End to End Consulting: Specialty Pharmaceutical Distributor

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A large specialty distributor of high value life-saving pharmaceuticals was seeking to innovate their strategy and grow market share in complementary services .  After multiple requests from their pharmaceutical manufacturing clients, they determined there was an opportunity to expand their services from the traditional buy-and-resell wholesaling model to an activity-based contract logistics model (3PL). They had no experience in the provision of 3PL services – but knew there were nuances that they needed to consider.

• What does the competitive landscape look like?
• Will our current warehouse support this model?
• Will I need more warehouse facilities to support our strategy? 
• Will our current technology systems support this model? 
• What should our organizational structure look like?
• Will the 3PL services be accretive or dilutive to our financials?
• What should the marketing materials look and feel like? 
• How do we write 3PL contracts?
• What are the regulatory requirements? 
• How do I go-to-market, and what should be my unique value proposition? 
• How do I create a model to cost and price future 3PL opportunities?
• How can I acquire all this knowledge quickly, accurately, and at a reasonable cost? 

• The Lumens Group team has designed, implemented, and operated hundreds of healthcare 3PL contracts allowing us to provide real world solutions that are proven to be effective in the 3PL marketplace.The Lumens Group could provide a complete healthcare 3PL market landscape overview
• Lumens has the tools and expertise to provide a warehouse network optimization analysis 
• Lumens has deep warehouse design experience and space optimization capabilities
• Our team understand how to assess and leverage WMS technology to create labor efficiencies 
• Our small parcel rate optimization and contract negotiation skills are unparalleled
• Our understanding of quality and regulatory requirements for healthcare 3PL’s allows us to assess facility design, quality management processes and technology, federal & state licensing, and compliant packaging requirements.

Our multi-faceted solution focused on leveraging our client’s exceptional market reputation for service and layered on:  

• The optimal entry point for an emerging healthcare 3PL based on the strengths of this client vs. the weaknesses of other 3PL’s, and the future needs of the overall market
• A complete network optimization study to complement the client’s strategy which included: 1. Optimized locations for forward deployed inventory to achieve 4-hour delivery to over 90% of U.S. hospitals 2.The impact to transportation, warehousing, and inventory carrying costs 3. The impact to legacy time-in-transits 4. Optimizing current warehouse space and labor to eliminate the perceived need to relocate to a larger facility. 
• A customized costing and pricing model was developed specifically for the healthcare 3PL services, ensuring this client would be price competitive upon launch  
• We provided an industry leading contracting template and negotiating strategies – honed from our years of experiences - to ensure a fair and efficient process. 
• The Lumens group provided proven sales and marketing presentation tools and techniques to utilize when promoting their 3PL services
• We provided  a gap analysis of the quality and regulatory requirements for them to consider, as they established and grew their 3PL business.
• The client’s small parcel spend was analyzed and we identified over $500,000 in annual savings, which funded our entire project (ROI was less than one year)
• During the process, we identified and advised them on additional cold chain packaging options and opportunities to reduce the number of total shipments, reduce overall packaging costs, increase pack-out efficiency, and improve in-transit temperature compliance
• We also assessed their technology platforms, and provided a gap analysis for systems functionality they would need to be compliant and competitive in the 3PL market