Global Risk Management: Labcon Harvard Case Solution & Analysis


Labcon North America was founded in Marin County, California in 1959. The original name of the company was Ways and Means, Inc. Itshowed the uniqueness of the plastics industry. The aim of the business was to develop ways and means to make plastic products. The company developed several small toys, vials for salt tablets, contact-lenses cases, cassette tape cartridges, and cigarette filters. Currently, the company supplies more than 800 products to labs all over the world. It develops more than a billion products every year. It focused on innovative disposable plastics and combined them with the highest levels of quality and service. 

Reinventing Bio-technology                                                                                                                                                   Since the environmental concern amongst people about the usage of disposable products, Labcon has begun developing innovative products that are environmental friendly using less packaging, recycled plastics, and refillable packages. This enabled the company to achieve patents of different products. A particularly good example is the Pagoda pipet tip reloading system. This product eliminates 90% of the packaging and waste.

Moreover, Labcon began finding ways to eliminate waste in the general laboratory. As high automated processing, and High Throughput Screening (HTS) consumes labware, and generates waste, at high rates, it manufactured a line of robotics to reduce waste. These low waste products; both standard and robotic, are marketed under their Earth-friendly banner(Labcon, n.d.).

It ensures maximum product recycling by using common materials like 100% polypropylene, polyethylene and paperboard packaging instead of “co-molded” plastic blends and polystyrene foam (Styrofoam) which are difficult to recycle. The design of their products and the manufacturing facility in Petaluma, California, have improved allowing the energy content to reduce by more than 50% since 2000 for a case of product(Labcon, 2014).

They have the best value proposition with an excellent distribution network to ensure their position as a leader in the market.

Global Risk Management Labcon Case Solution

Vertical Integration

 The company is a vertically integrated company. It has control over its distribution as far as its direct distribution through the website is concerned. This form of distribution is only available to Americans.However, it also depends on other distributors as well. The vertically integrated companies have lower costs as compared to others.

 For instance, it eliminates the profit margins of distribution companies that are now under its control.In order to increase the distribution of the labware products, Labcon would not be dependent on other companies. It would also ensure fast decision making and increased customer satisfaction as they will get their products on time.

 However, there are many drawbacks to this strategy. The company may not have expertise in this segment and not able to distribute its products effectively. Furthermore, this may disturb the attention of the management from their core objective that is the supplier of environmental friendly labware products. It may require a lot amount of investment to acquire distribution channels around the world.

 Moreover, as a multinational company, it has to face many regulatory concerns if it opens its distribution channels in other companies. It also requires a large amount of investment which can be invested in research and development of other eco-friendly labware products.

The in-house sterilization facility would make it more vertically integrated companyas it would save massive costs of handling and transportation charges associated with the shipping loads to and from sterilization facility. It is viable only when if there is sufficient volume to keep the sterilization process operating at and near future.

Current Sterilization process

 The current sterilization process required high heats for long periods. The penetration of the heat takes a long time in large devices. Therefore, it is not proper for plastic and clothes. The time of the sterilization and ventilation is long. Other methods can only sterilize a small number of instruments,and it is not possible to use materials after the sterilization process. Moreover, it sends its pieces of equipment to other areas for sterilization process that costs them a lot.

As sterilization is a very important process for this industry and products will not be acceptable to laboratories if pieces of equipment are not properly sterilized. As the costs incurred were large, and the quality of the process was essential, it was important to change their strategy to ensure their leadership position in the market. 

E-Beam Sterilization method

 The e-beam can penetrate medical devices and pharmaceutical products in their final shipping containers. The e-beam inactivates microorganisms either by causing microbial death as a direct result of the end of a vital molecule or by an indirect chemical reaction.Advanced electronics precisely control the role of electrons in the sterilization of medical devices.For many materials, e-beam processing results in less material degradation than with gamma radiation(Silindir, 2009)......................

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