How to combine global and local sourcing in the pharmaceutical sector ? Patterns of an industry

Details

Supervisors

Blome, Constantin

Faculty

Louvain School of Management

Degree label

Master [120] en Ingénieur de gestion

Abstract

This research focuses on the question of how to combine global and local sourcing in the pharmaceutical industry (in particular for active pharmaceutical ingredients (APIs) and excipients, as well as drug production plants) by drawing insights from representative case studies. In order to operationalize this research question, six propositions have been developed and are compared to the case study evidence, leading to generalizable findings. For the purpose of this analysis, the pharmaceutical sector has been divided in four main segments, according to size and innovation levels. The categories and their corresponding case study are: ➢ Big - Generic: Abbott ➢ Small/Medium - Generic: Company A (a subsidiary of Company B) ➢ Big - Branded: Janssen (J&J) ➢ Small/Medium - Branded: Laboratoires Bailleul The approach used is thus a multiple case study methodology based on interviews with key employees from companies of the different segments. For each discussed case, the sourcing of three key elements is discussed: ➢ The location of drug production plants ➢ The sourcing of active pharmaceutical ingredients (APIs) ➢ The sourcing of excipients These findings are compared to theoretical predictions from the global/local sourcing and the transaction cost economics (TCE) theories. Following this literature review and the case study descriptions, a cross-case analysis, which is enriched by perspectives from consultants, is performed. This brings the information of the different cases together and compares it to the six propositions developed at the beginning of the research in order to draw generalizable conclusions and results.