Case 9.1 Discusses Young Again Pharmaceuticals: The Three Op

Case 9 1 Discusses Young Again Pharmaceuticals The Three Options That

Case 9-1 discusses Young Again Pharmaceuticals. The three options that this firm has to manage risk are risk retention, risk transfer, or a mixed approach. In 200 – 250 words, discuss your recommendations on how this company should evaluate and implement these techniques to manage risks. CASE 9-1 Young Again PharmaceuticalsCliff 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 product has been dubbed “Twenty-something in a Bottle” by the media. Demand is expected 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. Crandall 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 shipments in May to the retailers' distribution centers. The product is high value, somewhat 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 carriers. 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 unauthorized distribution channels due to theft or misdirected deliveries.”
  • “The company sustainability push has led to reduced packaging and biodegradable 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 remote, Crandall thought that it would be wise to evaluate each one. His new concern became how to conduct an effective risk assessment.

Paper For Above instruction

Young Again Pharmaceuticals (YAP), on the brink of its most significant product launch, faces multiple risks across its supply chain, necessitating a comprehensive risk management strategy. This paper evaluates the primary risks identified and recommends appropriate risk mitigation techniques—risk retention, risk transfer, or a combination of both—tailored to YAP's specific challenges of high-value, fragile, and theft-prone pharmaceutical logistics.

Assessment of Risks

The brainstormed concerns can be classified into several categories: delivery delays and fines, environmental hazards, theft and piracy, border and customs issues, branding damage, and product damage due to environmental factors. The risk table includes hazards such as shipment delays due to hurricanes or port congestion, temperature excursions causing product spoilage, theft at ports and during transit, piracy, customs fines from improper documentation, and physical damage from handling or environmental exposure. Each risk varies in likelihood and impact, with theft, piracy, and delays posing significant threats to YAP's reputation and financial stability.

Primary Risks to Address

  1. Theft and Piracy: Given the high retail value and the product's appeal to thieves and pirates, theft during transportation and at ports is a critical risk with major financial and brand implications.
  2. Shipment Delays and Environmental Hazards: Hurricanes, port congestion, and customs delays could lead to missed deadlines, stock shortages, and financial penalties, jeopardizing the launch success.
  3. Product Integrity and Damage: Temperature sensitivity and packaging vulnerabilities pose risks of product spoilage or unusability, directly affecting sales and consumer trust.

Recommendations for Risk Mitigation

For theft and piracy, YAP should prioritize risk transfer through comprehensive insurance policies covering theft, piracy, and damage during transit. Engaging specialized carriers with security measures and tracking capabilities will also reduce the likelihood and impact of theft.

To address shipment delays stemming from environmental and logistical issues, risk retention could be appropriate. YAP might establish contingency plans, such as alternative routes or transportation modes, and maintain flexible inventory buffers at distribution centers to ensure supply continuity.

Regarding product integrity, risk mitigation involves both risk transfer and retention. Contracting with carriers that have temperature-controlled and secure packaging solutions transfers some risks, while investing in robust packaging and real-time monitoring systems helps retain control over product quality and reduces spoilage risks.

Post-Risk Management Focus

After establishing mitigation strategies, YAP should focus on ongoing risk monitoring and supplier audits to identify emerging threats. Additionally, fostering strong relationships with reliable logistics partners and implementing advanced tracking technologies will enable proactive responses to disruptions, ensuring product integrity and timely delivery. Continuous review of risk mitigation effectiveness is essential to adapt to evolving threats and maintain the integrity of the product rollout.

Conclusion

Effective risk management for YAP involves a strategic blend of risk transfer—through insurance and secure carriers—and risk retention—through contingency planning and process controls. By focusing on theft, delays, and product integrity, YAP can safeguard its significant investment, protect its brand reputation, and ensure a successful product launch.

References

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