Company name : Pfizer
Company name : Pfizer
Introduction Clear and specific introduction to the topic 2
Meaningful context and background 2
Clearly state the research planned to be carried out 2
Clearly state the rationale for the approach 2
Explain why the research is important 2
Total 10
Conclusion Clear topic summary 5
Paper exploration summary Introduction
Supply chain strategy: Strategic framework
1.1. Summary from the textbook
In order to develop a strategic framework, key strategic drivers, methodologies for analysis, and the strategic role of each subject are taken into account. A supply chain's performance is impacted by the following factors: facilities, inventory, transportation, information, sourcing, and pricing. And the organization build the strategic framework based on the logistical drivers which are facilities, inventory, transportation; and the cross-fuctional drivers which are the information, sourcing, pricing (Chopra, 2019).
It is important for the company itself to understand the uncertainty associated with its customers and the supply chain in order to achieve a strategic fit. Each targeted segment has its own needs and uncertainty, which a company must understand before it can create a supply chain that fit for the demand of the customer. Uncertainty regarding the supply chain assists the company in assessing how well it is prepared for the unpredictability of demand and supply. The second step is to analyze the capabilities of the supply chain which mean that the company must understand what it is designed to do. Finally, the strategic fit must be achieved (Chopra, 2019).
According to the textbook, any supply chain's performance is determined by the three logistical drivers-facilities, inventory, and transportation and the three cross-functional drivers-information, sourcing, and pricing. Key financial measures are return-on-equity, return-on-assets, return-on-financial-leverage, accounts payable turnover, accounts receivable turnover, inventory turnover, property, plant, and equipment turnover, cash-to-cash (Chopra, 2019).
Supply chain value will be developed based on the strategy of the business. The textbook theory has concluded that the highly responsive and costly the supply chain is the less efficient it will. If the business want to be more responsive, they could open new facility which will increase the inventory cost and facility cost. By doing this, the transportation cost will be decreased. The more efficient it could be, the lower responsive it will. In this case, the company want to be more efficient in their supply chain. They will have to control the inventory and will not please all of the customer demand and requirements (Chopra, 2019).
1.2. Summary of the research on the topic for the Pfizer
The first finding is that management science model is used as the effective manage inventories tool. Dosage work-in-process production chain of Pfizer from size to 15 weeks. Work-in-process inventory reduce the labour and equipment cost. The solution method that have been discussed by Kleutghen in his academic journal is the management science model based on the lead time, purchased materials, master planning system (MPS), safety stocks, inventory forecasting (Kleutghen, 1985).
The second finding is about Pfizer's distribution network which is greatly aided by its decision-support system. Decisions concerning daily operations, annual planning, and long-term strategic planning are supported by this system using databases, programming languages, and spreadsheets. Through this decision-supprt system, the company was able to make rapid, more informed decisions in many areas of distribution and supply chain management, including individual customer deliveries, location and technology for long-term manufacturing (Gupta, 2002).
Thirdly, it is suggested to understand and defend against the supply and demand of counterfeit medicines, according to Mages's academic journey. The supply chain of pharmaceutical companies, including pharmacies that dispense its medicines, should be monitored actively in order to detect counterfeit supplies. A proactive and thorough investigation should be carried out when there is a suspicion of counterfeit medicines being sold. Successful anti-counterfeiting programs are based on successful enforcement authorities in each country and region. In addition to increasing awareness of the counterfeiting problem, training these authorities facilitates the ability to identify genuine versus counterfeit medicines. Educating patients about the dangers posed by counterfeit medicines is a critical part of Pfizer's responsibility on the demand side (Mages, 2016).
Based on the author calculation and database on Yahoo Finance of Pfizer company (PEE, n.d.) and Moderna (Moderna, n.d.), this below chart will shown the comparison between these companies metrics:
In every metrics, Pfizer go after its competitor, Moderna.
