Glaxo Smithkline Supply Chain Challenges –Part II

Glaxo Smithkline (GSK) spends about GBP 800 million to develop a drug. Its efforts and money will go waste unless its customers get the product in time without any defects and have no difficulty in handling the package. In other words, every facet of GSK’s supply chain should be up to the mark. The previous article highlighted some of the supply chain challenges GSK faces. This article illustrates GSK’s response to those supply chain challenges.
Countering Market DynamicsLate pack customisation

To counter the challenge of supplying to a multifaceted US market and low volume niche markets, GSK implemented the late pack customisation programme. While typical production runs were up to 30,000 numbers for cost effectiveness, GSK could effectively produce as low as 100 or 500 packs at a time with this programme. For instance, basic boxes were volume filled with blisters at the pack site and shifted to the two distribution centres in Europe. At these centres, clear labels were printed online with country related information and applied automatically. Even country specific folded leaflets were attached automatically. Quality was ensured with three two-dimensional bar codes, one pre-printed on the box, the other pre-printed on the leaflet and another printed online on the label. Online inspection on the codes could be performed at one go owing to their inline position.

Countering Packaging Complexities
Global Pack Management

With more than 36,000 SKU’s and a six-month life cycle of its products, handling packaging specifications, associated graphics and artwork changes was an enormous task. Standardising the packaging changes was another major obstacle. GSK developed the Global Pack Management (GPM) to handle this complexity (currently in use for its prescription products). The GPM programme focussed on four major issues:

1.Change Standardisation- Packaging changes are standardised using global training and implementation programmes.
2. Developing a pack catalogue- All employees have access to a central and current set of all GSK’s packaging information. This helps foster idea sharing while achieving packaging optimisation simultaneously.
3. Central artwork development: Accordingly, only four centres (strategically chosen at US, UK, Italy and India) were to service the packaging graphic needs of all products. Earlier, 250 centres performed the same activity.
4. Uniform and centralised information technology- This helps streamline workflow. Since all the employees use the same central applications (For example, GSK adopts the graphics industry standard Apple Macintosh computers and software) it ensures uniformity. There are no serious encryption issues, if packaging artwork is transferred between similar standard systems.

Paperless labelling/electronic leaflets

According to FDA regulations, all drug companies in the US must print and attach labels to every product going into the market. So, any label or leaflet change can take up to a year to reflect with pharmacy stores first emptying existing inventory. Working along with the Pharmaceutical Research and Manufacturers of America (PhRMA), GSK has been striving hard to push forward its paperless labelling initiative. The aim of paperless labels and electronic leaflets is to prescribe information to healthcare professionals electronically. This will help instant updation as any change in the leaflet/label is reflected automatically. Patient safety is the ultimate goal of GSK.

Online Printing

GSK is working on developing online printing that matches the speed of the packaging line and prints at the desired quality level. Efforts are on to keep costs of online printing down.

Countering Supplier/Outsourcing issues
GSK realises the importance of finding and qualifying multiple suppliers to avoid any supply disruptions. For instance, for its popular Advair Diskus device, GSK has three suppliers, two in Europe and one in the US. The goal is to have enough capacity globally with all suppliers producing identical components with identical tooling on identical machines. Meeting strict regulations is of prime importance. Communication can play a vital role in establishing coordination among multiple suppliers. GSK uses an electronic CAD package. The CAD package has drawings indicating minor details and any subsequent or ongoing review to every component to overcome communication gaps if any.

Countering Operational/production challenges
GSK limits the number of equipment suppliers to minimise downtime. For instance, on one packaging line it has one supplier Schubert’s four robotic systems. The robots do the cartooning and case packing as well. In response, Schubert offers GSK the benefit of assigning a dedicated team that works for GSK alone. The team also has an office in GSK’s plant itself. Healthy supplier relationships have helped GSK minimise downtime. Moreover, all equipment from a single supplier facilitates a better understanding of the equipment functioning, than having disparate machines for same tasks. Thus training costs are also less.

Furthermore, GSK uses a central TIPS production management system that minimises downtime. The system tracks downtime data allowing for ongoing production improvements. GSK is able to maintain product quality with vision cameras and online inspection using bar code scanners. GSK prefers to be the rapid follower instead of being bleeding edge with respect to technology adoption. Instead of using ‘packaging only’ lines, GSK uses lines, which are integrated to do final assembly and packaging also.

GSK’s efforts as illustrated above have been successful. Organisations can follow its Supplu Chain Management strategies as they truly extend the value of product, packages, plants and people.