GlaxoSmithKline's business is to discover effective medicines and healthcare products for people throughout the world and create shareholder value

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The aim of Operational Excellence entails-

• Accelerating synergy and implementation

• Streamline processes and eliminate old processes

• Enhance procurement processes

• Manufacturing- rationalise, then improve technology and fiscal focus

• Exploit shared service centres – fiscal benefit; outsource

OBJECTIVE

The Operational Excellence programme is the continuous improvement strategy in place to deliver additional savings and maximised use of each department; the review of processes can streamline and effectively re-evaluate the efficiency of all the relevant departments. This is particularly relevant in the Sales, Marketing and Manufacturing departments. The manufacturing and sales departments are always reviewing their own successes and failures, trying to find new ways to increase their market share. This is important, so that the company is always ready and able to deal with any problems that may occur.  

Reducing the number of animals that are used in Research is another aim. GlaxoSmithKline are also very secretive about this part of their work so it is very difficult to ascertain whether these aims are being reached. Although they do stress that animals are only used where no alternative is available. “ Alternatives” are more common than animal use and these include computer modelling and isolating cells and tissues. The animals used are usually bred specifically for research purposes and are well cared for throughout their lives by specially trained qualified staff and 97% of these animals are rodents.

To accelerate their synergies GlaxoSmithKline has a page on its website devoted to encouraging other firms to join their large index of associated companies.

This is one way of keeping ahead of the competition and maximising its world synergies. The page is included within the Appendix.

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The aim of its GSK People entails-

• Making GSK the place where great people do their best work every day

• Provide opportunities for people to do meaningful and challenging work

• Promote development of professional potential

• Provide fair and competitive pay, and further reward in line with the success of the company

• Promote a work environment that supports an informed, empowered and resilient workforce

OBJECTIVE

GlaxoSmithKline stated in the annual report of 2002 that

‘ Our global team is aiming for excellence in performance and excellence in terms of its contribution to the economies and the communities in which it operates’.

GlaxoSmithKline are committed to the principles of diversity, equality of opportunity and equal treatment. The company aims to attract, retain and motivate the very best people. It is crucial to their retention that the way the personnel are rewarded and developed is industry competitive. By having a good reputation in good employee relations the Group attract high calibre staff.

GlaxoSmithKline have a focused Research and Development department, a highly efficient manufacturing system and sales and marketing teams that are recognised for their creative drive and scale of operation. All of the 100,000 staff employed in over 100 countries are appreciated and are financially rewarded when the company is doing well; this is a great incentive for all involved to be more productive. This ensures operations can effectively be cheaper and more profitable. They promote development of professional potential by training and promotion this ensures a good motivated informed and happy workforce and can reduce the numbers seeking to leave the business.

All of these schemes are the objectives that are in place to ensure that GlaxoSmithKline’s aims are fulfilled. The Group is in a great position to build on their successes of the last financial year and to launch new products. I feel that through these and other schemes that are in place GlaxoSmithKline are reaching their aims, and which are reviewed before and after the annual report so that any failure to meet the aims can be rectified.

The total company profits after tax was £4,757 million. The business performance trading profit increased with a growth of fifteen per cent from the previous year’s profit. Their strong financial position is underlined by the fact that their free cash flow for the third quarter 2003 was £1.8 billion.

GlaxoSmithKline are in a very highly specialised, characterised industry and they need to be very efficient in all their activities.

They achieve all that they set out to do because of their main focus to ‘improve the quality of human life by enabling people to do more, feel better and live longer.’

GSK Mission Statement

They are in a leading position and are able to successfully fulfil their financial and community commitments that are in place. They manage to create good relations with their employees, customers and stakeholders by valuing and understanding their requirements and working effectively with them.

ORGANISATIONAL STRUCTURE AND CULTURE

The structure of an organisation is important, a definitive clear structure will enable the company to successfully meet its objectives. The structure of GlaxoSmithKline is Divisional; because the company is globalised it is divided up into the different operations that it operates. E.g. R&D, Manufacturing, Pharmaceuticals, Information Technology etc. But the ultimate control and decisions still rests with the owners/shareholders, but the actual control rests with the Board of Directors.

The advantages of this type of structure are:

• There is a specialisation and whole concentration of the operations within the separate parts of the divisions

• There tends to be more motivation for the management of the individual sites, they are able to take more decisions without always referring to higher management
• The first-hand knowledge of these managers enables potentially better decisions  to be made

The disadvantages of this type of structure are:

• Can lead to poor communication across the company
• Lead to a weakened control of top management, which has a wider spread of resources

 Within these divisions the structure is Hierarchical, the characteristics of this type of structure are;

The ultimate control and decisions rests with the owners/shareholders, but the actual control rests with the Board of Directors.

The day to day running of the company lies with the senior management.

Senior management makes major decisions; middle management makes minor, less important decisions.

Staff have different grades at different levels of the structure, so there is a clear salary structure

 Levels of responsibility are larger the further up the structure. This can lead to good training opportunities and promotional prospects.

Communications generally pass up and down the organisation and can become distorted

Each department has many staff, but will each have a clear job role.

Poor communication between departments-tendency for departments to work in isolation from one another

Organisation tends to be formal

Written policies on all aspects of working conditions, specified entitlements and staff facilities, also the opportunity to join a trade union-if the company recognises them.

ROLE AND FUNCTION OF EACH DEPARTMENT

Starting from the top of the structure the role of The Board of Directors is to be ultimately accountable for the company’s activities, strategy and financial performance.

