Thesis Archive
A System Study on The Non-Penicillin Production of Sydenham Laboratories Inc. (2006)
de Luna
Nicholas
Tanega
Kathleen
Abstract:
-Established in 1971, SYDENHAM Laboratories Inc. (SLI) derives its name from one of the great British physicians, Dr. Thomas SYDENHAM. SLI manufactures nonpenicillin, penicillin and cephalexin oral drug preparations in the following dosage forms: Tablet, Capsule, Syrup, and Powder for Suspension. Non-penicillin, penicillin and cephalexin products are manufactured in separate buildings with exclusive air-handling systems to ensure zero-cross t. SLI also manufactures food supplements in the above dosage forms. The company is included in the pharmacy industry. The product line comprises of three parts – the non-penicillin, penicillin, and cephalexin oral preparations in the following dosage forms: capsule, tablet, and syrup (liquid). In conducting a situation appraisal, the company’s strengths, weaknesses, opportunities and threats were determined. Sydenham’s strengths included its high attendance rate, low rejects, low deviation between their target and actual output, and minimal product returns. On the other hand, like all other companies, Sydenham has its weaknesses. The company’s total cancelled orders amounted to 31.39% of the total orders for the year 2004. In addition, the machines are not fully utilized to its maximum capacity. The company also has an opportunity by using an existing machine which could well double the output of the production. The threats of the company include the Peso- Dollar exchange rates since raw materials are imported, and a threat of mislabeling product which may cause the company to be shut down. The corresponding seriousness, urgency, resource, and growth of the weaknesses, opportunity, and threats were evaluated. Based on the WOT-SURG analysis, the problem that has the most impact on the system was identified; it was the 31.39% cancelled orders. This problem has resulted into opportunity costs of Php889,460.70 monthly. A fishbone diagram was created to fully determine the root of the problem. The possible causes of the cancellation of orders are the production line bottleneck, machine downtime, poor production scheduling, standards, and worker productivity. Due to the problem, the company has incurred opportunity costs totaling to Php10,673,528.44 in the year 2004. A Pareto Analysis was used to narrow down the initial causes to the true roots of the problem. The Kepner-Tregoe Decision Analysis (KTDA) was used to evaluate the alternative solutions formulated for each final cause. The proposed solutions to reduce cancelled orders are as follows: Introduce a program for production scheduling, hire additional supervisors to monitor workers, and utilize available Sigma Mixer. The costs and benefits of the proposed solutions were evaluated. The computed net present value (NPV) of the proposed solutions was positive, making them beneficial for the company. The total net benefits incurred due to the proposed solutions amount to Php9,891,233.19. The net present value was evaluated over a five year time period, which amounted to Php23,889,349.90. Since the NPV is positive, the proposed solutions are financially feasible and will be beneficial to the company.
Adviser:
Mr. Dennis Cruz
[email protected]