Sneha Susan JacobAgnes Maina

THE BIG HUB THEORY!Student: Agnes Maina, MSCM 2016

Student: Sneha Susan Jacob, MSCM 2016

Advisor: Dr. David Gonsalvez

Sponsor: A Global Pharmaceutical Company

Lead Time reduction and faster responsiveness to demand volatility

Hub-and-spoke model was born from industry’s efforts to develop

more efficient networks. Benchmarking by the company has shown

that leading competitors have started developing a Hub.

Our Hub and Spoke Mental Model

What is the impact of alternative operating policies and supply chain

parameters on the APAC hub supply chain performance?

Develop an inventory control system to enable us infer the

operations of the secondary packaging hub

A proposed hub system evaluated under various operating scenarios

by building a model of the product supply chain under analysis,

identifying key supply chain parameters and alternative operating

policies.

A model and a tool that allows to simulate the expected output (stock

levels, write-off risks and service level) of alternative set of planning

parameters and policies.

Apply the model to the pharmaceutical sector in general where there

is a set shelf life and set legal restrictions around the residual shelf

life.

The overall lead-time must be reduced from the current 90 days for

all products and also reduce the review period for the temperature

controlled products; product MD, R and X so as to benefits from

lower costs at any given CSL.

The hub needs to receive the product with an RSL of at least 10%

above the affiliate’s minimum acceptable RSL. This would aid reduce

chances of the products becoming obsolete or unqualified for

importation to the affiliates.

Implementation of demand restriction on Safety Stock the low

volume products.

Methodology

The Problem

Motivation / Background

Key Question / Hypothesis

Relevant Literature

Results

Expected Contribution

Current situation: Products are transported directly from the manufacturer to the

country where they are required.

Implication: This in turn leads to long lead times which hinders the countries to

attend to urgent or unexpected demand.

January 2016 Poster Session

And a million other authors

Variables

Demand

Inventory Policy

MOQ, Safety Stock

Lead Time

8 10 12 14 16 18 20 22 24 26 28 30

89.5%

90.0%

90.5%

91.0%

91.5%

92.0%

92.5%

93.0%

93.5%

94.0%

94.5%

95.0%

95.5%

96.0%

96.5%

97.0%

97.5%

98.0%

98.5%

99.0%

99.5%

99.9%

Day

s

Cycle Service Level

Impact of Demand Restriction on Safety Stock (Days): Product MD

Demand Restricted at 1 σ Demand Restricted at 2 σ Unrestricted Demand