A root cause analysis of stock-outs in the pharmaceutical industry
Author(s)Sun, Xuewen, M. Eng. Massachusetts Institute of Technology; Yin, Bangqi
Massachusetts Institute of Technology. Engineering Systems Division.
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PharCo (an assumed name) is a leading global healthcare company with well-recognized brands of both pharmaceutical and consumer healthcare products. As PharCo continues to expand its global presence, product stock-outs in their pharmaceutical business unit have been consistently increasing. PharCo suspected that manufacturing quality defects were a major cause of stock-outs, reducing the production yield and preventing the company from meeting customer demand. To help test this hypothesis and address the stock-out challenge, we reviewed existing research on the subject of product stock-outs within the pharmaceutical industry. To understand PharCo's manufacturing process, we conducted on-site visits and reviewed their quality control practices. Finally, we designed a mixed methods approach that combines qualitative and quantitative techniques to analyze the root causes of product stock-outs at PharCo. The analysis revealed that, instead of manufacturing quality defects, regulatory issues were the primary cause for stock-outs at PharCo. Regulatory challenges associated with developments such as new product launches, license renewals, and formulation modifications need to be addressed for PharCo to reduce their stock-out level.
Thesis: M. Eng. in Logistics, Massachusetts Institute of Technology, Engineering Systems Division, 2014.Cataloged from PDF version of thesis.Includes bibliographical references (pages 45-46).
DepartmentMassachusetts Institute of Technology. Engineering Systems Division.
Massachusetts Institute of Technology
Engineering Systems Division.