Logistics network optimization in distributing critical medical supplies for a pharmaceutical company

Abstract

Operation cost plays an important role in most business as they strategize to minimize it to achieve maximum profit margin. The pace of contemporary shipping methods might eliminate complex distribution network design, which will strive hard for better service level to customers and value-added deliveries. However, with the constant cost pressure from the peers and with the increasing fuel and real estate cost, it is now a prime focus for any organization to reduce the warehousing cost with facilities consolidations and logistics network optimizations. Designing distribution network and locating a warehouse, is a substantial decision in managing an organization supply chain that influences every aspects of a business finding a balance between a convenient location and at a reasonable price. An optimum Distribution Centre location will directly contribute to the efficiency of the organization’s profit as well as to the overall customer experiences. Keeping this as a prime objective now organizations are looking for an optimum Distribution Centre location for consolidating and expanding their logistics network. At this backdrop, this paper is being initiated to analyze and simulate data analytics models for identifying optimum number of Distribution center required for a Pharmaceutical company to cater its customers PAN India within a customer reach of 72hours (3days).The paper will be of great importance to decision makers in the manufacturing and service industry, as they will use strategic factors in determining Distribution Centre location, Warehouse numbers and logistics network design decisions in meeting target customers and corporate profitability.