How Martin Dow is achieving strategic fit?

Strategic fit refers to the alignment between a company's capabilities, resources, and competitive
advantage, and the opportunities and challenges present in the external environment. It involves
developing a coherent and consistent strategy that enables the company to leverage its strengths and
resources effectively to achieve its objectives.

Here are some common ways in which a company like Martin Dow could achieve strategic fit:

1. Market Segmentation: Martin Dow may identify specific market segments that align with its strengths
and capabilities. By focusing on these segments, they can tailor their products and services to meet the
specific needs of the customers in those segments, thereby achieving a better fit between their offerings
and the market demand.

2. Product Development and Innovation: Martin Dow might invest in research and development (R&D)
activities to develop new products or improve existing ones.

3. Vertical Integration: Martin Dow could pursue vertical integration by expanding its operations
upstream or downstream in the pharmaceutical value chain. For example, they might acquire or partner
with suppliers of raw materials or distributors to gain more control over the supply chain and enhance
efficiency.

4. Strategic Partnerships and Alliances: Martin Dow might enter into strategic partnerships or alliances
with other companies in the pharmaceutical industry or related sectors.

5. Geographic Expansion: Martin Dow may explore opportunities to expand its geographical footprint.
By entering new markets, they can tap into growing demand.

6. Operational Efficiency: Martin Dow could focus on improving operational efficiency and cost-
effectiveness. By streamlining processes, optimizing the supply chain, or adopting new technologies,
they can enhance their competitive advantage and achieve a better fit with market requirements.
 Production, Planning, Control

Production: The production process in a pharmaceutical company involves the manufacturing of drugs
and pharmaceutical products. It typically includes the following steps:

a. Formulation Development: This stage involves research and development to design the formulation of
the drug, including selecting the active ingredients, excipients, and dosage form.

b. Raw Material Procurement: Procurement teams identify and source the necessary raw materials, such
as active pharmaceutical ingredients (APIs), excipients, packaging materials, and other components
required for manufacturing.

c. Manufacturing: This step includes the actual production of pharmaceutical products according to
established formulas and quality standards. It involves various operations such as weighing and mixing
ingredients, granulation, tablet pressing, encapsulation, filling, and packaging.

d. Quality Control: Quality control tests are conducted at different stages of the production process to
ensure the products meet the required specifications and comply with regulatory standards.

Planning: Planning plays a crucial role in managing production operations effectively. It involves
developing a detailed roadmap for production activities, resource allocation, and scheduling. Key aspects
of production planning include:

a. Demand Forecasting: Accurate demand forecasting helps determine the production volume required
to meet customer demand while minimizing inventory costs.

b. Capacity Planning: Capacity planning involves assessing the production capacity of manufacturing
facilities and ensuring that it aligns with the expected demand. This helps optimize resource utilization
and avoid bottlenecks.

c. Production Scheduling: Production scheduling involves creating a timeline and sequence for different
manufacturing activities. It considers factors such as product complexity, equipment availability,
workforce capacity, and lead times.

d. Inventory Management: Effective inventory management ensures an adequate supply of raw

materials, intermediate products, and finished goods to support uninterrupted production while
minimizing inventory carrying costs.

Control: Production control involves monitoring and regulating the production processes to ensure
efficiency, quality, and adherence to established standards. Key aspects of production control include:

a. Process Monitoring: Regular monitoring of production processes, including equipment performance,

temperature, pressure, and other critical parameters, helps identify any deviations from the expected
norms.

b. Quality Assurance: Quality control measures are implemented to verify that the products meet
specified quality standards. This includes conducting tests, inspections, and audits throughout the
production process.
c. Compliance: Pharmaceutical companies must comply with regulatory requirements and standards to
ensure product safety and efficacy. Production control includes ensuring compliance with regulations
related to Good Manufacturing Practices (GMP), documentation, labeling, and packaging.

