Page 39 - Case Study Annual 2015

LAA 2015 Silver

Aspen Pharmacare / Barloworld Logistics

A smart solution gearing for growth

The African pharmaceutical industry is a kaleidoscope of public and private sector

business, each with its own nuances. This dynamic and volatile environment, with

regulated production and storage activities, strong competition and significant shelf

life considerations, demands a sound supply chain strategy.

Aspen Pharmacare (Aspen) has a
legacy dating back to 1850 with
Lennon Limited. Aspen aspires to
deliver value to all stakeholders as a
responsible corporate citizen that provides high
quality, affordable medicines and products
globally, and has become a leading generics
manufacturer in the Southern Hemisphere.
Aspen is Africa’s largest pharmaceutical
manufacturer, manufacturing more than
20-billion tablets annually in 26 facilities at
18 sites around the world. Nearly one in
four prescriptions dispensed by pharmacists in
South Africa is for an Aspen product.

The problem Solution

Aspen operates in a highly competitive, complex Aspen embarked on a network modelling engagement
and changing environment. The industry is subject to define the least supply network cost of the highest
to a single regulated selling price (SEP) determined service supply network, as well as a re-configured
annually by government authorities. Competition is supply network that aligns flow and logistics costs to the
stiff, coming from a number of other prominent local relevant customer service offerings.
and international manufacturers and distributors. This
has resulted in 14 major wholesalers selling more than Aspen needed a smart partner that would understand
1 400 SKUs to 8 000 customers. With an average shelf the unique complexities of the business, with the right
life of 24 months, the First Expiry First Out (FEFO) skills, resources and capabilities to build a customised
practice is applied. Despite operating a complex supply network model tailored to Aspen’s business objectives
chain network, Aspen’s business has doubled every and geared to deliver results. The model would have
three years. to leverage the expertise of Aspen’s current suppliers
and optimise the existing framework, while remaining
However, complexity of flow through the supply agile – flexible, adaptable, responsive and cost effective
network resulted in an imbalance when considering – and that could grow, expand and evolve with Aspen’s
logistics costs in relation to the service offering to business.
customers. Logistics spend was deemed too high,
risks inherent in the supply chain were not effectively Aspen identified Barloworld Logistics as the partner
covered, customer service levels could be improved of choice. Together they applied a network modelling
and a more agile supply was needed to respond to the approach using CAST to define the optimal flow and
ever-changing market conditions. configuration within a particular scenario, while trading
off the total cost of logistics to achieve a particular
In alignment with Aspen’s intention to provide service offering to market.
quality, affordable and accessible medicines, certain
objectives were set: reduce supply chain costs and The least cost supply chain for current service levels
supply chain risk; improve customer service; and was identified as well as the highest possible service
increase agility. level using the current supply chain configuration.

the logistics news case study annual 2015 37