Our client, an Australian Medical Devices manufacturer, decided to set up and manage the Order-to-Cash (O2C) process for its Indian operations to help scale-up the support function and facilitate business growth. The crucial elements of the project included the process design and management of the sales and customer support functions as well as enhanced acceptance of the online customer interface platform.

The Nexdigm team created a comprehensive process which accounted for all key factors: People, Processes, Technology, Customer, and Performance Indicators (KPIs). The result was a 56% reduction in cycle time from order placement to product dispatch, improved customer satisfaction levels and after-sales support while delivering service accuracy levels at 99%.

We also managed to increase online case conversion from ~60% to ~ 90%, while significantly reducing manual intervention and process costs. Our structured process also enabled scalability to the client.

Our client wanted to centralize the contract management process within the ‘procure to pay’ function to standardize and automate processes, reduce turnaround time, and effectively manage risks arising from the process.

Our contract management solution helped the client achieve a 60% reduction in average end-to-end contracting cycle time and significantly reduced the time spent by the in-house legal team on routine issues. Through the solution, we managed to minimize commercial and legal risks from non-standard contractual terms while providing better controls and oversight. Overall, we ensured seamless support to multiple business groups across geographies, time zones, and jurisdictions for our client.

The client’s Indian subsidiary had a pan Indian presence through 200+ distributors. The subsidiary is currently serviced by three Distribution Centres. The client engaged a logistics service provider (4PL) to handle supply chain operations from port to customer but wanted to redesign its warehousing distribution network in India to increase efficiency, lower costs, and achieve higher levels of serviceability.

The client was on an aggressive drive to expand its presence in India. Besides, it wanted to redesign its warehousing distribution network to increase efficiency, lower costs, and achieve higher levels of serviceability. The revision of tax procedures due to the introduction the Good and Services Tax (GST) was an additional complexity to consider.

Nexdigm (SKP) was engaged to critically evaluate the efficacy of the Indian subsidiary’s distribution network, identify optimization opportunities, and recommend operationally efficient network designs to deliver world-class service levels. The primary focus was on finding the right stocking locations, DCs to service existing distributors, and source nodes (plant or import ports).

Our approach considered qualitative factors for each possible location like the perceived ease of doing business, availability of quality resources, proximity to existing offices, and relevant ecosystems, to develop a software-driven solution.

We also considered non-qualitative factors including operations of ports, their ability to handle temperature-controlled shipments, information technology at each port, speed of clearances, traffic conditions of each location, ease of transportation for both outbound and inbound traffic, and distribution of product loading per warehouse in the light of the demand pattern, among a host of other factors.

The assignment was executed in a three-phased approach:

Phase 1

• Review and understand the existing network design through data collection and analysis
• Design of a baseline model in terms of lead times and operating costs

Phase 2

• Analysis of potential supply chain structure scenarios to identify prospective warehousing locations and lead times
• Consideration of qualitative factors

Phase 3

• Presentation of different supply chain structure scenarios based on the warehouse used for fulfilment, considering variables such as the logistics, distance, etc.
• Simulation of possible supply chain costs by minimizing lead times and costs

Based on the opportunities available, Nexdigm(SKP) made recommendations focussed on achieving higher efficiencies in cost and service levels through rebalancing of demand load and adding a warehouse to the network.

Other suggestions included reworking the existing transportation lanes, tracking outbound costs, negotiating a penalty clause with the 4PL partner for SLA slippage, and more robust demand planning.

• More accurate demand planning and optimal utilization of warehouse space to help realize cost savings of 16%
• Adjusting the current baseline model to redefine customers supported out of each warehouse, reducing the cost by 2% and increasing service levels by 6%
• Replacing current transportation lanes with other recommended partner to increase service levels by 7%
• Addition of a fourth warehouse at a strategic location and relocation of an existing warehouse, which resulted in an additional 27% savings in supply chain costs

Nexdigm (SKP) delivered the project by focussing on achieving higher efficiencies in cost and service levels through rebalancing of demand load and adding a warehouse to the network. Other suggestions included reworking the existing transportation lanes, tracking outbound costs, negotiating a penalty clause with the 4PL partner for SLA slippage, and accurate demand planning.

Our high-accuracy demand planning solution and warehouse space utilization technique helped realize cost savings of 16%. Our suggestion to replace current transportation lanes with other recommended partners managed to increase service levels by 7%. We also recommended an addition of a fourth warehouse at a strategic location as well as the relocation of an existing
warehouse, which resulted in an additional 27% savings in supply chain costs.