The executive management of GlaxoSmithKline is through The Corporate Executive Team (CET). Their responsibilities are; To review and direct global business and financial progress-Relevant markets, products, therapy areas and business issues.

Review and approve; - Regional strategies and budgets

                                  -Functional strategies and budgets

                                  -Major portfolio decisions e.g. products

                                  -Major capital expenditure and resource allocation      

                                       decisions

                                  -Major strategic decisions e.g. M&A, licensing

                                  -Corporate policies

Each member of the Corporate Executive Team also has responsibility of a different dept.

The Chief Executive Officer is the link between the Board and staff; he over sees all operational aspects.

The Senior Vice-President and General Counsel is ultimately responsible for all legal matters across the company, other functions include environmental, insurance, security, health and safety issues. The Legal department helps the firm meet its aims and objectives of Operational Excellence by ensuring all legal, environmental, insurance and health and safety issues are up to date. The legal and Health and Safety depts are vital in the pharmaceutical industry; this is because of all of the health and safety issues associated with pharmaceuticals and the company must adequately insure themselves and their staff against the any hazards that may occur involving chemicals at any of the global sites.

These departments deal with any matters that may hinder or prolong the process of pharmaceutical production and are in charge of streamlining and eliminating old processes in favour of new better and improved methods.

The security function is very important to GlaxoSmithKline because of its research using animals. There are some animal rights protection groups who don’t like this fact, and some have been known to target the company with hate mail and even home made bombs! The company works closely with law enforcement agencies, government and the scientific community to ensure the safety of its personnel and are always looking for new and better ways to increase security at all of its global sites.

 

The Chief Information Officer is ultimately responsible for the Information Technology; this would also include the administration. The functions of these are; To Enable the key business processes globally, across all parts of the Group. E.g. The provision of Clerical and Support Services, Maintenance of premises and equipment, Reprographics and printing, Catering and computer services, Communications, Mail handling and storage, Study and analyse the administrative practices, and ensure the high standard of administrative work. This department is the backbone of the company and helps the company reach all of its aims and objectives by being the supporting department and ensuring the smooth running of the Group. This department also ensures all information and administration is legible and is easily accessed by those that require it and who have security clearance to it.

The Chief Financial Officer is ultimately responsible for the financial systems. The function such as financial reporting and control is done by producing the yearly financial statements of the Group. Other functions include Investor relations, internal audit and real estate; the payment of wages and salaries, tax and VAT; the treasury, production and manufacturing costs; responsibility for the management of the accounts of the business; the records keeping of budgets; and to set targets and raise finances.

 This department helps the company reach all of its aims and objectives, as the company needs to know what the profit, loss accounts are, and whether or not any unforeseen costs, profits or losses have occurred. Also the company needs to know what level of investment it can plough back into the Research and Development department to meet the aims of the New Product Portfolio and what, from the new product portfolio can be launched. The aims of Product Commercialism, Operational Excellence GSK people and Global Competitor need financial backing in all of the activities that they do, so if there was not enough finances these aims could not be met.

The Senior Vice-President is ultimately responsible for the Human Resources department. The functions of this department are: employee health and performance management; leadership, training development and succession planning; benefits; compensation; recruitment and retention of staff; organisation development, and industrial relations; ensuring the Group complies with employment law and avoid unlawful and unfair dismissals

This department helps the company reach its aims and objectives of GSK people because the recruitment, training, retention and development of staff are essential to the smooth running of the Group. By ensuring the right personnel are recruited for the right jobs, and the work environment is supportive, informed and empowered helps the company succeed in the pharmaceutical business.

By providing the right training and development programmes, and ensuring that they are regularly reviewed and successful, the human resource department can provide the best opportunities for its employees to succeed in their work, and to help them realise their own potential so they are motivated to achieve more. Rewards are implemented in times of good profits and the provisions of fair and competitive pay also helps meet the objectives and will motivate and satisfy staff.

The President of Global Manufacturing and Supply is ultimately responsible for the global manufacturing and supply chain. (Production). The functions of this department are; to control the manufacturing processes and maintain the quality of products; to ensure the quality of raw materials used are high; to keep to production targets and ensure the quality is of standard; to ensure customer requirements are met (customer services); and to efficiently use all available resources. Warehousing, storage, packing, despatches and transport; monitoring the quality of distribution and to ensure logistical delivery of the products.

This department helps the company achieve its aims and objectives of Operational Excellence as these activities and processes are continually being improved to deliver a more efficient line of production and uses new technology to help rationalise. The aim of being a Global Competitor is also achieved because if there were no manufacturing, supply and distribution would not take place and there would be nothing available to sell. Then there would not be a production side to the company or indeed a company.

The Chairman of Research and Development is ultimately responsible for drug discovery and development. The functions of this department are: To create new medicines through research and to seek new and better versions of existing products. This department is vital in achieving the company’s aims and objectives of New Product Portfolio and Product Commercialisation.

 The department does this by continually researching and developing, through the discovery and development of new pharmaceuticals, and by improving its current pharmaceuticals and other products. The research into extending product life cycles through technology is also what this department does to meet the aim of Product Commercialisation. By ensuring the Research and Development has secure funding these activities can be fulfilled. After a radical restructure, GlaxoSmithKline are producing more quality compounds than ever before, which has enabled them to improve their stake in areas where they are leaders- such as respiratory and psychiatry- and build a stronger portfolio in areas such as oncology and cardiovascular disease.

