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July 20, 2006
Is Supply Chain Visibility A Misnomer?
A recent flutter of activity in the pharma sector leaves cause for concern as to just how "leading-edge" some of the supply chains of today's top business performers really are. And seeing as some of the major blunders all take place in Puerto Rico, how can firms expect to continue to do business in this wonderful global economy we keep hearing about?
As the rules of supply and demand continue to change, leading manufacturers, regardless of industry, often discuss the merits of supply chain visibility in order to get a more accurate depiction of what the heck is going on in the organization. Sometimes this visibility is gleaned through holistic strategies, but more often than not, it's achieved through linking disparate IT systems in an effort to get a better picture of upstream and downstream activities, especially when something goes horribly awry.
A recent flutter of activity in the pharma sector leaves cause for concern as to just how "leading-edge" some of the supply chains of today's top business performers really are. And seeing as the few major blunders mentioned below all take place in Puerto Rico, how can firms expect to continue to do business in this wonderful global economy we keep hearing about?
This In-Pharmatechnologist.com article dissects how drug-maker Wyeth plans to unravel a packaging problem that has caused a major delay for one of its oral contraceptives:
The drugmaker says is too early to predict with any certainty how long it will take to resolve its manufacturing troubles which started in May with a warning letter from the US Food and Drug Administration (FDA) about its Puerto Rico plant and culminated last month in the agency expressing reservations about stability data regarding the manufacturing method of Lybrel, its low-dose oral contraceptive which, if allowed in the US market, is expected to reach annual sales of $400m in 2009.
Obviously, $400 million is nothing to sneeze at, and while Wyeth says it has hired a fancy consultant to advise them on this sticky situation, I can't help but wonder why the company failed to meet FDA requirements in the first place. Where's the visibility they needed to avoid this catastrophe, which has forced Wyeth to also pull its other oral contraceptives from the market until normalcy is established.
Wyeth CEO Robert Essner stressed his company has made restoring normality in manufacturing operations a top priority and hopes to have resolved all manufacturing issues by the end of 2006.
Reuters also honed in on another drug maker with Wyeth-like problems. This time it's Watson Pharmaceuticals, who U.S. regulators have in their cross hairs for not fixing a manufacturing problem at one of their plants in everyone together now Puerto Rico. This snippet from the Reuters article surmises the issues at hand:
An inspection in November and December 2005 found employees failed to handle materials properly to prevent contamination during production of generic antibiotic clindamycin. FDA inspectors also cited problems with quality-control tests of oral contraceptive Reclipsen and insomnia treatment estazolam at the site in Humacao, Puerto Rico.
Again, where's the visibility? Why must quality control practices continue to be an issue in this day and age? And what's in the water at Puerto Rican plants that is causing workers to lose common sense? Well, maybe we can learn something from GlaxoSmithKline, who recently resumed sales and promotion of its diabetes drug Avandament. Federal marshals in March last year seized unsold U.S. shipments of the drug thanks to problems created at one of its plants located in one more time Puerto Rico.
To replenish the huge U.S. market, Glaxo said it has reconfigured the Cidra plant to produce drugs only for Americans under FDA manufacturing rules. Ah-ha! A solution to the problem, which you can continue reading about here.
Also, be sure to check out the recent Aberdeen report called the "Global Supply Chain Benchmark Report." A description for the Aberdeen report goes something like this:
With so much emphasis on domestic supply chains, most enterprises have been caught playing catch up with their global operations. The good news is that companies are hungry for solutions that will enhance global visibility, amp up human resources, mitigate global risk factors, and enhance logistics operations.
Is your firm "hungry" for greater visibility into global operations?
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