THE IMPACT OF JUST IN TIME MANUFACTURING SYSTEM

ON THE OVERALL COMPETITIVE ADVANTAGE OF A

(COMPANY) IN THE PHARMACEUTICAL SECTOR
 Table of Contents

CHAPTER 1: INTRODUCTION....................................................................................................3

1.1 INTRODUCTION.................................................................................................................3

1.2 RESEARCH BACKGROUND..............................................................................................3

1.3 PROBLEM STATEMENT....................................................................................................4

1.4 RESEARCH RATIONALE...................................................................................................5

1.5 RESEARCH AIM AND OBJECTIVES................................................................................7

1.6 RESEARCH SIGNIFICANCE..............................................................................................8

1.7 SUMMARY...........................................................................................................................8

Reference List..................................................................................................................................9

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CHAPTER 1: INTRODUCTION

1.1 INTRODUCTION

Just-in-Time (JIT) manufacturing approach can be referred to as a management strategy that can
do alignment between the supply and the production system within the required schedule. It is a
required model for the production of a company through which demand can be met within time
without no creating in advance or surplus of requirements. The main reason for which it has been
popular in management systems is for its implementation in reducing commodities holding costs
and in increasing merchandise turnover. Acacia Pharma, the UK-based pharmaceutical firm has
used this manufacturing approach to counterbalance the production and the wastage in the
procedure of exposition (Acaciapharma, 2022). This chapter of the research addresses the
research aim and objectives through which the final goals of research findings will be met.

1.2 RESEARCH BACKGROUND

The management philosophy Just-in-time management techniques control the balance between
time, quantity, and quality. The management can also be referred to as lean management as it
benefits the supply chain production process in the biopharmaceutical industry (Nugroho et al.
2020). It originated in Japan which is not considered a technique in management systems, rather
they concluded that it is a philosophy that a management system should adopt to create products
with the maintenance of wastages. It has been in practice from the very early period of 1970 by
Japanese Manufacturing Industries (Investopedia.com, 2022). Other manufacturing plants have
been involved with this system from the time of its creation and it also helped in improving the
whole just-in-time management method. There are various opinions among pharmaceutical
analysts that the application of JIT may become beneficial for other manufacturing industries
whereas it might not become able to satisfy the needs of a pharmaceutical company. Acacia
Pharma can be referred to as a retail stage biopharmaceutical organization that was established in
2007 and has branches in various countries like Cambridge, USA, UK, IN, and Indianapolis
(Acaciapharma, 2022). The pharmaceutical industry's management system and the authorized
board have focused on applying the needful methods of management to shape their production to
marginalize profit in the pharmaceutical market. They have applied and got immensely satisfied

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through various manufacturing approaches to develop its inventory structure of production and
minimize the wastage in production. Current-day pharmaceutical companies are adopting Just in
time management philosophy as they have experienced optimization in production, increased
approach to productivity reduction in cost management, and improvement in product quality.
Just the time management model works with fewer items that can be utilized properly for the
massive required production of a company thus the cash utilization process becomes efficient in
the pharmaceutical products manufacturing process. The JIT controls the following methods it
prevents over-production cost, minimizes transportation cost and waiting time, helps in saving
unnecessary usage of resources through effective production approaches, reduces the required
capital from the storage, and helps in dispensing the required inventory operations. and also
decrease defects in products. Therefore, the pharmaceutical organization’s administration team
was serious about gaining ample knowledge in the procedure of commercialization and evolution
of its clinic pharmaceutical merchandise.

1.3 PROBLEM STATEMENT

Pharmaceutical Companies have always maintained various management techniques to become

more organized and developed. They have adopted various techniques for that purpose to
stabilize their business progress and activities. Those previous systems or approaches can be
referred to as Traditional management approaches. Those approaches had been applied for a long
period by various companies in the pharmaceutical market as well as in other markets too. The
traditional supply chain management system has not become successful in maintaining proper
budgetary and proper time-scheduling production systems. Traditional supply chain management
was inefficient, overcostly, data-intensive and often the system can be defined as burdensome
work in paper documentation, conflict in maintaining related data records, and unnecessary delay
in delivering products (JDSUPRA, 2022). The traditional system in pharmaceutical industries
worked through the application of a manual reconciliation process. The system was involved in
exchange methods in a series of documentation and transaction. Modern management
approaches of pharmaceutical companies are more dynamic in maintaining multiple strategies to
make their medical production business more productive which may require the adaptation of
multiple procedures to maintain constant changes in the market situation. Traditional approaches
have only focused on stability but it was unable to consider the balance between production and

