Cases

Novartis

Benelux branch of a world wide TOP 10 pharmaceutical company with 2 major product lines: OTC and health food products
Turnover: € 68 000 000
Employees: 150
3 logistics sites in Belgium: 2 outsourced and 1 own operated

Work out logistics strategy taking into account the global strategy of concentrating on the core business
Working within a tide legal framework
Monopsonistic supply market with only 2 significant logistic service providers for the entire Belgian market

Propose a strategy that aligned with the corporate strategy without jeopardizing service and costs
Install management controls that enabled long run improvement on service
Develop mechanisms to give necessary incentives to the logistics service provider to collaborate in continuous improvements programs

Propose a 3 year strategy consisting of 3 major waves:
- Insource the OTC business into the food business (accompanied by all legal requirements of getting a GDP license)
- Split of logistics into separate business unit with its own P&L
- Outsource the entire logistics to a logistics service provider
Negotiate strict Service Level Agreements with the 3PL including financial consequences in case of non compliance
Negotiate a continuous improvement program with long run cost reduction

Overall logistical strategy aligned with the corporate strategy
OTIF (On Time In Full) service improved from 97,5% to 99,7%
Against a general trend of increasing logistics costs the customers logistics cost reduced with 5% over the last 5 years
Within the corporate organisation, the Benelux model being used as best practice