Inventory management for drug discovery

Abstract

This thesis documents a study carried out at the Novartis Institutes for BioMedical Research (NIBR) in Cambridge, MA. The study focused on the development of inventory management processes for laboratory consumables. The pharmaceutical R&D process is characterized by a dynamic project portfolio, which results in a great diversity of stock-keeping-units, low repeat order rates and high variability in consumption rates. These factors create significant challenges for the design of inventory management processes. We first present an assessment and diagnosis of the current state of inventory management at NIBR, using data gathered from various NIBR sites as well as other companies. We discuss underlying drivers that influence current behavior, and identify opportunities for improvement. We then develop alternative models for inventory management and compare these models along several dimensions such as stock room location & control, inventory ownership and replenishment options. We recommend the use of consolidated department level stock rooms as the most suitable option for NIBR. Detailed implementation plans are then developed and validated through a case study. We present key findings and recommendations for implementation, and discuss opportunities for future projects.