Reflections on Cohen and Roussel - Case Study Example

Reflection paper on Cohen and Roussel Introduction According to Shoshanah Cohen & Joseph Roussel, the disciplines for top performance for Strategic Supply Chain Management include investing in the supply chain, development of an end-to-end process architecture, and designing organization for performance (2005). With these disciplines in mind, I shall give my opinion with reference to the case studies of Ely Lilly. Risk taking Ely Lilly, an Indianapolis based company, is one of the leading pharmaceutical companies in the world with revenues in excess of $ 10 billion, distributes its products in 159 countries and employs over 40,000 people (Shoshanah Cohen & Joseph Roussel, 2005). I must admit this is one of the few successful pharmaceutical companies in the world. Perhaps this is because the company is a risk taker. I know that all businesses take enormous risks, and critical decisions to ensure successful performance. Running a business is all about taking risks, and while we take these risks, we should always expect the worst of outcomes. Despite this awful expectation, we should always have hope when in despair and strive to beat the odds. This virtue has put Ely Lilly Company at the top of its game. Ely Lilly has taken enormous risks by spending lamp some amount of money on research, invention and development of pharmaceutical products. I am specifically concerned with the devastating setback that the company experienced in 2000, when a judge unexpectedly ruled out its patent, Prozac. The judge stated that the patent expired 3 years earlier than when it was meant to expire. Within 6 months, generic competitors had already siphoned more than half of Prozac’s sales (Shoshanah Cohen & Joseph Roussel, 2005). I guess this is could be worst mistakes ever made by Ely Lilly, which of course, they had to pay for in full. I think that Ely Lilly has been successful in creating manufacturing locations. This is because it has managed to register over half of its new manufacturing technologies in its supply chain. The director of manufacturing strategy, Ken Thomas, stated that the company has twice as many manufacturing sites and three times as many products in the supply chain (Shoshanah Cohen & Joseph Roussel, 2005). I have also observed that Ely Lilly puts its customers first and not the price of the products. They consider people’s health as opposed to the price of certain products to ensure an uninterrupted chain of supply. They can never disrupt a patient’s life by missing a sale. If they missed a sale, that would be poor business. The cost of goods sold is slightly lower than the price. This is remarkably different with most; if not all businesses, where the cost of goods sold which is to be higher than the price. Ely Lilly made a wise decision in 1997, when it set global standards in its supply chain management. This was particularly notable for the activities meant to convert raw materials to the final product. It also put many manufacturing networks, which were processes controlled to products. This ensures that every medicine developed fits in the “toolkit” environment. Launching new products Lilly has done a commendable job in focusing on its supply chain before its operations. This facilitated the company to support regulatory requirements. The company could manage to balance risk of speed to market response with clinical failure. The company also managed to maximize the manufacturing value by selection of the best products (Shoshanah Cohen & Joseph Roussel, 2005). Outsourcing of duties When companies CANNOT perform certain duties, they normally outsource the duties. Such duties may be those that require skills that are beyond the scope of the company’s responsibility or the skills may require exceptional talents. I would also commend for such a company to invest in training for such skills (Shoshanah Cohen & Joseph Roussel, 2005). Optimizing capacity Optimization of capacity may mean to make short term sourcing changes in a specified framework. Lilly is capable of optimizing capacity by shifting its work among plants. Suppose an English firm is making certain products at only 60 percent and Spanish makes it at 90 percent capacity, the company can distribute the work to other manufacturers of the same network (Shoshanah Cohen & Joseph Roussel, 2005). It is always advisable to change a supply chain when customers are not comfortable about a service or when something is broken. It is better take action before something terrible happens. Taking an action in a supply chain when a problem already exists may result into deception in terms of competitive advantage. Operations strategy Operations strategy represents the methods used to produce goods and services. Will the company chooses to make order, stocks or outsource its labor force? These questions require critical decisions they are influential to the supply chain. The operations strategy will determine how to run the company and the design of the information system (Shoshanah Cohen & Joseph Roussel, 2005). Make to stock. Standardized products, which sell high volume, are preferable with this strategy. Configure to order. In this strategy, a product is completed to a generic level, and then is completed when the order is received. When there are many sections of the product and the company wants to get low finished goods. Make to Order. Products with frequent demand require this strategy. Channel Strategy If I make channel of strategy, then the plan would have to do with how I would get the services and products to consumers. This process would include decisions that I would make to address the issue of products distribution. This means I would have to do market research to identify the market that I am targeting. The geographies and market segments that I am targeting will drive my decisions at this point. I will have to choose on optimal channel mix because the difference in profits is varied (Shoshanah Cohen & Joseph Roussel, 2005). Customers service strategies My customer’s service would be based on the profitability of my customers, overall volume and the customers’ expectations and needs. These pieces of knowledge would be integral to my supply chain because they would assist me in prioritizing and focusing my capabilities. Not all consumers may demand the same level of service. After studying and analyzing customer’s value, I will plan on whether to improve services for cases of high value customers and maintain it for low value customers. I know that most high value customers would demand rapid problem resolution. I would, therefore, select a staff of highly trained professionals and hardworking manager to cater for the customer’s demands. This strategy would result to high dividends. Asset Network My final decisions would regard the company’s asset network. These assets include production equipment, order desks, service centers, warehouses and other significant service centers that constitute the business. These assets have a significant influence on supply chain by virtue of size, location and mission. A Global model. A given product line is manufactured in one location. Country model. The country where the market exists is the best place to manufacture the product. A Regional model. Regions where the products are sold are best to manufacture the products. I have also noticed that due to competition in the prices, manufacturing in low-cost countries is common to limit the production costs. The main considerations in such locations include corporate tax rate, export incentives, manufacturing costs and infrastructure. References Cohen, S. Roussel, J. (2005). Strategic supply chain management the five disciplines for top performance. New York: McGraw-Hill. Read More