The Reasons for Holding Inventories in the Pharmaceutical Supply Chain - Coursework Example

The reasons for holding inventories in the pharmaceutical supply chain are enumerated below according to categories: Profit driving purposes: -The management seeks to be assured the pharmacy associates avoid making errors of mistakenly realising certain products do not have available stocks to be sold to customers at any point of time. Accurate inventory transaction would rest assure this incident is avoided. -The management wants to avoid selling extra number of stocks for products which have not been in demand that much in the market for quite some time. Because costs deduct the profits, if the costs spent are not compensated by larger amounts of profits, the retailer risks losing profits instead of making them. -When customers are very well aware that in reality, certain pharmacies or other types of retailers conduct inventories, the customers are able to trust them knowing the retailers are very efficient in providing the best customer service satisfaction. Cost cutting purposes: -The pharmacy inventory department is able to cut the amount of money spent on giving pharmacy associates’ salaries for over time at work in order to place the stocks of products in shelves to prepare these products to be sold. Certain products’ stocks need not be prepared to be sold if it is apparent these products have not been making good sale profits within half year to one year. -When pharmacy associates are able to cut down the time they spend on working over time to place stocks of certain products on shelves to prepare to sell them, the management is likewise able to cut down electricity bill costs by preventing the pharmacy to stay open beyond its normal store hours. -Inventories save time for employees to put away stocks not sold regularly. Hence, costs to be spent on over time work salaries of employees by the employers are reduced. Inventories usually automatically generate the estimated number of stock quantities needed to be sold to generate sufficient or high profits. - Inventories save time for employees to put away stocks not sold regularly. Hence, costs to be spent on over time work salaries of employees by the employers are reduced. Inventories usually automatically generate the estimated number of stock quantities needed to be sold to generate sufficient or high profits. Reasons for not holding inventories are the following: -The considerable amount of time spent on holding inventories by the pharmaceutical associates may very well been spent on assisting customers efficiently. Often when the associates get pressured from taking care of inventories, they fail to give excellent customer service. -Holding inventories induce pharmaceutical staff to intentionally give erroneous inventory data. When holding inventories, associates all the more become tempted to steal some stocks of the products then consequently produce erroneous inventory data to cover up their dishonest acts. This incident can be prevented by having the auditing management staff members check on the accuracy of the inventory data. However, by doing so, more time is wasted on a long due activity process which can better be prevented through taking a viable option instead. -Inventories allow manufacturers to avoid consulting a specialist as to the number of stocks of certain products that are ideal to be sold in order to make profits. This knowledge is obtained automatically upon conducting an inventory activity. - Conducting inventories give employees more time to chat personally. Hence, this scenario may open up opportunities for them to have the ability to connive ways to commit unlawful and unethical deeds that are of their advantages within the work premises. -Holding inventories at times give employees an impression that they are not being trusted for their honesty by the employers. If a retailer does not have numerous products it is advisable for the immediate manager to do the inventory himself to avoid this misunderstanding. I would definitely say a reduction in Throughput Time may result in reduced inventories. Throughout Time is defined as follows, Manufacturing Throughput Time (Anon., 2010): “Period required for a material, part or subassembly to pass through the manufacturing process,” Manufacturing Throughput Time (Anon., 2010). Concepts that could be applied to reduce TPT in order to enjoy the benefits for inventory levels are the following: -Quicker TPT means as soon as stocks of products are sold the number of items available for the products are immediately known. This is due to the fact that as soon as stocks are sold or deducted a new stock is added, and is immediately remembered with no difficulty by the pharmaceutical associates. By easily remembering this, the number of stocks left for products are easily remembered as well. -Quicker TPT allows for stocks of products to be manufactured at individual times in large quantities. For example, if an Advil tablet goes through quicker TPT, in a week approximately 500 tablets are able to be manufactured. - Reduced TPT entails shorter work hours for employees. Most employees do not like to work for long hours so they can spend more time with their loved ones. -Reduced TPT enhances the employees’ abilities to become more capable of working efficiently even when under pressure. They are not easily stressed out from difficult situations once they receive this training. Because of this situation, the times pharmaceutical associates need to hold inventories for newly manufactured products are considerably decreased. In