Ciba Vision Problem-Solution Example 1:

CIBA Vision

Problem-solution example 1: Clear Care shortage (2006)

Contact lens wearers demand consistency regarding the availability of their lenses. A delay in obtaining a new supply of lenses can be frustrating and ultimately cause a customer to discontinue the use of that particular product. In the past, there have been delays regarding the availability of Clear Care, a popular lens produced by CIBA Vision, due to supply chain problems. When Clear Care proved to be unavailable for inexplicable reasons, irate consumers bombarded CIBA Vision with emails, asking if the product had been discontinued.

Greater control over the production of its core products is essential for CIBA Vision. Introducing a system of vertical integration has been suggested as the solution to the types of issues that arose during the Clear Care shortage. Vertical integration allows an enterprise to expand upon its core competencies and to have greater control over the consistency of a product's supply. Given CIBA Vision's incorporation into a larger organization in the form of Alcon, there are greater financial and operational resources available for the contact lens company to expand its operations.

Two types of vertical integration exist, that of forward integration (an expansion of activities downstream in the production process) and backward integration (an expansion upstream) (Vertical integration, 2011, Net MBA). In the case of CIBA Vision, having greater control over the production of contact lenses (a backward movement) would have solved the Clear Care problem. As a result of the shortage, the company was forced to recommend to consumers that they buy a replacement product. This is problematic, as some consumers may then switch to the more easily-available replacement lenses on a permanent basis. In the future, CIBA must set a goal to minimize delays. In terms of its forward integration, it should also collaborate more effectively with issuers of prescriptions so that customers are informed in a timely fashion about any product shortages in the future. The company should also issue periodic updates on its website regarding the availability of its products.

Problem example 2: Miraflow product shortage -- Ebay availability: (2007)

A different type of supply chain problem was exhibited regarding a shortage of different CIBA Vision products available on eBay as well as in drug stores. Once again, due to problems with the supplier, the product was unavailable through conventional pharmacies and the cost of a bottle of Miraflow (20 mL) skyrocketed from $6.00 to $30 on eBay -- an increase of 400%. This created a negative perception of a lack of affordability of CIBA's core products. CIBA took note of this problem and collaborated with I2, a supply chain company. It set the goal of keeping product availability at major retail establishments at 99.5%. Before embarking upon its venture with I2, the product supply chain was highly fragmented, resulting in shortages in many areas and causing the price to spike online. The result was a series of unhappy customers. This also had the effect of deterring new customers from trying CIBA Vision products, because of the perception of the product being unnecessarily pricy.