Track: Supply Chain and Logisitcs Competition

Abstract

To overcome the increasing price and various operational issues, the 'Benefit-Sharing Model' can be an ideal solution as it improves resource optimization and maximizes cost efficiency. In particular, a Japan-Bangladesh joint venture medical device manufacturing company had been making loss since its inception. It reported an annual net profit for the first time after the introduction of the 'Benefit-Sharing Model' in the supply chain operations of the organization. Price fluctuations, limited supplier sources, below-par planning process and less supplier collaboration were resulting in continuous business losses which the company needed to solve to ensure profitability. Here we discuss the utilization of a strategic model to improve process parameters and resource optimization with ideal EOQ which was adjusted with supplier MOQ ensuring perpetual shipments. Furthermore, shipment optimization to achieve cost effectiveness, research opportunities for slow moving material and Covid impact minimization are reported in this paper. Utilizing this overall approach, raw-material price reduced 6% and a smooth order trend was achieved which reduced 41% inventory holding cost, 24% lead time, 67% port demurrage cost and increased capacity utilization by 25%. In addition, R&D development to utilize slow-moving quantity reduced purchase by 7% and new source development reduced cost 45%. Moreover, during Covid period, future risk assessment and strategic business negotiation helped to secure business from high freight and price hike up to 9 months and increased order by 20%. Overall, this model and the strategic approach helped the company to achieve annual net profit for the first time in 8 years.To overcome the increasing price and various operational issues, the 'Benefit-Sharing Model' can be an ideal solution as it improves resource optimization and maximizes cost efficiency. In particular, a Japan-Bangladesh joint venture medical device manufacturing company had been making loss since its inception. It reported an annual net profit for the first time after the introduction of the 'Benefit-Sharing Model' in the supply chain operations of the organization. Price fluctuations, limited supplier sources, below-par planning process and less supplier collaboration were resulting in continuous business losses which the company needed to solve to ensure profitability. Here we discuss the utilization of a strategic model to improve process parameters and resource optimization with ideal EOQ which was adjusted with supplier MOQ ensuring perpetual shipments. Furthermore, shipment optimization to achieve cost effectiveness, research opportunities for slow moving material and Covid impact minimization are reported in this paper. Utilizing this overall approach, raw-material price reduced 6% and a smooth order trend was achieved which reduced 41% inventory holding cost, 24% lead time, 67% port demurrage cost and increased capacity utilization by 25%. In addition, R&D development to utilize slow-moving quantity reduced purchase by 7% and new source development reduced cost 45%. Moreover, during Covid period, future risk assessment and strategic business negotiation helped to secure business from high freight and price hike up to 9 months and increased order by 20%. Overall, this model and the strategic approach helped the company to achieve annual net profit for the first time in 8 years.