GSK Annual Report 2002

14 GlaxoSmithKline Description of business
Primary supply chain
This is a global organisation with 13 sites, spread across 6
countries, where a broad range of active ingredients for antibiotic
and non-antibiotic products are manufactured and packaged. The
sites are located in Australia, India, Ireland, Singapore, the UK and
the USA. The majority of the active ingredients manufactured by
the primary supply chain are supplied to the secondary
pharmaceutical sites in Europe, North America and International.
Secondary supply chain
European region
There are 17 sites in the European region spread across eight
countries. Between them the European sites manufacture nearly
all of the major pharmaceutical products marketed globally by
GlaxoSmithKline in a wide variety of finished dosage forms.
North America region
There are six pharmaceutical sites in the North America region
located in Puerto Rico, Canada and the USA.
International region
The International region comprises 32 manufacturing sites, in
19 countries, spread across six distinct areas. There are five sites in
Middle East/Africa, 17 sites spread across the Asia Pacific area,
four sites in China, one in Japan and five in Latin America.
GlaxoSmithKline integration
This long-term, integrated change programme implemented at the
time of the merger is called the Global Supply Network (GSN) and
is structured to deliver benefits through five major streams of
activity:
• Reduction in above-site infrastructure and costs
• Procurement initiatives
• Continued network rationalisation
• Logistics improvements
• Operational excellence and lean sigma improvements.
As part of the network rationalisation plan, production ceased in
2002 at 12 sites in countries which included Argentina, India,
Japan, Kenya, Mexico, South Africa, Taiwan, Venezuela and the
USA. The disposal or closure of further sites were announced in
the year.
External suppliers
Procurement is a global function supporting all functions and areas
of the GlaxoSmithKline business. Manufacturing is one of the
largest areas with over £2 billion spent with many external
suppliers every year, including the purchase of active ingredients,
chemical intermediates, part-finished and finished products. GMS
has taken appropriate steps to protect its supply chains from any
disruption resulting from interrupted external supply through
appropriate stock levels, contracting and alternative registered
suppliers.
Vaccines supply chain
Vaccine production is located principally at Rixensart, Belgium, with
six other sites worldwide. Managing the vaccine supply chain
involves anticipating market needs and using a flexible approach to
be able to meet fluctuations in demand. These are based on
forecasts from the different markets and firm orders from health
authorities for mass vaccination campaigns. Bulk, filling and
packaging is carefully balanced and stocking of vaccines helps
manage short-term increases in demand. Such increases are
prompted by disease outbreaks or increased demand from the
public owing to disease awareness campaigns.
Consumer Healthcare supply chain
There are 27 Consumer Healthcare manufacturing sites spread
across 16 countries. The Consumer Healthcare supply chain is
diverse and includes the manufacturing and supply of OTC
medicines, Oral care, Nutritional healthcare and Smoking control
products. As well as internal facilities, over 230 contract suppliers
are used worldwide.
Research and development – Pharmaceuticals
The global biological and pharmaceutical Research and
Development (R&D) function in GlaxoSmithKline is responsible for
discovering, developing, registering, commercialising and
supporting effective marketing of innovative prescription
medicines, vaccines and delivery systems for the treatment and
prevention of human disease.
Fundamental to this goal is a thorough understanding of the
diseases under investigation, involving pioneering work in genetics
and predictive medicine, as well as more traditional research
disciplines. In addition to the work to create new medicines and
vaccines, extensive efforts are made to gain a clear understanding
of the unmet needs of patients and of healthcare providers and
payers as a guide to the overall direction of R&D.
In 2002 GlaxoSmithKline invested over £2.6 billion in
pharmaceuticals R&D. R&D is an organisation that benefits from
the insights of top scientists around the world and employs over
15,000 staff in biological and pharmaceutical R&D activities, at
more than 20 sites worldwide, including:
• UK: Beckenham, Brentford, Cambridge, Dartford,
Greenford, Harlow, Stevenage, Tonbridge, Ware,
Welwyn
• USA: Bristol, Tennessee; Philadelphia, Upper Merion and
Upper Providence, Pennsylvania; Research Triangle
Park, North Carolina
• Belgium: Rixensart
• Canada: Mississauga
• France: Les Ulis, Evreux
• Italy: Verona
• Japan: Tsukuba Science City, Takasaki
• Spain: Tres Cantos, Madrid.
During 2002, R&D continued to deliver a range of products to the
market and accelerated progress in the early stages of
development. The extensive in-licensing activity begun in 2001 has
continued and both the late-stage and the earlier pipeline have
been significantly enhanced. Practical prioritisation and
management of the portfolio of compounds in development has
also been a focus, ensuring that GlaxoSmithKline R&D invests its
resource to achieve the optimum value and deliver new medicines
to patients.