Merck Sharp & Dohme

Management Today, November 1995 | Go to article overview

Merck Sharp & Dohme


Merck Sharp & Dohme's Cramlington factory is one of its four plants in the UK. It is also one of the US pharmaceutical giant's lowest-cost manufacturing units, reports Brian Lumsden senior director of UK operations. Here 200 staff produce almost 2.8 billion tablets and capsules annually, with a sales value of $2 billion. Since 1992 the plant's cost index has dropped from 100 to 45, and further investment is expected to lower the index to 24 by 1998. By that time operating costs should have increased by 70% over a six-year period, while volumes will have climbed 700%.

Cost reduction is a Merck tradition that predates current pressures in the pharmaceutical market: back in 1976 the company was the first in the world to commission an entirely automated tablet packaging line, Lumsden points out. The 20-year-old Cramlington factory `has always been lean on headcount'.

The characteristic is very much in evidence in the Proscar prostrate drug facility, where a mere four people produce 400 million tablets a year - the entire world output of this product. …

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