The Senior Vice-President of Corporate Communications and Community Partnerships is responsible for the Group’s internal and external communications, its image and partnerships with communities of the world. This department is closely linked to the IT department. The functions relating to this department are to develop partnerships with others in industry, academia, and governments; to promote the public image of the Group; and to ensure information about the Group is available.

 This department helps the Group achieve its aims and objectives of Global competitor by ensuring the communications within the company are good, the image of the company comes across as a passionate caring community and the community partnerships are continually invested in, developed, well received and fully realised. By ensuring the synergies across the globe are always well informed of information required and are developed to satisfy all the organisations involved is beneficial to all and helps meet the aim of being a world leader.

The other members of the CET are all Presidents of the five Pharmaceutical departments. These are: Pharmaceutical International

                                 Pharmaceutical Operations

                                 US Pharmaceuticals

                                 Pharmaceuticals Europe

                                 Consumer Healthcare

All of these departments are responsible for the global Sales and Marketing of the products made by GlaxoSmithKline. The functions of these departments are: to know what the customer wants and to satisfy that need; persuade the customer to purchase products the company has already produced; promotional programmes of product launches and sales follow-ups.

This department helps GlaxoSmithKline achieve its aims and objectives of Product Commercialisation by successfully ensuring the products are launched and marketed correctly and effectively and are selling the products the company produces to new and existing customers. The Sales and Marketing departments also need to develop successful relationships with these customers so that the products are bought time and again.

Each of GlaxoSmithKline’s global sites have their own departments of human resources, legal, health and safety, IT and administration, security, finance and communications. These individual departments are accountable to their own member of the Corporate Executive Team. They are essential in the smooth running of the individual sites.

It is the interaction of all the different departmental functions that aid the success of GlaxoSmithKline in meeting its objectives. It is essential that all the departments have good communications between them. If the communication between departments is bad or non existent then the workings could collapse.

An example of this could be if the Research and Development department had developed a new pharmaceutical product they would need to collaborate with the other departments to get the final product onto the market.

To do this they would need to get the financial backing from the finance department, for the cost of producing, marketing and selling the final product.  The legal department would need to be consulted in case there were any legal implications. The production department would need to know the processes needed to produce the product. The human resources department would need to be consulted if any more staff were needed to be hired or specially trained. The administration department would need to administrate any paperwork details required. The marketing, sales and distribution departments would need to successfully market, sell and deliver the final product. The customer service department would report back to the relevant departments with customer feedback. The use of ICT within the Group makes it possible for all the different departments to access the same information, and to work well using the information.

CORPORATE CULTURE

The culture of a company is the way in which the organisational patterns and behaviour characterise the company. The Corporate culture is the core behind the decision-making processes and practices. The corporate culture of GlaxoSmithKline has Economic Influences, Social (environmental) Influences, and Ethical Influences.

 The Economic influence is their need to be a world leader (to make a profit). Also to be efficient and maintain growth in all the activities that they are associated with.

 The Social Influences is the Group’s global workforce, global partnerships and its contributions in the community and investment programmes. The corporate programmes that are in place all around the world are very important to the Company and they are very proud of the global community investments that are continually made. The impact on the environment is significant and reductions in energy usage and associated greenhouse gas emissions, reductions in solvent emissions and the amount of waste and wastewater disposed are monitored and targets for improvements are implemented.

 The Ethical Influence is their business dealings within the research and development and pharmaceutical aspects of the company, with emphasis on quality standards and safety. Other factors that have influence on the culture are the internal and historical traditions of the company.

The research and testing that is done on animals is a huge ethical influence. There are strict guidelines that must be followed, as research in animals is extremely highly regulated by law and by GSK’s own internal standards regarding the welfare of the animals used within research procedures.

The animal facilities and Research and Development programmes comply with all national laws, guidelines, and codes of conduct. Inspectors from many regulatory agencies, including the UK Home Office, the UK Department of Health, the US Department of Agriculture and the US Food and Drug Administration, pay unannounced visits to sites to check that the on-going projects and animal care and use, meet all law requirements. These must be maintained at all times and is the policy of GSK that all measures are taken to minimise pain and distress before, during and after experimental procedures.

All staff involved in animal research are trained to standards which are approved by recognised professional bodies and which adhere to national guidelines. All staff are supervised appropriately and the Company provides suitable facilities so that staff can carry out their duties responsibly and humanely. Qualified veterinarians are available at all times for advice and help in the care of the animals and the conduct of the research.

ORGANISATIONAL CULTURE

The organisation cultures are the patterns of behaviour, values, beliefs and systems that characterise an organisation. It is basically the way an organisation does things. The organisational culture of GlaxoSmithKline is that of a Role culture and Task culture.

A Role culture because all the management and staff have there own specific defined part in the running of the company. The company is divided into functions and within each of these functions, position and roles are the main sources of influence. As there are strict rules that must be adhered to, especially regarding R&D, manufacturing and security, employees are expected to stick to these regulations. The company has a skilled workforce who are trained and developed and who are all working towards delivering high quality products.

 A Task culture because of the highly competitiveness of the industry, the company seeks to maximise profits and increase their sales and market share, and deliver good profits. There are regular meetings where staff are informed of work practices and at these meetings staff are encouraged to participate fully. In certain areas of the Company the staff work in teams to complete projects. This is particularly applicable in R&D, Legal, Human Resources and Sales and Marketing departments. Staff are also encouraged to work together and get involved in the Community Investment Programmes and ‘make a difference’ throughout their own communities. The staff are valued, encouraged and are all working together to achieve the company’s aims and objectives.