1.3. Comparing between the company and the theory from the textbook
Image 1. Decision support system (Gupta, 2002)
The decision support system is displayed in Guptas academic journal has the same structure of three main drivers of supply-chain decision making framework which are capacities, facilities and resources. Every elements in the decision making framework which are discussed in the text book also is mentioned in the Guptas research paper. According to "Implementing a Distribution-Network Decision-Support System at Pfizer", the facilities element is determined by the location, inventory (actual and targets), cost, and location of the end items by the SKU (Stock keeping unit) number. The transportation is determined by transportation costs, duties, and shipments dimension. There are several types of information available. Below is an overview of the types of information available. There are items such as historical sales (shipments), manufacturing rates and costs, purchasing costs and terms, tax information, and local rules (Gupta, 2002).
The strategic fit that the textbook discussed is also mentioned in the Magess academic journal in the Pfizers war against the counterfeit issue. Pfizer solution is dealing with both supplier and customers, which has been summarized in the above part. Raising the problem awareness of using the counterfeit pharmaceutical drug which heavily affect the customers health is the Pfizer job and the strategic fit for this problem. Counterfeit problem can be considered as the supply chain general issue. The increasing of counterfeit Pfizer product will related to the market demand and make a major issue with the inventory and manufacturing plan.
Image 2. Pfizer distribution chain (Neubertify, 2021)
Pfizer supply chain maintain in the high responsiveness. With more than 35 manufacturing sites across six continents, Pfizer has the world's largest manufacturing network (Global manufacturing network, n.d.). In the covid-19 pandemic, the more responsive Pfizer supply chain was, the less efficient it was. This led to the reason why 899 Americans have gotten the expired Pfizer Covid-19 vaccines (Lee, 2021). Pfizer distribution chain is started from the raw materials from the supplier to the manufacturer and to the end consumers. Because at the pandemic, they have mass produced the vaccines, and by that chance, some of the vaccines have gone expired. At that time, there are major of people that against taking the vaccines. The government is Pfizers customer, however the end user who are the people scared to use the vaccines until they get a severe problem or be forced by the government.
Part-2 ( part is not final, i will add more and edit it at the end) - Yasemin
1-Summary of the topic from the textbook
Supply chain network design is the set of planning to better understand and measure the cost and time required to bring goods and services from suppliers and manufacturers to the market. Design decisions include following assignments:
oFacility role consists of decisions on the roles and processes performed at each facility. A facility can serve to only the local market of be more flexible and serve which market need at the time
oFacility location is all about decisions on the proper location of facilities. It is very expensive to shut down or move a facility from one location to another. That is why these decisions have long-term impact on the supply chain performance. A good facility location allows a company to increase responsiveness and decrease cost.
oCapacity allocation includes decisions on the capacity of each facility. It can be altered easier than facility location. Capacity and utilization act inversely proportional. Thus, allocating too much capacity to a single location could result in poor utilization. Additionally, too low-capacity allocation could result in less responsiveness. That is why it is crucial to optimize the capacity allocation to the locations.
oMarket and supply allocation combines the decisions on which supply sources to be fed and what markets to serve. These decisions affect the performance straightaway since market and supply allocation have critical influence on transportation, inventory and total production cost. They should be altered according to some external conditions such as market conditions and competition.
Network design decisions have a fundamental effect on overall performance of an organization as they influence the cost, level of responsiveness and flexibility at the same time. All design decisions listed above are connected to one another.
There are variety of factors influencing network design decisions. Strategic factors are first to be considered. Companies decide on their supply chain strategy according to what sector they operate in and what strategic objectives they pursue. For instance, a convenience store chain, like 7-Eleven, prefers having stores relatively small but many in number in order to increase accessibility. Besides, a discount store such as Costco focuses on providing low prices but in stores that are large and less in number. Technological factors, on the other hand, have a crucial impact on mostly production facilities. Macroeconomic factors consist of external aspects which are not unique to companys internal factors such as tariff and tax incentives, exchange-rate and demand risk, and freight and fuel costs. Furthermore, political factors play a significant role in location decisions. Companies prefer politically stable locations in order to minimize risk. Well-established infrastructure is another factor in facility location decisions. The last but one of the most important factors in supply chain network design is competitive factors. The decision of how close the facilities will be to the competitors plays a significant role.