Cardinal Health acquired a business segment from another multinational company. The acquired business encompassed multiple product categories in numerous geographies across the globe. This acquisition necessitated the setting-up of a distribution and replenishment center in Singapore for the APAC region.

Setting-up of a facility, with an OTC process, was being done for the first time in Cardinal Health. The following aspects made the project a unique challenge:

• Involvement of stakeholders from different time zones
• Product management across multiple countries
• Integration of Cardinal Health’s IT systems with those of the vendor
• Multiple currency billing feature

Nexdigm (SKP)’s involvement in the project began with providing a detailed financial analysis of project scenarios. The project plan included a detailed work breakdown structure, budgets, timelines as well as contingencies in case of delays. The monitoring framework included a weekly cadence with various stakeholders for status updates and escalations, if any.

The Hub became operational as per the schedule. The main objectives of being able to accept orders, ship orders and invoice customers were achieved within the budgeted cost and duration. In addition, we ensured that the entire process was carried out without causing any form of business disruption.

Hollister was planning to set up its first new manufacturing facility in over 30 years in north India. The company wanted to ensure they did their due diligence before going ahead with the proposed venture, and were seeking key inputs for their decision making process. In addition to advisory, they were looking for an Indian partner to assist in the implementation of their overall India entry strategy.

Hollister was planning to set up a manufacturing facility in north India. The company had existing facilities in the US and Europe and was looking to establish its first new manufacturing facility in over 30 years. The company wanted to ensure they did their due diligence before going ahead with the proposed venture, and were seeking key inputs for their decision making process. In addition to advisory, they were looking for an Indian partner to assist in the implementation of their overall India entry strategy.

We provided complete business and regulatory advisory and setup support for Hollister’s Greenfield manufacturing plans in India. As the implementation partner for the overall project, Nexdigm (SKP) assisted in the planning and execution phases on the following key aspects:

Phase 1: Business Plan and Capital Structuring

We worked closely with Hollister’s management team for a period of four months and provided a detailed business plan. The level of detail and insights presented in this document served as a useful reference to the client for budgeting and monitoring expenses throughout the project lifecycle. We also made recommendations on capital structuring and potential project funding options. This extensive background preparation enabled Hollister to firm up their India entry strategy, with the assurance that the venture had good potential for success.

Phase 2: Project Support

In the project phase, Our initial role was providing project management support in key aspects of the proposed manufacturing setup. The role included project planning, vendor onboarding and management, contractual obligations tracking, obtaining registrations and approvals, human resources support, treasury, information technology, drafting of policies and several other areas. We reviewed all prospective vendor contracts, andprovided feedback from a commercial perspective as well as potential tax planning possibilities.The role included dealing with contractors for the release of funds, cost and time overruns, vendor payments and invoice management.

Tax Advisory: We provided crucial advisory with respect to tax implications and compliances during various stages of the project. It including setting up Hollister’s inter-company transfer pricing, preparing detailed manuals to comply with complexity related to indirect tax provisions and availing various exemptions and benefits.

Other activities included managing project cash flow and providing feedback w from an accounting and tax standpoint for capitalization and development of a fixed asset register per Indian and US Generally Accepted Accounting Principles (GAAP).

Phase 3: Ongoing Support

Although the project was completed in 2009, Nexdigm (SKP) continued to be a vital partner to Hollister by providing advisory and assessment services in the areas of direct tax, indirect tax, and transfer pricing. Our services also include tax approvals for duty-free export/import, obtaining incentives, refunds, tax scrutiny and assessment. We assisted Hollister in some tax litigation matters with the Tax Appellate Tribunal. We also provides ongoing support to Hollister for GAAP conversion and payroll management.

Nexdigm (SKP) provided complete business and regulatory advisory and setup support for Hollister’s Greenfield manufacturing plans in India. We worked closely with Hollister’s management team to provide a detailed business plan. We also made recommendations on capital structuring and potential project funding options. This enabled Hollister to firm up their India entry strategy, with the assurance that the venture had a significant potential for success.

In the project phase, Nexdigm (SKP) provided project management support including project planning, vendor onboarding and management, contractual obligations tracking, human resources support, drafting of policies, etc. We reviewed all prospective vendor contracts, and provided feedback from a commercial perspective taking into account potential tax planning possibilities.

