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DSA OPTIMIZATION SAVES $2.7M
How a growing manufacturer identified $2.7M in savings with a thorough analysis of their existing Distribution Service Agreements.
SITUATION
A new manufacturer purchased a stagnant product line from another manufacturer with the goal of relaunching the acquired brands.
The manufacturer only had a team of three with limited distribution and 3PL experience. They started with no state licenses, a 3PL agreement that needed to be assigned and renewed, brands that required compendia price decreases, and full-line wholesaler agreements requiring renegotiation.
Archbow Consulting was engaged to manage the commercialization process and guide the manufacturer to a renewed relationship with the 3PL using a temporary title model, new wholesaler agreements, price compendia changes, and purchase orders.
Archbow essentially became part of the manufacturer’s trade team and was empowered to represent the organization during the entire process. All the previous manufacturer’s distribution agreements and 3PL contract were reviewed for benchmarking.
Archbow attended all 3PL/manufacturer meetings during the onboarding process to assist with technical and strategic decisions. Archbow participated in the distribution agreement redlining and negotiations process.
The new vendor setup processes was completed to establish the manufacturer as an approved vendor with the Big 3 wholesalers. Price decreases and discontinuations were submitted to First Databank, IBM Micromedex, Gold Standard, Wolters Kluwer, and Cerner.
Archbow facilitated introductions, distribution agreements, and vendor onboarding with four additional regional wholesalers.
APPROACH
RESULTS
The 3PL partner was successfully onboarded using temporary title model. Distribution agreements were negotiated at the same rates the previous manufacturer had with no increases. The manufacturer was onboarded with “Big 3” wholesalers plus additional regionals.
The price decrease process was successfully managed with compendia services. Archbow provided strategic guidance along the entire project so manufacturer was able to resume selling these brands with no extra FTE’s hired.