“Analysis of SCM: A case study of Wyeth Pharmaceutical company”
Submitted by: Shahzad Ali Rajpar
Supervised by: Mr. Muhammad Amir Adam
Program:
MBA
FALL 2010
National University of Computer & Emerging Science
Management Science Department,
Karachi, Campus
Page | 1 Acknowledgments
Thanks to Allah the All Merciful the all Benevolent for providing me the strength, courage, direction and skills to learn, acquire knowledge, and the ability to accept and meet challenges. Second I would like to thank all those people who have helped me in performing this research study, especially Mr. Aftab Amie Siddiqui manager planning and warehouse, Wyeth Pharmaceutical Limited Pakistan.
I would like to express my sincere gratitude to my supervisor Mr. Mohammad Amir Adam for providing me his precious time, guidance, and instructions all along in order to materialize my content for the project report. I would also like to thank the FYP Coordinator Mr. Zaki Rashidi for his assistance and guidance for the research project.
I am also thankful to my parents who accommodated me during those long hours of work in my project development and all the friends and colleagues who helped me out in my times of weakness and encouraged me.
I am hopeful that the effort will be fruitful for the students to come in FAST after us. Once again, I am very thankful to all people who have been involved in this project report directly or indirectly.
Page | 2 Table of Contents Acknowledgments ...... 2 Table of Contents ...... 3 CHAPTER 1 “INTRODUCTION” ...... 6 1.1 Supply chain management...... 6 1.2 Evolution of supply chain management...... 7 1.3 Challenges of supply chain management ...... 8 1.3.1 Information Integration ...... 9 1.3.2 Co-Ordination and Resource Sharing ...... 9 1.3.3 Organizational Relationship Linkage ...... 9 1.4 Activities in SCM ...... 10 1.4.1 Strategic: ...... 10 1.4.2 Tactical: ...... 11 1.4.3 Operational: ...... 11 1.5 The management components of SCM ...... 11 1.6 SCM in Pharmaceutical industry ...... 13 1.7 Pharmaceutical industry in Pakistan: Industry overview ...... 14 1.8 Pharmaceutical sector current scenario ...... 15 1.8.1 Top Pharmaceutical Companies in Pakistan...... 17 1.9 Introduction to Wyeth Pharmaceutical: ...... 17 1.9.1 List of products manufactured and/or sold in Pakistan: ...... 19 1.9.2 Hirarchy ...... 21 1.10 PROPOSAL PART 1: ...... 23 1.10.2The problem statement: ...... 23 1.10.3Main Research Questions: ...... 23 1.10.4 Objectives of the study: ...... 24 1.10.5 Justification: ...... 24 1.10.6 Limitations / Barriers ...... 25 1.10.7Scope: ...... 25 1.10.8 Assumptions: ...... 25 Page | 3 1.10.9 Who will benefit from the study? ...... 26 2.0 CHAPTER 2 “LITERATURE REVIEW” ...... 26 2.1Supply Chain Management ...... 26 2.2Logistics and Supply chain management ...... 30 2.2.1The Evolution of Logistics...... 30 2.3Supply Chains and Flexibility ...... 32 2.3.1From Manufacturing Flexibility to Flexible Organizations ...... 32 2.3.2Supply Chain Flexibility ...... 33 2.4Challenges of SCM ...... 35 2.4.1Information Integration ...... 36 2.4.2 Co-Ordination and Resource Sharing ...... 36 2.4.3Organizational Relationship Linkage ...... 36 2.5Oppertunities in SCM ...... 37 2.5.1Information Technology in SCM ...... 37 2.5.2Supply chain management software’s ...... 38 2.5.3Supply Chain in Food Sector ...... 38 2.5.4 E-Financial Supply Chain Systems ...... 39 2.5.5 SCM in Pharmaceutical industry ...... 39 3.0 PROPOSAL PART 2: Research Methodology ...... 40 3.1 Research Design: ...... 40 3.2 Procedure: ...... 40 3.2.1 Population: ...... 40 3.2.2 Sample and Sampling Method: ...... 40 3.2.3 Measurement/Instrument Selection: ...... 40 4.0 Data Analysis: ...... 41 4.1 Up stream Activities...... 41 4.1.1 Vendor Analysis: ...... 41 4.2 Mid Stream Activities: ...... 43 4.2.1 Planning Department: ...... 43 4.2.1.1 ABC Classification: ...... 44 4.2.1.2 Marketing Forecast: ...... 45 4.2.1.3 Master Production Schedule: ...... 45 4.2.1.4 Materials Requirement Planning: ...... 47 4.2.1.5 Schedule Adherence Report: ...... 48
Page | 4 4.2.2 Purchasing Department: ...... 48 4.2.2.1Purchase Local: ...... 49 4.2.2.2 Purchase Requisitions: ...... 49 4.2.3 Warehouse (Raw material packaging): ...... 53 4.2.4 Quality Assurance: ...... 54 4.5.1 Objectives of Wyeth’s QC: ...... 54 4.5.2 QC of purchase material: ...... 54 4.3 Down Stream Activities ...... 55 4.3.1 Shipping Department: ...... 55 4.3.2 Key Role of Wyeth’s Distribution Manager: ...... 56 4.3.3 Functions and Objectives of Wyeth’s Distributors: ...... 57 4.3.4 Distribution list of Wyeth: ...... 58 5.0 CHAPTER 5 :CONCLUSION and RECCOMENDATIONS: ...... 62 As after being acquired by Pfizar in February 2009, Wyeth Pakistan is still facing management issues, which may affect its performance in both the short and long run. One such issue is of the name. The name of Wyeth has changed throughout the world but due to some share holders issues the name of the company still remains Pfizer. Another problem that has aroused is of the placement of the top management, though some of the directors and vast number of employees have been downsized, their experience and the services have also left a vacuum, which is to be filled and managed accordingly as it may and will directly affect the performance and hence the performance and workability of its effective and efficient supply chain department...... 62 As from the website, we can read the slogan ...... 62 References ...... 64
Page | 5 CHAPTER 1 “INTRODUCTION”
1.1 Supply chain management. Supply Chain Management encompasses the planning and management of all activities involved in procurement, sourcing, conversion, and logistics management activities. SCM also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, SCM integrates supply and demand management within and across different companies. More recently, the loosely coupled, self-organizing network of businesses that cooperates to deliver product and service offerings has been called the Extended Enterprise.
Supply chain management is the process of Planning, implementing and controlling the operations of the supply chain as efficiently as possible. SCM spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of- origin to point-of-consumption.
Some experts distinguish SCM and logistics, while others consider the terms to be interchangeable. Supply Chain Management can also refer to supply chain management software which is tools or modules used in executing supply chain transactions, managing supplier relationships and controlling associated business processes. Supply chain event management (abbreviated as SCEM) is a consideration of all possible occurring events and factors that can cause a disruption in a supply chain network. With Supply chain event management possible scenarios can be created and solutions can be planned.
Page | 6 A supply chain is a network of facilities and distribution options that performs the functions of sourcing and procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to the end customers. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm.
Typically, Supply chain management is viewed to lie between fully vertically integrated firms, where the entire material flow is owned by a single firm and those where each channel member operates independently. Therefore coordination between the various players in the supply chain is a key in its effective management. Cooper and Ellram compare supply chain management to a well-balanced and well-practiced relay team. Such a team is more competitive when each player knows how to be positioned for the hand-off. The relationships are the strongest between players who directly pass the baton, but the entire team needs to make a coordinated effort to win the race.
Supply chains encompass the companies and the business activities needed to design, make, deliver, and use a product or service. Businesses depend on their supply chains to provide them with what they need to survive and grow. Every business fits into one or more supply chains and has a role to play in each of them. The pace of change and the uncertainty about how markets will evolve has made it very important for companies to be aware of the supply chains they participate in and to understand the roles that they play. Those companies that learn how to build and participate in strong supply chains will have a substantial competitive advantage in their markets.
1.2 Evolution of supply chain management. The term “supply chain management” arose in the late 1980s and came into widespread use in the 1990s. Prior to that time, businesses used terms such as “logistics” and “operations management” instead.
In the 1990's, firms recognized the necessity of looking beyond the borders of their own firms to their suppliers, suppliers' suppliers, and customers to improve overall customer
Page | 7 and consumer value. This movement, titled supply chain management or demand chain management, changed the companies' focus from the internal management of business processes to managing across enterprises.
Globalization, highly competitive markets, and the rapid pace of technological change are now driving the development of supply chains where multiple companies work together, each company focusing on the activities that it does best.
