Advice You - Business

In the business world the method that a particular company uses to get its products from the factory to the consumer varies. These methods are very sophistic

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

ated and often define the profitability, quality and ultimately the success or failure of a particular business. One particular logistical system that is int

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

eresting is the system that Dell uses to deliver its computers from the factory to the customer's location.

If you have ever purchased a Dell computer you kn

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

ow that you are allowed to completely customize your computer and that Dell guarantees delivery of your computer in a certain time frame. To provide such a t

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

emendous service to their customers it would seem to cost Dell a tremendous amount in unused inventory and storage costs. One would even wonder how Dell can

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

afford to operate like this. The truth is that Dell actually carries no inventory and that they in fact force their suppliers to carry all the inventory and

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

therefore the suppliers also assume all the risks and costs associated with this inventory.

The first step in this incredibly profitable logistical system is

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

when the customer enters his specifications for the computer that he or she will purchase. When Dell receives and processes this information, they send an o

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

der out to each individual supplier and they transport each part to a location where the product can be assembled. Then Dell simply assembles the item and sh

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

ips it out to the customer. Dell is not responsible for any inventory and even more incredibly does not have to pay for any unused parts. Dell's logistical

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

system works almost flawlessly and it would seem to the casual observer that Dell has really designed an ingenious system that allows them to run their busine

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

ss in this manner. However the reality is that a logistics system like this has been come up with before, but the difference is that no other company has bee

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

able to convince its suppliers to go along with an arrangement which will cost them so much. It is very difficult for a company to convince a supplier to gu

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

arantee that a certain number of parts will be in stock and ready for use and to not offer a guarantee in return that they will be paid for the parts. From a

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

supplier's point of view it would not be beneficial to assume all the risk of unused inventory.

How Dell convinces its suppliers to agree to take part in a

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

system in which the supplier will assume all of the responsibility for the over-forecasting of sales and unsold parts is still a mystery. One of the only pos

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

ibilities is that Dell chooses small suppliers and makes sure that the majority of their business is done at Dell. Dell then leverages this position and coer

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

ces them into taking part in a logistical system that is clearly not beneficial to the supplier. In order for the supplier to allow this to happen Dell has t

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

o keep sales high so that Dell can give the individual suppliers enough business to stay afloat and be profitable. This is of course easier said than done a

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

nd this is the reason that Dell is one of the only companies that can offer a customizable product that can be assembled and delivered quickly to the consumer

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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A brief summary of the history of the competitive market system by author Ryan P. M. Allis.

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