Baxter Business Operations– Middle East & Africa

Running head: BAXTER
Baxter Business Operations– Middle East & Africa
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1BAXTER
Executive summary
The main purpose of this report is to identify the issues in the supply chain of Baxter. The paper
identifies two issues on a broader aspect. Those two issues are incapability to keep products fresh
in temperature variation and costlier Iraq shipment. In the Middle East countries, the temperature
is generally on a very higher side. On the other hand, Baxter’s products are very sensitive and are
vulnerable to such variation in temperature. Hence, the paper identifies this as an issue and tries
to provide possible solutions to counter this. In sea shipment, small orders are partially loaded in
containers. However, a container can be used for loading more than what Baxter normally does.
It also causes to happen unnecessary expenses being made to the logistic cost. The paper also
provides suggestions on how to effectively maintain the Iraq shipment.

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Table of Contents
Introduction......................................................................................................................................3
1. Key Operations Management issues faced by Baxter to serve the GCC market.........................3
2. Recommending the best supply chain design/model...................................................................7
3. The measures to take with all the stakeholders to ensure that the SC is supporting the business
growth not the opposite.................................................................................................................13
4. Resolving the issue with regards to the Iraq Shipment..............................................................17
Conclusion.....................................................................................................................................21
References......................................................................................................................................23

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Introduction
The supply chain can be considered to be the heart of a company’s operations. The fact
though varies from SMEs to MNCs. Despite this, only a very few firms are actually able to
utilize its benefits. Firms that struggle they are affected by their capabilities to make the best
decisions. The management in such companies fails to establish access to real-time data. It is
because they have limited access to legacy technologies, which is required to create end-to-end
transparency (1). There is a need to get rid of the traditional business model that is being largely
followed across the global supply chain operations. The traditional model of supply chain
operations can be replaced with an alternative. The recommended alternative is about supporting
a digital foundation in the operations field. The digital foundation can be formed with latest and
emerging technologies like automation, artificial intelligence, predictive analytics, and robotics.
By using this digital formation in place, firms belonging to different industries can capture,
integrate, analyse, and interpret high-quality data in real-time (2).
The main purpose of this report is to identify the supply chain operations issues of Baxter
and providing adequate solutions to counter those issues. Baxter’s products are essential building
blocks of healthcare sectors at the global level. The products and services of this company are
available to a number of countries across the globe. These products of Baxter contribute
substantially to the global stock of medications, and treatments. Hence, it is important for Baxter
to be able to supply adequate products, and services to global countries when it is needed.
However, it has constantly been facing a range of issues in its supply chain especially in the
Middle-East and the African regions. Hence, this report first identifies the issues and then tries to
propose a few way outs of it.
1. Key Operations Management issues faced by Baxter to serve the GCC market

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As noted by (3), supply chain management practices can influence the rate of customer
satisfaction for a firm. As per this article, there should exist a deeper relationship between the
employers and suppliers. Indeed, employers must be capable of working collaboratively and
having good control over the transaction between them and the suppliers. If this can happen the
rate of customer satisfaction for the concerned company will definitely go high.
The evolution of the supply chain is also very interesting. The Supply Chain
Management (SCM) term was first coined by logistics consultants in 1980s. Since then the
supply chain has kept on gaining popularity with passing days. The popularity of SCM did not
remain confined just to the practice but also extended to the scholars. Those scholars researched
and wrote a variety of journals on distribution, manufacturing, marketing, transportation,
customer management, and integration. According to (4), the introduction of the supply chain
produced a paradigm shift within and around the management literature. Individual businesses
no longer competed as autonomous entities but rather as the member of supply networks. In a
network of interconnected firms, success was not just dependent on individual operations but on
capabilities to manage the interconnected entities.
The fact mentioned in the above paragraph suggests that the success of a supply chain
depends a lot on firms’ capabilities to manage their business relationships with others in the
interconnected network. It suggests that communication between interconnected entities is also
very important. Effective communication between these entities will ensure that demands and
supplies are effectively communicated to each party. Considering these few facts, a number of
supply chain issues can be traced in Baxter’s issues. These are (5):

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1. Baxter is facing a considerable variance in the forecast between orders being
communicated to the manufacturing sites, and the orders received from the firms. It is
affecting its forecast capability on a larger note.
2. Larger orders are prepared and manufactured in different manufacturing branches. These
branches are sometimes based in different countries or even the continents. Moreover,
sometimes similar orders are manufactured from different products at the different
manufacturing branches. It shows clear communication and inventory management gaps
in supply chain operations.
3. Small orders are kept in queues until it reaches the minimum order quantity. The process
is cost-effective from operations’ perspective; which is a good thing. However, it is not
that pleasant an experience for the Baxter because it generally fails to deliver orders on
time.
4. The company does not offer a feasible container option for small orders. The container is
used to carry such products are generally made of higher containers. Hence, the container
handling cost does not get an equally good return.
5. The products of the Baxter Company are temperature sensitive. It needs to be kept
between (+15 to 25°C). The temperature is one of the few constraints in Gulf
Cooperation Council (GCC) countries. The temperature can seriously impact the quality
of the products.
6. Sudden orders create a lot of problem for the company. The delivery lead time is equal to
120 days from the date of order received. Despite this Baxter receives urgent orders to be
delivered in unexpectedly less time. They are receiving urgent orders on a regular basis.