Genentech Case
COURSE
Operations Management
WRITER
Group HZM
CLASS
M1412091
PROFESSOR
Vinod R. Singhal
Case
Genentech-Capacity Planning
Howard 1141209823 Maxime LECOCQ 1141209829 Junhai Zhou 1141209226
Genentech Case Suggestion The problem before David Ebersman, VP of product operations at Genentech, is fairly basic. The demand for the company’s drugs is expected to grow substantially over the next decade, and current production capacity is unable to keep up with that projected demand. The VP is, therefore, considering the details on building a new plant for cell culture production. There is a lot of uncertainty on the success of clinical trials for new applications of Avastin, Genentech’s potential blockbuster drug, and Ebersman needs to make a decision fairly soon.
1. After going through all the various scenarios for Genentech, the best recommendation for Ebersman in Our mind is to wait another year before committing to the new expansion. There are simply far too many unknown variables to make a good projection of future demand for the next decade based on the information available in November of 2014. The success of clinical trials for either lung or breast cancer indications will greatly impact the demand for Avastin. If both of them fail, then current production facilities would be enough for expected demand. However, if both or one of them succeed, it would then be imperative for the company to build new production capacity as soon as possible. The scientists in charge of process improvement also stated that they were confident of significant progress if they were given another year to test. If they could improve the process for a 10% gain in efficiency, then it could potentially eliminate the need for building a new facility. The worst scenario in this case is the scientists are not able to improve production efficiency, and new data implies that both of the
Operations Management
WRITER
Group HZM
CLASS
M1412091
PROFESSOR
Vinod R. Singhal
Case
Genentech-Capacity Planning
Howard 1141209823 Maxime LECOCQ 1141209829 Junhai Zhou 1141209226
Genentech Case Suggestion The problem before David Ebersman, VP of product operations at Genentech, is fairly basic. The demand for the company’s drugs is expected to grow substantially over the next decade, and current production capacity is unable to keep up with that projected demand. The VP is, therefore, considering the details on building a new plant for cell culture production. There is a lot of uncertainty on the success of clinical trials for new applications of Avastin, Genentech’s potential blockbuster drug, and Ebersman needs to make a decision fairly soon.
1. After going through all the various scenarios for Genentech, the best recommendation for Ebersman in Our mind is to wait another year before committing to the new expansion. There are simply far too many unknown variables to make a good projection of future demand for the next decade based on the information available in November of 2014. The success of clinical trials for either lung or breast cancer indications will greatly impact the demand for Avastin. If both of them fail, then current production facilities would be enough for expected demand. However, if both or one of them succeed, it would then be imperative for the company to build new production capacity as soon as possible. The scientists in charge of process improvement also stated that they were confident of significant progress if they were given another year to test. If they could improve the process for a 10% gain in efficiency, then it could potentially eliminate the need for building a new facility. The worst scenario in this case is the scientists are not able to improve production efficiency, and new data implies that both of the