Medical devicesLogistics & 3PL sourcing

Logistics operating model and 3PL selection for a medical-device manufacturer

Opyflow designed a single-partner logistics model for a medical-device manufacturer, and ran the tender that chose the partner: a five-year contract signed at about ₪6M (~$2M) less than the previous set-up.

Situation

Logistics ran through several providers, with split accountability, duplicated interfaces and uneven service.

Opyflow's role

Opyflow defined the future operating model, wrote the end-to-end tender, and built the evaluation and five-year total-cost model leadership decided on.

Documented outcomeRealised result

About ₪6M (~$2M) lower contracted logistics cost over the five-year contract, around 20% · Contract signed, model running · Three providers evaluated, two finalists · One partner running logistics for the plant

The challenge

Management wanted a logistics network that would operate as an extension of manufacturing: warehousing, inventory management, quality operations, kitting, localisation, transport and returns in one framework, with room to grow. Two questions had to be answered together: how the future logistics operating model should be designed, and which partner could run it at the lowest total cost.

Opyflow's work

Opyflow defined the operating model first. The selected provider would work as a dedicated manufacturing backyard: holding inventory, replenishing the plant, kitting, packing, transporting and taking on value-added services. That model became the tender. The request for proposal covered warehousing operations, quality and regulatory requirements, dedicated operational areas, kitting and packaging, transport, reverse logistics, systems integration, service levels and governance. Three providers responded; two went through to a detailed commercial and operational assessment. In place of a quotation comparison, Opyflow built an evaluation model with a five-year total cost of ownership, commercial terms, operational capability, compliance and quality, facility readiness, partnership and flexibility, and a risk and sensitivity analysis, so that leadership compared the proposals on the same assumptions.

One operating model,one tender scopeThree proposals,two finalistsFive-year total cost,weighted criteriaOne partner, about ₪6Mlower over five years
Illustrative explanation of the sourcing process; not a client deliverable.

What changed

Over its five-year term, logistics cost is about ₪6M (~$2M) lower, around 20%: the contracted difference against the previous set-up. The larger change is how the plant runs. One partner, based in the plant's region, holds the inventory and feeds the plant on a fixed rhythm, so material sits next to the line and floor space goes to manufacturing. Kitting, packing, localisation and returns move to the partner. One interface, one set of service levels and one governance structure replace the hand-offs between providers, and the same model scales with the plant.

Why design the operating model before the tender?

Because a tender can only compare what it asks for. Defining the manufacturing-backyard model first meant every provider priced the same scope, and the evaluation could weigh capability, compliance and partnership alongside the five-year cost.

See the capability: 3PL tendering and governance →

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About Opyflow

Opyflow is an operations and supply chain consultancy, founded in 2019, working with manufacturers in regulated and high-complexity industries. Offices in Kiryat Ono, Israel and Melbourne, Australia; projects across Israel, Europe, the US and India. The senior person you talk to is the one who does the work.

We are done when it's in the P&L.

Logistics split across several providers usually costs more than the invoices show, and every operation splits it differently.