You are the VP of global operations for Best Health (BH), a mid-sized pharmaceutical firm based in Canada. Your company sources chemical and botanical ingredients for the production of drugs all over the world. BH prides itself on being both eco-friendly and in the production of the highest quality pharmaceuticals in its industry sector. It has won many awards for the effectiveness and purity of its products and the World Health Organization has cited BH for its sourcing of effective and potent ingredients. BH maintains that high quality by sourcing the best ingredients from places all over the globe, in fact, some of the ingredients for some of their most effective drugs are available only from very specific parts of different countries. The firm has signed exclusive long-term contracts with the producers of those ingredients to maintain supply. BH contracts with audit firms to formally evaluate and document quality programs at each of your ingredient’s suppliers. These audits are performed twice per calendar year and any non-conformances by any of the supplying firms must be rectified within thirty days from audit, with written confirmation of the repair to the non-conforming process. That written report stating the conforming processes goes to the auditing firm for review, and the auditing firm sends confirmation of compliance to you. Best Health has been using the same auditing firm for fifteen years. That auditing firm is known world-wide, and it is employed by many of your competitors. It has a unique process where it never allows the same certified auditing individual from the auditing firm to audit a facility in consecutive years. This is done to prevent any friendly favoritism in the audits, or in reporting severity (or lack thereof) in quality or process deficiencies. Your VP of sales is on vacation in one of your supplier countries. She happens to drop in to visit the supplier. That company supplies the purest form of a naturally occurring ingredient. It is your sole supplier of the product, and that product is an ingredient for your best-selling pharmaceutical making up 30 percent of your firm’s annual revenue. Your VP of Sales is very well received and is offered a tour of the operation. Once back from vacation, she tells you of her fun time on her holidays, and mentions the surprise visit to the supplier. After some additional small talk, the VP openly wonders if the facility was having a bad week, as it appeared to be dirtier than she was used to seeing from other suppliers that she had visited in the past. She also noted that not all workers were wearing the protective hair nets, smocks and gloves that she knew were mandated in your company standard operating procedures (SOPs).

The two of you attribute her findings as anecdotal at best. She adds that she really wasn’t there for a formal audit, laughing that she toured in her flip flop beach sandals. You agree with her that the visit wasn’t an accurate account of the situation at the supplier, noting that the firm is due for its semi-annual audit in three weeks. That audit should tell the real truth. Six weeks later, you receive the audit report from the auditing firm and it shows one small non-compliance on a missed signature in a training program. You chuckle, knowing that auditors will always have to find something wrong just to make sure you know that they are doing their job. The remainder of the audit indicates no problems. You are once again assured that the process works, and can finally attribute the concerns noted by the VP of sales as a one-off situation. Two weeks later, there is a bulletin from the World Health Organization (WHO) that they are investigating rumors that some firms that perform quality audits may be applying very loose standards to formal audits. The memo states that they will perform secondary checks to verify any findings and that member groups will receive a memo within eight days. You eagerly await those findings. One day before the WHO report is issued, a team from a Canadian investigative news group televises a report on drug manufacturing in third world countries. The report shows video of unsanitary conditions, poor sanitation standards and even alludes to pay offs to auditors in exchange for high rated quality reports. As you watch the program, you see a familiar building, then some familiar facility managers’ faces. The news team is in fact visiting the same facility that your VP visited months earlier. All of a sudden you don’t feel so good. The very next day, the WHO report openly states that poor audits of four pharma-chemical ingredient firms confirm low sanitary standards and attribute these poor audits to long standing cheating by the companies and their paid-off auditors. Your supplier is one of them. Those findings are leaked to the press and are now world-wide knowledge the next day. On the very same day, you receive reports that twelve people are hospitalized for severe fungal infections. All were being treated exclusively with drugs supplied by your firm. The doctors treating the patients are not sure if those affected will survive. Challenges: 1. At what point(s) was there an issue in this case? 2. At what point(s) was there a risk in this case? 3. At what point(s) was there a crisis? What family/families of crisis are displayed here? 4. An external threat may not be controllable. Can it (they) be predictable? Choose an example from this case and explain how it could be considered predictable. 4. Create a program (within this report) that outlines a plan that may have avoided the risks and ensuing crisis (es).

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