1.3 Challenges of supply chain management The demands made to a manufacturer by a client are dependent upon demands made by client’s customers. In a supply chain all manufacturers, suppliers, distributors and retailers have the same end customer. All of them will be successful, if they collaborate with each other in satisfying the demand. The competition is no longer between the organizations but between supply chains. If one supply chain fails to meet the demand another supply chain will overtake and satisfy that customer. Contemporary issues in SCM can be briefed as . Expanding distribution systems transcending the national boundaries and becoming global · Reduced inventory goals require flexible, high velocity manufacturing strategies that can enable a quick response when unexpected changes in demand occur · Many new SCM technologies like RFID are in the nascent stage and for them ROI is not yet identified · Increased demand responsiveness requires a “demand driven supply network” (transformation from push to pull operations) collaboration and closed-loop planning environment requires clean synchronized data · Information disintegration-disconnected demand, supply and financial plan make it difficult to reconcile plans with reality and re-plan accordingly · Complexity- increasingly complex supply chain processes impede best practice decision making and management of data transfers. · JIT inventory- can’t afford to have errors or supply chain disruption that will cause manufacturing to halt
Page | 8 · Short product lifecycles-one has to constantly set up new supply chains. Each product has its own supply chain; the more finished product and inventory are lying dead in your supply chain the faster you will get obsolete. · Faster order cycle time-less margin for error or delay in the supply chain.
1.3.1 Information Integration It means getting to the point where supply chain partners share information I real time. The kind of information shared is production plans, designs, promotions and sales, orders, production schedules etc. This information sharing as a tangible advantage can counter so called “Bull whip effect”, which is the problem of demand distortion in a supply chain as it moves back through the supply chain. It starts with a shift in consumer demand, which drives a response by retailers, then wholesalers then manufactures, the component suppliers, then raw materials suppliers. The effect is that variations are amplified the further you get from the end customer. It is obvious that if all the information’s were transparent across the whole supply chain, there would be no “Bull whip effect”
1.3.2 Co-Ordination and Resource Sharing Here it is not just information we are sharing, but rather we are shifting “decision rights” and “actual work” across firm boundaries. Traditionally decisions and work are located with owner of resources but now it is better to locate decision and work with those people who have the most knowledge and have incentives to make the right decisions that not necessarily are owners. Wal-Mart’s vendor managed inventory is the best example for this practice
1.3.3 Organizational Relationship Linkage This is one of the most difficult problems in SCM. Here we are entwining two organization together i.e. exchanging accountability, exchanging risks, costs gain. The vendor managed inventory is a partial application of this. Dell’s sharing of forecasts with suppliers is also an example of this. At Dell supplier’s co locate near Dell plants and they commit to fulfill 25% of Dell demand. This is purely based upon extended communication, performance measures and incentive realignment
Page | 9 1.4 Activities in SCM Supply chain management is a cross-functional approach to managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and then the movement of finished goods out of the organization toward the end-consumer. As organizations strive to focus on core competencies and becoming more flexible, they have greatly reduced their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other companies that can perform the activities better or more cost effectively. The effect is to increase the number of organizations involved in satisfying the customer demand, while reducing management control of daily logistics operations. Less control and more supply chain partners lead to the creation of supply chain management concepts. The purpose of SCM is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and improving inventory velocity. Several models have been proposed for understanding the activities required to manage raw material movements across organizational and functional boundaries. SCOR is a supply chain management model promoted by the SCM Council. Another model is the SCM Model proposed by GSCF “the Global Supply Chain Forum” Supply chain activities can be grouped into strategic, tactical, and operational levels of activities.
1.4.1 Strategic: Strategic level activities in supply chain includes,
. Strategic network optimization, including the number, location, and size of warehouses, distribution centers and facilities. . Strategic partnership with suppliers, distributors, and customers, creating communication channels for critical information and operational improvements such as cross docking, direct shipping, and third party logistics. . Product designs coordination, so that new and existing products can be optimally integrated into the supply chain, load management, IT infrastructure, to support supply chain operations. Where-to-make and what-to-make-or-buy decisions. . Aligning overall organizational strategy with supply strategy.
Page | 10 1.4.2 Tactical: Tactical level activities in supply chain includes,
. Sourcing contracts and other purchasing decisions. . Production decisions, including contracting, locations, scheduling, and planning process definition. . Inventory decisions, including quantity, location, and quality of inventory. . Transportation strategy, including frequency, routes, and contracting. . Benchmarking of all operations against competitors and implementation of best practices throughout the enterprise. . Milestone payments
1.4.3 Operational: Operational level activities in supply chain includes,
. Daily production and distribution planning, including all nodes in the supply chain. . Production scheduling for each manufacturing facility in the supply chain (minute by minute). . . Demand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers. . Sourcing planning, including current inventory and forecast demand, in collaboration with all suppliers. . Inbound operations, including transportation from suppliers and receiving inventory. . Production operations, including the consumption of materials and flow of finished goods. . Outbound operations, including all fulfilment activities and transportation to customers. . Order promising, accounting for all constraints in the supply chain, including all suppliers, manufacturing facilities, distribution centers, and other customers.
1.5 The management components of SCM The Supply Chain Management components are the third element of the four-square circulation framework. The level of integration and management of a business process link is a function of the number and level, ranging from low to high, of components added to the link. Consequently, adding more management components or increasing the level of each component can increase the level of integration of the business process link. The
Page | 11 literature on business process reengineering, buyer-supplier relationships and Supply Chain Management suggests various possible components that must receive managerial attention when managing supply relationships. Lambert and Cooper identified the following components which are: a. Planning and control b. Work structure c. Organization structure d. Product flow facility structure e. Information flow facility structure f. Management methods g. Power and leadership structure h. Risk and reward structure i. Culture and attitude However, a more careful examination of the existing literature will lead us to a more comprehensive structure of what should be the key critical supply chain components, the "branches" of the previous identified supply chain business processes, that is, what kind of relationship the components may have that are related with suppliers and customers accordingly. Bowersox and Closs states that the emphasis on cooperation represents the synergism, leading to the highest level of joint achievement. A primary level channel participant is a business that is willing to participate in the inventory ownership responsibility or assume other aspects of financial risk, thus including primary level components. A secondary level participant is a business that participates in channel relationships by performing essential services for primary participants, thus including secondary level components, which are in support of primary participants. Third level channel participants and components that will support the primary level channel participants, and which are the fundamental branches of the secondary level components, may also be included. Consequently, Lambert and Cooper's framework of supply chain components does not lead us to the conclusion about what are the primary or secondary (specialized) level supply chain components. That is, what supply chain components should be viewed as primary or secondary, how these components should be structured in order to have a more
Page | 12 comprehensive supply chain structure, and to examine the supply chain as an integrative one. Baziotopoulos reviewed the literature to identify supply chain components. Based on this study, Baziotopoulos suggests the following supply chain components:
1.5.1 Customer service management: It includes the primary level component of customer relationship management, and secondary level components such as benchmarking and order fulfilment.
1.5.2 Product development and commercialization: It includes the primary level component of Product Data Management (PDM), and secondary level components such as market share, customer satisfaction, profit margins, and returns to stakeholders.
1.5.3 Physical distribution, manufacturing support and procurement: It includes the primary level component of enterprise resource planning (ERP), with secondary level components such as warehouse management, material management, manufacturing planning, personnel management, and postponement (order management).
1.5.4 Performance measurement: It includes the primary level component of logistics performance measurement, which is correlated with the information flow facility structure within the organization. Secondary level components may include four types of measurement such as: variation, direction, decision and policy measurements. More specifically, in accordance with these secondary level components, total cost analysis (TCA), customer profitability analysis (CPA), and asset management could be concerned as well.
1.5.5 Outsourcing: It includes the primary level component of management methods, and the strategic objectives for particular initiatives in key areas of information technology, operations, manufacturing capabilities, and logistics (secondary level components).
