“Coordination and Strategic Challenges in Biopharmaceutical Supply Chains”
by Yasemin Limon
University of Wisconsin-Madison
Abstract
The biopharmaceutical industry has received significant attention in the recent years with the development of revolutionary therapies based on gene editing and recombinant proteins. The industry spent $180 billion on the research and development of biopharmaceuticals in 2018. In this talk, we present models to address coordination and strategic challenges in the biopharmaceutical supply chain.
In the first part of the talk, we consider a coordination problem in the collaboration between biotechnology companies. Through effort-based contract models, we show that traditional incentive mechanisms fail to achieve coordination, although they are commonly used in the industry. We introduce a new contract model called fee-for-effort and output that encourages the parties to exert higher efforts by offering discounts on their operating costs, and coordinates efforts with appropriate selection of contract parameters.
In the second part, we analyze resource allocation strategies in biomanufacturing operations where differences in scientist capabilities can lead to significantly different outcomes. Using queuing models, we show that certain partial flexibility structures coupled with appropriate priority rules can yield efficient system performance. Our numerical experiments provide guidelines for the biomanufacturers to achieve higher profits and shorter lead times.
The talk will conclude with discussion of future research opportunities in the biopharmaceutical area.
Yasemin Limon is a Ph.D. Candidate in Industrial and Systems Engineering at the University of Wisconsin-Madison. Her research interests are stochastic modeling and game theory with their applications in operations and supply chain management. She has been working as a Research Assistant at the Center for Quick Response Manufacturing, University of Wisconsin-Madison, where she has been involved in industry projects, and co-supervised graduate students. She holds B.S. and M.S. degrees in Industrial Engineering from Middle East Technical University.
