Who's got strategic sourcing on the brain?(Buylines: strategic sourcing news for supply chain & purchasing professionals)(Merck and Company Inc.)(Brief Article)

Purchasing, February, 2005

Pharmaceutical giant Merck Co. unveiled plans for a major cost reduction effort aimed at cutting its costs by about $2 billion by 2008. In a recent news report, Richard Clark, president of Merck Manufacturing Division, said Merck plans to save $1.2 billion of that by 2008 through aggressive supplier management.

Planned initiatives include streamlining its supply chain and reducing inventory for a savings of $300 million by 2006. Merck also expects to see $600 million in cumulative savings through decreased capital expenditures and more efficient use of current resources. The company is also reducing its workforce significantly. Merck was forced to make major changes after one of its major sellers, Vioxx, was pulled off the shelf.