BioPharma, Inc., is a global manufacturer of bulk chemicals used in the pharmaceutical industry. The company...
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BioPharma, Inc., is a global manufacturer of bulk chemicals used in the pharmaceutical industry. The company holds patents on two chemicals that are called Highcal and Relax internally. These bulk chemicals are used internally by the company's pharmaceutical division and are also sold to other drug manufacturers. The finished drugs are distributed downstream the chain to three main distribution centers located in Asia, Middle east and Europe. BioPharma transports the chemicals in specialized containers by sea and in specialized trucks on land. The two chemicals are distinctions in the precise chemical specifications to be met in different parts of the world. All plants, however, are currently set up to be able to produce both chemicals for any part of the world. The plants themselves can handle varying levels of production. The plant capacity, measured in millions of kilograms of production, can be assigned to either chemical as long as the plant is capable of producing both. The firm had experienced a steep decline in profits and very high costs at its plants in Germany and Japan. However, BioPharma has forecast that its sales for the two chemicals are likely to be stable for all other parts of the world, where sales are expected to grow by 10 percent annually for each of the next five years before stabilizing. James was appointed to address low profits by: (i) laying-off employees, mainly from the production dept.; and (ii) cutting production costs. James thinks these decisions would result in an increase in profits within the next seven months. The Vice-President of Sales (Joe Martin) noted that customer complaints regarding the quality of the two chemicals' characteristics. Kate Brosney (an assistant within the production dept.) suggests further investment in the inspection process of the two chemicals before they process to the production dept. or other manufacturing customers. She believes that 100% inspection rates would prevent any defective raw materials from being processed or shipped to customers and therefore solving this problem entirely. It should be noted that the Japanese plant is a technology leader within the BioPharma network in terms of its ability to handle regulatory and environmental issues. Some developments in the Japanese plant had been transferred to other plants in the network. The German plant is a leader in terms of its production ability. The plant has routinely had the highest yields within the global network. The Brazilian, Indian, and Mexican plants have somewhat outdated technology and are in need of an update. Analyse the operations' characteristics of BioPharma based on the 4Vs? How can BioPharma handle possible demand variations? BioPharma, Inc., is a global manufacturer of bulk chemicals used in the pharmaceutical industry. The company holds patents on two chemicals that are called Highcal and Relax internally. These bulk chemicals are used internally by the company's pharmaceutical division and are also sold to other drug manufacturers. The finished drugs are distributed downstream the chain to three main distribution centers located in Asia, Middle east and Europe. BioPharma transports the chemicals in specialized containers by sea and in specialized trucks on land. The two chemicals are distinctions in the precise chemical specifications to be met in different parts of the world. All plants, however, are currently set up to be able to produce both chemicals for any part of the world. The plants themselves can handle varying levels of production. The plant capacity, measured in millions of kilograms of production, can be assigned to either chemical as long as the plant is capable of producing both. The firm had experienced a steep decline in profits and very high costs at its plants in Germany and Japan. However, BioPharma has forecast that its sales for the two chemicals are likely to be stable for all other parts of the world, where sales are expected to grow by 10 percent annually for each of the next five years before stabilizing. James was appointed to address low profits by: (i) laying-off employees, mainly from the production dept.; and (ii) cutting production costs. James thinks these decisions would result in an increase in profits within the next seven months. The Vice-President of Sales (Joe Martin) noted that customer complaints regarding the quality of the two chemicals' characteristics. Kate Brosney (an assistant within the production dept.) suggests further investment in the inspection process of the two chemicals before they process to the production dept. or other manufacturing customers. She believes that 100% inspection rates would prevent any defective raw materials from being processed or shipped to customers and therefore solving this problem entirely. It should be noted that the Japanese plant is a technology leader within the BioPharma network in terms of its ability to handle regulatory and environmental issues. Some developments in the Japanese plant had been transferred to other plants in the network. The German plant is a leader in terms of its production ability. The plant has routinely had the highest yields within the global network. The Brazilian, Indian, and Mexican plants have somewhat outdated technology and are in need of an update. Analyse the operations' characteristics of BioPharma based on the 4Vs? How can BioPharma handle possible demand variations?
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Cost Management A Strategic Emphasis
ISBN: 978-0078025532
6th edition
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins
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