Wyeth Pharmaceuticals Analysis - Case Study Example

Wyeth Pharmaceuticals Name Date Course Summary report from Mike Kamarck to Wendy Kouba briefing the objectives at hand Sine 2007, the company has been facing a number of challenges which have negative impact on the revenue collection and profitability of the company. The productivity of the company has been plummeting and this has been a serious concern to the company. The product pipeline of the company was also drying due to the drop in profitability. The company failed to introduce new products in the market (Oliver, 2). This is because the introduction of the new products in the market requires a lot of investments. A lot of research is also required for the purpose of developing a new drug and the drop in profitability of the company cannot support it. It is also important to note that the company is also facing a lot of competition in the market. This is due to the rules on the development of the generic drugs. The company lacks an international patent which impacts negatively on the products of the company. This is because it affects the profitability of the company in the i8nternational scene. The main competitors of the company were mainly based in India and China at the international level. Other companies were also allowed to develop the same products as that of the company and sell it at the international market. This is problem also increased the competition from the Indian and Chinese firms. The patent for two of its drugs that generate a high amount of revenue was also coming to an end. The two drugs were top performers in the company in terms of revenue generation. On the other hand, a competing firm has already begun the process of developing the generic drugs. This is an indication that the company is likely to loose more profit and market share. The company thus decided to put in place measures that will ensure that it reduces the operation costs by 25% (Oliver, 3). This is for the purpose of ensuring that it is able to continue operating. The measures have led to the reduction of the production in all the production plants of the company. The company is no longer focusing on making profits at the moment. Much of the operations are aimed at reducing the operational cost in order to maintain its stability in the market. The main target of the company is thus cost reduction during the production process. The company has been able to trim $40 million which amounts to 20% of the target of the company (Oliver, 2014). This is an indication that more needs to be done. Over the next year, the company intends to achieve a reduction of 200 million. In order to ensure that the target is reached, Wendy has to ensure that operational efficiency has been enhanced. On the other hand, it is also important to ensure that the paperwork should be eliminated in order to eliminate most of the procedures that are time consuming. It is also recommended that the company should ensure that automation of services is achieved in order to enhance on its productivity. The automation of services will ensure that most of the manual operations are eliminated and hence reducing the costs. Training of the personnel will also be required from time to time in order to enable the company to meet the goals and objectives. It also recommended that working closely with the top managers should be enhanced. This will improve on the processes of the company. It is also important to ensure that an effective communication mechanism has been put in place. Directive letter from Wendy Kouba to site leaders (MD’s and QH’s) To: MD’s and HQ’s Date: RE: CHALLENGE FACING THE COMPANY The company currently undergoing tough times and it faces a lot of challenges. The competition facing the company is stiff and the patent of the top products have already expired. The competitors are already making generic drugs which impacts negatively on the sales of the products of the company. As you are aware, the company has been implementing measures to ensure that it solves the problems. The measure that was initially put in place led to the trimming of $40 million. However, this was only 20% of the operating cost. The company therefore requires putting in place more measures that will ensure that the cost is drastically reduced. The company targets to reduce $200 million over the next year. Mr. Mike Kamarck who was the original champion of the cost reduction measures will not be involved in the process. As the leaders in charge of operation at the site, the quality of the products should be high despite the cost effective measures that have been put in place. On the other hand, it is expected that collaboration between the leaders at the site should be maintained in order to ensure that the costs are reduced. The Quality Heads and the Managing Directors should continue working together for the purposes of ensuring that the quality of the products of the company is enhanced. It is expected that frequent consultations should take place between the managing directors and the Quality heads at the site in order to ensure that the goals and objectives of the company are achieved. Some of the concepts that were initiated before for the purposes of achieving the cost reduction will still be used in order to ensure that the company is able to meet the objective of reducing $ 200million. The guiding principles for the leaders should still be maintained in order to enable the organization to meet its goals and objectives. The quality of the services and products will not be compromised despite the cost reduction measures that will be put in place. A consistent and coordinated approach will be used across all the sites in order to ensure that the operations of the company can be accounted for. This will also ensure that efficiency is improved and hence impacting positively on the cost reduction process. As the leaders at the sites, changing the mind sets of the employees will be important. This is for the purposes of ensuring that the employees are fully aware of the process that is taking place at the company. A good communication process with the employees should be put in place in order to ensure that the company is able to meet its objectives. It is also important to note that a good communication process will plays an essential role in ensuring that no resistance by the employees is witnessed. As the leaders on the ground, it is expected that the sharing and development of the best practices should continue. Frequent meetings will also be held from time to time for the purposes of determining the progress that is being made in ensuring that the cost reduction measures are being achieved. Some of the initial measures that had been put in place to reduce costs will still be used in order to achieve the goal of reducing the operational costs by $200 million. It is expected that the sites will be able to maintain a highly skilled workforce for the purposes of ensuring that efficiency is achieved at the sites. The efficient use of resources while maintain high quality services will play an essential role in ensuring that the organization is able to meet its goals and objectives. The data driven approach will still be used for the purposes of ensuring that the cost reduction objective is achieved. On the other hand, it is also important for the managers to ensure that the lean methodology or six sigma is applied in order to ensure that the costs are reduced during the production process. This will play an essential role in ensuring that the organization is able to continue reducing its costs. This is considering that the methodology was able to reduce some costs although it did not meet the required targets. Frequent training will also be conducted for the purposes of equipping the leaders with the skills and knowledge that is required for the purposes of improving on their operations. The success of the organization in reducing on the costs will be highly dependant on the efforts of the Managing Directors and Quality Heads. Yours Faithfully Vice President