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2. Operations Management Case Studies case study (20 Marks) In 2011,, the chairman of Dr. Reddy’s Laboratories (DRL) had just had his morning coffee, when he received the news that US Food and Drug Administration (USFDA) had imposed an import ban on products manufactured at DRL’s Mexico plant for violation of good manufacturing practice norms. DRL’s Mexican arm, which the company bought from Swiss pharmaceutical major Roche in 2005, produced intermediates and Active Pharmaceutical Ingredients (APIs). After going through the letter twice, Prasad was convinced that he had to take immediate corrective actions.

3. Though the company had taken some corrective actions following the warning letter and also replied back to the USFDA, it faced this ban. As Prasad looked back at the fond memories following the acquisition in 2005, he wondered what went wrong at the Mexico plant and how could he address them without upsetting the current stakeholders of DRL. The case focuses on the problems faced by Dr. Reddy’s Laboratories (DRL), a leading Indian pharmaceutical company, with respect to its Mexico plant in 2011. The company had acquired the plant, which supplied these bulk drugs to other pharmaceutical companies in the West, from Roche. DRL received a warning letter from the US drug regulator, USFDA, for violating current good manufacturing practices.

4. USFDA inspected the plant and found it non-compliant with the manufacturing practice norms for APIs. The FDA sought an answer from DRL within 15 days of the letter. Though the company managed to submit a report to the USFDA within the stipulated time, a ban was imposed on the import of products from the Mexico plant as USFDA was not satisfied with the company’s response.

5. Answer the following question. Q1. Explain the link between strategy and operations. Q2. Discuss the issues and challenges in quality management. Q3. Discuss the issues and challenges for a company from an emerging market competing in the global markets, particularly markets in the West. Q4. Explain the importance of operational effectiveness in sustaining a low cost strategy.

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