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Chapter 10Supply Chain Strategy
Liyan DizonMarose Monedero
Martin ReyesMacky Villagarcia
January 29, 2011
Topic Outline
What is Supply Chain Design Strategy Outsourcing Global Sourcing Purchasing-system design matrix Mass Customization
Supply Chain defined…
is a total system approach to managing the entire flow of information, materials, and services from raw-material suppliers through factories and warehouses to the end customer
describes how organizations (suppliers, manufacturers, distributors, and customers) are linked together
Its importance…
An effective supply chain operations lead to a company’s significant competitive advantage!
Supply Chain Pfizer Philippines
Company Background - Pfizer
Recently acquired Wyeth last October 2009 The world's largest and most talented biomedical
research organization that combines a portfolio of leading prescription medicines, vaccines and animal health business
Major Divisions: Pharma/Vaccines Consumer Nutrition Animal Health
Employs about 2,000 employees to date
Company Background - Pfizer
Mission: To achieve and sustain our place as the world's premiere research-based health care company. Our continuing success as a business will benefit patients and our customers, our shareholders, our families, and the communities in which we operate around the world.
Vision: To strengthen our #1 leadership position among research-based pharmaceutical companies. We will be the most valued partner of key stakeholders in shaping the healthcare environment to improve access to quality healthcare products and programs for better health outcomes.
Pfizer’s Popular Products
Lipitor Norvasc Zithromax Ponstan Prevnar (vaccine)
Some info…
Prevnar 13®, indicated for children 6 weeks through 5 years of age, helps protect against 13 strains of pneumococcal bacteria. Prevnar 13® can help protect your child against pneumococcal bacteria that may cause invasive disease today.
Prevnar’s Supply Chain
Ensures the availability of products and physicians' samples at optimized levels of inventory and cost.
Utilizes strategies for sourcing and ordering of materials or finished goods, in-bound and out-bound transportations, maintaining the right amount of inventory vis-à-vis demand, warehousing, and managing returned goods.
Zuellig Pharma – Exclusive Distributor
Supply Chain for Prevnar
Wyeth Havant
U.K.
Pfizer Philippine
s
Head office
GB Distributor Warehouse
(Zuelling Pharma)
Doctors
Fieldforce
CustomsDirect Delivery
Vaccine Distribution
Guideline: All vaccines should be distributed through a strictly controlled “cold chain”
Vaccine must remain in a cool and controlled environment from the point of manufacture to the point of use
Controlled environment is provided by: Fixed cold rooms or refrigerators Mobile units such as insulated containers
Supply Chain Design Strategy Forward Buying – buying a year’s supply; stocking up
Bullwhip Effect– demand order variability in the supply chain is amplified as they moved up the supply chain
Effects of strategies:*Lack of synchronization among supply chain
members*Inventory patterns do not match the demand
*Inventory accumulates at various stages
Bullwhip Effect
1. Functional products
2. Innovative Products
- products that satisfy basic needs, which do not change much over time
- stable, predictable demand and long life cycles
- product stability invites competition, hence low profit margins
- have a life cycle of just a few months
- products can be easily imitated
- companies are forced to introduce a steady stream of newer innovations
Aspects of a product’s demands
Hau Lee’s Concept
Align supply chain with the uncertainties revolving around the supply process side
A stable supply process has mature technologies and an evolving supply process has rapidly changing technologies
Types of Supply Chain Efficient Supply Chain Risk-Hedging Supply Chain Responsive Supply Chain Agile Supply Chain
Efficient Supply Chain- strategies aimed at creating the highest cost efficiency
Risk-hedging supply chains- strategies aimed at pooling and sharing resources in a supply chain so that the risks in supply disruptions can be sharedResponsive supply chains- strategies aimed at being flexible to the changing needs of customers
Agile supply chains- Combine strengths of “hedged” and “responsive” supply chains
Types of supply chain
Hau Lee’s SC Uncertainty Framework
Outsourcing
Act of moving some of a firm’s internal activities & decision responsibility to outside providers Activities, people, facilities,
equipment, technology, & other assets
Allows a firm to focus on activities that represents its core competencies
Outsourcing vs. Offshoring
Organizationally Driven
Improvement-Driven Financially Driven Revenue-Driven Cost-Driven Employee-Driven
Reasons to Outsource & the Benefits
How would you know if you will outsource an activity?
Required coordination How difficult it is to ensure that the activity
will integrate well w/ the overall process Strategic Control
Degree of loss that would be incurred if the relationship with the partner is severed
Intellectual Property Potential loss of intellectual property
through the partnership
Global Sourcing
Sourcing from the global market for goods and services across geopolitical boundaries
“borderless manufacturing”
Benefits, Costs and Risks
http://www.youtube.com/watch?v=npJGgQunCLg
Li & Fung Group
http://www.youtube.com/watch?v=UzwmlbAS8dg
Purchasing design system
Mass Customization
Chapter 10Supply Chain Strategy
Liyan DizonMarose Monedero
Martin ReyesMacky Villagarcia
January 29, 2011