Corporate Value Chain Analysis of Perrigo Company

Perrigo Company is the market leader in OTC nonprescription drugs and Personal care segment by creating value for their customers through the following value chain activities.

Marketing & sales

• Establishing close relationship with the retailers and developing store brand management plans and offering them significantly higher profit margins, thus resulting in increased corporate commitment by retailers in form of promoting store brand products through coupons, rebates and other individualized promotions. 

• Introducing MIMS program to reduce retailer’s inventory costs while maintaining optimum level of product on store shelves, thus allowing Perrigo to monitor and manage customer inventory levels.

Operations

• Company’s six manufacturing plants, while operating at an average of 86% capacity, was designed and equipped to allow low cost production of a wide variety of products of different quantities, sizes and packaging.

• Flexible production line change over capabilities and reduced cycle times enabled the company to respond quickly changes in customer’s orders from one item to another.

• Installation of MRP 2 system enables the company to develop realistic and attainable production schedules and related material and capacity requirement.

• Introduction of JIT concept led the company to formation of work teams.

• Through supplier certification Program Company can improve quality, save time, eliminate duplication of efforts between Perrigo and its suppliers, thus reducing costs by eliminating the amount of incoming inspection, rerouting the flow of certified materials through the production department and reducing lead times and inventory levels.

• Perrigo Graphic Arts and Printing Department carried extensive consumer research to design and produce packaging that attract customers.

Human Resources

• Introduction of Improshare- a productivity-based bonus plan, thus eliminating the cost of living increases and other general increases. It improved productivity as well as employees began more concerned about hours worked and absenteeism not only their own but also those of others.

Product Development

• Perrigo manufacture and market not only new store brand products but also variations of existing products such as new sizes, flavors, and product forms while working in partnership with their customers.