Eli Lilly Case Study

In: Business and Management

Submitted By pds4409
Words 1959
Pages 8
Executive Summary
With the evolution of the Pharmaceutical industry in the US and the current decline of the blockbuster products of Eli Lilly which were coming to an end of their life cycle, the company is in the process of developing three new products that plan to launch in 1996. A great number of factors such as decrease of the industry growth rate, steady decline of innovation, increasing competition from competitors, generic drug substitutes, government regulations and an ever increasing cost in manufacturing, R&D and quality protocols and processes have made the decision to launch new products into the market place a necessity and created a topic of debate within the management and leadership of the company.

In response to these conditions, the management has established a company-wide initiative and goals to accomplish in the launching of their three new upcoming products. These goals were set up keeping in mind that the company wanted to bring new innovative products to their customers faster, cheaper and serving the needs of their customers.
1. Reduce manufacturing costs by 25%.
2. Reduce product development lead time by 50% as compared to the current lead time of 8 to 12 years.
3. Never Stock out – meet projected manufacturing demands.

The dilemma facing this company and the upcoming challenge has given rise to a difficult decision by Steve Muller, Manager of Strategic Facilities and Planning at Eli Lily and Company. The decision was to decide on the type of manufacturing facility that will be used in the manufacturing of these three new products. This was a critical decision as important factors such as Total overall costs of operations, Time to market, the capital investment, long term and short term development decisions, plant capacity profit margin and finally aligning all these decisions to the company’s goals and strategy.


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