case study -ALLEGEX NASAL SPRAY

Case Study
ALLEGEX NASAL SPRAY

Agenda
Introduction
Analysis
Alternatives
- Working Overtime - Adding an Operator - New Automated System - Overtime and Adding Operator Recommendation Conclusion

Introduction
Problem:
In Cambridge we can only produce 15,000 units of Allegex per week
We cannot meet the demand of 19,000 bottles per week
Is there a way Cambridge can meet this demand?
Purpose:
Find an option that would be best suited for Pharma to meet current and future demand.
Scope:
To discuss our options that we were given to aid in our 19,000 units endeavour.
Overtime shifts on weekends
Adding an additional operator to the line
Automating all of the packaging operations
Combine adding an operator and overtime

Analysis
Resources : Current Demand= 19,000 units/week Cambridge Facility Capacity= 15,000 units/week
People:
4 employees per shift, 3 shifts per day, 5 days per week.
Processes:
The extra 4,000 is produced in a facility in the Unites States but the changeovers are costly and inefficient. This results in a contribution of $3 less per bottle than the Cambridge plant.

Constraints:
The future demand could increase to 23,000 units per week within 2 years Allegex’s patent protection expires in 2003 which opens the door to generic imitations.

Overtime Shifts
Adding an Operator
New Automated System
Overtime and Adding Operator
Current Demand
19,000 units
19,000 units
19,000 units
19,000 units
Current Capacity
15,000 units
15,000 units
15,000 units
15,000 units
Possible Future Demand
23,000 units
23,000 units
23,000 units
23,0000 units
New Capacity
19,000 units
18,750 units
24,000 units
22,750 units
Meet Current Demand
Yes
No
Yes
Yes
Meet Future Demand
No
No
Yes
Almost
Current Labour Cost
$7,200
$7,200
$7,200
$7,200
New Labour Cost
$10,080
$9,000
$2,040
$11,880
Labour Savings
($2,880)
($1,800)