Novo Nordisk has expanded its business significantly during the last 15 years. Especially, during the last 5 years with the introduction of Victoza® which is used for treating diabetes 2 and obesity. During the past year, NN has expanded its product portfolio and introduced 4 new products. This means that the total number of finished products have increased tremendously as each country requires country specific packaging material. Especially, the factory in Hillerød building 25A, which is a standalone factory that covers all steps in the supply chain, has experienced a significant increase in the amount of finished goods. The overall utilization of the warehouse is over 95 %, meaning that it does not support the production sufficiently enough. An expansion of the warehouse has been initiated but is expected to take at least 15 month before it is operational. Therefore, a task force team has been established with the task of creating space in the warehouse to ensure the production can continue simultaneously within this period. A situation analysis was conducted which revealed existing challenges within re-order point, ABC classification and safety stock. Especially, the way NN was using ABC as product classification resulted in a high stock. This led to a natural further investigation on the ABC classification. The result from the analysis laid the foundation for recommending to changing the current setup, as the analysis revealed potential improvements by using cost related inputs as sorting criterion. This opened up for the opportunity to maintain the target service level while lowering the total amount of SKU’s in stock. For the re-order point setup, it became apparent that improvements were necessary. At the moment, NN is only using a strategic safety stock as foundation for the re-order point. This resulted in unnecessary high stock, as the variability in some of the SKU’s was very low and thus a potential for improvement was discovered. The adjusted re-order point took the variability of the demand into consideration before calculating the adjusted safety stock. This means that some SKU’s were given a higher SS than other. Overall, this created the biggest improvement as this lowered the total number of SKU’s in stock significantly. Another benefit that was revealed from the optimization analysis was that the annual holding cost could be lowered significantly, and thereby reduce the annual holding cost with 4,8%. Based on the analysis this thesis concluded that the approach introduced by Teunter et al. back in 2010, is the best way for optimizing the challenge. By using this model, NN could reduce the total amount of SKU’ significantly, as well as lowering the annual holding cost. All of this would be possible while still maintaining the target service level of 95 %. In addition to this, the analysis revealed that an exclusion of lead time as a parameter could imply significant better results in regards to lowering the total amount of SKU’s in stock.
|Educations||Graduate Diploma in Supply Chain Management, (Diploma Programme) Final Thesis|
|Number of pages||61|