the case of the mentioned situation, associates would only likely need to conduct inventories at least once, twice a week or once a month. Implementation Plan Using Concepts To Reduce TPT Benefits And Constraints On Implementation: Benefits: -Numerous satisfied customers are obtained and kept when products are manufactured faster and efficiently. This situation applies to customers who are constantly in need of new stocks of products due to urgent medical purposes. For example, if a patient has a heart illness and needs to take as much medication daily, that patient would expect the pharmacy does not run out of stocks of the medicines when he needs them. Running out of stock of this type of medicine could cause the patient to undergo serious health complications. -The manufacturer of the products gains better reputation and trust from the industry and the customers through the reduction of TPT. The public gleans the manufacturer as having employees who are able to work promptly and efficiently at the same time. Hence, the manufacturer earns an image of having the most competent human resource staff members that screen the applicants for job positions. This impression comes from the positive image exhibited by the manufacturers’ employees. Constraints: -Employees of the manufacturers who are constantly put under pressure to work faster and efficiently in manufacturing those products at times bear the consequences of suffering from stress-related health issues. Being frequently rushed bears down on the health immune system negatively of any human being. These consequences may take their forms through physical or emotional detrimental states. -Reduced TPT bears higher risks of employees to manufacture products of low or below best qualities. When employees are constantly in a hurry to manufacture products, they are unable to formulate the best ways to take in order to bring out their best in manufacturing these products. Roadblocks In Preventing Implementation Of The Concepts In The Company And The Corresponding Suggested Solutions -Inability to hire staff members capable of going through quicker TPT process when working. This scenario can largely be attributed to not enough advertisements disseminated in various media in order to attract the right people for the job. The management would better resolve this issue by having the creativity and resourcefulness to tap into advertisement mediums unique and yet effective in the industry. By doing this patiently, through time, they would be able to finally attract the right people to fill in these positions. -Quicker TPT is prevented from taking place successfully if the management is not objective or rational in requiring the acceptable quicker TPT. At times, there are managers who require TPT’s be implemented at a faster pace that is way beyond normal. As a result, instead of being able to have a successful quicker TPT, what results is a slower TPT. The managers are encouraged to consult with other experts in order to discern the proper quicker TPT duration to be required of their employees. By doing this, managers are able to gain more knowledge on this issue, and eventually succeed in implementing quicker TPT. -Numerous employees may not agree to do inventory activities. When this happens, there is a huge chance numerous employees will quit their jobs. If this happens, the management undergoes another process of screening out and hiring new staff members. It would be better to obtain the views of the employees about doing inventories by holding surveys. By doing so, the management is able to discern how most employees feel about inventories. If numerous employees do not agree with doing inventory activities as objective, the supervisor is encouraged to conduct workshops employees can attend to learn of the importance of inventories. Concepts And Tools That Could Further Be Used To Analyse The Process And Prioritise A Consistent Action Plan -Obtain the feedback of the employees as to how they view the quicker TPT being implemented as a success or a failure. At times, the management is not able to discern whether or not their techniques of doing things bring success or failures. This may largely be due to the fact that people usually view the way they do things as successful even if at times it is not that way just to place more faith in their abilities. -Closely monitor the improvements in profits obtained by products since the quicker TPT plan has been implemented. By doing so, any weaknesses can be associated with the current quicker TPT plan may be easily detected. Hence, corresponding positive modifications may be executed accordingly. Six Sigma And Lean Operations is defined as follows: “Lean Operations is a series of mathematical and visual tools to streamline material and information flow. It encompasses continual waste reduction and looks at all processes from the perspective of the customer,” Lean Operations And Six Sigma-Frequently Asked Questions, (Anon., 2008). “Six Sigma is a system for reducing variation in processes using advanced statistical techniques. It seeks to reduce defect levels to 3.4 per million units produced or transactions processed,” Lean Operations And Six Sigma-Frequently Asked Questions (Anon., 2008). The Six Sigma And Lean Operations help BI to reduce TPT, thus, optimising inventories, through producing more accurate data when implementing advanced statistical and mathematical computations when yielding data. This data is yielded mostly through the use of high quality technologies and tools (i.e., progressive computer software and programs, etc.) Read More