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CASE STUDY

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 pharmaceutical company with $252M in annual sales for 2 retail products hired Archbow to review their full-line wholesaler agreements.

The agreements were with “Big 3” wholesalers.

Their original agreements were established when the company was very small, but they had since grown substantially.

APPROACH

Archbow reviewed all wholesaler agreements and provided feedback on 29 different contract attributes for each.

The attributes were either checkpoints to ensure contracts were within normal parameters or areas Archbow identified as having room for improvement during negotiations.

Several strategic and tactical opportunities to renegotiate terms were identified.

The findings were presented with data points, sales forecasts, and a return on investment calculator to show how course corrections might amount to significant savings.

RESULTS

The analysis uncovered $2.7M in savings opportunities for the manufacturer.

Archbow has subsequently been retained by this manufacturer to advise on formal renegotiations and aid in maximizing their leverage.

The manufacturer expects to significantly decrease their supply chain costs over the lifetime of the products.