From Exception to Expectation: The Benefit for Pharma Companies to Involve 3PLs Early in Network Design Studies

By Christopher Engel

Across Europe, network design studies—often called “distribution studies”—are no longer rare. They have become a standard step for pharmaceutical and healthcare companies seeking to optimize their supply chains. Post-pandemic resilience, cost pressures, and ambitious sustainability targets are driving this shift toward network optimization, often resulting in fewer distribution centers and a reduced number of logistics service providers.

These studies frequently evolve into RFIs, RFPs, or RFQs. The decisions made during the design phase can significantly impact cost, compliance, and service quality. That’s why involving logistics partners early is critical.

Why Early Engagement with 3PLs Matters

Network design is not just about theoretical efficiency. It must account for regulatory compliance, operational feasibility, and service continuity. Choices such as where GMP labelling occurs, how QA release is sequenced, and how cross-border flows are managed can turn an “optimal” design into a costly or noncompliant reality.

By engaging 3PL providers from the start, pharma companies can:

• Validate feasibility and compliance—ensuring scenarios are practical and meet regulatory standards.
• Shape RFI/RFP criteria to reflect strategic factors beyond price, such as quality, IT integration, and sustainability.
• Gain accurate Total Cost of Ownership (TCO) insights, including transportation, handling, warehousing, value-added services, QA, IT, customs, and transition costs.

Lessons from Real-World Cases

In Central Eastern Europe, a proposed leaner network looked ideal on paper: fewer sites, lower unit costs. However, once real-world factors were applied—extra kilometers, double handling, GMP labelling—the TCO exceeded expectations. The RFQ that followed was unsuccessful, with market pricing landing 25–30% above the client’s benchmark, particularly in warehousing and labelling. Timing for site readiness also conflicted with the desired go-live date.

Early involvement of logistics partners could have prevented these misalignments.

What Pharma Companies Should Look For in a 3PL Partner

• Pan-European reach combined with local expertise, enabling flexible distribution models.
• Strong capabilities in quality, IT, and sustainability, as ESG criteria increasingly influence tender evaluations.
• Structured tools and methodologies, such as standardized intake processes, scenario modeling, and post-bid debriefs to continuously improve competitiveness.

Best Practices for Successful Network Design

1. Engage logistics partners early—before scenarios are finalized.
2. Provide comprehensive data: lanes, volumes, VAS requirements, primary distribution inputs.
3. Explore multiple models: centralized hub, hub-plus-satellites, and local distribution.
4. Evaluate based on TCO and service—not rates alone.
5. Capture learnings after each tender to refine future strategies.

Key Principle: Early collaboration with 3PL providers ensures pragmatic, compliant, and cost-effective network designs—turning studies into successful RFIs, RFPs, and RFQs.