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wastage. On the other hand, JIT manufacturing approaches highlight the reduction methods of
wastage in excess overstocking and inventory process, and improvement in the efficiencies
through the reduction of managing, procuring, and storing massive amounts of raw materials and
other inventories. Previously, pharmaceutical companies were not able to conduct business
through the dynamic smart procedure to satisfy the need of balancing stability and the reduction
of excessive production.

1.4 RESEARCH RATIONALE

The pharmaceutical industry uses just-in-time management to implement its resources

effectively. JIT works on reducing cost and reducing buffer stock and enhancing flexibility to
increase profitability. Pharmaceutical Company applies this philosophy to maintain their supply
chain management more dynamically (IFM, 2022). The pharmaceutical industry has experienced
ample growth from 19.3% to £25bn. The current annual growth rate has become 3.6% due to the
implementation of the JIT management philosophy (Global ambition, 2022). With the
application of JIT, supply chain and logistics overview of the industry have become faster which
contributes largely to the growth of sales margin.

Acacia Pharma has experienced massive growth in its production during the current years
through its effective supply chain management system. It has developed its inventory cost
through the implementation of Just-in-time management.

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 Figure 1.1: Growth in Production of Pharmaceutical companies

(Source: Pharmasalmanac.com, 2022)

From the above figure, it is evident that JIT has helped in increasing 23% of market access and
8% manufacturing growth in the pharmaceutical industry (Pharmasalmanac.com 2022). JIT has
become beneficial in maintaining logistical performance in the new normal era in Covid as it
makes the supplying process of medicines globally. JIT has allowed the management to decline
the number of parts and steps in their production through standardizing, refining, and examining
the fundamental method. Determining the inventory guidelines, unnecessary activities,
authorities, and requirements have helped in their growth in disastrous situations like the
situation of Coronavirus globally. Widespread disaster requires supply according to their urgency
and pharmaceutical companies have to produce those required medicinal products. JIT has
become helpful in maintaining the urgent supply system of Acacia Pharmacy (Brakman et al.
2020).

Figure 1.2: Impact on Logistic Market of Pharmaceutical companies

(Source: Pharmasalmanac.com, 2022)

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The UK health funding has grown by 1.8% which is 124.7bn euros between 2017-2018 (Global
ambition, 2022). The following research is going to explore the measurement of JIT management
philosophy and the opportunities it can bring to develop the management in pharmaceutical
companies. JIT will enhance the productivity in company production and the manufacturers in
pharmaceutical companies will be able to maintain a more rapid outcome turnaround. The
company management will also become focused on “Total Quality Management” with the help
of its quality control techniques (Pambreni et al. 2019). Through the benefit of Just in time
management, a company will be able to focus on less inventory as massive merchandise can
become the cause of deterioration in the industry. Therefore, lower inventory will be maintained
by the pharmaceutical company and that will bring massive profit to their production gradually.

1.5 RESEARCH AIM AND OBJECTIVES

Aim

The research aims to evaluate the implementation of JIT in the current supply chain management
system of UK pharmaceutical companies like Acacia Pharma.

Objectives

● To analyze the role of JIT in the supply chain management of a UK pharmaceutical

company named Acacia Pharma
● To address the outcome of waste management through JIT in the supply chain of Acacia
Pharma, a UK pharmaceutical company
● To find out the gaps or challenges in JIT faced by UK pharmaceutical companies in the
competitive market
● To recommend some effective strategies for the UK pharmaceutical company for
improving the JIT in supply chain management

Research Questions

1. What is the role of JIT in the supply chain management of a UK pharmaceutical company
named Acacia Pharma?

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 2. What is the outcome of waste management through JIT in the supply chain of Acacia
Pharma, a UK pharmaceutical company?
3. What are some of the challenges in JIT faced by UK pharmaceutical companies in the
competitive market?
4. What can be some recommended strategies for the UK pharmaceutical company for
improving the JIT in supply chain management?