d. Continuous Improvement: Ongoing evaluation of production processes, feedback analysis, and

implementation of improvement initiatives are important to enhance operational efficiency, reduce
waste, and optimize resource utilization.
 Role of MPs in production Martin Dow

The role of Master Production Schedule (MPS) in production at Martin Dow, or any pharmaceutical
company, is to serve as a detailed plan that outlines the production schedule for each product or SKU
(stock-keeping unit). The MPS is an essential component of the production planning and control process,
helping to synchronize production activities with demand and optimize resource allocation. Here's how
the MPS contributes to the production process:

1. Demand Planning: The MPS starts with demand planning, which involves forecasting and
estimating the demand for each product. It considers factors such as historical sales data, market
trends, customer orders, and other relevant information. By analyzing this data, the MPS helps
determine the quantity and timing of production needed to meet customer requirements.

2. Production Scheduling: Once the demand is estimated, the MPS assists in creating a detailed
production schedule. It specifies when and how much of each product needs to be produced
within a specific time frame. The MPS takes into account factors such as available resources,
production capacity, lead times, and constraints to ensure that the production schedule is
feasible and realistic.

3. Resource Allocation: The MPS helps allocate resources effectively by considering the availability
of raw materials, production equipment, labor, and other necessary resources. It ensures that
the required resources are available at the right time and in the right quantity to support the
production schedule. This helps optimize resource utilization and minimizes disruptions in the
production process.

4. Inventory Management: The MPS plays a crucial role in managing inventory levels. By aligning
production with demand, it helps control inventory levels and prevent excess or insufficient
stock. The MPS considers lead times, production quantities, and delivery schedules to maintain
appropriate inventory levels and minimize carrying costs.

5. Production Control: The MPS provides a framework for production control activities. It serves as
a reference point for monitoring and controlling the progress of production orders. By comparing
actual production against the planned schedule outlined in the MPS, it enables timely
identification of any deviations or delays and facilitates corrective actions to maintain schedule
adherence.
 6. Coordination with Other Functions: The MPS acts as a communication tool, facilitating
coordination between various functions within the organization. It helps align production plans
with other departments such as procurement, sales, marketing, and distribution. This
coordination ensures that the entire supply chain is synchronized and supports efficient
production and order fulfillment.

Overall, the MPS serves as a critical link between demand and production activities, enabling Martin
Dow to effectively plan, schedule, and control its production operations. It helps optimize resource
utilization, minimize inventory costs, and ensure timely delivery of products to meet customer demands.
 Role of MRP in inventory management and production scheduling
Material Requirements Planning (MRP) is a key tool in inventory management and production
scheduling. It helps companies like Martin Dow ensure the availability of materials and components
needed for production while optimizing inventory levels and minimizing costs. Here's how MRP
contributes to inventory management and production scheduling:

1. Inventory Planning: MRP assists in determining the optimal inventory levels for raw materials,
components, and finished goods. By considering factors such as lead times, production
schedules, and demand forecasts, MRP calculates the required quantities of each item to
maintain sufficient stock without excessive holding costs or stockouts.

2. Material Ordering: MRP generates purchase orders or production orders based on the planned
production schedule and the availability of materials. It takes into account lead times, reorder
points, and safety stock levels to initiate timely procurement of materials, ensuring that they are
available when needed for production.

3. Bill of Materials (BOM) Management: MRP relies on the bill of materials, which is a
comprehensive list of components and their quantities required to manufacture a product. By
referencing the BOM, MRP accurately determines the materials needed for each production
order, including any sub-assemblies or intermediate components.

4. Production Scheduling: MRP provides critical input for production scheduling. It considers the
availability of materials and components, production lead times, and other constraints to
determine when each production order should start and how it should be sequenced. This
ensures that production activities are aligned with the availability of materials and resources,
optimizing the use of production capacity.

5. Lead Time Management: MRP takes into account the lead time required to procure materials
and manufacture products. By considering lead times in the planning process, MRP helps ensure
that materials are ordered with sufficient time for delivery and that production schedules are
adjusted to accommodate lead times, reducing the risk of delays or stockouts.

