The paper "Production and Operation Management Analysis". Wyeth pharmaceuticals’ competitive placing in the pharmaceutical industry is wanting and under threat. The company needs to implement certain structural changes to maintain its competitive position in the market and to continue generating revenue. Industry changes in patent policies have limited the production period of a drug and advanced competition in the industry. There exists a threat to loss of production life for a drug. Currently, Wyeth’ s top revenue drugs, Premarin, Protonix, and Effexor are almost due to have no patent protection. The company anticipates pricing pressures shortly when similar drugs enter the market.
New regulations have also removed the two-year weaning post-patent period that protected a company from the international pharmaceutical industry (Beede 2014, pg 2). From this, we anticipate an influx of international pharmaceutical drugs into our current market. The pre-FDA approval period for a new drug has also been lengthened meaning it will take more time for a new drug to enter the market. All these factors result in a reduction of production time and an increase of competition towards the few market spaces in the industry. To retain and maintain a competitive position in the market, it was determined by the Technical and Supply sections of Wyeth that a reduction of 25% in operational cost had to be done (Beede 2014, 3).
Wyeth Pharmaceuticals has already employed some operation strategy to meet this goal. The company has 25 independent global facilities. All these facilities employ different methods in the production process. To cut the operational cost, standardization of the 25 plants is in progress in terms of operability. The facilities were also built in a manner to facilitate bulk production.
The facilities produce twice the projected output meaning at most times half of the facility is idle. This increases maintenance costs.
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