Problem Identification: Eastern Pharmaceuticals is struggling to supply its sales representatives with enough samples in a timely manner due to late ordering of materials from suppliers, tablets shortages, and incorrectly printing the mailing lists. The shortages of samples have a direct impact on the company's bottom line as most its business comes from convincing doctors to sell their products by providing them with samples on a regular basis. In a highly competitive industry with lots of similar products available, doctors can easily switch to a competitor if samples are not promptly replenished. Root causes: The sales strategy which is driven by its ability to supply doctors with samples doesn't vertically align with the company's production capacity as certain unusual sample cartons can slow down production by up to 50%%. Also, there's no horizontal alignment between and among functional areas. This is evident in the dysfunctional relationship that exists between the marketing and purchasing department. Shannon, from Marketing, made a deal with Lucas's sales representative, John Cao, promising him 100%% of the contract filing without first consulting with the purchasing department which has always been their responsibility. In this case, Andrew had already been quoted a better price from a different reliable supplier, and there was significant inventory of old-style samples in the warehouse that marketing didn't consider. Solutions: Ensure process compliance to prevent non-purchasing staff member from making any maverick buying which may lead to higher total cost of ownership and undermine the purchasing's credibility with other departments or suppliers. Adapt an enterprise resource planning (ERP) system to integrate all the various functions within the organization. This will help with purchasing, forecasting, planning, order tracking, shipping, receiving, scheduling and inventory management. Use RFID to track product throughout the manufacturing process; automatic tracking of inventory levels and more accurate inventory identification and picking Implementation Strategy: A mandate from top management to use the supply process may be required to ensure that no further unauthorized purchasing decisions are made by the marketing team. Develop a cross-function sourcing team to improve communication throughout the supply process, especially in the critical stages of need recognition and description Hire consultants and project managers to help set-up with ERP. It's important to examine how processes are currently used and the changes required prior to implementing the system. Contingency plan: The cost of ERP may be too expensive and disruptive to the organization. To avoid that, the company can instead use a cloud-based system which offers similar benefits with the cost advantage of pay-as-you-go instead of upfront