1.6 SCM in Pharmaceutical industry Outsourcing- the current mantra of pharmaceutical industry is being used more strategically as on going part of a company’s overall business strategy. Outsourced Page | 13 activities can be in various field rights from “drug discovery” till manufacturing of the product. Pharmaceutical companies have a long outsourced function such as manufacturing, packaging; clinical trials and sales force mobilization. Bio-technology companies which have almost doubled in number during the past five years, also contributed to this trend as they seek ways of bringing their products to markets without making capital investment in their own manufacturing facilities, the major benefits of outsourcing are given below · Outsourcing reduces the overall cost by 30 to 35 percent · Reduces problems faced during the regulatory process · Improve manufacturing efficiencies · Reduces excess production capacity by divesting facilities · Improve net earnings and cash flow · Fast and cheaper to have discovery work outsourced as it reduces the drug development cost
1.7 Pharmaceutical industry in Pakistan: Industry overview After independence, Pakistan had no pharmaceutical industry and traders primarily based in India were importing most of the medicines. Recognizing the importance of this industry, the Government of Pakistan established two pharmaceutical units named “Khurram Chemicals limited” (near Islamabad) and “Antibiotics Private Limited” (in Mianwali) through the Pakistan Industrial Development Board (PIDB). The growth of pharmaceutical industry started from 1948 and continued till 1971. At that time, due to the conducive policy and the right entrepreneurial spirit, the pharmaceutical industry reached its peak and had a leadership position in Asia. From 1972 to 1991, due to the discriminatory and restrictive registration policy (Drug Generic Act, 1972), national companies suffered a lot so that earlier created export markets were lost. In addition to that, completely manufactured drugs and medicines were imported largely with the permission of the government, which resulted in large scale flooding of imported drugs. In The period from 1991 till now, the government followed a policy of de-regulation in prices that resulted in free play where the national companies could fix the same price as multinational companies. Due to this policy
Page | 14 Global sale of pharmaceuticals is US$317.2 billion and Pakistan’s share in world pharmaceutical market is 0.31% only (Source: EPB). The PPI has flourished with the passage of time. Currently there are 379 companies (29 MNC’s, 350 local) having valid drug manufacturing licenses. The share of top 50 players (29 MNC’s and 21 local) is 83.74% of the total market volume and among top thirty players only twelve are local.
1.8 Pharmaceutical sector current scenario Pakistan meets 80% of its domestic demand of medicines from local production and 20% through imports. The pharmaceuticals market size is Rs. 70 Billion (US $ 1.2 Billion), approximately. The market for pharmaceuticals in Pakistan has been expanding at a rate of around 10 to15% since last few years.
Pakistan is also exporting its surplus drugs to a large number of countries particularly to the Asian and African regions with an expanding trade in the newly emerged Central Asian States. About a hundred million strong populations of the Central Asian States, with almost no local manufacture of medicines, offers an attractive market for industries located in Pakistan.
Pakistan's large population of more than 160 million people, expanding economy including health services, individual rise in purchasing power, general awareness regarding use of new molecules of drugs, etc. provides an ideal environment for investment in this field. Presently the pharmaceutical industry in Pakistan is producing all the major pharmaceutical dosage forms. Similarly, there are some special products e.g. immunological, anti-cancer drugs, certain anti-diabetics, antidotes and products manufactured from biotechnology, which are still being imported, in the finished form. These specific areas provide excellent opportunities for investment. Only few bulk pharmaceutical raw materials are being manufactured locally and most of the pharmaceutical raw materials are being imported in large quantities from different countries of the world. This sector also gives challenge to explore and avail the opportunities.
Page | 15 National pharmaceutical industry in Pakistan has made tremendous progress during the last few years. A number of quality conscious drug manufacturers have made heavy investments in upgrading their manufacturing facilities and some of them have set up new units as well. Complying with Current Good Manufacturing Practices, the industry has made available quality drugs at affordable prices.
There are about four hundred licensed drug manufacturers in Pakistan which includes about twenty eight multinationals. Of the remaining national pharmaceutical concerns, one hundred seventy are members of Pakistan Pharmaceutical Manufacturers Association (PPMA) while the MNCs are represented by the Pharma Bureau. Pakistan's total drug market is worth 1.5 billion US dollars. The Drug Registration Board of Federal Health Ministry has registered over forty thousand brands representing over fourteen hundred molecules. Though all the licensed drug manufacturers, multinational as well as national have got registration for a large number of products, they are not all being marketed at the moment for various reasons.
According to some estimates the value-wise share of the National Pharmaceutical industry in Pakistan's total drug market is between 55-60% whereas unit-wise its share has increased to between 70-75% which is no mean achievement. Not only that some of these national pharmaceutical companies were now engaged in contract manufacturing as well as third party manufacturing on behalf of some multinational companies which itself is a proof of the high quality control standard maintained by these manufacturers. The figures quoted in the IMS may not reflect the true picture of Pakistani drug market and the share of various manufactures because it does not take into account the sales to institutions, hospitals as well as direct orders from the doctors who also dispense drugs and medicines. Not only does that it also not include the sale of IV preparations.
Utilizing the government incentives, Pakistani pharmaceutical industry has also made inroads in many countries in Middle East, Far East, Africa, Ceylon and Latin American countries where Pakistani drugs are now being exported during the last couple of years. Export Promotion Bureau is also extending all possible help and assistance to the
Page | 16 Pakistani Pharmaceutical Industry to increase their share of drugs export in these countries besides looking for newer markets.
1.8.1 Top Pharmaceutical Companies in Pakistan. Top six pharmaceutical companies in Pakistan are;
• Pfizer
• GlaxoSmithKline Pakistan
• Asian Continental
• Searle Pakistan Ltd.
• Ferozsons Laboratories
Some of the other pharma companies in Pakistan are Hilton Pharma Pvt. Ltd
Sanofi-Aventis Pakistan, Wyeth Pakistan, Stiefel Pakistan, Saia Pharmaceutical (Pvt) Limited, Trans Asian Pharma Pakistan, 21st Century Pharmaceuticals Co, A.J. & Company, Accurate Medical Supplies, Acme Laboratories Pakistan (Pvt) Limited, Adamjee Pharmaceuticals (Pvt) Limited, Al-Habib Pharmaceuticals / Al-Habib Corporation, Albro Pharmaceuticals, Alina Combine Pakistan (Pvt) Limited / Alina Pharmaceuticals (Pvt) Limited, Alkar Pharma (Pvt) Limited, Amros Pharmaceuticals, Ankaz Pharmex (Pvt) Limited, Askari Pharmaceuticals, Atco Laboratories (Pvt) LTD.
1.9 Introduction to Wyeth Pharmaceutical: Wyeth is a global leader in prescription pharmaceuticals, non-prescription consumer health care products, and pharmaceuticals for animal health. Wyeth's products are sold in more than 145 countries, and its product portfolio includes innovative treatments across a wide range of therapeutic areas. It is the market leader in Anti- TB drugs throughout the world. Wyeth employs more than 47,500 people around the world and has manufacturing operations in four continents. Wyeth is a research oriented
Page | 17 pharmaceutical; the most significant research avenues include small molecules, biopharmaceuticals and genetic engineering. The research will pave way for innovative therapies and vaccines that will help cure critical diseases.
Wyeth is committed to excellence—in the results that are achieved and they how were achieved. Wyeth prides itself on quality manufacturing; responsible sales, marketing, and licensing alliances; commitment to educational programs and initiatives; and service to health care professionals and patients.
The company employs more than 40,400 people worldwide—each one committed to improving the health of people around the world. The diverse and talented people who work at Wyeth bring to the Company a full range of talent in research, marketing, sales and manufacturing. It is the employees that sustain the cutting edge of innovative discoveries and superior customer service.
Production at Wyeth Pakistan Limited is done at four locations as described below:
1. Head office, S- 33 S.I.T.E, Karachi
2. Reko, Lahore
3. Spencer, Karachi
4. Macter, Karachi
The following table summarizes the key aspects of the company:
Industry Pharmaceuticals
Headquarter New York , USA
Page | 18 Divisions (i) Wyeth Pharmaceuticals
(ii) Wyeth Consumer Health Care
(iii) Fort Dodge Animal Health
Annual Sales Worldwide $ 22,834 Million
Annual Sales in Pakistan PKR 2,384 Million in 2008
Market Leader Worldwide Anti-TB Drugs
R&D Expenditure $ 3,340 Million
Date of incorporation 23rd August 1949 (Pakistan)
Headcount (Pakistan) 400 (120 workers, 150 field staff and 130 management officer grade employees
Net Revenue Worldwide $22.8 Billion (2009)
Profit after tax in Pakistan PKR 144 Million (2009)
1.9.1 List of products manufactured and/or sold in Pakistan:
1. Ativan Tablets 4. Efexor - XR Tablets 2. Entox - P Tablets 5. Enbrel PFS 3. Efexor Tablets 6. Mucaine Page | 19 Suspension 19. Wymox Suspension 7. Omnipen N 20. Wymox Injection Injection 21. Stresstabs 8. Myambutol Inh Forte Tablets 22. Lederplex Liquid 9. Myrin- P Forte 23. Vi-Magna Syrup Tablets 24. Myambutol Tablets 10. Prevenar Pre- 25. Myambutol Inh Filled Syringe 0.5 26. Pyrazinamide Tablets 11. Premarin 27. Lederiff Tablets 12. S-26 Infant Milk Powder 28. Nilstat Drops 13. S-26 Gold 29. Myrin Tablets 14. Promil Gold 30. Tussivil Syrup 15. S-26 LF Infant 31. Incremin Syrup Formula 32. Tazocin Injection 16. Progress Gold 33. Lederiff Suspension 17. Tygacil 34. Caltrate Tablets 18. Wymox 35. Myrin – P Tablets Capsules 36. Trihemic
Page | 20 1.9.2 Hirarchy
21 Zakwan AhmedZakwan Assistant Director MMD
Khurram Siddiqui Kamal Murtaza Tahir Qureshi Manager Planning Purchase Manager Snr. Material Manager Basharat Ali Assistant Manager Planning
Naeem. AM Arif Deen Snr officer Purchase, packaging, Raw materials supplies
Absar Aftab Amir Siddiqui. Javed Khan Manager planning and Am non inventories ware houses, Hawks Manager supplies warehouse SITE bay Plant B2
General Raw material Packaging Finished engineering warehouse material goods supplies warehouse warehouse.
