Innovation at American Health Packaging

Business

Innovation at American Health Packaging

American Health Packaging (AHP) is a wholly owned subsidiary of AmerisourceBergen, located in Columbus Ohio (AHP, 2014). The business provides customized pharmaceutical packaging to two main customer groups; pharmacies and drug manufacturers. The strong position the firm has within the pharmaceutical packaging industry is the result of the high level of innovation, seen with the number of patent protected proprietary products; of approximately 380 SKUs, one third are exclusive to the organization and protected by patents (AHP, 2014).

To consider the way innovation takes place it is necessary to look at general approaches to innovation, consider which is most aligned with the organizations operation. Firms may approach innovation in different ways. Traditional approaches to innovation will focus on the development of evolutionary changes; making small improvements to existing products and systems (Mintzberg et al., 2011). The innovation led organization will have a more proactive approach towards innovation which is more flexible and may lead to greater levels of revolutionary or radical change (Mintzberg et al., 2011). The former model is likely to have an internal focus, where products are examined in order to identify small changes may be made, the latter model as a greater focus on customer needs and end goals, and then looks at the best way in which those goals may be achieved, it utilizing existing or new approaches (Mintzberg et al., 2011).

An examination of American Health Packaging (AHP) may indicate that many of the innovations introduced are incremental and evolutionary rather than revolutionary, but the approach is one that is proactive. The advertising for the organization demonstrate a high level of focus on customer, with the ability to design and manufacture customized products for their clients (AHP, 2014). Areas of innovation which are resulting in patents and exclusive products include those which are of most concern to customers; including innovation in terms of packaging design, including blister packaging and a bottle packaging, the development and provision of ready to dispense packaging with barcodes, and measures to support anti-counterfeiting, such as RFID, unique serialization, as well as distinctive labeling,

The way in which innovation is achieved since the organization undertake all of the tasks from initial conception right through the development stages and final design testing and manufacture, in a team-based structure which includes the utilization of packaging engineers to design and develop custom packages (AHP, 2014). The process within the organization has a focus on customer needs, this is seen in the way the organization works with other companies. In the 2013 AmerisourceBergen entered into an arrangement with Walgreens and Alliance Boots, the primary focus of the lines was based on the core operational areas in order to increase revenues improve earnings from operating efficiencies, but part of the agreement was also the sharing of best practices, the aim of utilizing shared knowledge in order to support innovation (AHP, 2014). This is being particularly seen in areas such as bar-coding of individual dose products (AHP, 2014).

The process may be customer lead, with customers approaching the organization, but the organization undertakes innovation based on knowledge of the way in which the market is changing and existing customer needs. This has been seen as a way that anti-counterfeiting measures have been developed and adopted within the organization, including the way in which RFID technology has been incorporated into packaging, and special labeling has been developed.