Merck targets $1.2bn procurement savings by 2008

02 November 2006 23:06  [Source: ICIS news]

EAST BRUNSWICK, New Jersey (ICIS news)--Merck said on Thursday it expected to deliver $1.2bn (€939m) in cost savings through global procurement initiatives during 2004-2008.

“We feel confident we’re on track to deliver these initiatives and savings,” said Richard Spoor, vice president, global procurement for Merck. He spoke here at the Drug, Chemical & Associated Technologies Association/Institute for Supply Management (DCAT/ISM) Strategic Sourcing Summit & Showcase ’06, which was held conjunction with ICIS.

The pharmaceuticals giant has invested in a procurement transformation programme to handle the difficult pharmaceuticals market environment that the company and other drug firms have found themselves in recently, said Spoor. The company expected to meet its target of $250m savings next year through procurement management.

The procurement transformation programme's primary objective was to handle and manage its supply chain more efficiently from end to end, Merck said.

“Internal and external drivers create the great need for us to focus on cost management as an organisation,” Spoor said. “We need significant financial return from the money we spent with third parties, and we want an organisation that’s going to help us drive that return for the company overall,” he said.

Merck was entering the third full year of its procurement transformation programme and has already begun to see changes in manufacturing, research and marketing operations, Spoor said. These changes were leading to sourcing and contracting, where the company continued to see important opportunities for expansion.

By: Feliza Mirasol
+1 713 525 2653

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