The solid foundations that GlaxoSmithKline has been built upon have lead to the creation of today’s organisation. This has largely been due to the pioneering exploits of individuals of yesteryear. The Group is a forward-facing company, they are willing to change, and be innovative throughout the whole company, but still guaranteeing the safety and quality of its products.

GlaxoSmithKline is a risk-taking company; the firm is prepared to delve into under-developed and unknown areas of pharmaceutical research, whether using new processes or technology.

MANAGEMENT STYLE

The Board of Directors comprises of three Executive and eleven Non-executive members. The Board has accountability for reviewing and approving how adequate and effective the activities, strategy and financial performance within GlaxoSmithKline are.

The management style and framework is the approach that an organisation takes in setting objectives and the way it manages relation between its managers and subordinates. GlaxoSmithKline’s framework includes- central direction; resource allocation; and risk management of the key activities of research and development; manufacturing; marketing and sales; legal; human resources; information systems; and financial practice. As GlaxoSmithKline is a global company the management style of the company is both autocratic and democratic.

Autocratic because of the work environment, which has potential risks to health and safety of its staff, therefore exact compliance with legislation is needed. The management takes responsibility for decisions and allocation of tasks, this is essential within the R&D and manufacturing departments as tasks can be crucial to the completion of a project that must be finished on time. Also the senior management makes the decisions, set targets and objectives, and a clear expectation is given but this can lead to lack of teamwork among some.

Democratic because management of the individual sites involves the employees in the day to day running of their own departments and the development programmes are designed so that managers can motivate their teams and individuals to do their best work. The staff will therefore feel that they are appreciated for the work that they carry out and so give them job satisfaction, and gives them a sense of belonging. This encourages personal contact, motivation and productivity of working conditions. Employee involvement is encouraged and a daily news service is in place on all business units Intranet sites. The need for consultation especially within the Research and Development department is high, the skills and knowledge required of staff within this department is paramount to its smooth running.

HOW DOES THE ORGANISATIONAL CULTURE AND MANAGEMENT AFFECT THE COMPANY

The objectives are met by individual departments as they have goals to meet in the every day work that is carried out.

The Divisional organisational structure affects how the global operations are conducted. This is because each operation is individually operated, e.g. R&D, Manufacturing, Pharmaceuticals, Information Technology etc are all at separate sites and each member of the Executive Board has responsibility for an operation.  If the sites were operated individually this would impact where and how each site were operated. It is easier to implement changes to operations as a whole rather than at each individual global site.

Although within the divisions the structure is hierarchical, this gives the workforce commands and procedures that senior management implement but which are crucial to the efficient and success of the R&D and manufacturing departments.

The organisational culture affects the way in which the company carries out its various activities. GlaxoSmithKline is a dynamic, focused company continually striving to improve its own standards and products. It has a constant emphasises on becoming a world leader in the pharmaceutical industry that influences the culture.

As GlaxoSmithKline is a Forward-facing company, it needs its management to also adopt this approach. If they do not then it could cause the company to fall behind in their quest to become a world leader. As there are strict rules that must be adhered to, especially regarding R&D, manufacturing and security, employees are expected to stick to regulations within the role culture. The affect of the task culture on GlaxoSmithKline is that they have a strong emphasis on the motivation of employees to work well together towards their common goals. The company has a skilled workforce who are trained and developed and who are all working towards delivering high quality products.

 On their customer’s needs and to build their confidence in the company and products, but while still maintaining the high standard of these products.

 For the stakeholders it is how GlaxoSmithKline can work most effectively with them within the diverse communities and to deliver a good return on their investments. To operate in a highly efficient way, but while still guaranteeing the safety and quality image of brand products.

The culture helps GlaxoSmithKline meet its objectives by focusing on what the company feels are most important to them. This focus can also help each individual division to wholly concentrate on the job that is to be done rather than getting confused with other aspects of the company. The culture gives an outline to the management of the divisions, all of what and how things are expected to be done, and also gives them the freedom to make the decisions that they have the ability and knowledge for.

The autocratic management style affects the company in how decisions are reached at the senior management level. It is essential because of the work environment, which has potential risks to health and safety of its staff; therefore exact compliance with legislation is needed. A clear expectation is given and this is essential within the R&D and manufacturing departments as tasks can be crucial to the completion of a project that must be finished on time.

The democratic management style affects the company because management of the individual sites involves the employees in the day to day running of their own departments. Employee involvement is encouraged especially within the Research and Development department where the skills and knowledge required of staff within this department is paramount to its smooth running.

CHANNELS OF COMMUNICATION

The channels of communication refer to how information is given. The actual choice depends on several different things; these may include a combination of:

• Cost and convenience
• Speed and urgency, The need for immediate feedback or response
• The number of people needed to receive the information
• The type of information to be communicated
• The desired level of confidentiality
• The need to keep a record of the information

The downward channels of communication are that from senior and middle management to staff, this method of communication is used to give instructions and commands, requests for aspects of work that has been done.

 The upward channels of communication are from staff to middle and senior management; mostly the information that is given is a brief outline of the original data. Information given to management can provide feedback on decisions, awareness of any problems, and ideas for ways of improving the running of the organisation and whether targets and objectives are being met. This communication motivates the lower staff.

Lateral communication is between the different departments throughout the whole of the company. This is to ensure they are co-ordinating their activities so that the business can work effectively and efficiently.

