Stephan Bancel, Executive Director of Global Manufacturing Strategy, Global Supply Chain Management at Eli Lilly, sees integration of supply chain management with R&D and sales & marketing organizations as the key to fully capturing business opportunities, increasing speed-to-market, and reducing costs.

Another problem is the rise in product recall levels: the FDA noted 354 recalls in 2002, compared with 248 in 2001 and 176 in 1998. One company recalled 59 million asthma inhalers in 1999 and 2000 - because they had shipped out an unknown number of empty ones.

• For example, a large pharmaceutical company created a multiplant model of its internal supply chain by using value chain mapping. The process map identified 97 different production nodes - links within the supply chain - spanning six different plants around the world. At the completion of the mapping project, the pharmaceutical company had achieved substantial inventory reductions without compromising customer service. In some locations, inventory levels were trimmed by as much as 90 percent, with 20 percent to 30 percent being a common reduction at a given node. Lead times were reduced by 50 percent.