6. Demand Forecasting: MRP utilizes demand forecasts, sales orders, and other demand signals to
estimate future requirements. By analyzing demand patterns and trends, MRP helps determine
the quantity and timing of material orders and production schedules. This ensures that inventory
levels are aligned with anticipated demand, avoiding excessive inventory buildup or shortages.
 7. Stockout Prevention: MRP helps prevent stockouts by generating timely purchase or production
orders based on demand forecasts and lead times. By ensuring that materials and components
are available when needed, MRP helps maintain continuous production and prevents disruptions
caused by shortages.

8. Cost Optimization: MRP assists in optimizing inventory costs by minimizing excess inventory and
carrying costs. By aligning procurement and production activities with demand forecasts, MRP
helps avoid overstocking while ensuring that materials are available to meet production
requirements. This minimizes holding costs associated with excessive inventory levels.

In summary, MRP plays a vital role in inventory management and production scheduling by facilitating
effective material planning, procurement, and production order generation. It helps ensure that the right
materials are available at the right time, supports efficient production scheduling, and optimizes
inventory levels to meet customer demand while minimizing costs.
 lot sizing techniques for dependent demand and independent items
Lot sizing techniques are used to determine the appropriate quantities to order or produce for inventory
items. The choice of lot sizing technique depends on the type of demand—whether it is dependent or
independent—and the characteristics of the items. Here are the commonly used lot sizing techniques for
dependent demand and independent items:

Lot Sizing Techniques for Dependent Demand:

Dependent demand refers to the demand for components or sub-assemblies that are directly tied to the
production of finished goods. Lot sizing techniques for dependent demand include:

 Material Requirements Planning (MRP): MRP calculates the quantities of dependent demand
items required based on the bill of materials, lead times, and production schedules. It considers
the net requirements for each item and generates planned orders or purchase orders to fulfill
the dependent demand.

 Fixed Order Quantity (FOQ): FOQ involves ordering a fixed quantity of a dependent demand item
whenever the inventory level reaches a predetermined reorder point. FOQ is suitable when the
lead time is constant, and the item has a stable demand pattern.

 Periodic Order Quantity (POQ): POQ involves ordering a fixed quantity of a dependent demand
item at fixed time intervals, regardless of the inventory level. POQ is suitable when the item has
a predictable demand pattern and the ordering cost is high relative to the holding cost.

Lot Sizing Techniques for Independent Demand:

Independent demand refers to the demand for finished goods or items that are not directly tied to the
production of other items. Lot sizing techniques for independent demand include:

 Economic Order Quantity (EOQ): EOQ is a classic lot sizing technique that minimizes the total
cost of inventory by balancing ordering costs and holding costs. It calculates the optimal order
quantity based on the item's demand rate, carrying cost, and ordering cost. EOQ assumes that
demand is constant and that lead time is known and consistent.

 Reorder Point (ROP) with Safety Stock: ROP is a technique that sets a predefined inventory level
at which a replenishment order is triggered. Safety stock is added to account for demand
variability and lead time uncertainties. When the inventory level reaches the ROP (including
safety stock), an order is placed to replenish the inventory.
  Order-Up-To Level (OUTL): OUTL involves ordering or producing items up to a specified level to
bring the inventory back to a predetermined target level. The quantity ordered is based on the
difference between the target inventory level and the actual inventory level.

 Periodic Review: In periodic review systems, inventory levels are reviewed at regular intervals,
and orders are placed to bring the inventory level back to a desired target level. The order
quantity is determined based on the difference between the target level and the current
inventory level.

It's important to note that the choice of lot sizing technique may involve trade-offs between factors such
as holding costs, ordering costs, demand variability, lead time variability, and service level requirements.
Companies often employ a combination of these techniques based on the characteristics of the items
and the specific requirements of their supply chains.