Formal communication is the communication that is through official procedures. This would include official meetings, memos and newsletters.

Informal communication is not part of officially recognised company procedures. For example, the managers can find out a lot about how staff feel by attending an informal social evening. This communication can often be very beneficial to the company, as staff may feel more motivated and able to view their opinions. Although there can be misinformation which could be confusing.

Restricted communication is usually aimed at one individual or a group of people; this type of communication could be confidential.

Open communication is information that anyone can access; information that is has a broad interest

COMMUNICATION WITHIN GLAXOSMITHKLINE

Good communication within GlaxoSmithKline is very important. Especially the communication needed between the Research and Development and other departments. The methods of internal communication between departments and staff that GlaxoSmithKline uses are:

• Memos, (memorandums) some verbal communication may need written confirmation, although most memos are sent via e-mail. This can be upwards, downwards, lateral, open, restricted and formal.
•  Letters, written confirmation of actions. This can be upwards, downwards, lateral, open, restricted and formal
•  Noticeboards, legal/social notices messages to staff. This form of communication is written. This can be downwards, lateral, open and informal
•  In-house magazines, This is a written form of communication which is produced to inform employees of company performance/profits and social activities. GlaxoSmithKline’s UK based magazine is called GSK UK today and is published quarterly. This can be downwards, informal and open.
• E-mails, Are a written ICT based form of communication, which is used to inform staff of a wide range of activities. Apart from the telephone, this is the main form of communication between departments and staff. This can be upwards, downwards, lateral, informal restricted and open.  
•  Face-to-face and team meetings, This verbal form of communication is used to outline any new procedures/information needed to be given. For example. All UK office based staff are called to an ‘ATRIUM BRIEFING’ which is held quarterly in the atrium at Stockley Park to hear presentations from senior management on key issues facing the business. This can be downwards, lateral, formal and restricted
•  Reports and minutes of these meetings, written records of discussions/action to be taken. This can be upward, downward, lateral, formal and restricted.
•  Facsimile, This written form of communication is used to transmit any paperwork to another department/employee. This can be upwards, downwards, lateral, formal, informal, restricted and open
•  Brochures, Are written communications used for information of products. This can be downwards, lateral, formal and open.
•  Pagers, This form of communication can be both verbal and written, it can also be ICT-based, and is used for the urgent summoning of employees. This can be upwards, downwards, lateral, formal, informal and restricted
•  Telephones. Are a verbal form of communication. This can be upwards downwards, lateral, informal and restricted
•  Voice mail, recorded messages. These are verbal communications. This can be upwards, downwards, lateral, formal and open
•  Health and Safety handbooks and manuals, These forms of communication are written and are essential for staff to have access to. These operating instructions are compulsory to learn, especially the security and health and safety booklets This can be downwards, lateral, formal and open
•  Conferencing, (meetings). These forms of communications are verbal. This can be upwards, downwards, formal and restricted
•  Client/server network, the computer network the company uses (for the use of databases, Intranet). This form is an ICT based communication. This can be informal and open
• Videos and CDs, This form of communication is verbal and ICT-based To be used for information to employees. This can be downwards, formal, informal and open

The methods of external communication that GlaxoSmithKline uses are:

• Business letters, external contacts need to have written letters
• Facsimile, to transmit any paperwork – fax report facility/transmission header need to be set up
•  Reports, produced for meetings
•  Meetings, shareholder/business
• Press releases and Briefings, for launches of new products/ or to counteract negative coverage in the media
•  Presentations, e.g. sales presentation to customers, scientist presentations - drug trials and results
•  Conferences, business to business (CBI conference)
• Video conferencing, used for face-to-face meetings of people globally separated
•  Brochures and Exhibitions, develop contacts/corporate hospitality
• Databases, for information on suppliers/customers/clients/partnerships
• Videos and CDs, are used as a way of giving corporate and promotional information to interested parties
• File transfers, large graphic and computer files
• Web sites, for public relations and all forms of external communication
• E-commerce, business to business communication to partners and suppliers, which has improved the effectiveness of the supply chain and R&D alliance partners and prescribers
• Sales Representatives, for the information needed to be given to the medical profession about the medicines available and what they are able to achieve for the patients that need them

WHAT IMPACT HAS THE USE OF ICT ON GLAXOSMITHKLINE

The use of ICT is here to stay; being improved all of the time. If companies do not change to accommodate at least some of the new technology then they will find themselves less competitive. Good Information and Communications Technology will improve the flexibility of the organisation so that the company can respond better and easier to changes within the marketplace.

The use of ICT has had a large impact over the last thirty years on the practices that GlaxoSmithKline use within the company and on the practices used externally. It plays three major roles in GlaxoSmithKline:

• Supporting key business processes at the local, regional, functional and global levels
• Enabling the transformation and extension of key business activities
• Facilitating collaboration and access to information on a global basis

As Glaxo SmithKline are a globalised company a system had to be installed that would efficiently serve the whole company. This I feel has been done well, as there is a large proportion of the workings of the company done within the technology installed. The biggest change is within the Research and Development departments as the “alternative” animal research is done on or with the help of the computer systems. As GlaxoSmithKline are trying to reduce the amount of research using animals, the use of ICT will continue to play a more important role within this area. The use of ICT within this area has enabled complex information to be communicated easily and quickly, saving time and money. Due to the sensitivity of some of the work GlaxoSmithKline carries out, security within the system is controlled by the use of passwords to gain access.