of Operations management Wendy Kouba Recommendation report from site MD to Wendy Kouba The first wave of transformation was successful in reducing costs although it did not meet the required targets. It is recommended that more training should be conducted from time to time for the leaders at the site. This will play an essential role in ensuring that the leadership within the site is experienced and well equipped to handle the changes. All the employees participating in the process should also be trained so as to enable them to understand the main aims and objectives of the company. It is also important to note that a good communication process with the employees will ensure that tension and anxiety among the employees is reduced. This is considering that every time there is a change, the employees are always anxious which affects their performance. It is also recommended that all the process that is aimed at improving the activities of the company should be put in place. This will plays an important role in ensuring that the cost cutting measures are put in place. This however requires a lot of support from the office as some of the activities will require changes in the operational processes of the employees. On the other hand, the policies that are put in place should consider employee participation. It is also recommended that the site leaders should be empowered for the purpose of ensuring that they are able to identify the areas of cost reduction within their sites. This will impact positively on the process as the site leaders are at a better position to understand the operations at their sites. This should however be carried out after the training of the leaders so as to ensure that informed decisions are made. It is also recommended that the issues of the labor should be addressed as it contributes to the increase in costs. Only the direct and indirect labor that is necessary should be utilized by the company at the sites. The company should ensure that the employment policies are reviewed so as to enable the managers to hire only the labor that is required. The reduction in the cost of labor will play an essential role in ensuring that the organization is able to reduce the operational costs. The number of employees should be reduced at different departments so as to reduce the costs of operations. However, it is recommended that the process should be handled carefully so as to eliminate employee resistance. The company should consider reducing the number of part time employees so as to reduce the costs. It is also recommended that productive maintenance best practices should be put in place. This is for the purposes of ensuring that the use of the machines is effective. The effective use of machines will play an important role in eliminating wastes. This is considering that some of the wastes occur due to the current methods that are used during the operations of the machines. It is also recommended that the company should ensure that innovations policy should be developed and implemented at the different sites. This is for the purposes of ensuring that the decision making process by the managers is improved. This is because new ides could be developed as a result of the innovations and hence impacting positively on the cost reduction process at the company. On the other hand, it is recommended that a benchmark should be developed for the purpose of determining whether the changes implemented are making progress. This will assist the management at the site to work towards attained the required goals and objectives. The presence of a benchmark will also be useful to the managers in terms of determining the corrections that they are supposed to make in order to achieve the goals of cost reduction. It is also recommended that the value streaming workshops should also be enhanced so as to equip the managers with the required skills. Recommendation report from site QH to Wendy Kouba The quality of the products of the company is important in determining the ability of the customers to purchase it. Despite the cost saving measures that have been put in place, it is recommended that the company should ensure that the products are of the highest standards. The paperless automation process plays an essential role in improving on the quality of the operations. It is thus recommended that the process should be embraced in order to eliminate errors that may compromise on the quality of the products due to the cost effective measures that have been put in place. An extensive back up system should be put in place for the purpose of ensuring that the data is accurate and hence improving on the quality and standards of the products of the company. Some of the process of the company consumes a lot of resources and hence impacting negatively on the process. The reduction in the number of process should be carried out in order to ensure that the company is able to reduce on costs. This is because some of the processes do not have any impact on the quality of the products of the company. However, it is also important for the company to ensure that it complies with all the regulations whenever the processes are eliminated. The use of lean methodology has been able to make improvements in reducing the costs without compromising on the quality and standards of the products of the company. It is recommended that the lean methodology concepts should continuously be used. This will play an essential role in ensuring that the costs are reduced and the quality of the products is not compromised. The training programs should also be established for the employees who work in the quality department. This is for the purposes of enabling them to use the new method of production while at the same time maintaining the high quality and standards of the products of the company. It is recommended that the training should be conducted from time to time in order to enable them to be creative. However during the production process strict compliance with the rules and regulations that have been set up by Food and Drug Administration should be put in place. The use of technology should also be incorporated in terms of checking the quality of the products. The use of technology will also play an essential role in reducing the costs while at the same time eliminating any errors. This will simplify the operation at the site in terms of quality management. The automation of services is also useful to the organization in terms of ensuring that the costs of production are reduced. The employees should therefore be trained on how the automation process works and the role that they should play. On the other hand, it is also recommended that the company should ensure that a close relationship is established between the quality department and the other departments. This is for the purpose of ensuring that the quality department has all the information regarding the changes that are planned within the organization. This will play an essential role in ensuring that the quality of the products is not compromised by the process that is undertaken by the company. It is also recommended that the quality management department should be consulted before the implementation of any decision regarding the production. This is because the quality of the products is dependant on the production process. It is also recommended that the experts should continue offering their advice win close consultations with the quality department. This is for the purposes of ensuring that the quality of the products is not compromised during the process. Incase of changeover of the equipment, it is important for the management to inform and consult the quality department. It is also recommended that the number of employees in the department should be reduced incase the automation process is put I place. This will play an essential role in reducing the cost of operations. Reference Oliver, Rebecca. Wyeth Pharmaceuticals in 2009: Operational transformation. University of Virginia, Darden business publishing. Read More