The goal when designing a supply chain network is to maximize the firms profits while satisfying customer needs in terms of demand and responsiveness (Chopra & Meindl, 2012, p.114). The framework for network design decisions has 4 phases:
oPhase I: define a supply chain strategy/ design under global competition, competitive strategy and internal constraints such as capital, growth strategy, and existing network
oPhase II: regional facility configuration including competitive environment, aggregate factors and logistic costs, political, exchange rate and demand risk, tariffs and tax incentives, regional demand such as size, growth, homogeneity and local specifications, and production technologies like cost, scale, support required and flexibility.
oPhase III: desirable sites with available infrastructure and production methods such as skill needs and response time
oPhase IV: location choices including logistics cost such as transport, inventory and coordination, and factor costs like labor, material and site specific.
2-Summary of the research on the topic for the company
Pfizer is one of the worlds largest research-based pharmaceutical and biomedical companies founded in 1849. The company is dedicated to exploring, advancing, manufacturing and marketing prescription medications for both humans and animals (Nolen,2016, p. 1). The company has achieved many successes in its long life that have been changing peoples lives. In the 1930's, Pfizer developed a fermentation-free method which allowed them to become the worlds leading producers of vitamin C. In virtue of its unique fermentation method, Pfizer could pursue mass production of penicillin and saved many lives during World War II. In the following years, the company accelerated its investments and developed drugs that would be a cure for many people. At the same time, it has continued their expansion to the world with partnerships and acquisitions (Pfizer Inc., 2022, History). Pfizers latest invention that changed the world is the COVID-19 vaccine, collaborated with BioNTech, which is a German biotechnology company.
Companys supply chain network design has been evolving according to its achievement and needs to expand more day by day. Pfizer was incredibly successful in turning a deadly pandemic into an advantage to expand its business. While the world was drifting in great despair, Pfizer discovered COVID-19 vaccine in a short time by making necessary investments and establishing a critical partnership with BioNTech. According to Pfizer-BioNTech COVID-19 Vaccine: U.S. Manufacturing and Distribution Fact Sheet, Pfizer is one of the largest sterile injectables suppliers in the world providing vaccines to more than 175 countries. As of June 2022, more than 3.5 billion vaccines have reached all around the world. Behind that fact, there should be a strong supply chain network.
As of 2022, Pfizer operates in 39 manufacturing sites and 11 distribution/logistics centers with the contribution of 28,000 global manufacturing and distribution colleagues. The company supplies medicines and vaccines to 165 countries by delivering more than 25 billion doses every year. Due to the urgent need of COVID vaccine, the company focused on decreasing the timeline of the supply chain as much as possible. The scientists cut the manufacturing timeline from 110 days to 60 days. In order to ensure cold chain distribution, GPS-enabled thermal sensors are used (Pfizer Inc., 2022). According to the Pfizer-BioNTech COVID-19 Vaccine Fact Sheet, the development of temperature-controlled thermal shippers allows the transporters to use dry ice to keep recommended storage temperatures. Overall distribution model is built on a flexible and just-in-time system directly from plan to vaccination centers. Additionally, Pfizer leverages both air and road modes. The supply chain processes do not only include manufacturing and logistics but information as well. Pfizer created new software in order to follow how the virus evolves, as well as keep track of the physical manufacturing process under control (Garland, 2021). Another improvement in information systems in the supply chain is the Highly Orchestrated Supply Network (HOSuN). It is a new network design to support customers to reach accurate and truthful information on the condition of their shipments (How Pfizer is, 2021). The new app-based supply chain platform- allows Pfizer to reach a new level of visibility and gain competitive advantage against its competitors.
Part 2 references
Chopra, S., Meindl, P. (2012). Supply Chain Management. (5th ed.). Pearson.
