9. The Pharmaceutical Industry - PMMI

Carton Machines CAM 1 Italy 21
Plastic wrapping machines Pester 3 Germany 3
Pallet machines MAB 1 Italy 16
Tablet filling machines Korsch 3 Germany 7
Tablet filling machines Fette 1 Germany 2
Envelope sealing machines Siebler 5 Germany Two: 6 years
Three: 15 years
The company noted that the machinery it has in operation is mostly developed to application
specifications presented by Bayer to its machinery suppliers.
D) Last Packaging Machinery Purchase
Over the 2006-2007 period, the company spent approximately US $5.25 million in the purchase
of packaging machinery.
The most recent purchase was during 2007, and included the machinery presented in the
following table:
Machinery Brand Country
Blister machine Ulhman Germany
Cartoning machine Ulhman Germany
E) Future Packaging Machinery Ordering Plans
Bayer has developed a purchasing budget spanning over the next seven years. This budget
requires the approval of both the top management of the Mexican operation, as well as the
world headquarters in Germany. The planned budget estimates expenditures in packaging
machinery of approximately US $2 million in 2008 and US $ 2.5 million in 2009.
Bayer purchases packaging machinery from suppliers specializing in the pharmaceutical
industry. The next packaging machinery purchase will include the following:
Machinery Units Origin Motive of
purchase
Tablet packaging machine T.B.D. Germany Replacement
Plastic Wrapping machine T.B.D. Germany Replacement
F) Purchasing Policies and Financial Arrangements
Before proceeding with the supplier selection of packing machinery, the company develops a
detailed analysis of the specifications that must be met by the desired machine. Purchasing is
based upon the specific requirements of the company, and not on the adaptation of an existing
machine into their operation.
Once the company has developed the desired characteristics and specifications, it circulates
the information to various potential suppliers. These companies commonly use a basic machine
model, and develop a plan to retrofit the machine for offering a custom-specified machine that
meets the precise requirements outlined by Bayer.
Bayer commonly requests proposals from three to four qualified packing machinery suppliers.
The company usually agrees to a 50 to 60% down payment, with additional payments made
during the construction of the machine. The final payment of 10% is made once the machine is
in operation. The purchase contract has clear definitions of the specifications that must be met
by the machine; the supplier must commit to complying with the required performance.
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