Case study 4- Eastern Pharmaceuticals

Problem Statement:
This case is about Eastern Pharmaceuticals Ltd.(Eastern), here, the problem is the lack of
communication between the marketing and the purchasing department due to which the process
of sample sending, sample filling, and finished products is obstructed causing a delay.
Moreover, the Marketing department decided to give a 100% contract to John Cao without
meeting with the purchasing department. Andrew Baines, assistant purchasing manager,
thought upon giving 25% of the contract to a supplier Lucas. The budget is for the marketing
department but the decision of purchasing department matters a lot.
List of Alternatives:
Formulation of new flowcharts showing schematic processes between purchasing and
marketing departments.
Purchasing must have the major control over all the decisions made however, the marketing
department should aid in making decisions about the design of purchasing samples but first
consulting and knowing the requirements with the purchasing department. Marketing
department should focus and intervene on advertising sample’s part.
Finance department should release the budgets on time however, it should also verify how
much amount to release for each department and looking at the case purchase department
should be first allowed to work upon and then only releases be done.
Decision Criteria:
The decision criteria should be based on the capital/costs, Time, Quality. You can’t just give
the filling and packaging to a company first you need to look at the requirement of packaging
your product require( in this case the pharmaceuticals products).Purchasing and marketing
department is included but duties and responsibilities not clear and thus, first of all after the set
of roles ,responsibilities, decision making, a comprehensive flow chart to be developed on and
this may require some amount of time and money. Also, to work better inner consultation and
outer consultations is necessary moreover, each department must audit on their own and
financial departments should not miss the audit part. Each co-packaging company filling
feasibility should be looked upon and tallied. Quality should never be compromised;
standardization and benchmarking are necessary along with the backup contingency planning
to avoid unforeseeable events.
Analysis:
Contract filling seems to be the major issue; here the problem is of coordination between the
marketing and purchasing department. Separate duties and responsibilities not being assigned
seems to be the major issue. To avoid the conflicts both departments should look upon basing
on the common grounds which will not only minimize the cost but also make the purchase
packaging and fillings useful to the purchasing department so, that each dollars spent will
generate an extra revenue.
There should be a demarcation line between the purchasing and marketing department.
Purchasing department needs to maintain set of rules, procedures while choosing the tablets
and other medicinal items co-packaging or contract packaging firms. Marketing department
has the right to look in the designs of packaging being done but the purchasing department
decision carries a most however, marketing departments should not rush on without letting
purchase department analyse the quotations. If marketing departments directly decides than
that decision might cause a loss since useful stocks might not be packaged on time and even
the packaging might be done differently like instead of packaging done on a vial or on a piece
strip with five different products, bellows bottle and wand tubes.
Recommendations:
New set of rules, byelaws, regulation be enacted considering the best interest of the Eastern
Pharmaceuticals. Highest standard, quality assurance should always be kept upon while
choosing the packaging firms so, that the decisions made be fruitful. Latest standard to be
chosen like ISO 8 including the gowning room. As, the matter is of high importance president
of the Eastern should also, be informed and a sound, viable decision to be taken solving the
problem. Regular interval meetings should be done and if conflict of interest arises human
resource department should look at the issue taking the help of audit department in
coordination. Interchanging information is extremely crucial among all the departments but
most of the interchange should be done with related departments like purchasing and marketing
in this case to avoid conflicts.
Action plan:
Development of new rules, byelaws, procedures in line with the legal set boundaries within
the first week of Sept.,2020.
President of the firm needs to be informed by the Andrew Baines within two days i.e., on 4th
of Sept,2020.
Interchange of information hubs to be made within the within the 6th of Sept,2020 after the
detailed meetings with purchase, marketing department on 5th of Sept,2020. Feedbacks to be
taken from each staff to reach to the conclusion point.
Human resource and accounting department to stay alert and proactive always.
On 7th final decision to be made in presence of the board of directors, president and
management head and a contract filling done by selecting the packaging firm after reviewing
all the necessitate information.
By November mid all packaging be done for Eastern Pharmaceuticals.