The impact ICT has had on other areas of GlaxoSmithKline is the communication between departments; this is mainly done through using fax machines, e-mail, pagers, their Intranet and video conferencing. The impact fax machines have had on the Group is the ease in which paperwork can be given to the relevant people. The effectiveness of this is that it is quickly, simply and easily done. It is widely used and cheaper than sending a conventional letter.

 Although faxes are not used if the paperwork has a highly confidential content. If highly confidential material is needed to be sent elsewhere, then a confidential business letter is sent.

E-mail is widely used internally, the impact that this method has is that all personnel have access to the computer network (access to which a password is required, as some areas are more confidential than others are). It has taken over and is used more often than memos and noticeboards. The effectiveness of this method is good but the problem with e-mails is that some people might not check what they have received, also it is all too easy to delete these without reading them so important e-mails may be lost.

Pagers are highly used within departments, especially within the Research and Development, Production and Manufacturing areas. Pagers are used to locate personnel and inform them of what is required of them. The effectiveness of pagers is good, because the use of mobile phones is prohibited within the sites because of the radio waves they emit.

Video-conferencing is used as an internal and external communication. It is used to aid communication within GlaxoSmithKline. This has a large impact on reducing the cost and time of holding meetings between all of the global departments; it enables staff to discuss face-to face issues without the need to leave their own offices. Also externally between GlaxoSmithKline and their customers/partnerships, many of which are globally situated. This is very effective and now widely used, it can be used to communicate with the medical profession worldwide and the other customers of the Consumer Healthcare Products.

The Intranet within GlaxoSmithKline is an important tools that every employee all over the world has access to. It is run and added to by a specialist team of people. Within the Intranet, employees can look at any other department, site or aspect of GlaxoSmithKline. There are pages allocated to every aspect of GlaxoSmithKline, although not all aspects are available to some employees because of confidentiality. Internal communication within the Intranet, is very important to GlaxoSmithKline, a lot of their notifications are applied through the Intranet. ‘Temperature Check’ is a page within the Intranet, that every six months surveys staff about different aspects of working for GlaxoSmithKline. The results are then analysed within the departments in question and are then used to improve any misgivings.

The use of ICT in manufacturing plants and commercial units has been implemented and are being used to enable efficient delivery across the supply chain. The introduction of an accessible extranet and the adoption of standard access to information has enabled secure interaction between partners and suppliers and collaboration with R&D. Access for regulatory agencies, healthcare professionals, patients and the public has been improved. This has enabled significant cost savings and a more productive function.

GlaxoSmithKline is an organisation that has invested in up to date technology throughout its company. The use of which has enabled GlaxoSmithKline to react easily and quickly to changes within the business environment it is in, computerised administrative information can easily and quickly retrieved, by cutting down the time that was previously lost trawling through filing systems seeking the information.

 The overall impact and effectiveness of ICT is that it is easier, faster and more cost effective to communicate with other departments throughout their global structure and less time consuming. This has lead to a more constructive and productive level of work being carried out. It is also benefited the response to customers, the queries that are received, can immediately be dealt with through the computer systems. Leaving customers happier and more likely to return their custom.

THE ‘PRODUCTION’ PROCESS AND QUALITY

GlaxoSmithKline’s Global Manufacturing and Supply has a mission statement and objectives. These are:

‘GMS Mission is to ensure:

• A secure source of supply of high quality products
• Compliance with regulatory requirements and customer expectations
• Best in cost class
• Leading edge practices and performance, at sites, in Procurement and in all other global functions

GMS 2003 Objectives will ensure we stay focused on the major activities that deliver maximum benefit to the business and they are as follows:

• Focus on performance – supply and cost
• Absolute attention to compliance
• Drive hard to complete the Global Supply Network programme
• Accelerate progress with Operational Excellence, technology, process integrity
• Team work and talent expression
• Extract the value from our IT strategy
• Develop our future vision

Operational Excellence (OE) continues to be a key priority in Global Manufacturing and Supply. At manufacturing sites and in above site functions, the OE tools and techniques allow GMS to continue to streamline its business processes, reduce process variability and improve the way we make our products. Operational Excellence is now becoming part of the GMS culture and there is much more we can do.

GMS is run as one global network and operates common global processes for maximum efficiency and competitive advantage. It has close links with R&D to ensure the smooth and rapid transition of new products into full scale commercial manufacture and also with markets for continuity of supply and to respond to market needs for new presentations, line extensions, pack designs etc.’

GlaxoSmithKline website ‘gsk.com’

The various inputs used within the production process are the design of the product, the knowledge of how to conduct the production process, the components that are needed, the people required to process the components, the machinery needed to conduct the process, and the energy and factory needed to complete the process within.

As GlaxoSmithKline manufactures its own pharmaceuticals, they have sites dedicated solely to this process even though they are situated all over the world.

A map of these sites is included within the Appendix.

GlaxoSmithKline has 108 sites in 41 countries with over 39,000 employees. The sites within the manufacturing network include the following activities –

Supply products to over 160 global markets

Produce over 1200 different brands

Manufacture 4 billion packs per year

Produce over 36,000 different finished packs per year

Supply around 6,000 tonnes of active ingredients each year

Manage about 2,000 new product launches globally each year

The Site Network is managed through Supply Chains, Regions & Functions.

The Supply Chains consists of

• The Consumer Healthcare Supply chain brings together sites whose primary focus is the manufacture and supply of consumer healthcare products (e.g. toothpaste, analgesics, nutritionals), OTC medicines, oral care, nutritional healthcare and smoking cessation products.