Although the project was completed in 2009, Nexdigm (SKP) continued to be a vital partner to Hollister by providing advisory and assessment services in the areas of direct tax, indirect tax, and transfer pricing.

Cardinal Health Australia (CHA) is a subsidiary of Cardinal Health. CHA engaged a leading Logistics Service Provider (LSP) to handle all supply chain operations. The costs charged by the LSP to CHA exceeded the original estimates and were significantly higher than comparable markets. Cardinal wanted to review its logistics operations and costs for its Australian operations to help identify savings/optimization/efficiency opportunities.

Cardinal Health, Inc. is a global, integrated healthcare services and products company, providing customized solutions for hospitals, health systems, pharmacies, ambulatory surgery centers, clinical laboratories and physician offices worldwide.

Cardinal Health Australia 401 Pty Ltd (CHA) is Cardinal Health’s Australian subsidiary. CHA services cover its customers across the continent through an elaborate omnichannel distribution network comprising of hospitals, health systems, pharmacies, laboratories, and physicians’ offices.

CHA has engaged a leading logistics service provider (LSP) to handle all supply chain operations from port to customer (receiving, stocking, transportation, returns, local compliances, order to cash, etc.).

• LSP costs to CHA exceeded the original estimates and were significantly higher than comparable markets.
• Additionally, the recent acquisition of Medtronic’s patient care business posed concerns to CHA’s management on the potential for increased supply chain costs as scale increased.
• Nexdigm (SKP) undertook an exercise to review logistics operations and costs for its Australian operations to help identify savings/optimization/efficiency opportunities.

• A capable project team was quickly assembled to review logistics operations and costs for Cardinal’s Australian operations.
• A multi-phased approach was designed to understand root causes, identify cost drivers, unearth optimization opportunities, develop more efficient operating
• Models, identify levers, and design dashboards for Cardinal to manage and control costs.
• The project was executed with minimal face time in Sydney, since the consulting team in India did most of the analytical and background work.

Phase 1

• Analyzed historical costs
• Measured metrics
• Critically evaluated commercial terms with LSP
• Carried out an operational review of both CHA and LSP

Phase 2

• Developed Optimization models and scenarios to look for improvements in the network, inventory management, and terms of engagement with LSP

Phase 3

• Designed and developed management dashboards for performance monitoring of logistics partner
• Prepared a re-negotiation checklist for dealing with the LSP

After reviewing the operations and costs, Nexdigm (SKP) identified opportunities for cost savings of over AUD 0.8 million in annual costs. We evaluated opportunities to reduce order receiving costs by 89%. We also created smarter palletization models coupled with inventory pruning of low-value slow movers to drive potential cost-savings of up to 60%.

Overall, Nexdigm (SKP) managed to achieve 33% annual cost savings in regard to the LSP.

Cardinal Health acquired three medical supply businesses from Medtronic (Patient Care, Deep Vein Thrombosis and Nutritional Insufficiency). The range of products Medtronic transferred included Medical Machinery. Unlike consumables which require only supply and product return channels, machinery supplies require maintenance support. Hence, a Service and Repair (S&R) function needed to be created to support these products.

Cardinal Health connects patients, providers, payers, pharmacists and manufacturers for integrated care coordination and better patient management. Backed by nearly 100 years of experience, with approximately 50,000 employees in nearly 60 countries, it ranks amongst the top 25 on the Fortune 500. The company provides clinically-proven medical products and pharmaceuticals, and cost-effective solutions that enhance supply chain efficiency from hospital to home.

Cardinal also brings scaled solutions that help its customers thrive in a changing world. It helps pharmacies, hospitals and ambulatory surgery centers, clinical laboratories and physician offices focus on patient care while reducing costs, enhancing efficiency and improving quality.

The Acquisition

In 2017, Cardinal acquired three medical supplies businesses from Medtronic (Patient Care, Deep Vein Thrombosis and Nutritional Insufficiency) for USD 6.1 billion.

The range of products Medtronic transferred included Medical Machinery. Unlike consumables which require only supply and product return channels, Machinery supplies require maintenance support. Hence, a Service and Repair (S&R) function needed to be created to support these products.

Key challenges

• Lack of experience in maintenance function
• Aggressive transaction timelines
• Implementation across 22 APAC countries
• Customization required due to different sizes and operating environments of countries.