22 1.10 PROPOSAL PART 1:
1.10.1Pakistan Pharmaceuticals sector: Pharmaceutical industry is one of Pakistan’s major manufacturing sectors growing at an annual rate of over 11% since 2000 (Special Report 2004 on Pharmaceutical industry of Pakistan 2005). The Special Report states that there are nearly 600 firms including MNCs and local firms operating within this industry for a market worth Rs 60 billion. The pharmaceutical industry is experiencing unparalleled change and challenges. All of the usual suspects that impact business today are at play: globalization, treatment and pricing economics, government controls and technology.1 However, in an era of continuing consolidation, innovation abounds not only in R&D, but also in business models.
1.10.2The problem statement: How is Whyte Pharmaceutical managing its supply chain?
Today the most popular theme for the businesses on the developing countries is that today organizations are not competing against, but rather supply chains are competing against supply chains. In Pakistan, supply chain management is only implemented in a few sectors, namely, pharmaceutical and Automobiles sectors are known to recognize the importance of maintaining and managing an efficient supply chain management.
1.10.3Main Research Questions: 1) How pharmaceutical companies manage their supply chain? 2) Does supply chain really creates value for the manufacturing company and the end user or is it just an outsourcing tool? 3) What challenges exist for supply chain in the pharmaceutical sector? 4) How much coordination, planning and communication exist between the supply chain and the manufacturing company? 5) How strong is the alliance between the pharmaceutical companies and its supply chain?
23 1.10.4 Objectives of the study: 1.) To determine the management of supply chain in Whyte Pharmaceutical 1.1) To study the level of planning, coordination and communication among them. 2.) To identify the challenges for supply chain in pharma 2.1) To determine the role of supply chain in pharma 2.2) What difficulties exist at level of supply chain 3.) To study the impact of partnership or alliance between the supply chain and the manufacturing company
1.10.5 Justification: In recent years, the basis for global competition has changed. No longer are organizations competing against other organizations, but rather supply chains are competing against supply chains. According to a survey carried out in 2004 (Special Report, 2005) the market size of the pharmaceutical industry in Pakistan is $1.1 billion in sales (at 2004 Rupee-Dollar percent values and prices) growing at a rate of 11.4%, which includes sales to retailers and institutions in the ratio of 88:22. Companies in Pakistan however are involved more in processing, packaging and distribution rather than in R&D. The total companies sharing this market are 586. As large MNC’s in Pakistan, especially FMCG companies are having a competitive edge, because of the increasing attention and management of supply chain. Businesses today depend on their supply chains to provide them with what they need to survive. Those companies that learn how to build and participate in strong supply chains will have a substantial competitive advantage in their markets. As supply chain management only exist in a few sectors like, pharmaceutical, Automobile and Engro Foods. It is therefore necessary to study the impact supply chain has on the company.
24 1.10.6 Limitations / Barriers There are certain factors that could change overtime and could affect different assumptions in this report.
Following are some limitation that could affect the study
Government and its policies Internal Polices of the company Technological trends Geographical Area (sampling of data required)
1.10.7Scope: This study will focus on Pharmaceutical organizations and the various players in its supply chain management. The scope of the study will focus on the processes and management practices (communication, coordination, planning, organizing) of the supply chain department. The input regarding the study will be taken from the organizations located at Karachi only.
1.10.8 Assumptions: Globalization and technological advancements are making the business processes more complex and competitive. This requires a business to be cost effective as well as competitive. As increasing competition especially in the FMCG sector, where the relative profits are low but the cumulative profits are very high, the businesses are realizing the importance of having an efficient supply chain which is now seen as a value creating activity rather than an outsourcing tool. Pharmaceutical companies in Pakistan are implementing and most of them in the process of building and implanting a supply chain network.
25 1.10.9 Who will benefit from the study? This research study will help a number of people. Following could be some examples.
Pharmaceutical companies Local businesses and FMCGs. Consumers Researchers Stakeholders involve in the supply chain industry.
2.0 CHAPTER 2 “LITERATURE REVIEW”
2.1Supply Chain Management Today’s organizations are faced with increasing levels of global competition, demanding customers and employees, shrinking product life cycles, and decreasing acceptable response times. Competition in many industries has been based mainly upon strategic assets (investments in scale, scope, brand equity) and on the ability to deploy these assets. However, competition is now based upon capabilities, or “complex bundles of skills and accumulated knowledge, exercised through organizational processes” (Day, 1998). Corporations are also extending outside of their legal boundaries as a normal way of organizing and forming competitive networks of companies. Thus, organizations need to develop strategically aligned capabilities not only within the company itself, but also among the organizations that are part of its value adding networks.
In its broadest sense, the term ‘supply chain’ is used to suggest a holistic, if linear, view of the value-adding process: from the extraction of raw materials, through to the delivery of a finished product to the end-user, including subsequent recycling (New and Payne, 2000). This view is echoed in both the ‘lean’ and ‘agile’ views of SCM: a ‘value stream’ through which raw materials are transformed into a specific product and passed into the ‘hands of the customer’, (Day 1998 ) refer to an ‘enrichment chain’ of interacting companies through which goods and services pass to the end user. These concepts of related physical activities
26 and interlinked firms are combined in Christopher’s (1999) definition of the supply chain as, ‘the network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer’. Additionally, the ‘value net’ concept has been used to describe the three-dimensional nature of such a supply chain network .This facilitates understanding of both vertical and horizontal dimensions of the network, in terms of both customer and supplier interaction, and competitor and ‘complementor’ activity (Borders and Johnston, 2000). Goffin (1995) identified three basic supply chain flows: product, information and cash. Existing literature appears to focus on the physical, including such elements as purchasing and supply, materials, inventory, physical distribution and logistics
Clearly, supply chain/networks are a ubiquitous phenomenon: yet to what extent are they managed? No empirical examples of such ‘holistic’ supply chain management were found in the literature, despite theoretical discussion of alternative mechanisms. New and Payne 2000 state that networks are, by their nature ‘boundless and opaque’ suggesting that they would be difficult, if not impossible to manage. It is perhaps for this reason that supply chain management literature to date focuses on particular segments of the network. Two distinct groupings emerge. One considers SCM activities from goods leaving their final point of manufacture, through to their presentation to the end user. The other grouping is informed by an operations management view, including precursor-manufacturing operations and, by implication, the management of component supply. Christopher (1998) demonstrates the generic case for an ‘extended value chain’. This integrative perspective is seen as a progression from functional silos, through functional and internal connection to external integration with customers and suppliers (Stevens, cited by Christopher, 1999).
Ellinger (2000) found evidence of internal marketing and logistics integration and found interaction with suppliers through procurement policies, strategic purchasing and operational linkages. The importance of supply relationship quality has also been highlighted and there is a developed literature base in this area, specifically related to the
27 Western adoption of Japanese-style ‘lean’ principles, for example keiretsu and obligational contracting (Womack, 1990; Imrie and Morris, 1992; Turnbull et al., 1991; Hunter et al., 1996.) The ability of lean principles adequately to cope with current market challenges of volatility and customization have yet to be demonstrated.
The importance of having a supply chain network can be seen through the companies that have used them as a strategy. Market leaders such as Wal-Mart and Dell understand that the supply chain can be a strategic differentiator. They constantly search for new ways to add value and push the boundaries of performance. And they keep refining their supply chains so they stay one step ahead of the competition. They know that today’s competitive edge is tomorrow’s price of entry. Michael Dell is widely viewed as a pioneer in the personal computer (PC) business. He transformed Dell from struggling PC maker to market leader by introducing supply chain innovations such as direct-to-consumer sales and build-to-order manufacturing to the computer industry. In truth, Michael Dell is a visionary in supply chain management. PCs simply were the medium he used to introduce his idea for a competitive supply chain: Sell direct, build to order, and ship direct. Sam Walton was another supply chain visionary. Wal-Mart’s legendary partnership with Procter & Gamble to replenish inventory automatically showed the power of integrating with key suppliers. To further reduce inefficiencies and costs, Wal-Mart shifted from buying from distributors to buying directly from manufacturers for a broad range of merchandise. These and other supply chain actions combine to deliver on the promise of “always low prices”—the strategy that has helped Wal-Mart become the world’s largest retailer.
