Supply Chain (Chap10)

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Supply Chain (Chap10)

  1. 1. Chapter 10 Supply Chain Strategy Liyan Dizon Marose Monedero Martin Reyes Macky Villagarcia January 29, 2011
  2. 2. Topic Outline <ul><li>What is Supply Chain </li></ul><ul><li>Design Strategy </li></ul><ul><li>Outsourcing </li></ul><ul><li>Global Sourcing </li></ul><ul><li>Purchasing-system design matrix </li></ul><ul><li>Mass Customization </li></ul>
  3. 3. Supply Chain defined… <ul><li>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 </li></ul><ul><li>describes how organizations (suppliers, manufacturers, distributors, and customers) are linked together </li></ul>
  4. 5. Its importance… <ul><li>An effective supply chain operations lead to a company’s significant competitive advantage! </li></ul>
  5. 6. Supply Chain Pfizer Philippines
  6. 7. Company Background - Pfizer <ul><li>Recently acquired Wyeth last October 2009 </li></ul><ul><li>The world's largest and most talented biomedical research organization that combines a portfolio of leading prescription medicines, vaccines and animal health business </li></ul><ul><li>Major Divisions: </li></ul><ul><ul><li>Pharma/Vaccines </li></ul></ul><ul><ul><li>Consumer </li></ul></ul><ul><ul><li>Nutrition </li></ul></ul><ul><ul><li>Animal Health </li></ul></ul><ul><li>Employs about 2,000 employees to date </li></ul>
  7. 8. Company Background - Pfizer <ul><li>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. </li></ul><ul><li>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.  </li></ul>
  8. 9. Pfizer’s Popular Products <ul><li>Lipitor </li></ul><ul><li>Norvasc </li></ul><ul><li>Zithromax </li></ul><ul><li>Ponstan </li></ul><ul><li>Prevnar (vaccine) </li></ul>
  9. 10. Some info… <ul><li>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. </li></ul>
  10. 11. Prevnar’s Supply Chain <ul><li>Ensures the availability of products and physicians' samples at optimized levels of inventory and cost. </li></ul><ul><li>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. </li></ul><ul><li>Zuellig Pharma – Exclusive Distributor </li></ul>
  11. 12. Supply Chain for Prevnar Wyeth Havant U.K. Pfizer Philippines Head office GB Distributor Warehouse (Zuelling Pharma) Doctors Fieldforce Customs Direct Delivery
  12. 13. Vaccine Distribution <ul><li>Guideline: All vaccines should be distributed through a strictly controlled “cold chain” </li></ul><ul><ul><li>Vaccine must remain in a cool and controlled environment from the point of manufacture to the point of use </li></ul></ul><ul><li>Controlled environment is provided by: </li></ul><ul><ul><li>Fixed cold rooms or refrigerators </li></ul></ul><ul><ul><li>Mobile units such as insulated containers </li></ul></ul>
  13. 14. Supply Chain Design Strategy <ul><li>Forward Buying </li></ul><ul><li>– buying a year’s supply; stocking up </li></ul><ul><li>Bullwhip Effect – demand order variability in the supply chain is amplified as they moved up the supply chain </li></ul><ul><li>Effects of strategies: *Lack of synchronization among supply chain members </li></ul><ul><ul><ul><li>*Inventory patterns do not match the demand </li></ul></ul></ul><ul><ul><li>*Inventory accumulates at various stages </li></ul></ul>
  14. 15. Bullwhip Effect
  15. 16. Aspects of a product’s demands 1. Functional products 2. Innovative Products <ul><li>products that satisfy basic needs, which do not change much over time </li></ul><ul><li>stable, predictable demand and long life cycles </li></ul><ul><li>product stability invites competition, hence low profit margins </li></ul><ul><li>have a life cycle of just a few months </li></ul><ul><li>products can be easily imitated </li></ul><ul><li>companies are forced to introduce a steady stream of newer innovations </li></ul>
  16. 17. Hau Lee’s Concept <ul><li>Align supply chain with the uncertainties revolving around the supply process side </li></ul><ul><li>A stable supply process has mature technologies and an evolving supply process has rapidly changing technologies </li></ul><ul><li>Types of Supply Chain </li></ul><ul><ul><li>Efficient Supply Chain </li></ul></ul><ul><ul><li>Risk-Hedging Supply Chain </li></ul></ul><ul><ul><li>Responsive Supply Chain </li></ul></ul><ul><ul><li>Agile Supply Chain </li></ul></ul>
  17. 18. 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 shared Responsive 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
  18. 19. Hau Lee’s SC Uncertainty Framework
  19. 20. Outsourcing <ul><li>Act of moving some of a firm’s internal activities & decision responsibility to outside providers </li></ul><ul><ul><li>Activities, people, facilities, equipment, technology, & other assets </li></ul></ul><ul><ul><li>Allows a firm to focus on activities that represents its core competencies </li></ul></ul><ul><li>Outsourcing vs. Offshoring </li></ul>
  20. 21. <ul><li>Organizationally Driven </li></ul><ul><li>Improvement-Driven </li></ul><ul><li>Financially Driven </li></ul><ul><li>Revenue-Driven </li></ul><ul><li>Cost-Driven </li></ul><ul><li>Employee-Driven </li></ul>Reasons to Outsource & the Benefits
  21. 22. How would you know if you will outsource an activity? <ul><li>Required coordination </li></ul><ul><ul><li>How difficult it is to ensure that the activity will integrate well w/ the overall process </li></ul></ul><ul><li>Strategic Control </li></ul><ul><ul><li>Degree of loss that would be incurred if the relationship with the partner is severed </li></ul></ul><ul><li>Intellectual Property </li></ul><ul><ul><li>Potential loss of intellectual property through the partnership </li></ul></ul>
  22. 23. Global Sourcing <ul><li>Sourcing from the global market for goods and services across geopolitical boundaries </li></ul><ul><li>“ borderless manufacturing” </li></ul>
  23. 24. Benefits, Costs and Risks <ul><li>http:// www.youtube.com/watch?v = npJGgQunCLg </li></ul>
  24. 25. Li & Fung Group <ul><li>http:// www.youtube.com/watch?v =UzwmlbAS8dg </li></ul>
  25. 26. Purchasing design system
  26. 27. Mass Customization
  27. 28. Chapter 10 Supply Chain Strategy Liyan Dizon Marose Monedero Martin Reyes Macky Villagarcia January 29, 2011

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