Background

• As-is mapping of current systems, processes, infrastructure, SLAsand KPIs
• Gap identification

Considerations

• Business decision points (nodes)
• Solution attributes
• Risk identification: Commercial, Technical and Operational risks

Evaluation Matrix

• Alternative S&Roperating models:
• In-house S&R workshops
• Outsourcing to Logistics Service Provider/4PL/Master Distributor
• Outsourcing to in-country Regional Dealers
• Outsourcing to Third Party Special S&R Providers.
• Country-wise assessment parameters:
• Business objective fulfilment
• Transitional risks
• Investment needs

Solution Design

• Draft implementation roadmap
• Stakeholder inputs: Country/region PMOs, function owners, and other key stakeholders
• Gap analysis and escalation

Outcome

• Country-specific implementation roadmap
• Robust and cost-effective technical service and repair solution

• Country-wise optimal S&R model: We assessed the commercial, operational, cost, and transactional aspects to determine the optimal model for each of the 22 APAC countries.
  For some of the larger and complex countries, SKP delved deeper to offer more granular visibility. Different models were presented based on quality, cost, and timeline analysis, and this helped facilitate selection of a final model.
• Insights on IT and Supply Chain: Insights on complex functional work streams were also provided and used to facilitate decision making.
• Stakeholder inputs: Inputs from geographically scattered stakeholders were consolidated and aligned with the different models.
• Detailed roadmap: SKP provided a detailed roadmap to country specific project management teams to facilitate smooth execution to achieve the desired outcome.
• Solution alignment: Additionally, SKP also supported the client by bringing alignment to the recommended models among the relevant stakeholders scattered across geographies.

Country-wise optimal S&R model

We assessed the commercial, operational, cost, and transactional aspects to determine the optimal model for each of the 22 APAC countries. Different models were presented based on quality, cost, and timeline analysis, and this helped facilitate selection of a final model.

Insights on IT and Supply Chain

Insights on complex functional work streams were provided and used to facilitate decision-making.

Detailed roadmap

Nexdigm (SKP) provided a detailed roadmap to country-specific project management teams to facilitate smooth execution to achieve the desired outcome.

Solution alignment

Additionally, Nexdigm (SKP) also supported the client by bringing alignment to the recommended models among the relevant stakeholders scattered across geographies.

The client acquired a business segment from another multinational company. The acquired business included multiple product categories in numerous geographies across the globe. This acquisition necessitated co-ordination across 20+ countries and multiple work streams without impacting the supply to end customers.

The mandate was to support business integration across 20 countries –Australia, New Zealand, and ‘Emerging Asia’, a group of 18 countries which includes Singapore, Thailand, Hong Kong, and India. Nexdigm (SKP) also helped identify and implement the Service & Repair functionality in the entire APAC region.

Nexdigm (SKP) provided support across all phases of the project – from initiation to handover.

Initiation

Nexdigm (SKP) helped in several key aspects:

• Finalization of the scope of work
• Identification of key work streams and on-boarding of the respective owners
• Setting-up regular meeting cadence and escalation matrix

Besides these, we also conducted business analyses and provided advisory on business models.

Planning

We identified integration activities and outlined their interdependencies, duration, and resource requirements. Additionally, we prepared multiple supporting documents, viz. the project plan, function-wise schedules, milestones, and a communication plan.

Monitoring & Control

Nexdigm (SKP) diligently monitored the progress against planned milestones and highlighted exceptional deviations.

We gave advance notice of approaching milestones and helped coordinate the information flow between various functions and regions.

Our monitoring framework included a weekly cadence with various stakeholders for status updates and escalations, if any.

Go-Live

The team prepared and monitored the transition plan. This comprised of cut-over activities like transfer of fixed-assets, employee transfer, communication to business partners, signing of Country Transfer Agreements, and payment as per the transition agreement.

Post Go-live Support

After the go-live, we closely monitored the health of the integrated business for a period of 60 days. During this period, we provided dashboard-based daily reporting to Cardinal Health’s integration management team.

Handover

We concluded the assignment by providing a comprehensive handover to the function teams.

Some of the factors that contributed to the complexity of this project were:

• Simultaneously carrying out the integration in 20+ countries in APAC
• Navigating through complex and varied regulatory requirements
• Involvement of multiple stakeholders e.g. distributors and external service providers

Nexdigm (SKP) completed the integration on time, while balancing the overall costs and risks. We also focused our efforts on the stabilization of the consolidated business which enabled the client to leverage synergies of scale and value.

The business transition was completed on the planned date across all countries, within the estimated budget. The Nexdigm (SKP) team achieved this without any disruption to Cardinal’s business.