The term “supply chain management” arose in the late 1980s and came into widespread use in the 1990s. Prior to that time, businesses used terms such as “logistics” and “operations management” instead. Some definitions of a supply chain are offered below.
Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers (Harland, 1996). Supply Chain Management spans all movement and storage
28 of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (supply chain).
“A supply chain is the alignment of firms that bring products or services to market.”(Lambert, Stock and Ellram 1998)
A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves.” (Chopra and Meindl 2001)
“A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers.” (Ganeshan and Harrison 1995)
If this is what a supply chain is then we can define supply chain management as the things we do to influence the behavior of the supply chain and get the results we want. Some definitions of supply chain management are:
“The systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole.” (Mentzer, DeWitt, Deebler, Min, Nix, Smith, and Zacharia 2001)
“Supply chain management is the coordination of production, inventory, location, and transportation among the participants in a supply chain to achieve the best mix of responsiveness and efficiency for the market being served.
29 2.2Logistics and Supply chain management There is a difference between the concept of supply chain management and the traditional concept of logistics. Logistics typically refers to activities that occur within the boundaries of a single organization and supply chains refer to networks of companies that work together and coordinate their actions to deliver a product to market. Also traditional logistics focuses its attention on activities such as procurement, distribution, maintenance, and inventory management. Supply chain management acknowledges all of traditional logistics and also includes activities such as marketing, new product development, finance, and customer service. “Logistics is the flow of material, information, and money between consumers and suppliers” (Edward Frazelle 2002) .To help clear up some of the potential confusion for logistics the writer (Edward Frazelle) presents four different contexts for logistics that also serve as a presentation of the evolution of logistics
2.2.1The Evolution of Logistics. Paralleling advances in management theory and information systems, logistics has evolved in scope and influence in the private sector since the mid to late 1940s. In the 1950s and ‘60s, the military was the only organization using the term logistics. There was no true concept of logistics in private industry at that time. Instead, departmental silos including material handling, warehousing, machining, accounting, marketing, and so on, were the norm. The five phases of logistics development—workplace logistics, facility logistics, corporate logistics, supply chain logistics, and global logistics
2.2.1.1Workplace Logistics Workplace logistics is the flow of material at a single workstation. The objective of workplace logistics is to streamline the movements of an individual working at a machine or along an assembly line. The principles and theory of workplace logistics were developed by the founders of industrial engineering working in WWII and post-WWII factory operations. A popular name today for workplace logistics is ergonomics.
30 2.2.1.2Facility Logistics Facility logistics is the flow of material between workstations within the four walls of a facility (that is, interwork station and intrafacility). The facility could be a factory, terminal, warehouse, or distribution center. Facility logistics has been more commonly referred to as material handling. The roots of facility logistics and material handling are in the mass production and assembly lines that distinguished the 1950s and 1960s. In those times and even into the late 1970s, many organizations maintained material-handling departments. Today, the term material handling has fallen out of favor because of its association with non value added activities.
2.2.1.3Corporate Logistics As management structures advanced and information systems accordingly, our ability to assimilate and synthesize departments (material handling, warehousing, and so on) into functions (physical distribution and business logistics) in the 1970s permitted the first application of true logistics within a corporation. Corporate logistics became a process with the common objective to develop and maintain a profitable customer service policy while maintaining and reducing total logistics costs.
2.2.1.4Supply Chain Logistics Supply chain logistics is the flow of material, information, and money between corporations (interworkstation, interfacility, intercorporate, and intrachain). There is a lot of confusion surrounding the terms logistics and supply chain management. The writer (Edward Frazelle) distinguishes the the two by explaining that the supply chain is the network of facilities (warehouses, factories, terminals, ports, stores, and homes), vehicles (trucks, trains, planes, and ocean vessels), and logistics information systems (LIS) connected by an enterprise’s supplier’s suppliers and its customer’s customers. Logistics is what happens in the supply chain. Logistics activities (customer response, inventory management, supply, transportation, and warehousing) connect and activate the objects in the supply chain.
31 2.3Supply Chains and Flexibility In the 1990's, firms recognized the necessity of looking beyond the borders of their own firms to their suppliers, suppliers' suppliers, and customers to improve overall customer and consumer value. This movement, titled supply chain management or demand chain management, changed the companies' focus from the internal management of business processes to managing across enterprises. The Supply Chain Council (2002) defines the concept as:
"The supply chain - a term now commonly used internationally - encompasses every effort involved in producing and delivering a final product or service, from the supplier's supplier to the customer's customer. Supply Chain Management includes managing supply and demand, sourcing raw materials and parts, manufacturing and assembly, warehousing and inventory tracking, order entry and order management, distribution across all channels, and delivery to the customer."
Supply chain management has emerged as the term defining the integration of all these activities into a seamless process.
The three main strategic imperatives that emerged in this century are low cost, high quality, and improved responsiveness (both delivery time and flexibility of product delivery).
2.3.1From Manufacturing Flexibility to Flexible Organizations A review of the previous literature on flexibility reveals much of the focus has been on manufacturing flexibility. It is generally agreed that manufacturing flexibility does not refer to a single variable, but rather it is a multi-dimensional construct. Smith, and Zach G. Zacharia (2001) expanded previously defined dimensions to fifteen identified dimensions of manufacturing flexibility Each dimension of flexibility has two elements: range and mobility. Further, they suggested a contingency relationship between manufacturing flexibility and firm performance. In their examination of past studies, they found four general forces strategy, environmental factors, organizational attributes, and technology - comprise the dominant forces influencing manufacturing strategy.
32 The hierarchy of flexibility dimensions as proposed by Koste and Malhotra (1999) provides support for the argument that much of the focus on flexibility concentrates on flexibility within a single plant. The lower three tiers – Individual Resources, Shop Floor, and Plant have a single plant, internal focus. Not until reaching the fourth level is there recognition that flexibility for the business unit is actually a combination of flexibility from many functional areas. The manufacturing flexibility literature has recognized that manufacturing flexibility is not only a potential element of a manufacturing strategy, but it may also be a component of marketing and R&D strategies as well (Hyun and Ahn 1990, Sethi and Sethi 1998). It is also recognized as one element of a business strategy, with certain dimensions impacting growth and financial performance of the firm (Day, 1998). However, while the manufacturing flexibility literature provides a "bottom-up" view of flexibility in an organization, it is perhaps business strategy literature that provides the "top-down" view. Day, (1998) make a strong argument for a linkage between business strategy, manufacturing flexibility, and the financial and growth performance of the firm. Lau (1996) defines strategic flexibility as "a firm's ability to respond to uncertainties by adjusting its objectives with the support of its superior knowledge and capabilities" He also proposes a framework for attaining strategic flexibility (Lau, 1994) that provides a broad picture of flexibility for an organization. It is this work that begins to recognize that flexibility is associated not only with manufacturing capabilities, but is also important for the linkages between manufacturing units and suppliers and customers - the supply chain.
