Introduction

The client this document is based upon is a reputable biotechnology research company working to treat cancer and defend against infectious diseases. The client partnered with MarathonLS to take control of their inventory and procurement management which includes resolving the effects of stockpiling and implementing an inventory management software to provide visibility into key reporting metrics.

Since implementing Marathon Pacer one year ago, the client has:

• Reduced the number of expired or unusable products by 100%, depleted stockpile, and saved $240,000 annually in warehouse costs
• Regained control and visibility to products stored in their off-site warehouse
• Achieved precise budgeting and forecasting based on deadly accurate inventory data

About the Client

The client is a tenured research biotechnology company that develops and manufactures immunotherapies with over 500 employees in Cambridge, Massachusetts. Their research is used to create mRNA-based pharmaceuticals to treat cancer and defend against infectious diseases.

The Challenge

Data and Product Integrity

Similar to other scaling biotechnology companies, the client often found that supply chain challenges, operational inefficiencies, and lack of visibility to inventory were delaying or interfering with their research. These challenges ranged from late or incomplete lab product shipments impacting research, duplicate ordering of products, resulting in wasted expenses and expired products sitting in stockrooms and an off-site warehouse, which were all at maximum capacity.

The client had grown an extensive off-site stockpile with an estimated $542,600 of product stored in a warehouse in Cambridge, MA, much of which was unidentified or inspected. Products shipped from the warehouse to the lab frequently arrived damaged or expired. Not only did this waste time and money, but it also delayed research. Although this challenge was persistent and impactful, the client did not have the personnel to take on this project and devise a sustainable solution.

Software

Up until this point, the client had never utilized an inventory management software and had historically only tracked inventory in an Excel workbook. The client had well outgrown this system and realized the risk it presented with human error. They needed a more reliable and automated way to track inventory.

This created an opportunity for MarathonLS to assist the client in prioritizing their core competencies and enhancing operational efficiency, therefore, reducing the client’s need to allocate time to non-research related tasks.

The Solution

Similar to all Marathon Pacer implementations, the engagement began with a complete stockroom, point of use, and off-site storage audit. This process included recycling or throwing out expired products, repurposing or donating unused products to different labs or academic research companies, and counting and uploading each individual SKU into the Pacer software. This ensured that the client would have complete visibility to high-integrity data on what they have in storage, both on and off-site.

From there, Marathon Pacer implemented accurate minimum and maximum thresholds on all products to eliminate over or under ordering. Products were then sufficiently stocked on-site and metered in from the off-site warehouse as needed to deplete overstock. During implementation, the Marathon Pacer team identified that 26.8% or $145,416.80 of products in the client’s off-site warehouse were expired or otherwise unusable.

Following implementation, the Marathon Pacer team performed weekly site audits to ensure stockrooms and points of use were optimally stocked and organized.

The Result

Data and Product Integrity

Following a successful first year of partnership with Marathon Pacer, the client confidently always has the products they need, when they need it, which has enabled research and discovery to continue smoothly. Through Marathon Pacer’s support, the client was able to whittle their products in off-site storage down significantly, which allowed them to terminate their warehouse lease agreement. The client now takes advantage of Marathon Pacer’s virtual stockroom (off-site storage), in which the cost is included as part of the program, to house any products that may have long lead times or require bulk purchasing.

This transition has reduced the client’s warehouse costs by $240,000 annually (annual warehouse cost estimated based on average warehouse rent price in Cambridge, MA). Marathon Pacer’s dedicated Customer Success Specialists conducts routine site visits to maintain data and product integrity.

Through meticulous and ongoing product audits, they ensure precise inventory management across various locations, including warehouses, stockrooms, and points of use. By accurately auditing inventory and placing orders based on strategically set par levels, disruptions to research caused by stock shortages have been effectively eliminated.

Software

In addition to the cost savings outlined already, the operations and finance teams now also have complete real-time visibility to their inventory, including trends and key metrics, in their customer dashboard. The client is able to leverage insights from the following reports to make more informed business decisions moving forward: inventory on hand by location.

(warehouse, stockroom, POU), identification of tail spend, spend by manufacturer, cost center tracking, and more. This data has allowed the client to accurately forecast their lab consumables spend, ensure they are staying on budget throughout the year, utilize spend reporting to uncover opportunities to negotiate with key manufacturers, and much more.

$240k Saved

in warehouse cost annually

Eliminated Disruptions to Research

caused by stock shortages

Accurately Forecast

lab consumables spend

Leverage Insights

reports to make more informed business decisions moving forward

Conclusion

Through a strategic partnership with Marathon Pacer, the client has fundamentally improved their operations through proper inventory, procurement, and supply chain management which has ultimately enabled the organization to focus their efforts solely on the critical research and development that their patients require.