Life Sciences Supply Chain Inventory Optimization

Accelerate Decision Making with a Dose of Digital Transformation

Over the last 100 years, the human lifespan on Earth has grown significantly, mostly due to progress in the medical field. Lifespan has nearly doubled in a century and is continuing to grow as the life sciences industry advances. The life sciences are integral to the quality of life and lifespan, but the field faces some uniquely difficult inventory challenges.

With long lead times to market, short product shelf life, and strict regulatory requirements, life science products require an exceptional digital twin. Once you’ve created a digital twin of your physical supply chain, you can manipulate and experiment with the data. You can then take it a step further with multi-echelon inventory optimization (MEIO), which provides visibility to everything from raw materials, to finished goods.

Find out how advanced life sciences inventory optimization can significantly and positively impact your supply chain with minimal upfront costs.

Advantages of a Digital Twin Life Sciences Inventory Optimization

Effective inventory and supply chain management isn’t just a business investment; it can be a powerful shift that makes it easier and faster for people to access life-saving products. There are several advantages to creating a digital twin, including:

  1. Augmentation: Incorporating machine learning and artificial intelligence into your workflow is a powerful way to highlight opportunities to improve efficiency. AI augmentation can identify issues in your supply chain that basic data analytics cannot spot.
  2. Risk mitigation: The stakes are high in the life sciences industry, so mitigating risk is of the utmost importance. When you’ve produced a “digital twin,” you can easily spot vulnerabilities in your supply chain before they’ve produced consequences for your business or customers.
  3. Multi-plant optimization: Coordinating across plants is complex when you don’t have a clear map of your supply chain. Inventory optimization allows you to pinpoint where your inventory is at all times, making it easier to optimize across multiple locations.
  4. Improved company synchronization: While optimizing your supply chain is important, it’s also vital to sync within your own company. A digital transformation of a life sciences supply chain is an easy access point for various company teams to understand the status of your inventory, without needing to check in with any one stakeholder or department.

When you’ve implemented your digital twin into your supply chain management, you can use a long list of proven techniques to optimize your supply chain flow. MEIO, while underutilized, is extremely beneficial and a way to interpret your data to improve your supply chain’s flow.

Advantages of Multi-Echelon Inventory Optimization (MEIO)

MEIO is another method of improving efficiency within your inventory by optimizing inventory across all echelons or levels of their supply chain. It’s been demonstrated to slim overall inventory numbers by 30% or more and increase inventory turns by 28%. It’s built on four identifying questions, which are:

How much excess inventory do we have and where is it?

Taking stock of your present state of affairs is an important prerequisite to finding areas for improvement and reduce the risk of product expiration. Without a digital twin, this step can feel nearly impossible, but once you’ve digitalized your data, it’s significantly easier to map your inventory and identify excess.

Can we safely reduce inventory?

Before you start cutting down products, be sure to assess whether or not that’s something your company can safely do. Because of industry restraints and company complexities relating to bringing products to market, it’s important to hone in on whether inventory reduction is a reasonable plan of action.

Can we reduce inventory by applying science to inventory policies?

Many inventory managers make stock decisions based on industry “rules of thumb.” While using a rule of thumb is a simple approach, it’s likely not the best fit for your use case. MEIO uses mathematical algorithms to reach conclusions about inventory optimization, which are very likely to minimize inefficiencies.

Is Your Organization Ready to Embrace Best Practices and Advanced Solutions?

Shifting from basic and simple organization to scientific best practices can be a cultural change, so solid executive-level support is a must. Trust and resources are required to understand and integrate MEIO algorithms into your inventory management. Ensure your organization is ready to switch to best practices to ensure the smoothest possible implementation.

After you’ve navigated the foundational questions of MEIO, you can find a tool to integrate within your supply chain. Logility’s InventoryAI+ is a machine-learning software constructed to make it simple for your organization to benefit from MEIO. InventoryAI+ can improve any size company, inventory, or supply chain network with a complex analysis of all parts of your product’s distribution and production. With IAI+, you can count on drastically improving inventory and supply chain efficiencies.

MilliporeSigma and their Journey to Increased Forecast Accuracy

For example MilliporeSigma, a life sciences and technology company with a long list of products, faced extreme inefficiency in its inventory and stock management. Its forecasts were inaccurate and its inventory management was lacking, so the company engaged Logility to overhaul its processes. After integrating Logility’s inventory optimization tools, MilliporeSigma saw a sharp boost in forecast accuracy and a reduced inventory, as well as a greatly improved supply chain.

Optimizing your inventory and supply chain produces a long list of positive outcomes, including a 30 to 40% reduction in forecasting errors, improved decision-making, and enhanced product launch and planning. Together, these outcomes spur growth and profit while keeping your inventory leaner and your supply chain more efficient.

Want to learn more about how your organization can benefit from inventory optimization? Take the first step towards transforming your life sciences inventory management and supply chain performance.

Rightsizing Inventory in a Cash-Conscious Economy

Dive into this executive brief and learn how you can minimize inventory and maximize customer service

Download Now