Garland, Max. (September 21,2021). How Pfizer transformed its supply chain to deliver vaccines at lightspeed. Supply Chain Dive. https://www.supplychaindive.com/news/pfizer-jim-cafone-covid-vaccine-manufacturing-distribution-cscmp/606867/Nolen, J. L. (2016, April 6). Pfizer, Inc.. Encyclopedia Britannica. https://www.britannica.com/topic/Pfizer-Inc
Pfizer Inc. (2022). History. Pfizer. https://www.pfizer.com/about/history
Pfizer Inc. (April 2022). Pfizer-BioNTech COVID-19 Vaccine: U.S. Manufacturing and Distribution Fact Sheet. Pfizer. https://cdn.pfizer.com/pfizercom/Pfizer_PGS_COVID-19_Factsheet_071122.pdf
Pfizer Inc. (2022). Global Manufacturing, Supply & Distribution. Pfizer. https://www.pfizer.com/products/how-drugs-are-made/global-supply
How Pfizer is Using Mobile Technology to Boost Supply Chain Visibility. (February 15,2021). Logi Pharma. https://logipharmaeu.wbresearch.com/blog/heres-how-pfizer-is-using-mobile-technology-to-boost-supply-chain-visibility
3. Supply chain operation: How does the organization coordinate demand and supply in their supply chain?
3.1. Summary from the text bookHow does the organization coordinate demand and supply in their supply chain?
What techniques do they use for demand forecasting and measuring forecast error?
How do they handle seasonal demand?
How have they optimized both supply and demand?
What obstacles to coordination did the organization have or may have?
What are the levers that could or did help the organization to improve coordination in their supply chain?
Textbook citation: (Chopra, 2019)
3.2. Pfizers techniques uses for demand forecasting and measuring forecast error
Textbook citation: (Chopra, 2019)
Pfizer achieved high value product by constantly acting to enhance and optimizing performance stages. Pfizer Supporting supply actions along with the unpredictable existence of market pressure is crucial to providing high values. By improving and applying new strategy at its facility located at Freiburg Germany, Pfizer balanced up their goods centred on order and impulsiveness patterns. Pfizer do this division method - developed on an adaptable pull system along with the capability to operate both fixed schedule and fixed volume at Freiburg production to buyer requirement in the 180 nations wherever it deals drug and allows to perform optimized. Pfizer using this approach to reduce the requisite of elevated level inventory to take on all feasible demands, results in adaptable and efficient approach to deal complex nature to enable low down inventories and provide effected service. Presently, Pfizer practices this new strategy at Freiburg and other production sites around the world. Pfizer started lean production that leads to substantial development in manufacturing, packing and quality by capitalized in automation. Previously, Pfizer managed all goods with conventional key method that didnt take several demands patterns into notice. Market forecast prompted production for all products indicates to longer leads time because of its product portfolios shared the same production equipments thus forcing prolonged substitutions. Moreover, schedule was extremely inflexible caused laborers more concerned by crucial supply needs and unexpected happenings (Seller, 2012).
Image 3. 4 different prediction strategies along value stream (Seller, 2012)
Pfizer uses four different production strategies various product segments
A product having high worth but constant demand - In this section Goods having vastly expectable sales (for instance, while deals are likely enough to backing prediction the manufacturing of 1,0000 packages every three weeks) and therefore do not need an entirely flexible arrangement grounded uniquely on market pull. As a substitute of a strong pull system, a secure, anticipated production utilizing a pre-specified phase centred on the projected demand is more economical for this manufactured goods section. It is based-on KANBAN an inventory management system that initiates production when specified levels achieved (Seller, 2012).
B - Products in this segment has varying packaging-In this category those product groups whose sales are steady in aggregate, however, may consist of SKUs traded in low amounts with high instability in particular nations because market restricted packaging needs. For this, Pfizer uses a pull system known as packaged-to-order, meaning that bundle manufacturing affected by the restocking limit (Seller, 2012).
C - Ordinary Combine Products made with Unstable or Weak Demand for packing and Mass-In this category Pfizer utilized goods are concentrated on joint blends, but manufactured in seldom approved quantities, such as one 300 mg pain dose, as an example. Items in this class are made and put up only after refilling stock level achieved (Seller, 2012).
D - Exotic goods - In this category Pfizer used rarely medicines centred on rarely used combinations. The results, from starting to ending, are made-to-order after well-supplied APIs (Active Pharmaceutical Ingredients) (Seller, 2012).
3.3. How have Pfizer optimized both supply and demand?
Pfizer uses thermal sensors with GPS enabled in them to make sure that the vaccines are distributed at the required temperature. Pfizer made more than 300 suppliers in 2020 to enhance its supply chain making it more resilient. Pfizer manufactures its vaccines in bulk and in advance so whenever it gets approved by the health care authorities, the company would be able to ship the required vaccines/ medicines within 24 hours (Pfizer, 2022).
