Betapharm Case

750 Words3 Pages
EXECUTIVE SUMMARY FOR PROCUREMENT AT BETAPHARM Corp. Introduction: Betapharm corp. is one of the largest pharmaceutical companies in the world with overall share between 5-10%. A number of important patents were about to expire in a couple of years, therefore Betapharm was actively seeking for new ideas that could help facilitate the future growth. Due to tough generic competition for drugs with expiring patents and introduction of new products by their competitors, increasing the price was not an option. Betapharm decided to focus on reduction of cost by improving procurement management. Company has recently implemented centralized procurement and Emptoris ePass system that facilitates eProcurement (including reverse auctions). Company’s…show more content…
The main advantages are: * Economy of scale - Possibility of bulking the orders to get higher negotiation power and better prices * Less administrative work with regards to invoices and accounting * Better traceability of spending - Better control of what is really happening, who is purchasing what and from whom The main disadvantages are: * More bureaucracy with regards to the order cycle (one more step) * Employees might think that the company don’t trust them, Hard to keep local vendor relationship * Difficult to purchase High end products where deep product knowledge and understanding is required. Usage of e-sourcing tools, as opposed to face-to face has following advantages: * Increased transaction efficiency - Transactions occur faster. Easier to issue RFIs, ran eRAs, request sealed bids and compare the offers save time/cost (possibly less inventory since necessary products come faster) * Better transparency for offer comparison * Decreased price - As a result of reverse auction and more competitive bidding, final price might be better Disadvantages: * The competitive field is unknown to the participants (no ability to ask and no personal…show more content…
ii) A lot of administrative work can be saved by signing contracts with e.g. 3 largest chains, that could cover most of the needs. It would be advisable to link contract price to their traditional (online) prices. With orders above €2m, Betapharm could get very impressive discounts (>30%). iii) Not all hotels have access to the system, plus knowing that there are many different systems it takes additional time to adjust for each of them. We recommend set basic standards (e.g. Innovation, Regulatory, good restaurants and workout facilities shouldn’t be used as key factors in determining the hotel) and work directly with few hotel chains for best offers
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