I have attached screenshots of the case after the questions. If you were in the

Question

I have attached screenshots of the case after the questions.

If you were in the position of Alan Mannik:

1. What would be the objectives of your procurement plan for the eight products to be transferred from the French plant?

Sub-parts: What alternatives do you have? What action would you take and why?

Case 14-3 Sarin Pharmaceuticals Ltd. Alan Mannik, director of procurement for the Sarin Phar- ceutical Division accounted for approximately 70 percent of maceuticals Ltd. (Sarin) Animal Health Division plant in company revenues, while the Vaccine, Consumer Health, Vancouver, British Columbia, was planning for the trans and Animal Health Divisions represented 13 percent, fer of eight products from the company's plant in France. 10 percent, and 7 percent of Sarin's revenues respectively. He had a conference call with Francois Simpson from the The Pharmaceutical Division developed and manufactured Sarin facility in Arras, France, on June 11 to discuss details medicines for the treatment of a variety of serious and chronic of the transfer. It was Monday, June 2, and Alan needed to diseases, such as cancer, epilepsy, and heart disease. The prepare for the meeting, which was set up to review pur- Vaccine Division produced pediatric and adult vaccines to chasing transition issues. He was particularly concerned prevent a range of infectious diseases, including hepatitis with the supply of raw materials and packaging A and B, polio, and influenza. The Consumer Health Divi- sion focused on a wide range of consumer health products in the areas of skin care, wellness, oral care, and nutrition. The smallest division, Animal Health, developed and produced medicines for livestock, poultry, and pets. SARIN PHARMACEUTICALS LTD. Founded in 1865, Sarin was headquartered in New York and had a reputation for excellence and innovation in the discovery, development, and manufacturing of medicines for people and animals. In the most recent year, company revenues were $12 billion, with net income of $1.4 billion. The company employed more than 45,000 people who worked in 60 countries Sarin focused on its strategic mission of discovering, developing, and bringing to market health care prod ucts in an effective manner that fulfilled unmet medical needs. As a result, the company had recently divested a number of operations that did not align with the com pany's strategy. A number of businesses that comple- Sarin was organized into four segments: pharmaceuticals, vaccines, consumer health, and animal health. The Pharma mented Sarin's strategy had recently been acquired, and

Explanation / Answer

1) The objectives of the procurement plan should be to ensure that the Vancouver plant has all the necessary supplies for production in an efficient and a timely manner.

2) Alternatives -

a] Ask with the available approved Sarin suppliers with whom you buy materials for the Vancouver Plant. They might have the required RM.

b] Reduce the required lead time to induct a new supplier in Vancouver. The people who test can work in shifts to reduce the time taken and hence approval. We still have 6 months.

c] Transport the materials from the approved RM suppliers from France to Canada for the period it takes to approve new vendors at Vancouver. We need to incur these additional transportation costs for sometime.

We should utilise our strength of the reach to the various geographies that we have. Also that we have a sort of monopoly in the animal health market due to the acquisition of one of our biggest competitor. We should not let the market be deprived of the product for sometime as it would be difficult if some other competitor takes our place - the opportunity costs involved with the lost sales.

My step would have been as follows -

Reduce the time taken to test by around 6 months. Till then manufacture around 60% at France and commence the production, around 40% in Vancouver. Gradually build up the manufacturing in Vancouver and reduce it in France in the 6 months. During this time, induct new vendors for the products and get the testing done. Also, till then procure RM from the France sources until we have the approved Suppliers.

Quality need not be compromised at any instant.

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