9. The Pharmaceutical Industry - PMMI

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Liquid filling machine N.A. 1 USA 25 Blister machines Bosch 1 Germany 20 Cream filling machine N.A. 1 USA 23 Syringe filling machine N.A. 1 Germany 10 Powder filling machine N.A. 1 USA 20 Ovule and suppositories filling machine Saron 1 Italy 30 D) Last Packaging Machinery Purchase The last packing machinery purchase was made in March 2007, when the firm purchased a case filling machine from U.S. supplier Tiele. Machinery Brand Country Case filling machine Tiele USA E) Future Packing Machinery Ordering Plans, 2004-2005 Russek–Loeffler plans to acquire a filling machine from Bosch and two case filling machines to increase productivity. It also is planning to eliminate several old machines, however the budget for these investments is still pending. Machinery Units Origin Motive of Purchase Estimate Budget Liquid filling machine 1 Germany or UK Productivity US $300,000 Case filling machine 2 N.A. Expansion in production line US $200,000 F) Purchasing Policies and Financial Arrangements The company has been able to maintain production and packing using a significant portion of used equipment. Because of this experience, the company always considers whether used equipment could meet its needs for additional machines. Because of the significant demand on certain lines, the company is beginning to realize that new machines might be the only option in offering the volumes and flexibility that the company requires in certain processes. The company prefers to receive financing for equipment purchases. It has obtained financing from banks and would value financing from suppliers. All final purchasing decisions need the approval of the company’s chairman. G) Factors That Influence Purchasing Decisions 1. Price and payment terms . 2. Availability in the market. 3. Brand reputation in the Mexican market. 4. Spare parts availability. 5. Service and technical assistance from the supplier. H) Comments on Preferred Brands and Existing Business Arrangements With Packing Equipment Suppliers.\ The company believes that European machines have a stronger penetration in the pharmaceutical industry in Mexico. It considers those machines, in general, to be superior to other alternatives. Unfortunately, under current exchange rate conditions, these machines are very expensive. However, local distributors are working to offer alternatives, such as equipment rental and service packages, to try to spread the price impact over time. The company’s perception about packing machinery by origin is as follows: 185
Origin Technology Flexibility Service Price United States Good Good Good Good Germany Very Good Good Very Good Average Italy Very Good Good Good Average France Very Good Very Good Very Good Average China Average Average Poor Very Good The company believes that U.S. equipment is not the top choice for the pharmaceutical industry. The preferred choice is European equipment, but it is very expensive and spare parts are not readily available. The company said that it has had so much trouble with spare parts that it has developed an in-house shop to try to produce the spare parts needed more often. I) Strengths and Weaknesses of the Installed Machinery Brand: Sarog Strengths: • Robust machinery. • Long-lasting machines. • Trustable machines. • Precise. Weaknesses: • The price of the machine and maintenance costs are very high. • Very high costs for spare parts. Brand: Tiele Strengths: • Efficient machines. • Easy to work with. • High productivity. • Low waste of ingredients. Weaknesses: • High contract costs. J) Comments Related to Asian Packaging Machinery The company said that it has been approached by several Asian suppliers, especially from China, which have proposed very attractively priced and flexible equipment. In addition to low prices, through the Chinese embassy in Mexico the machinery suppliers are offering financing from the Chinese Commerce Department and from the Bank of China. Even as these proposals are very attractive, the company considers that the quality of the proposed machines is not good, especially because of the low quality of the metals used, which might not withstand high temperatures and might reach metal fatigue in a short period. K) Trade Show Attendance / Trade Publication Information The company reviews trade publications regularly and visits packing machinery trade shows in Mexico, the United States and Germany. The company is also abreast of the equipment used by its competitors and of the new technologies being incorporated into machinery used in the pharmaceutical industry. L) Specific Interest 186
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Page 5 and 6: Astra Zeneca only provided comments
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Page 17 and 18: A) Company Description Sanofi Avent
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9. The Pharmaceutical Industry - PMMI

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