Lean six sigma supply chain case study: Aircraft shipment improvement in a pharmaceutical company

Abstract

Distribution is an important activity in the integrated supply-chain management for pharmaceutical products, especially when these goods have to travel long distances from manufacturing facilities to the consumer markets. This paper presents the case of a pharmaceutical company in which the quality assurance and the management teams set an objective of reducing their distribution costs to less than 0.16 Euros per unit. The quality assurance (QA) team has decided to optimize sample shipments as a high priority in order to reduce costs. The methodology used in this study was supported through a series of experiments using a Lean Six Sigma approach that implemented the Define Measure Analyze Improve Control (DMAIC) phases. The QA team analyzed the previous state of sample shipments and then suggested improvements based on an optimized process. The results showed a set of non-value added activities specifically in transportation, motion, waiting, defects, and the sub-utilization of people. Based on Lean tools, the improvements achieved a 26% reduction in the cycle time spent and no complaints from customers have been reported since implementation of the new process. In addition, a control plan was also developed to track shipments and maintain open and close communication with the customer. Finally, the resulting processes that have been implementation have a significant impact on reducing distribution costs.