2.3.2Supply Chain Flexibility A goal of this paper is to extend these concepts of manufacturing flexibility and flexible organizations to the supply chain. The supply chain extends beyond the enterprise which means supply chain flexibility must also extend beyond one firm's internal flexibility. This extension involves looking at those components that make an organization flexible and extends them beyond the organization's boundaries to other nodes in the supply chain. "Nodes" refer to other companies participating in the supply chain as producers, distributors, retailers or other customer outlets. A limited number of authors have begun to discuss flexibility from a supply chain perspective. Fisher (1999) discussed considering the nature of a product's demand as a first
33 step in devising an effective supply chain strategy. If a product is innovative with unpredictable demand, a market-responsive (flexible) supply chain is the more proper strategy. A more functional product with predictable demand should look at a physically efficient process. In their paper on matching the supply chain to the marketplace, Mason-Jones et al. (2000) did not discuss supply chain flexibility per se, but discussed the importance of matching supply chain improvement initiatives to customer demand. They stressed the importance of combining the lean concepts of eliminating waste with the agility concepts of exploiting opportunities in a volatile market. Their definition of 'legality' included creating a supply chain capable of delivering to an unpredictable marketplace that includes a decoupling point along the chain where product becomes unique. Prior to the decoupling point lean concepts are applied and product built to forecast. After the point, customer orders drive supply chain processes. Vickery et al. (1999) defined five supply chain flexibilities based on previous operations literature. The authors stated that supply chain flexibility "should be examined from an integrative, customer-oriented perspective." Flexibilities viewed as directly impacting a firm's customers and the responsibility of two or more functions, whether internal or external to the firm, are included. The five defined flexibilities include:
* Product flexibility or the ability to customize product to meet specific customer demand. * Volume flexibility or the ability to adjust capacity to meet changes in customer quantities * New product flexibility or the ability to launch new or revised products * Distribution flexibility or the ability to provide widespread access to products * Responsiveness flexibility or the ability to respond to target market needs
These descriptions of flexibility are proposed in terms of types of flexibility required to meet customer demand. Not apparent is what it takes to make a supply chain flexible in meeting those customer requirements. Previous literature on flexibility fails to show the cross-functional, cross-business nature of supply chain management. This paper draws from the current literature to develop a model of supply chain flexibility, discusses the components that make up that model, and identifies some of the characteristics across the
34 supply chain which may improve supply chain flexibility. A flexible supply chain is one with the ability to respond to changes in customer demand. Changes might include increases or decreases in product volumes, requirements for customized products for individual customers, demand for new products, and the addition of new customer locations. Thus, supply chain flexibility requires both internal flexibility at each node and flexibility between supply chain member companies. Rather than looking at a type of flexibility (e.g., product flexibility) or a specific organization's functional flexibility (e.g., manufacturing flexibility), this paper focuses on supply chain flexibility which is defined as the supply chain's promptness and the degree to which it can adjust its supply chain speed, destinations and volumes in response to changes in customer demand (Prater, et al., 2001)
2.4Challenges of SCM The demands made to a manufacturer by a client are dependent upon demands made by client’s customers (Sandeep.S 2007). In a supply chain all suppliers, manufacturers, distributors and retailers have the same end customer. All of them will be successful, if they collaborate with each other in satisfying the demand. The competition is no longer between the organizations but between supply chains. If one supply chain fails to meet the demand another supply chain will overtake and satisfy that customer. Contemporary issues in SCM as highlighted by the author Sandeep.S, can be briefed as · Expanding distribution systems transcending the national boundaries and becoming Global · Reduced inventory goals require flexible, high velocity manufacturing strategies that can enable a quick response when unexpected changes in demand occur · Many new SCM technologies like RFID are in the nascent stage and for them ROI is not yet identified · Increased demand responsiveness requires a “demand driven supply network”(transformation from push to pull operations) collaboration and closed-loop planning environment requires clean synchronized n data · Information disintegration-disconnected demand, supply and financial plan make it difficult to reconcile plans with reality and re-plan accordingly
35 · Complexity- increasingly complex supply chain processes impede best practice decision making and management of data transfers. · JIT inventory- can’t afford to have errors or supply chain disruption that will cause manufacturing to halt · Short product lifecycles-one has to constantly set up new supply chains. Each product has its own supply chain; the more finished product and inventory are lying dead in your supply chain the faster you will get obsolete. · Faster order cycle time-less margin for error or delay in the supply chain
2.4.1Information Integration It means getting to the point where supply chain partners share information I real time. The kind of information shared is production plans, designs, promotions and sales, orders, production schedules etc. This information sharing as a tangible advantage can counter so called “Bull whip effect”, which is the problem of demand distortion in a supply chain as it moves back through the supply chain. It starts with a shift in consumer demand, which drives a response by retailers, then wholesalers then manufactures, the component suppliers, then raw materials suppliers. The effect is that variations are amplified the further you get from the end customer. It is obvious that if all the information’s were transparent across the whole supply chain, there would be no “Bull whip effect” (Sandeep.S 2007).
2.4.2 Co-Ordination and Resource Sharing Here it is not just information we are sharing, but rather we are shifting “decision rights” and “actual work” across firm boundaries. Traditionally decisions and work are located with owner of resources but now it is better to locate decision and work with those people who have the most knowledge and have incentives to make the right decisions, that not necessarily be owners. Wal-Mart’s vendor managed inventory is the best example for this practice (Sandeep.S 2007).
2.4.3Organizational Relationship Linkage This one of the most difficult problems in SCM. Here we are entwining two organization together i.e. exchanging accountability, exchanging risks, costs gain. The vendor managed inventory is a partial application of this. (Sandeep.S 2007).
36 2.5Oppertunities in SCM
2.5.1Information Technology in SCM The internet wave and the emergence of e-business have highly influenced the traditional supply chains by enhancing co-ordination and communication between the partners (Sandeep.S 2007). The enabling technologies like EDI, Intranet, Extranet, Electronic market places, ERP, DRP, ware house management system, CRM,CPFR etc has tremendously improved the integration among the buyers and sellers. Information technology has removed the roadblocks of information sharing making the firm smarter everyday. E-business has enhanced both supply chain efficiency and responsiveness by sharing real time information regarding inventory, shipment status and other key information like product design, product availability and demand between partners. The e- supply chain will have customers and suppliers seamlessly linked together, through out the world, exchanging information almost instantly. As a result of e-speed information sharing the companies are adopting pull strategy instead of push strategy. Fast access to relevant supply chain information can pay-off handsomely in lower product acquisition costs, lower procurement transaction, less inventory, higher quality decision making, shorter lead times, profitable means of disposing unused excess inventory and better customer services. Effective supply chain management can impact and improve upon virtually all business processes, such as data accuracy, operational complexity reduction, supplier selection, purchasing, and warehousing and distribution. Other benefits include · Quicker customer response and fulfillment rates · Shorter lead time · Greater productivity and lower costs · Reduced inventory throughout the chain · Improved forecasting precision · Fewer suppliers and shorter planning cycles · More reliable and quality information
37 2.5.2Supply chain management software’s Supply chain management software (SCMS) is a business term which refers to a range of software tools or modules used in executing supply chain transactions, managing supplier relationships and controlling associated business processes (Sandeep.S 2007). Some common features of these software’s are as follows · Customer requirement processing · Purchase order processing · Inventory management · Goods receipt and warehouse management · Supplier management/sourcing A requirement of many SCMS often includes forecasting. Such tools often attempt to balance the disparity between supply and demand by improving business processes and using algorithms and consumption analysis to better plan future needs. SCMS also often includes integration technology that allows organizations to trade electronically with supply chain patterns
2.5.3Supply Chain in Food Sector The food supply chain consists of various players. The supply chain is consists of farmers who sell produce directly into consumers or to traders or manufacturers, cold storage units, food processing entities, packaging units, wholesalers or distributors, retail chain or other form of retailers, hotels, restaurants, caterers and consumers. Supply chain in the case of food sector varies from product to product in terms of no of players and value addition at the level of each player. The efficiency of a supply chain depends upon the way in which the relative activities or processes are conducted such that cost, time and efforts are saved and productivity increases. These cover forecasting supply of and demand for products, sourcing of raw materials and intermediaries, production, inventory, orders, distribution and making the products available to customers (Sandeep.S 2007). A connecting thread in these cases is the level of technology used, technology-backed information systems and logistics which integrate the various players in the supply chain.
38 2.5.4 E-Financial Supply Chain Systems Cross border transactions, decreasing cost of technology, speed of transaction and a 24 hour 365 day facility has lead to development of e-financial supply chain. Though efinancial supply chain has been growing it needs to accelerate at a much faster pace to keep up with global business demands. Comprehensive laws and mitigation of risk of fraud would enhance its use and acceptance. Proper financial supply chain management using e-payment mechanism can reduce the cost of working capital and improve supplier relationship management by providing speedy payment. (Sandeep.S 2007).
2.5.5 SCM in Pharmaceutical industry Outsourcing- the current mantra of pharmaceutical industry is being used more strategically as on going part of a company’s overall business strategy. Outsourced activities can be in various field rights from “drug discovery” till manufacturing of the product. Pharmaceutical companies have a long outsourced function such as manufacturing, packaging; clinical trials and sales force mobilization. Bio-technology companies which have almost doubled in number during the past five years, also contributed to this trend as they seek ways of bringing their products to markets without making capital investment in their own manufacturing facilities (Sandeep.S 2007). The outsourcing of supply chain also has to address protect the supply channel for pharmaceutical, Chris Zimmerman (2006) writes about the protection of supply chain in pharmaceutical that “securing the pharmaceutical supply channel requires constant vigilance with complete cooperation among all channel partners: the manufacturer, the distributor, and the pharmacy as well as state and federal legislators and regulatory agencies. No one approach will accomplish this; rather, the pharmaceutical channel as a whole needs to adopt a combination of approaches to ensure the safety and integrity of the pharmaceutical supply channel”. The major benefits of outsourcing as highlighted by Sandeep (2007) are given below · Outsourcing reduces the overall cost by 30 to 35 percent · Reduces problems faced during the regulatory process · Improve manufacturing efficiencies · Reduces excess production capacity by divesting facilities · Improve net earnings and cash flow
39 · Fast and cheaper to have discovery work outsourced as it reduces the drug development cost
3.0 PROPOSAL PART 2: Research Methodology
3.1 Research Design: The research design of study will be qualitative research.
3.2 Procedure: The research will be accomplished through primary research in which structured interviews will be conducted with the Supply chain personnel in Whyte Pharmaceutical Company. Interviews will be conducted in order to find out the Supply chain processes and practices of each player in the supply chain of the company. This will help in developing a framework of managing the supply chain.
