Mithra Pharmaceuticals' supply chain : a step towards a centralized distribution model and postponement strategies

Abstract

Mithra Pharmaceuticals is currently embracing many challenges and thereby questions the stature of its present supply chain network as well as the responsibility of each stakeholder. The business environment of the healthcare industry has significantly changed in the past decade putting a tremendous price pressure and strengthening competition among life science companies. Beyond a stricter regulatory scrutiny, contract manufacturing operators impose rigorous constraints leading to long lead times with regards to products’ shelf life and large minimum order quantities. Therefore, supply chain is viewed as a new strategic asset and becomes a potential competitive advantage rather than an unavoidable cost center embedded in daily operations. For what is more, Mithra recently started an international expansion and is aware that the current supply chain network might represent a burden to the successful accomplishment of its ambitions. In addition to that, Mithra’s future state-of-the-art technologic R&D and manufacturing platform is likely to bring changes and innovations in the way Mithra produces and commercializes its products, reducing the production dependency on third parties. In this context, this project thesis aims at studying two potential alternatives to Mithra’s current distribution patterns. One the one hand, it will address a problem of network design and facility location to determine whether Mithra should move on to a centralized distribution model with a single warehouse taking roots in Liège Airport or not. Indeed, nowadays, the firm has a decentralized model including four local distribution centers. One the other hand, I will work on postponement concepts for Mithra’s production process. The objective will be to determine the best suited postponement strategy with regards to Mithra’s products portfolio. In both scenarios, I will evaluate the financial impact of such models.