There are 24 sites spread across 16 countries, employing around 7,000 staff.

• The Primary Supply chain focuses on the manufacture of active ingredients for pharmaceutical compounds

The Regions consists of bringing together the manufacturing network processes and packaging sites in their own geographical area.

• Secondary Supply is organised regionally with sites in Europe, North America and International and is solely focused on processing and packaging actives into finished medicines. Within the European region there are fifteen sites spread across nine countries, employing around 9,250 people. Within these sites, they manufacture nearly all of the major pharmaceutical products marketed by GlaxoSmithKline in a wide range of finished forms.

Within the North American region there are three pharmaceutical sites, which employ around 1,750 staff.

The International region comprises 38 manufacturing sites within 20 countries, which employs around 106,000 people. There are 5 sites in Middle East/Africa, 19 sites spread across the Asia Pacific area, 5 sites in China and 2 in Japan. In Latin America there are 7 sites.

The functions supports the Site Network by the following specialist departments:

• Engineering, Technology & Capital Management (ETCM)
• Global Logistics
• GSN
• Manufacturing ERP Solution (MERPS) / global Rollout Implementation Team (GRIT)
• Manufacturing Strategy
• New Product Supply(NPS)
• Operational Excellence (OE)
• Procurement (GSK wide, but reports through GMS)
• Quality (QMS)

The manufacture of medicines begins with the development of a therapeutic active ingredient in a selected formulation. Global Manufacture and Supply (GMS) develops manufacturing processes for full-scale production of active ingredients/compounds at ‘primary’ manufacturing sites. Converting active compounds into a finished dose formulation is the responsibility of the ‘secondary’ manufacturing sites.

Within GlaxoSmithKline the ‘Production’ process starts with the R&D department, by working on the scale-up of new chemical entities. The R&D department will design, develop the knowledge needed to complete the process and establish what components are needed to produce the product. This is a continuous action, going on all the time with the New Product Supply. A diagram of how a new product is implemented into the manufacturing and launching process is within the Appendix.

The next stage is to collaborate the various chemicals/ actives required for processing in the case of the pharmaceuticals, with the Consumer Healthcare Products it is the different ingredients needed to produce them. The active ingredients (Actives Supply) required are produced at 13 sites across the network. . This includes the active ingredients of non-antibiotic products.

 These are located in the following countries:

Latrobe & Port Fairy, Australia,

Biopharm, USA,

India,

Cork, Ireland,

Jurong & Quality Rd, Singapore  

Beckenham, Irvine, Dartford, Montrose, Ulverston & Worthing, UK

Approximately 3,700 staff are employed in manufacturing and supplying these active ingredients to the secondary sites and the staff required for these processes are trained specifically for the practices needed.

The actual processes of turning the chemicals and actives into the well-known pharmaceuticals that we know are a closely guarded secret within the company; this is to limit generic competition and to stay ahead of the competition. Although almost always, the first step in the manufacture of the active ingredients is of fermentation, synthetic processing, enzymatic conversion and biopharmaceutical plants.  For both the Consumer Healthcare Products and the pharmaceuticals a sterile environment is required to manufacture all of the products, so the staff are required to wear protective clothing and masks within these areas.  

The method of production that is used to manufacture the pharmaceutical products (tablets) is batch production. Each batch manufactured has its own batch number, this number will correspond to information about the particular batch. E.g. where it is produced, the date and time of production, the particulars of the ingredients used for that batch.

This system has computer-aided manufacture; this is to ensure that there are always the required amounts of chemicals/actives being processed. The computers can check the standards, alter any method of production runs and processes and produce many, far quicker than people. The CAM procedure will ensure high quality assurance.

The method of production used for the Consumer Healthcare Products is continuous flow production. This system is an automated process that requires minimal labour input, only one or two people are required to watch the process to ensure it runs smoothly. As these products do not change their ingredients or look, this is the most efficient and easiest way of production.

The outputs that GlaxoSmithKline produces are many. The pharmaceuticals include many household names such as; Panadol, Nicorette, Zantac, Imigran, (Migraine tablets), Hepatitus A vaccine, Avandia, Flixotide Inhaler and Tums. The Consumer Healthcare Products include products such as Lucozade, Aquafresh Horlicks, Ribena and Polident. These are just a few of the many hundreds that are produced every year.

ADDING VALUE

GlaxoSmithKline add value to its products within the manufacturing process by the procedures it undertakes in turning the raw materials of chemicals, actives, ingredients and compounds into pharmaceuticals and Healthcare Consumer Products. The actual processes that GlaxoSmithKline undertakes to produce the products is not open information, this is because of the intense competition within the pharmaceutical industry.

 The company is continuously striving to add to the processes that are carried out to add value to the products to make them more marketable; this is done through the research and development department.

 The Research and Development that the Group undertakes into improving the already extensive range of products is ongoing and is one of the company’s aims. ‘Being the best product developer’. This would include doing things such as improving the formulae of pharmaceuticals and improving the ingredients that are included within the Consumer Healthcare Products.

QUALITY ASSURANCE

It is company policy for quality to be implemented into every step of the manufacturing process. The quality assurance that GlaxoSmithKline has in place is a continuous implemented action that is started with the supply of the raw materials.      