3.2.1 Population: The population for the research study will be the Wyeth Pharmaceutical Limited.
3.2.2 Sample and Sampling Method: The sample for the research will be the personnel in the supply chain department in the Whyte Pharmaceutical.
3.2.3 Measurement/Instrument Selection: Primary data will be collected through interviews while the secondary data will be collected through internet, magazines and articles. Structured Questionnaire will be developed for interview which will cover all aspects of the study.
40 4.0 Data Analysis:
As per Wyeth Pharmaceutical, “Supply Chain is a process of raw material planning plus production based on the marketing forecast and then distribution” “Supply chain is customer desire”. The old concept was focused on customer need, now the focus of supply chain is “customer satisfaction”.
4.1 Up stream Activities.
4.1.1 Vendor Analysis:
4.1.1.1 Who are the vendors of WHL?
Vendors of Wyeth are referred as the business partners of the company. Their evaluation is necessary and the company work in close coordination with the vendors and visit their premises to check and evaluate the goods manufacturing practices.
4.1.1.2 Vendor SOP’s:
Some of the highlights of the SOP, for the vendor evaluation are.
• Procurement of raw and packaging material is made from the vendors duly approved by quality assurance of WPL
41 • For newly approved vendors, manager imports or manager materials management will prepare a vendor setup/change form and will forward it to Finance for approval and update in JD Edwards Computer system.
• Procurement will be made on most competitive prices, best quality and timely availability.
• The vendor quoting the best price will be selected. However, if more than one vendor is quoting the same price, decision will be made based on their quality and delivery performance.
International standard exists regarding the evaluation of suppliers. The system used is “supplier Management system” all standards are defined in the system. Specification of raw material is based upon, USP: United States Pharmacopeia
4.1.1.3 Vendor involment in company:
Vendors are the business partners. The company work in close coordination with the vendors and they are invited for the meetings which regard planning and other activities. Mostly the meetings are held for sharing of the information which includes the market forecast and hence a plan is put forward of what is to be done. If information is confidential but can be shared with vendors only after the approval of the top management. Suppliers service the company. They are bound to company’s desire. They are communicated through the meetings with MM (material management).
42 4.2 Mid Stream Activities:
4.2.1 Planning Department: Planning is one of the most crucial jobs in supply chain management, crucial because it involves management of 384 items (Raw Material and Packaging) in which most of the items are imported. Planning Department is one the most key department as it linked with marketing, finance and production as well. There are four basic approaches which demand
43 so much vigilance, at Planning Department in creating the plan. They are mentioned below: 1. Amount of production capacity 2. The level of utilization of the production capacity 3. The amount of inventory to carry 4. The type of inventory to carry (ABC Classification)
Planning is actually the framework within which, short term decisions are made about production, inventory, and distribution. Production decisions usually involve setting parameters such as the rate of production and the amount of production capacity to use. Inventory decisions include how much demand will be met immediately by inventory on hand and how much demand can be satisfied later. Distribution decisions define how much and when product will be moved from the place of production to the place where it will be used or purchased by customers.
4.2.1.1 ABC Classification: ABC classification of the items can be done through Pareto Analysis or 80-20 Theory. This theory was first developed in 1906, by an Italian economist, Vilfredo Pareto, who observed an unequal distribution of wealth and power in a relatively small proportion of the total population. Pareto Analysis is also used in inventory management through an approach called "ABC Classification". Wyeth Pakistan Limited uses the ABC classification system in grouping items by annual usage and cost volume. This helps identify the small number of items that will account for most of the cost and usage volume and that are the most important ones to control for effective inventory management. According to ABC classification at Wyeth Pakistan Limited, supply chain planner maintain inventory as given below:
‘A’ Class Material - 2 to 3 months
44 ‘B’ Class Material - 3 to 5 months
‘C’ Class Material - 5 to 9 months
4.2.1.2 Marketing Forecast: Planning basically originates after receiving the ‘Marketing Forecast’ from Marketing Department. For most manufacturing plans, the marketing forecast is the primary variable. In Wyeth Pakistan Limited, Marketing Forecast shows product name, corresponding production volume in terms of packs and months. Once a marketing forecast is developed to the best of organization’s marketing ability, it is up to the manufacturing planner to utilize that data properly.
4.2.1.3 Master Production Schedule: Enterprise resource planning (ERP) is a company-wide computer software system used to manage and coordinate all the resources, information, and functions of a business from shared data stores. Wyeth has JD Edwards world, a well known and commonly used ERP system manufactured by JD Edwards World Solution Company which was later bought by PeopleSoft which in turn was bought by Oracle Corporation.
A Master Production Schedule (MPS) is a plan for production, inventory, etc. It is usually linked to manufacturing where the plan indicates when and how much of each product will be demanded. It is a key component of Materials Requirement Planning (MRP) which translates a business plan into a comprehensive product manufacturing schedule that covers what is to be made, when, with what materials acquired. The MPS is first made according to monthly data which is later split into weekly data in terms of batches.
45 Figure 1: This is a screen that shows the user options for SCM in Jd Edwards
46 4.2.1.4 Materials Requirement Planning: MRP system follows a successive planning concept, as depicted in the following figure.
Material Requirements Planning (MRP) uses the MPS as a starting point and computes derived demands for all components required for the production of the end products. MRP is a tool to deal with these problems. It provides answers for several questions:
• What items are required? • How many are required?
47 • When are they required?
MRP can be applied both to items that are purchased from outside suppliers and to sub- assemblies, produced internally, that are components of more complex items.
The data that must be considered include:
• How much is required at a time. • When the quantities are required to meet demand. • Shelf life of stored materials. • Inventory status records. Records of net materials available for use already in stock (on hand) and materials on order from suppliers. • Bills of materials. Details of the materials, components and sub-assemblies required to make each product. • Planning Data. This includes all the restraints and directions to produce the end items. This includes such items as: Routings, Labor and Machine Standards, Quality and Testing Standards, Pull/Work Cell and Push commands, Lot sizing techniques (i.e. fixed Lot Size, Lot-For-Lot, Economic Order Quantity), Scrap Percentages, and other inputs.
4.2.1.5 Schedule Adherence Report: In the end of every month, schedule adherence report has to be made by planning department to promote compliance with standards and specifications for operational processes and procedures.
4.2.2 Purchasing Department: One of the greatest challenges of the purchasing activity is to see that the data communication happens in a timely manner and without error. Purchasing Department
48 can be considered as a support function of the key business, is actually revenue generating departments. For example, if the company needs to buy $18 million USD of widgets and the Purchasing Department secure the widgets for $15M USD, the Purchasing Department would have saved the company $3M USD. That savings could exceed the annual budget of the department and company.
Traditionally, the main activities of a purchasing manager were to beat up potential suppliers on price and then buy products from the lowest cost supplier that could be found. That is still an important activity, but there are other activities that are becoming equally important. Because of this the purchasing activity is now seen as part of a broader function called Procurement. The procurement function can be broken into four main categories:
1. Purchasing 2. Consumption Management 3. Vendor selection 4. Contract Negotiation
4.2.2.1Purchase Local: The local purchase of Wyeth Pakistan Limited can be classified into four categories:
1. SGM (General Expenses) 2. ASP (Advertising and Sales Promotion) 3. LSP (Spare parts of Engineering Goods) 4. LCI (Capitalized Items such as cars, machineries etc) Follow up with the vendor till delivery
4.2.2.2 Purchase Requisitions: A purchase requisition is an authorization for a purchasing department to procure goods or services. It is originated by Planning Department and approved by the Associate Director of Supply Chain Management and Technical Director. Typically, it contains a description and quantity of the goods or services to be purchased, a required delivery date, account
49 number. Often, the names of suggested supply sources are also included. A purchase requisition is owned by the Planning Department and should not be changed by the purchasing department without obtaining approval from the Planning department.
