As part of a major transformation program for production and supply chain, the management of a global manufacturer of instruments for the pharmaceutical industry set an ambitious savings target for their indirect COGS (Cost of Goods Sold). However, the company faced several challenges, and they have asked Prokura to develop an optimization program.
Initially, we analyzed the company’s total indirect investments and developed a new category structure to create transparency in the consumption patterns across the company’s subsidiaries. Despite fragmented and highly opaque consumption, our initial analysis showed that there was a potential for savings of 30-50% to be realized. The majority of this potential came from non-commercial levers such as a reduction in specifications and new policies for handling subsidiary’s indirect costs.
As a result, the company received new global guidelines mainly focused on reducing complexity, and the guidelines were standardized for the entire organization. Additionally, we developed an exhaustive list of improvement initiatives and proposals for optimizing the company’s portfolio.
To find out more about this case and other medical device manufacturers, please contact Christian Svane.