Pfizer has selected 4 locations across Europe to handle different stages of a manufacturing procedure of a vaccine. For example, a manufacturing facility in Ringaskiddy, Ireland is used for extensive research and development procedures while Freiburg, Germany, Newbridge, Ireland, & Ascoli, Italy are chosen for its packaging capability to pack the vaccines in large quantities (Pfizer, 2022).
Pfizer didnt followed any new manufacturing procedures but instead followed a pattern in which all the procedures such as process understanding, scaling, and design and fabrication happened at the same time. By following this procedure the manufacturing process got reduced from 24 months to 6 months. Pfizer also developed a lightweight shipper box which is easy to handle, it is reusable,easy for packaging. It keeps the vials stable for 10 days and can be shipped to remote locations (Pfizer, 2022).
Image 4. Pfizer shipping box explained (Associated press, 2020)
(Pfizer, 2022).
Obstacles for Pfizer
Some of the raw materials for the vaccine was not upto the acceptable level which further delayed the processing and manufacturing of the vaccine. Raw material started depleting at a quick pace when the organization started production at a large scale. Some of the raw materials include antivirus agents,elements of DNA, sterile water etc (Neubertify, 2021).
For its covid 19 vaccine, they had never used mRNA for any vaccine before, but due to sudden demand for vaccine all over the world, Pfizer continued to produce these vials even with research being going in parallel (Neubertify, 2021).
Most of the storage freezers are not capable of storing the vaccine as it requires a storage temperature of -94 degree. They had to make sure that these vaccines were distributed at this temperature. The distribution trucks needed to have dry ice on it to deliver the vaccine without any harm or loss (Neubertify, 2021).
There is a lack of coordination between demand and capacity and how the capacity should be used. In attempt for localizing manufacturing process of vaccines, lack of regulatory bodies in some countries acted as a major obstacle. Countries like South Africa, due to shortage of resources like water,electricity the nation was used just to complete the final stage of the vaccine making process i.e., putting vaccine material into the vials. There are export taxes, tariffs and other trade barriers which makes the task of supplying the vaccine more challenging (Neubertify, 2021).
3.4. What are the levers that help in coordination with supply chain?
Pfizer recognized as leading in supply value products in various parts of the global. Moreover, it committed that the products provided by them available every time and anywhere they are essential by its stretched global distribution network. Pfizer aimed to provide superior standards of quality, reliability and delivering value to its loyal customers without negotiating feature and fulfilment. Pfizers offers reliable, rapid, compliant supply chain and distributes ,trustworthy remedies all over the globe. At global scale production, Pfizer with its supply network or with outer strategic partners, they manufacture complicated formulations, how to packaging and complete line up of medicines that meet the high specifications and usefulness. Pfizers believes on its advanced highly orchestrated supply network designed in a way that co-ordinate with its inventory stock and supply chain planning, transportation and logistics, environmental health and safety known as EHS, and globally trade management for safely delivers to the world. Pfizer is world leader in supply chain safety. It also offered security program that includes every step from manufacturing to deliver to its consumers. Pfizer designed a program known as serialization to control authenticity across the supply chain by various trade programs with organizations as well as suppliers to protect its goods and ensure truthfulness. Pfizer dedicated to trustworthy supply chain management and maintained all producing and supply associates to superior levels of quality. Pfizer partnership with outer suppliers who dedicated to running their enterprises in a proper and sensible approach, recognizing the rights of entities they engage and assisting to protect the ecosystem. Pfizers always expected from it aligns to support its laws or adopt their own policies like Pfizer. Also, Pfizer established EHS supplier review program to make sure contractors meet Pfizers potentials. This program aimed to evaluations the suppliers EHS understanding and performance to improve their operation.In addition, Pfizer collaborating with its partners to sharing good practices in reducing greenhouse gas emission and works more efficiently. Moreover, Pfizer is leading member of PSCI which has other biopharmaceutical firms dedicated to helping suppliers to achieving better wellbeing and safety operation as enhancing industry norms (Pfizer, n.d.).
