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Young Again Pharmaceuticals Case 9 1

Question

CASE 9-1 Young Again Pharmaceuticals Cliff Crandall, senior director of transportation for Young Again Pharmaceuticals (YAP), is gearing up for his company’s most critical product rollout in more than a decade. YAP has developed a breakthrough liquid suspension that reverses the ageing process for anyone over 35 years of age. Available only by prescription, the new pro- duct has been dubbed “Twenty-something in a Bottle” by the media. Demand is ex- pected to be very high despite the outlandish price tag of $395 for a month’s supply.

The product is being manufactured in YAP’s San Juan, Puerto Rico laboratory and will be distributed to major retail pharmacies in the United States and Canada. Cran- dall is responsible for selecting the mode and contracting with carriers to deliver the product. He is concerned about the safe and timely delivery of the initial product ship- ments in May to the retailers’ distribution centers. The product is high value, some- what fragile, and of interest to thieves. Some product, stolen from the laboratory, has already appeared on auction websites.

In an effort to make effective transportation decisions and minimize YAP’s risks, Crandall decided to hold a brainstorming session with his logistics team before signing any carrier contracts. The discussion of key risks produced the following list of concerns: 

  • “If shipments are late or incomplete, retailers will penalize us with vendor chargebacks. You know they will hit us with small fines for delivery mistakes.” • “I’m worried about shipment delays or freight loss from hurricanes in the Atlantic Ocean.”
  • “You’ve got to consider temperature sensitivity issues. If the product freezes, we won’t be able to sell it.” 
  • “I’ve been reading about all the piracy problems experienced by ocean car- riers. You know, a 20-foot container of our product has a retail value of nearly $275,000.” 
  • “I’m more concerned about theft of individual cases at ports and while the product is on the road.” • “We’re looking at border delays and Customs fines if we don’t properly document and mark our freight.” 
  • “Our brand image will take major damage if the product gets into unauthor- ized distribution channels due to theft or misdirected deliveries.”
  • “The company sustainability push has led to reduced packaging and biode- gradable packing materials. If the cartons get wet or bounced around, we’re going to end up with a lot of damaged, unsellable product.” 
  • “Those major East Coast ports can get very congested during peak shipping season. That will cause delays.”

By the time the meeting was over, Crandall realized that he needed to spend some time looking into these issues. While he was pretty sure that some problems were re- mote, Crandall thought that it would be wise to evaluate each one. His new concern be- came how to conduct an effective risk assessment.

CASE QUESTIONS 

  1. Assess the risks identified in the brainstorming session. Create and populate a table similar to Figure 9-2. 2. 
  2. Based on your answer to Question 1, what are the three primary risks that you be- lieve YAP must address? Why?
  3. What do you recommend that YAP do to mitigate each of the three risks identified in Question 2?
  4. What should YAP focus on after attempting to mitigate these transportation risks?
Solution

Title: Young Again Pharmaceuticals Case 9 1
Length: 2 pages (622 Words)
Style: MLA

Preview

Transport

 Advanced Manifest regulations 
 Mode Inbound freight Outbound Freight
 Air 3 hours prior to arrival in U.S. or “wheels up” areas which are nearby to the port 4 hours prior to arrival in U.S. or “wheels up” from areas close to the port
 Ocean 12 hours prior to lading of the products at the port. 24 hours prior to departure from U.S. port.
 Rail 3 hours prior to arrival at a U.S. port. 3 hours prior to the arrival of the train at the border
 Road FAST: 30 minutes prior to arrival in U.S. Non-FAST: 1 hour prior to arrival at the destination 1 hour prior to the arrival of the truck at the U.S boarder
   

 

The primary risk is the damage of goods due to shaking of the boxes during transport. This mostly occurs with the trucks, which are not qualified for the transport of the delicate products. If the products are shaken and the bottles hit each other in the boxes, they will and up breaking thus bringing losses to the company (Mark 65).

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