Developing a framework for global distribution in the biopharmaceutical industry

This paper addresses two basic questions about the outbound distribution operations with a case study example of a large biopharmaceutical company. First, the research work focuses on developing an efficient, scalable truck distribution system to help reduce transportation cost, while maintaining the service level and capacity constraints. In doing so, the paper examines the Vehicle Routing Problem (VRP), a NP-hard combinatorial optimization in the context of biopharmaceutical customer demand fulfillment process. The thesis presents a model developed to perform distribution center decisions, with Amgen North America market as case study. The second question addressed in this paper is a study on the number of distribution centers and possible locations. In a market with a certain geographic distribution of customers, and a desired number of distribution centers to operate, the analysis compares the different potential locations from standpoint of transportation cost, inventory level and site loading. The model is well suited for a company expanding into a new market to make decision on location of distribution centers to cater to a certain spread of customers in that region. The paper presents analyses for a real case study to provide contextual example, as well as more broad recommendations in the field. Both models are scalable to markets outside North America for similar companies.

Department dc:contributor.department

Leaders for Manufacturing Program at MIT

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2010

Author dc:creator

• Sekar, Swaminathan

Advisor dc:contributor.advisor

• Chris Caplice and Donald Rosenfield.

• Electrical Engineering and Computer Science.
• Sloan School of Management.
• Leaders for Manufacturing Program.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/63079

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/63079