Supply Chain

Customer Experience - Following the appointment of a new Director external supply, Pharma company wanted to optimise its manufacturing & supply network.


Need For Optimisation...


Following the appointment of a new Director external supply, PharmaCo wanted to optimise its manufacturing & supply network.  Larka was asked to support them in order to generate bottom-line savings and increase business profitability. 

Initial objectives were to generate 12 to 15% savings based on manufacturing & supply operations overall cost after the implementation of a 2-year optimisation plan, as well as to allow significant improvements in the following areas:

  • Products quality
  • Products profitability
  • On-time delivery
  • Internal manufacturing site performance
  • External contractors performance
  • External contractors management and relationship
  • Benchmarking and assessment of new supply opportunities

Company Profile

  • 650mn EUR revenue
  • 2,800 employees
  • Four production sites
  • Network of 196 CDMOs at the start of the project

Larka's Scope Of Intervention

Larka's project management team covered the following tasks:

  • Data gathering on manufacturing, products and future requirements
    • Assessment of internal site network capabilities, capacities, performance and planned internal network changes and investments
    • Data gathering on current products in internal sites and projected future volume trends for these products
    • Confirmation of all external contract activities within the scope of the third parties network - manufacturing, packaging, testing, product release, distribution etc.
    • Data gathering on current products at Contract Manufacturers and projected future volume trends for these products
    • Data gathering on contractor performance, particularly Quality and Supply
    • Confirmation of current contractual terms, expiry dates and termination clauses at CMO’s
    • Confirmation of future manufacturing and supply requirements including volume projections, new product launches, product discontinuations
    • Confirmation of constraints on product supply or transfers including commercial, regulatory, technical, capacity, cost, etc.
    • Data collection on manufacturing costs at internal sites and contractors
  • Data analysis and development of Master plan options
    • Analysis of comparative costs and performance between internal sites and contractors
    • Definition of constraints on product transfers and supply restrictions from certain sites, or to certain markets
    • Implications of future company strategy, new markets, new product launches, volume trends
    • A face to face workshop to analyse this data and develop an overview of current status, future requirements and constraints
    • A second phase of this workshop to develop, review and compare options for a proposed future Manufacturing Master Plan
  • Testing of options and constraints, selection of preferred plan
    • Detailed analysis of the shortlisted options to test internal and external constraints, regulatory requirements, technical and transfer capabilities, fit with future company requirements, cost implications
    • Elimination of sub-optimal network options
    • Selection and definition of the preferred future Manufacturing Master Plan
  • Analysis of implementation costs, timescales and development of business case
    • Development of a detailed implementation plan
    • Definition of project structure, resources, timescales and costs for implementation
    • Development of a detailed Business Case for implementation of the Manufacturing Master Plan defining overall costs and benefits
  • Implementation
    • Establish implementation project team and support functions with clearly defined roles and responsibilities
    • Establish communication systems, metrics and tracking mechanisms for effective coordination and management of the implementation processes
    • Implement the new network strategy while maintaining clear focus on ensuring uninterrupted product supply to markets and customers throughout the transition process


PharmaCo observed the following improvements:

  • Network cutback to 127 CDMOs
  • 12.3% - 39.9mn EUR - reduction in overall cost of goods supplied after 2-years implementation through optimising the total network of internal and external sites with greater efficiency in a smaller number of manufacturing units
  • Improved customer service with significant improvements in on-time delivery, flexibility and responsiveness to support Commercial growth
  • Improved quality through concentrating manufacture in a smaller number of locations which can be managed more effectively.