 The Quality Control Laboratory provides an essential service by testing in-coming raw materials, packaging materials, work-in-progress and finished product. This includes microbiological testing of product, the manufacturing environment and materials used. The laboratory is also equipped to undertake finished product stability testing using the latest equipment and analysis are carried out using the latest software.

At the start of the Primary supply, the responsibility is huge, if the materials are not to the right quality or at the right levels of control and compliance, then every site within the secondary supply that converts the active drug substances into finished dose is at a significant disadvantage. At each stage of production, all of the products are tested to ensure they are up to standard. This includes certification of local material suppliers, in-process control at all stages of manufacture, rigidly controlled specifications and methodology, and the highest standards of Good Manufacturing Practice (GMP) underpinned by staff training and internal auditing. This is done continuously and only after Total Quality Management is satisfied that the products are of the highest quality will they continue onto the next stage of production. All quality assurance activities are supported by detailed and controlled documentation.

Staff within all of the manufacturing sites, are constantly reviewing the practices used in all aspects of the processes, so that new and better ones can be discovered. These members of staff are all within the Quality circle and devote their time to trying to implement improvements within their work areas. As there are already strict quality practices in place and a continuous drive for more improvements, there would not be any need to change them.

As well as the above activities, The Risk Oversight and Compliance Council (ROCC) is responsible for co-ordinating the internal control and risk management activities of the company and ensures that there are designated managers to manage significant risks. These managers are heads of departments with internal control, risk management, audit and/or compliance responsibilities. They will assess and ensure that regular ‘gap analysis’ is carried out to identify any gaps in internal controls and providing reports to the Audit Committee, in addition to separate ones provided to the separate internal control, audit and compliance departments within the company.

The Health and Safety requirements that are in place are strict; this is because of the implications that could occur if the product was not up to standard. I.e. causing the death of a person. GlaxoSmithKline has its own set of standards that it works towards and although external validation and approval is needed, it is the job of GlaxoSmithKline to ensure that the products it manufactures are effective. (These practices are done within the Research and Development department, through trials, human or otherwise).

The external validation is done by three main bodies these are; Centre for Drug Evaluation and Research, U.S. Food and Drug Administration and European Regulatory Affairs.

These external bodies ensure that drugs are safe and effective, they regulate and ensure the implementation of policy for appropriate qualities and materials within the industry. They also ensure that the laws set out by the countries that the company is within are withheld. GlaxoSmithKline complies with the ISO 9000 international standard; this sets down standards covering-

The supply of goods, quality control/assurance, training, internal documentation, after sales service, and system management.

Other standards that GlaxoSmithKline comply with include BS 5750, (British Standard) and GW433908-This is the standard for investigational materials used in human trials.

CONCLUSIONS AND RECOMMENDATIONS

Having undertaken a thorough investigation into GlaxoSmithKline, the conclusions that I have found throughout my research into this company are that the performance of the company as a whole is efficient and prosperous. They are a company that is continually reviewing its practices throughout the whole of the globe.

The risks that are relevant to the Company’s business are taken into consideration when forecasts are made. A major risk is that R&D will not deliver commercially successful new products. To counteract this, GSK continue development of improvements to existing products and to increase overall sales of products.

The loss or expiration of patents or marketing exclusivity impacts on the Group’s sales and earnings, the approval for generic versions by competitors is vital to the company and there are a number of legal proceedings going on at any one time. To try and protect themselves, and to ensure a reasonable return on investment in R&D, the Group patents, trade marks, registers designs, copyrights and ensures domain name registrations of it’s products. Patent and trade marks rights are regarded as particularly valuable.

The business performs well; this shows in the latest annual report. This report published in 2002, illustrates the total pharmaceutical sales grew eight per cent to £18 billion of which new product sales totalled £4.8 billion.  The Group also experienced business performance trading profit up by fifteen per cent.

 The organisation structure, culture, management style and communication (ICT) interact easily and efficiently.  These are efficient because as the company has grown and become a global company, the functions have been reviewed and are continuously revamped to become as efficient as they are today. The Group has programs that it designs and follows to fulfil its own potentials, to get the best results throughout the world, from within each department. They interact effectively because the aims and objectives of the Company are intertwined in each department and all employees are working towards the same goals.

 GlaxoSmithKline expect a high standard of its employees and this is one of its ‘Leadership Essentials’- ‘Performance with Integrity’.

GSK Website

‘Our global quest is to improve the quality of human life by enabling people to do more, feel better and live longer.’ This is a common goal within GlaxoSmithKline that is always being stressed, and as this aim is always innovated, employees feel that their jobs are a process to help people within the global community.

 This is implemented within every department of the global company, from the senior management right down to the cleaners, and as every employee within the company feels they have an important role to fulfil, their inputs and performance are at a high level.

An alternative approach to the total quality management assurance that GlaxoSmithKline has in operation could be to implement quality assurance to all its activities. This would be a reduced quality system and the effect that it would have on the functions within the business as a whole, would be that it might prohibit the already efficient practices from continuing. This would therefore have a knock-on effect to reduce the overall production sites and effectiveness of the other parts of the company.

The practices already in place help the Group to achieve its objectives by;

 Continually reviewing its source of supply-This meets the objective of focus on performance, supply and cost

 Continually applying quality management-This meets the objectives of absolute attention to compliance and team work and talent expression

Continually benchmarking other companies- This meets the objective of focusing on their own performances to meet the aim of being a world leader.

Continually reviewing its practices through out the Operational Excellence program- This meets the objective of streamlining the processes used within the GMS

APPENDIX

Bibliography

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