1.6 RESEARCH SIGNIFICANCE

The main significance of this research is to find the implementation techniques related to the Just
In Time management methodology in the pharmaceutical industry. Pharmaceutical Industry
faces difficulty in delivering the product within time and lacks in balancing the factors related to
wastage control as well as production cost management in Acacia Pharmacy. The research has
included the whole analysis to assess the JIT philosophy that can bring advantages to grow their
overall production. Therefore, research on JIT can be done effectively as an essential tool to
reduce massive costs in inventory as well as manage the massive wastages (Brakman et al.
2020). With the implementation of the research, the respective company will be successful in
making supply chain activities stronger, and thus, the threat of exceeding cost from the
production could be avoided. The pharmaceutical companies like Acacia Pharmacy can build a
better inventory management system where the company will be able to deliver their product in
any territory without fail by the implementation of JIT in their management.

1.7 SUMMARY

The whole research has been conducted about the Just in time management approaches which
have helped Acacia Pharma massively in their productivity growth and their supply chain
product management system. This method has introduced the process of production with the
lowest waste. Pharmaceutical Industries go through massive wastage to produce various
medicinal products. This UK-based biopharmaceutical company Acacia Pharma has been
focused on commercializing and expanding pharmaceutical-related products. This organization
has identified essential and commercially lucrative unmet requirements in the medical treatment
field such as invasive procedures of surgery or chemotherapy. During the massive disastrous
situation, JIT has helped them to deliver products and it has also benefited in their cost reduction

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in production. Therefore, it can be concluded that the proper usage of JIT can bring beneficial
results in the whole business procedure of a pharmaceutical company.

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Reference List
Journals

Brakman, S., Garretsen, H. and van Witteloostuijn, A., 2020. The turn from just-in-time to just-
in-case globalization in and after times of COVID-19: An essay on the risk re-appraisal of
borders and buffers. Social Sciences & Humanities Open, 2(1), p.100034.

Nugroho, A., Christiananta, B., Wulani, F. and Pratama, I., 2020. Exploring the Association
Among Just in Time, Total Quality and Supply Chain Management Influence on Firm
Performance. Int. J Sup. Chain. Mgt Vol, 9(2), pp.920-928.

Pambreni, Y., Khatibi, A., Azam, S. and Tham, J.J.M.S.L., 2019. The influence of total quality
management toward organization performance. Management Science Letters, 9(9), pp.1397-
1406.

Website

Acaciapharma, (2022) About: Acacia Pharma Available at: https://acaciapharma.com/about-us

[Accessed on: 11.08.2022]

Global ambition, (2022) About: UK Pharmaceutical Sector Overview Available at:

https://globalambition.ie/wp-content/uploads/2020/03/Enterprise-Ireland-Report-UK-
Pharmaceutical-Manufacturing-Sector-Overview.pdf [Accessed on: 11.08.2022]

GWP Group, (2020) About: 8 Problems of Just in Time Packaging Supply (JIT) – and How to
Avoid Available at: https://www.gwp.co.uk/guides/just-in-time-packaging-supply/ [Accessed
on: 11.08.2022]

IFM, (2022) About: Just in time manufacturing Available at:

https://www.ifm.eng.cam.ac.uk/research/dstools/jit-just-in-time-manufacturing/ [Accessed on:
11.08.2022]

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Investopedia.com, (2022) About: Just-in-Time (JIT) Available at:
https://www.investopedia.com/terms/j/jit.asp [Accessed on: 11.08.2022]

JDSUPRA, (2022) About: Traditional Supply Chain Challenges During COVID-19 Spur
Innovation in Blockchain Applications Available at:
https://www.jdsupra.com/legalnews/traditional-supply-chain-challenges-78699/ [Accessed on:
11.08.2022]

Pharmasalmanac.com (2022) About: Rethinking the Global Pharmaceutical Supply Chain Post-
COVID-19 Available at: https://www.pharmasalmanac.com/articles/rethinking-the-global-
pharmaceutical-supply-chain-post-covid-19 [Accessed on: 11.08.2022]

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