: Cathlen Fourie, 012 644 2833, [email protected], www.atthatpoint.co.za

For more information on SAPICS please visit:
Website: www.sapics.org.za
Twitter: @SAPICS01
LinkedIn: SAPICS group
Facebook: OperationsManagement

ABOUT SAPICS – your supply chain network
SAPICS is a professional knowledge-based association that enables individuals and organisations to improve business performance. SAPICS builds operations management excellence in individuals and enterprises through superior education and training, internationally recognised certifications, comprehensive resources and a countrywide network of accomplished industry professionals. This network is ever expanding and now includes associates in other African countries.

ABOUT APICS
APICS is the leading professional association for supply chain and operations management and the premier provider of research, education and certification programs that elevate end-to-end supply chain excellence, innovation and resilience. APICS Certified in Production and Inventory Management (CPIM) and APICS Certified Supply Chain Professional (CSCP) designations set the industry standard. With over 37,000 members and more than 250 international partners, APICS is transforming the way people do business, drive growth and reach global customers.  APICS is based in the USA and has a broad global footprint.
www.apics.org

About Kirk Nash
Kirk Nash is the Supply Chain Manager at Aspen Pharmacare with responsibility for the business front-end supply chain, demand planning forecasting, physical distribution and inventory management

Prior to joining Aspen Pharmacare, Kirk worked in Logistics and demand planning at several companies, including Adcock Ingram, Tiger Brands (Snacks, Treats and Beverages) and Beacon Sweets. Notable is his 5 years as National Logistics Manager for Adcock Ingram navigating the upgrade of the physical distribution network.

Kirk received an MBA from the University of Wales in 2006.

For additional information about Aspen click on www.aspenpharma.com

About Riaan Burger
Having been an APICS Certified Supply Chain Professional since 2007 coupled with over 15 years’ worth of experience spanning all domains of planning, Riaan Burger has extensive experience in demand, supply and inventory planning. His experience comes in the form of more than 50 supply chain optimization engagements across multiple industries in various countries, in addition to published works and presenting at conferences.                                

---