Evaluation of postponement in the Drug Product supply chain

Abstract

This thesis evaluates the use of postponement in the Drug Product (DP) supply chain at Amgen, which is characterized by highly variable production lead times. The motivation for the use of postponement in the DP supply chain is to reduce the lead time and improve the service level from the manufacturing site to the distribution centers (DCs). Amgen is undergoing a rapid global expansion and is now serving markets that operate on tender (bid) systems that require rapid fulfillment. To compound this challenge, FDA driven requirements have significantly increased the likelihood of generating Non-Conformances (NCs) in DP manufacturing, which in turn increases the production lead time variability. A simulation model was created in Microsoft Excel that uses historic production lead time and demand data to determine postponement levels and simulate performance of the system. Leveraging the simulation model, this thesis demonstrates that utilizing postponement in supply chains with highly variable production lead times can significantly improve service level and diminish customer lead time while potentially reducing global inventory levels.