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GLAXOSMITHKLINE (GSK)- CASE STUDY ON SUPPLY CHAIN PERFORMANCE
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OVERVIEW OF COMPANYGlaxoSmithKline (GSK) is the world’s
second largest pharmaceutical, biological and healthcare company
Its sales touched GBP 20 billion yielding a profit of GBP 6 billion approximately.
100,000 people worldwide, with over 40,000 in the sales and marketing teams.
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CONT..Primarily headquartered in London, with
dual US headquarters in Philadelphia and Research Triangle Park.
GSK’s prime activities includeCreation, discovery, development, manufacture, and marketing pharmaceutical and consumer health-related products the world over.
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CONT..GSK operates largely in two segments
Pharmaceuticals Consumer Healthcare
More than 36,000 SKU’s manufactured across over 80 manufacturing plants worldwide
GSK has a market share of 7% in the pharmaceutical business.
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SUPPLY CHAIN OF GSK75,000 suppliers worldwidestrategic relationships with suppliers
that manufacture active Pharmaceutical ingredientsIntermediatesRaw materials Packaging for GSK medicines through to
local contractsGoods or services such as office equipmentCleaning and security
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SUPPLY CHAIN PERFORMANCE
Supply chains have improved drastically in the past ten to fifteen years
Companies’ shift in focus to efficiencyEfforts in improving
Production processes packaging Enhanced supply to meet demand better
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SUPPLY CHAIN CHALLENGESPost merger Integration Issues
* Integrating the separate identities* Integrating different strategies and* Integrating the packaging and manufacturing operations of Glaxo, Burroughs Wellcome etc.
Complex product portfolio
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CONT..Multi faceted US MarketsRegulatory and operational challenges
Merger and acquisition activity implies complicated paper work compliance with regulatory frameworks of different countries
Different departments could always make different packaging design changes
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CONT..Outsourcing/supplier challengesFinding alternate/multiple suppliersOperational/production challenges
different packaging and assembly linesimplementing automation and advanced technology
process improvement programmesTechnological Challenges
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GSK’S RESPONSE SUPPLY CHAIN CHALLENGES.Countering Market Dynamics Late pack customizationmultifaceted US market and low volume
niche marketsproduction runs were up to 30,000
numbers for cost effectivenesseffectively produce as low as 100 or 500
packs at a time with this programme
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CONT..Countering Packaging ComplexitiesGlobal Pack ManagementChange StandardizationDeveloping a pack catalogueCentral artwork developmentUniform and centralized information technology
Paperless labeling/electronic leaflets
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CONT..Online Printing
Developing online printing that matches the speed of the packaging line and prints at the desired quality level
Keep costs of online printing down.
Countering Supplier/Outsourcing issuesFinding and qualifying multiple suppliers to avoid
any supply disruptionsCommunication can play a vital role in establishing
coordination among multiple suppliers
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CONT..Countering Operational/ production challengesMinimize downtimeRobots do the cartooning and case packing as well
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SUGGESTIONS Educate the upper levels of management.
Create a strategic visionSharing information around the globe
Consensus forecastingTraining for GSK procurement teams
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CONCLUSION Organizations can follow its Supply Chain Management strategies as they truly extend the value of ProductPackagesPlants People
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