| The package labeling function within the pharmaceutical industry is examined for the purpose of developing a total cost simulation model for evaluating postponement strategies. A combination simulation-regression analysis is conducted using data obtained via the case study interview method. Based on these findings, variables were developed and tested in the model to determine the economic viability of postponing labeling to the distribution center level.; Different types of economic structure drive two separate printing technologies, namely plate (conventional) and plateless (digital). Depending on the technology utilized, pharmaceutical companies may generate cost savings through postponing the labeling function to the distribution center level in the supply chain. Digital printing is identified as an enabler to postponement due to significantly reduced setup times.; In conclusion, the study identifies and defines the product factors that have an impact on the total cost of printing labels for the pharmaceutical industry. Results indicate that the number of annual production runs is the factor that has the largest impact on total cost savings realized through the use of digital printing. Consequently, total cost savings achieved through digital printing technologies become increasingly greater as the number of annual production runs increase. The second largest impact is the number of brands, with the number of global markets and the frequency of marketing changes tied for the next order of importance. Managerial implications are discussed where labeling postponement becomes economically viable for a given product line in the pharmaceutical industry, based on the defined product factors. |
