Ethic1 - Operations Management and Ethics In the...

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Operations Management and Ethics In the pharmaceutical industry, there are times when an operations manager must make ethical decisions regarding the company's supply chain during a public crisis. Some of these cases have been the availability of drugs such as Cipro (antibiotic) after the terrorist scare, the sudden need for smallpox vaccine, and the recent pneumococcal vaccine shortages. Drug product shortages can delay and compromise patient care and increase total costs, including those of alternative therapies, delivery devices, and staff training (ASHP Guidelines, 2001). Operations management in this industry typically needs to determine various scenarios and capacity constraints to ensure that their products are manufactured and distributed in a timely manner according to customer demand. In addition, during times of crisis, ethical considerations must be made because there may be people suffering or even dying due to a drug shortage. Many drug companies manufacture a large quantity of different products often using the same resources, equipment, and facilities. Therefore, operations managers generate production schedules to meet their company's business needs. These schedules are mainly based on customer demand and profitability of the different products. When drug shortages arise due to a crisis, such as an influenza outbreak, decisions must be made regarding how to manage the supply chain. Often, production on a product must be decreased in order to increase production of another. This is where the operations manager must make decisions of an ethical nature. A shortage of diphtheria and tetanus vaccine occurred when one of the manufacturers, claiming low revenues, discontinued its product (ASHP Guidelines, 2001). Therefore, sometimes operational management must weigh business needs as well as customer needs. Another cause of drug shortages may be the unavailability of raw materials used in the finished products. This is problematic in situations where multiple manufacturers make a drug product with material available from only one source. Therefore, operations managers must also make decisions about managing the incoming end of the supply chain. Often, the raw materials cannot be stored in large quantities due to lack of storage space and expiration of the products. In addition, budgeting constraints must be considered and this is dependent on forecasts of the amount of final product that will be manufactured. Again, business need have to be weighed carefully with the needs of the consumer. At my company, we manufactured a product that was called an "orphan drug". This meant that only a very small population was afflicted with the ailment that required the use of the drug. Obviously this was not a profitable product for our company due to a small number of sales. Our operations manager was faced with the ethical decision of continuing to manufacture the drug even though the business needs dictated that it should be discontinued. Because the drug prevented some horrible effects of a disease, the
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This note was uploaded on 09/25/2010 for the course PHARM 501 taught by Professor Gyasi during the Spring '10 term at Adams State University.

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Ethic1 - Operations Management and Ethics In the...

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