Selecting Regional Postponement Centre Using PESTLE-AHP-TOPSIS Methodology: A Case Study in a Pharmaceutical Company

Abstract

Supply network planning can be considered as one of the key elements to an effective supply chain management. Decision on where and in which form a company should hold its inventory can give not only cost competitiveness but also responsiveness to customer requirement. This research is based on a case study of a multinational pharmaceutical company with international suppliers and a presence in several countries. The company has a few regional supply factories (affiliates or third parties), including one in Indonesia, serving its Asia-Pacific market. Pharmaceutical products involve many stock keeping units (SKUs) in different packaging formats even though they share the same ingredients. To enhance its supply network, the company is evaluating the option of a regional postponement centre which would serve as a consolidation and repacking facility to direct the demand of similar products from several markets to its supply nodes. This research project evaluates in which country the regional postponement facility should be best located. The research uses a combination of PESTLE-AHP-TOPSIS methodology. The criteria and sub-criteria are derived using PESTLE methodology, while the ranking and analysis is done using AHP-TOPSIS. The final result shows that Singapore is the most suitable location for the company’s regional postponement centre.