Case Study
Supply Chain Optimization for Manufacturer of Laboratory Equipment
Simulation-Driven Supply Chain Optimization for Medical Distribution Cost Reduction
Challenge
- Complex network: 290+ medical products across 4 distribution centers with differing demand patterns
- Inefficient Inventory Management: Stockouts for high-demand medical products due to manual replenishment delays.
- Fragmented Logistics Operations: 21 redundant cross-docking routes between DCs with increasing transport costs by 15%
Solution
Hitachi Digital Services deployed Supply Chain Optimization (SCO) to:
- Modelled the supply chain
- Digital twin of 4 DCs and supplier routes
- Simulated 5 scenarios (for inventory changes, direct shipping, batch consolidation)
- Automate decision-making:
- Dynamic safety stock calculations based on demand variability
- Transport optimization (eliminated 21 inefficient cross docking routes)
Result
- Cost savings: USD 647*K (Β₯96M) annual year potential by optimizing 185 high-impact products
- Inventory reduction: 33% decrease for 101 items with stable demand
- Scaled to 40% of product linesΒ for inventory optimization
- Faster planning: Reduced manual workload by automating replenishment rules
Key benefits include:
USD 647K
(Β₯96M) annual cost reduction potential uncovered
33%
Reduction in inventory for items with stable demand
40%
of product lines scaled for inventory optimization