Genentech Case Study
Overview: Genentech Company is facing a lot of problems and difficulties in order to implement and incorporate best technologies for future growth regarding uncertain future of its cancer drugs. The senior vice president of product David Ebersman along with his team is busy outlining the best approach to it. Central Issue: What measures should Genentech employ or implement in order to increase their production and manufacturing capacity to meet the future anticipated and predicted demands over the next 2 to 3 years for a family of new cancer drug?
Recommended courses of action: They should try to further improve the current process by boosting throughput. Try to build relationships with other manufacturers and additional companies to meet the Excess demands by negotiating contracts and agreements. Start searching for economical and strategic locations for building up of new manufacturing plant. It’s important to keep looking for space and be ready with a blue print of an additional facility.
Try to stay away from messing up with FDA regulations by avoiding long period revalidation. Focus should be laid on fully completing the CCP2 at Vacaville. Basis for recommendations: There is no proper assurance of a continuous growth and increase in sales by creating the CCP3 facility. The investment on implementing CCP3 is worth $600 million. And it is still not clear about the effectiveness and market response of Avastin. The drug could also result in failure and by investing CCP3 will surely cost us $6oo million.
The golden rule for the moment is to wait and watch as sales are dependent on market response and there is point investing $600 million with hinting success. Moreover, the location at Vacaville won’t be able to withstand the additional load of CCP3, if we built it on the same location alongside CCP2, which is not fully completed. The process and work force will be at risk of mounted pressure and in turn new employees that might be hired could hurt the comfort levels of existing employees for some time.
As the drug is in premature stage it is very risky to play with the existing location and employees. Instead areas like capacity expansion should be researched as it will be costing way less than building up new unit. Also, external cost effective and superior contract manufacturing deals could be stuck from outer suppliers and manufacturers to speed up operation and demands. Through proper research and planning there are incredible chances of improving certain process.
They can increase the capacity by 20% by making three changes; by monitoring the raw material to minimize contagion, checking involvement in production process, tightly sealing of the pieces of equipment. Once CCP2 is fully completed the production capacity will tremendously increase. A plan and strategy should be devised to look at cheap, resourceful locations for building new plants and be ready with an action plan. Also, efforts should be laid on hunting technical and cheap labor for building of new plant.
Significant factors: Expensive venture CCP3 as building new plant will cost over $600 million. Challenge of facilitating two simultaneous projects. (CCP2 and CCP3 at Vacaville) Uncertain scale and scope of future demand for Avastin. There is a risk of losing profit margins and gloomy sales forecast isn’t helping the cause. Management facing a dilemma and challenge in how to run at large capacity Quality control issues in large capacity.