SUPPLY CHAIN

Supply Chain

Supply Chain

Glaxo Smithkline Supply Chain Challenges

Glaxo Smithkline (GSK) spends about GBP 800 million to develop a drug. Its efforts and money will go waste unless its customers get the product in time without any defects and have no difficulty in handling the package. In other words, every facet of GSK's supply chain should be up to the mark. The previous article highlighted some of the supply chain challenges GSK faces. This article illustrates GSK's response to those supply chain challenges (Gosain & Malhotra, 2005: 7).

To counter the challenge of supplying to a multifaceted US market and low volume niche markets, GSK implemented the late pack customisation programme. While typical production runs were up to 30,000 numbers for cost effectiveness, GSK could effectively produce as low as 100 or 500 packs at a time with this programme. For instance, basic boxes were volume filled with blisters at the pack site and shifted to the two distribution centres in Europe. At these centres, clear labels were printed online with country related information and applied automatically.

Global Pack Management

With more than 36,000 SKU's and a six-month life cycle of its products, handling packaging specifications, associated graphics and artwork changes was an enormous task. Standardising the packaging changes was another major obstacle. GSK developed the Global Pack Management (GPM) to handle this complexity (currently in use for its prescription products). The GPM programme focussed on four major issues:

Change Standardisation- Packaging changes are standardised using global training and implementation programmes.

Developing a pack catalogue- All employees have access to a central and current set of all GSK's packaging information. This helps foster idea sharing while achieving packaging optimisation simultaneously.

Central artwork development: Accordingly, only four centres (strategically chosen at US, UK, Italy and India) were to service the packaging graphic needs of all products. Earlier, 250 centres performed the same activity.

Uniform and centralised information technology- This helps streamline workflow. Since all the employees use the same central applications (González-Benito, 2007: 901).

Paperless labelling/electronic leaflets

According to FDA regulations, all drug companies in the US must print and attach labels to every product going into the market. So, any label or leaflet change can take up to a year to reflect with pharmacy stores first emptying existing inventory. Working along with the Pharmaceutical Research and Manufacturers of America (PhRMA), GSK has been striving hard to push forward its paperless labelling initiative. The aim of paperless labels and electronic leaflets is to prescribe information to healthcare professionals electronically. This will help instant updation as any change in the leaflet/label is reflected automatically. Patient safety is the ultimate goal of GSK.

Countering Supplier/Outsourcing issues

GSK realises the importance of finding and qualifying multiple suppliers to avoid any supply disruptions. For instance, for its popular Advair Diskus device, GSK has three suppliers, two in Europe and one in the US. The goal is to have enough capacity globally with all suppliers producing identical components with identical tooling on identical machines. Meeting strict regulations is of prime importance (Garavelli, 2003: 141). Communication can play a vital role in establishing ...