Tag: Pfizer

OM Podcast #17: An Interview with Pfizer’s Global Supply Chain VP

In our latest podcast, Barry welcomes Tom Cheslock, VP of Global Supply Chains at Pfizer.  Tom and Barry discuss the massive network of supply chains that support Pfizer’s pharmaceutical business, including their recent success delivering the COVID vaccine to 180 countries around the world during the height of the pandemic.  Additionally Tom describes his recent trip to Tokyo to experience the Toyota Production System first-hand and bring new tactics back to Pfizer.

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Transcript

A Word document of this podcast will download by clicking the word Transcript above.

Instructors, assignable auto-graded exercises using this podcast are available in MyLab OM.  See our  earlier blog post with a recording of author and user Chuck Munson to learn how to find these, or contact your Pearson rep to learn more!  https://www.pearson.com/en-us/help-and-support/contact-us/find-a-rep.html

 

OM in the News: Vaccine Manufacturing in U.S. Races Ahead

Covid-19 vaccine manufacturers are ramping up production, churning out far more doses a week than earlier in the year, progress that is accelerating mass vaccination campaigns in the U.S., writes The Wall Street Journal (March 22, 2021). This is good news and is a followup to our blog (March 21, 2021) how making Covid vaccines is taking away from production of other important drugs. This is a nice place to introduce Figure 7.1 (the four process strategies) to your students.

After a slow start, Pfizer and Moderna have raised output by gaining experience, scaling up production lines and taking other steps like making certain raw materials on their own. Pfizer figured out how to stretch scarce supplies of special filters needed for the vaccine production process by recycling them. (The filters remove certain components from the vaccine during production.) And the company added more high-speed vial-filling lines to its plants.

pfizer2

Moderna took 3 months to make the first 20 million doses of its vaccine last year, but now it is making roughly 40 million a month for the U.S. The U.S. monthly output for the authorized vaccines is expected to reach 132 million doses for March, nearly triple the 48 million in February.

Moderna wasn’t able to produce at maximum capacity right out of the gate because of the need to introduce new equipment and processes in stages. It was still training newly hired workers and encountering issues like equipment malfunctions and holdups in getting replacement parts such as filters. It is planning to further speed output by boosting the number of doses in each vial to 15 from 10. “There has not been a single week since we started that we have not had issues,” said a company exec.

Some 2.5 million people in the U.S. are vaccinated daily on average, up from about 500,000 in early January. The increased output should be enough to fully vaccinate 76 million people in the U.S. in March, 75 million in April, and 89 million more in May.

Classroom discussion questions:

  1. Which process in Figure 7.1 of your Heizer/Render/Munson text best fits the vaccine manufacture?
  2. What factors had made the vaccine so difficult to produce?

Good OM Reading : Pfizer–The Inside Story of Revenge, Betrayal, and Power

Fortune’s cover story (Aug.15, 2011) is a wonderfully written article about a dysfunctional pharmaceutical giant, Pfizer, and the palace coup that removed CEO Jeff Kindler last December. The inside view (from 42 interviews over a 4-month period) of a $68 billion company that produced such blockbusters drugs as Lipitor and Viagra is movie material. Once a Wall Street darling and corporate icon, Pfizer has tumbled into disarray, with its stock price sagging from $49 down to $18 today and its pipeline dried up. What went wrong  and how is this an OM topic?

 First, there is the management issue. “Its managers descended into behavior that would do Machiavelli proud. There was the ex-CEO who wouldn’t relinquish his power. There was the HR chief who divided the staff rather than uniting it. There was Kindler himself who agonized over decisions even as he second-guessed everyone else’s actions”, writes Fortune.

The real OM story, though, is R&D and new product development (Ch.5), which is the lifeline of every drug company.With 3 of its biggest drugs about to lose patent protection and face generic competition (Lipitor alone brought in a staggering $12 billion/year and loses its exclusive rights this year), investors wanted to know what Pfizer was going to do to replace them. Its immense R&D budget of $9.4 billion last year produced two major hopes. Both ended in disaster. A cholesterol drug, torcetrapib, cost $890 million to develop and produce. A late trial revealed it increased death rates over control groups– and the drug was killed 2 days later. Exubra, an insulin system, cost a $2.8 billion write-off when unhappy customers  bought only $12 million of the product.

With the business model failing, the R&D budget cut to $7 billion, Pfizer laid off 1,600 researchers at its Groton ,CT, flagship site, fired CEO Kindler and the HR VP (with massive severance packages, of course). The big pharm industry is one that requires excellent management, and I think you will be interested in  reading about what happens without it.