Optimization of the packaging solution for the thermal sensitive product EVICEL® in Europe

Details

Supervisors

Agrell, Per Joakim

Faculty

Louvain School of Management

Degree label

Master [120] en Ingénieur de gestion

Abstract

This report develops the future shipping solution of the thermal sensitive product Evicel®. The project was commissioned to examine the different shipping solutions in order to react to German customers’ complaints on the size of the shipping boxes. The data analysis draws the attention to several points: • The classification of our customers. It divides them in three main groups. • The benchmarking with the competitor Baxter. It reveals that the current shipping box is by far bigger than Baxter’s boxes. • The description of the current transportation flow points out different problems: o The lack of homogeneity of the transportation flow and the quality issues (due to France) o The expensive extra fees paid for the remote destinations in Italy o The essential update required for the World Courier’s flow. • The marketing survey. It was carried after the reception of the German complaints. The customers show interest in developing multiple shipping boxes. • The total cost of Evicel®. It represents 12% of its NTS (the standard is around 3 to 4 %). The transportation cost represents 50% of the total cost • Johnson & Johnson is currently losing 41% of its capacity. Most of the orders are really small. 25% of the packages only ship 2 products while the package can deliver up to 12 biologics. The data analysis gave incentive to optimize and develop a new shipping solution. Intuitively, a multiple box shipping solution looks interesting. A two-steps approach was chosen in order to find the future set of shipping boxes. Firstly, we found the best theoretical set of boxes. Then we carried out a market research so as to choose the best potential supplier. The best theoretical set of boxes was found thanks to a linear model and experiment. The linear model was cost-oriented, we wanted to minimize the total cost of Evicel®. The output of that part gave us the theoretical set of four boxes with 2, 5, 10 and 20 as capacity respectively. Next to this optimization, we tried some experiments, which was packaging-oriented. Out of those experiments, we found out that a special combination of dry ice (blocks and pellets) allows us to increase the capacity of the current box up to 20 biologics in the same insulated box. Moreover, this combination of dry ice can be used to deliver the remote destinations in Italy without paying the extra fees. Knowing the best theoretical set of boxes, we contacted different suppliers in order to find the best potential providers of boxes. To do so, we followed different steps: • Create the list of decision criteria: o Mandatory decision criteria: (a). The adhesion of an approved supplier list (ASL). (b). The respect of the temperature threshold (-18°C). (c). The duration of thermal protection ≥ 100 h. (d). The maximal weight of a box ≤ 25kg. o Optional decision criteria: (a) Volume/ea. (b) Total cost to serve. (c). Supplier’s global footprint. (d). The initial investment. (e). The speed of implementation. (f). The complexity of the shipping solution. • Create the list of alternatives (Suppliers): Thermosafe (current supplier), Topa, Laminar Medica, Medicold, TAPS International. • Decision matrix: Scoring each alternative regarding the optional decision criteria. A fuzzy AHP was used to execute the weighting of the optional criteria and standardization was used to compute the suppliers’ performances. Thermosafe was chosen to provide the future set of boxes. The report recommends a final configuration of four boxes with 3, 6, 12(current box) and 20 as capacity respectively. The little changes in the capacities are due to local optimization. The provider of those boxes is Thermosafe. It is also recommended for the transportation flow to: • Deliver all the European countries with this set of four boxes: France included, hybrid destinations in Italy and World Courier’s destination (group 3) excluded. • Deliver hybrid destination with the special combination of dry ice. (Pellets + blocks) • Remove the first step of World Courier’s flow; remove the temperature loggers from the entire package for those destinations; switch supplier for Poland (from World Courier to DHL); Deliver Switzerland by road instead of by air. (Recommendations for group 3) After computations, the recommendations could lead to a cost of improvement up to 300K€ which corresponds to a drop of 23% of the total cost. The average volume per unit will decrease by 33%. The loss of capacity will decrease from 41% to 13%. Finally, this project will decrease the complexity of the shipping solution, using 3 packaging components less.