The client, a leading biotech manufacturer, produces medical equipment for its global customer base. The high value of this durable-goods inventory creates substantial carrying costs for the client while in the supply chain.
Prior to Morgan’s engagement, the client attempted to mitigate these costs by implementing a vendorowned inventory supply chain model, however key suppliers were reluctant to participate. This prevented the client from gaining the full value of deferring inventory ownership and resulted in inefficiencies related to excessive transportation costs, the need for buffered inventory, and carrying costs on the corporate balance sheet.