To bolster growth in a challenging environment, pharmaceutical companies are expanding into new markets and broadening their product lines to include niche medicines. In many cases, however, their production processes are not geared toward supporting the volatile, variable demand that goes hand-in-hand with these opportunities.
To stay competitive, pharmaceutical companies need to put to rest the idea of a one-size-fits-all supply-chain and manufacturing strategy and focus instead on leveraging different strategies for different products, based on demand and volatility patterns. Working with The Boston Consulting Group, Pfizer followed this approach as it developed a new production strategy at its manufacturing site in Freiburg, Germany.
Pfizer’s flexible, cost-effective system grew out of a concerted effort to manage complexity and utilize lean production techniques. The new system has allowed Pfizer to overcome a vexing tradeoff—the Freiburg facility has lowered inventory and production costs without compromising product competitiveness or customer service. Freiburg has become a role model for other manufacturing sites that are adopting the same approach.
This article originally appeared in the July/August 2012 issue of Pharmaceutical Manufacturing.