DMAIC SIX SIGMA APPROACH TO DISTRIBUTION NETWORK OPTIMIZATION IN PHARMAHEALTH GROUP

• Main Author: Muhammad Rizaldy, Farrell
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/83594
• Institution: Institut Teknologi Bandung

The global pharmaceutical industry faces challenges such as high drug development failure rates, shifting production to developing countries, and new regulatory demands. Despite these issues, it remains innovative through knowledge-based approaches and collaborations among start-ups, development firms, and multinationals. The COVID-19 pandemic highlighted the need for efficient medical distribution and exposed supply chain vulnerabilities. In Indonesia, rich in biological resources, efforts continue to advance phytopharmaceuticals and enhance industry competitiveness. HealthGen Pharma, now PharmaHealth Group, is transforming to strengthen its business and organizational aspects, aiming to boost national pharmaceutical independence, ensure product availability, prioritize innovation, support affordable access, expand its business, and strengthen health sector collaboration. By focusing on supply chain optimization, PharmaHealth Group seeks to improve efficiency and scale its operations globally. The recent merger of HealthGen Pharma into PharmaHealth Group has introduced inefficiencies in their supply chain distribution network. This study aims to analyze and optimize PharmaHealth Group’s distribution network using the DMAIC Six Sigma methodology. In the Define stage, the existing conditions and problems are outlined. The Measure stage involves collecting and analyzing data, including fulfillment rates, inventory data, and area coverage for each branch of ChemWell Trading & Distribution (CWTD), revealing problem symptoms. The Analyze stage uses root cause analysis with the Current Reality Tree (CRT) to identify key issues, concluding that forecasting inaccuracies, suboptimal Sales & Operations Planning (S&OP), and an inefficient distribution network are primary causes. In the Improve stage, targeted solutions are proposed: advanced forecasting systems, enhanced S&OP and Sales & Operations Execution (S&OE), and distribution network optimization through branch consolidation, new Distribution Centers, and a Single Entity Distribution (SED) system. The Control stage outlines a 5-year implementation plan to ensure sustained improvements. Ultimately, the DMAIC methodology addresses PharmaHealth Group’s distribution inefficiencies with a comprehensive plan to enhance efficiency, integration, and automation across the supply chain.