Recommendation
Short Term (3 months to 1 year) Supply Chain recommendations based on what you learned from the research
Long Term (1 year to 5 years) Supply Chain recommendations based on what you learned from the research
In the supply chain strategy phase, short-term recommendation for Pfizer is to understand the customer demand to reduce the expired pharmaceutical products, reduce the production cost and inventory cost. Understanding and forecasting the customer demand in the pharmacy industry can based on the seasonal data that Pfizer collect from the last year. The long-term recommendation for Pfizer is the fight against the counterfeit problem which come from the supplier and the low awareness of the customer. This fight will go along with the development and growth of the company. The counterfeit problem can be fixed by registering the intellectual property for each product on every jurisdiction.
In supply chain planning (network), short-term recommendation
Long-term recommendation
In supply chain operation (forecast), short-term recommendation
Long-term recommendation
Conclusion
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References
Pfizer Inc. (Jan, 2022). Scaling Up Manufacturing For the COVID-19 Vaccine. https://cdn.pfizer.com/pfizercom/Scaling_Up_Manufacturing_For_the_COVID-19_Vaccine-032922.pdf
Exploring the supply chain of the Pfizer/BioNTech and Moderna COVID-19 vaccines. (2021, January 10). Neubertify Get neubertified here. https://blog.jonasneubert.com/2021/01/10/exploring-the-supply-chain-of-the-pfizer-biontech-and-moderna-covid-19-vaccines/
Seller, C., Field, P., Werner, A., Schepers, G., & Lesmeister, F. (2012, August 1). Tailoring production to demand at Pfizer. Pharma Manufacturing. https://www.pharmamanufacturing.com/articles/2012/120/
Associated press. (Dec 8, 2020). Pfizer shipping box characteristics. https://www.youtube.com/watch?v=W2hXQtA97RQ
Pfizer. (n.d.). Manufacturing and Supply Chain: Pfizer 2015 Annual Review. https://www.pfizer.com/sites/default/files/investors/financial_reports/annual_reports/2015/manufacturing-and-supply-chain.htm#:%7E:text=Supply%20Chain%20Management&text=Pfizer%20is%20an%20industry%2Drecognized,of%20product%20to%20our%20customers.
Supplier Partnerships | Pfizer. (n.d.). Supplier Partnerships. https://www.pfizer.com/about/responsibility/EHS-supply-chain/supplier-partnershipsSeller, C. (2012, August 1). Production to Demand at Pfizer. Pharma Manufacturing. https://www.pharmamanufacturing.com/articles/2012/120/Chopra, S. (2019). Supply chain management: Strategy, planning, and operation. Pearson, 7th Ed.
Lee, B.Y. (Jun, 2021). 899 New Yorkers Got Expired Pfizer Covid-19 Vaccines, Must Get Re-Vaccinated. Forbes. https://www.forbes.com/sites/brucelee/2021/06/18/899-new-yorkers-got-expired-pfizer-covid-19-vaccines-must-get-third-dose/?sh=71ce3ee14f35
Global manufacturing network | Pfizer manufacturing locations | Pfizer CentreOne. (n.d.). Pfizer CentreOne - CDMO. https://www.pfizercentreone.com/manufacturing-network
Kleutghen, P. P., & McGee, J. C. (1985). Development and Implementation of an Integrated Inventory Management Program at Pfizer Pharmaceuticals. Interfaces, 15(1), 6987.
Gupta, V., Peters, E., Miller, T., & Blyden, K. (2002). Implementing a Distribution-Network Decision-Support System at Pfizer/ Warner-Lambert. Interfaces, 32(4), 2845. https://doi.org/10.1287/inte.32.4.28.54Mages, R., & Kubic, T. T. (2016). Counterfeit medicines: Threat to patient health and safety. Pharmaceuticals Policy & Law, 18(14), 163177. https://doi.org/10.3233/PPL-160441
Pfizer Inc. (PFE). (n.d.). Yahoo Finance - Stock Market Live, Quotes, Business & Finance News. https://finance.yahoo.com/quote/PFE/balance-sheetModerna, Inc. (MRNA). (n.d.). Yahoo Finance - Stock Market Live, Quotes, Business & Finance News. https://finance.yahoo.com/quote/MRNA/balance-sheet