4.2.2.2.1 Inquiry: After receiving the purchase requisitions, purchaser starts inquiry in which he/she performs the following activities:
•To check the list of approved vendors •Ask Bits •Negotiations •Counter bits if required •Comparative Analysis •Generate purchase order
4.2.2.2.2 Comparative Analysis: Purchase Order Management System (POMS) is a useful tool, which enable purchase manager to compare the bits of approved vendors. This software is very efficient and helpful for purchaser because it reduces the time through automatic calculation.
4.2.2.2.3 Indent:
When the purchase order has been sent to the supplier, a representative of that particular supplier in Pakistan sends an indent to the purchaser. It is basically a document which shows an agreement on the price and quantity. It also shows Indent number, mode of payment, plant address of buyer and seller and mode of transport through which material will be delivered.
4.2.2.2.4 Letter of Credit (L/C):
LC is written commitment to pay, by a buyer's or importer's bank (called the issuing bank)
50 to the seller's or exporter's bank (called the accepting bank, negotiating bank, or paying bank). L/C guarantees payment of a specified sum in a specified currency, provided the seller meets precisely-defined conditions and submits the prescribed documents within a fixed timeframe. These documents almost always include a clean bill of lading or air waybill, commercial invoice, and certificate of origin etc. They are usually used where the seller is not willing to extend credit to the buyer; this is the reason that LC is more favorable for seller.
4.2.2.2.5 Bank Contract: It is also a written document as LC but it does not guarantees payment to supplier as LCs. They are comparatively cheaper than LCs. Usually, bank contract generated on the basis of good terms between buyer and seller. It shows all the information as LCs has, like bill of lading or airway bill, commercial invoice, and certificate of origin etc. Due to its cheaper cost and extensive credit period, it is more favorable for buyer.
4.2.2.2.6 Purchase Order: A Purchase Order is a commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services the seller will provide to the buyer. POs usually specify terms of payment, required delivery date, and specifications and reference or part numbers of the items to be purchased, with quantities and prices. When accepted by the seller, it forms an agreement between the buyer and seller. From an internal control perspective, Purchase Orders are the end result of an authorization process that is traditionally triggered by the creation of a Purchase requisition. An internally authorized Purchase requisition is normally converted into a PO.
4.2.2.2.7 Shipping Documents:
Form 3 – This form shows the plant premises of supplier.
51 Form 7 – This form also shows the plant premises of supplier as well as manufacturing date, expiry date and batch number of a product that will be imported.
Certificate of Analysis - Authenticated document, issued by an accredited firm or individual that certifies the quality and purity of pharmaceuticals. It shows all the ingredients present in a pharmaceutical good as well as its percentage.
Bill of Lading/ Airway Bill - Document issued by a carrier, or its agent, to the shipper as a contract of carriage of goods. It is also a receipt for cargo accepted for transportation, and must be presented for taking delivery at the destination. Among other items of information, a B/L contains (1) consignor's and consignee's name, (2) names of the ports of departure and destination, (3) name of the vessel, (4) dates of departure and arrival, (5) itemized list of goods being transported with number of packages and kind of packaging, (6) marks and numbers on the packages, (7) weight and/or volume of the cargo, (8) freight rate and amount. Airway Bill is a type of bill of lading that serves as receipt of goods by an airline carrier. It includes (a) conditions of carriage that define (among other terms and conditions) the carrier's limits of liability and claims procedures, (b) a description of the goods, and (c) applicable charges. The airline industry has adopted a standard format for AWB which is used throughout the world for both domestic and international traffic. Unlike a bill of lading, an AWB is a non-negotiable instrument, does not specify on which flight the shipment will be sent, or when it will reach its destination. Also called air bill or air consignment note.
4.2.2.2.8 Delivery Order:
In freight-collect (free on board) shipments, order by a carrier to the port authorities to release a shipment to the named delivery party on payment of the specified freight charges.
4.2.2.2.9 Bill of Entry: Declaration (on a prescribed form) by an importer or exporter of the exact nature, precise
52 quantity and value of goods that have landed (entered inwards) or are being shipped out (entered outwards). Prepared by a qualified customs clerk or broker, it is examined (in terms of physical status) and assessed (in terms of quantities value) by customs authorities for its accuracy and conformity with the HS codes and regulations. HS Codes is Six-digit coding for identification and classification of imported and exported goods, for the purpose of compiling trade statistics and determining customs tariff. Called harmonized system (HS) for short, it divides goods into about 5,000 groups and sub-groups and is in use in most countries since January1, 1989. US tariff system is a modified form of HD that employs a ten-digit code.
4.2.2.2.10 Regulatory Commitments: Limitations imposed on the activities of a firm in compliance with the requirements of a regulatory agency.
4.2.3 Warehouse (Raw material packaging): Activities performed in warehousing include
• Receiving inventory in buffer area from supplier.
• Verification of item code, lot number, MFG date, expiry date, physical status etc.
• Putting inventory in quarantine area.
• Goods receiving report (generated in planning).
• Circulate GRR in Quality Assurance, raw materials and accounts department.
• Sampling of raw material by QA (root n+1).
• Proper lotwise staging in RM store for traceability purpose.
• Proper monitoring (temperature, handling etc).
• Follow up with QC for status (release or reject).
53 • Status clarification after QC approval.
• Issuance according to the requirement (work orders).
4.4.1 Quality:
“Quality is customer satisfaction achieved through product features and freedom from deficiencies.”
4.2.4 Quality Assurance: Often used interchangeably with quality control (QC), it is a wider concept that covers all policies and systematic activities implemented within a quality system. QA frameworks include (1) determination of adequate technical requirement of inputs and outputs, (2) certification and rating of suppliers, (3) testing of procured material for its conformance to established quality, performance, safety, and reliability standards, (4) proper receipt, storage, and issue of material, (5) audit of the process quality, (6) evaluation of the process to establish required corrective response, and (7) audit of the final output for conformance to (a) technical (b) reliability, (c) maintainability, and (d) performance requirements.
4.5.1 Objectives of Wyeth’s QC:
• Ensure adequate maintenance of quality • Assurance of fitness in assembly • Reduction of defective work and scrap (LEAN AND SIGMA) • Prevent labor and machine time for rework
4.5.2 QC of purchase material: • Defining the right quantity • Selecting quality vendors by reputation, by vendors plant survey or by experience
54 • Monitoring suppliers’ quality • Vendors performance evaluation
4.3 Down Stream Activities
4.3.1 Shipping Department:
55 Figure 2: Wyeth's presence in Pakistan
4.3.2 Key Role of Wyeth’s Distribution Manager: Monitoring distributors performance on • Coverage • Payments • Daily availability of sales data • Plan and executive dispatches as per replenishment plan. • Maintain good stock level for each SKU with each distributor.
56 • Monitoring institutional sales
4.3.3 Functions and Objectives of Wyeth’s Distributors: • Proper and Satisfactory Warehousing • Should be located centrally • Maintenance of GMP • Booking Schedule Daily / Weekly / Fortnightly / Monthly • Proper Supplies as per schedule • Should provide office facility to our field staff • Sufficient number of vehicles should be available-owned/contract • Incentive to salesman • Sufficient number of salesman according to requirement of the sales • Supervisory check on the sales staff • Should be Financially Stable • Feedback about the market • Careful for emergency supplies • Coverage area Tehsil level Town level Distance level
Stamping should be done by the distributors of all the products • Manager’s Interaction with important customers • Coordination with the field force • Increase in shelf stock level of Wyeth product • Timely Execution of the sales order • Proper coverage of whole sale market • Should be vigilant about stock holding • Quick response to office queries
57 • Timely Submission of Claims • Timely Submission of Sales data • Smart penetration in Institutions • Better co-ordination for institutional sales • Maintenance of Institutional purchasing record • Timely Execution of Institutional orders • Coordinate to collect payment from the institution
4.3.4 Distribution list of Wyeth: Wyeth Pakistan has many different distribution companies working in collaboration in an effort to get our product out to where it is needed. Together we create a dynamic supply chain framework, reaching out to all regions of Pakistan. Wyeth Pakistan relies on this effective network for proper distribution of its valued medicines.
Distributor Address Location City PhoneNumber Name Quetta Ali Traders 6-B, Model Town Quetta Cantt. 081/2836710-11 Cantt. 2nd Floor, Gul Charsadda Al-Madina Peshawar 091-2042455, 2041755 Plaza Road Civil Line, Baloch 151-B/F Near Ali Gulistan Sahiwal 040/4221819 Enterprises Masjid Road Baloch Medicine Plaza, Dera Ghazi Dera Ghazi Enterprises DG Block-18, Bulkh 0641/462200, 470436 Khan Khan Khan Sarwar City Bungalow #.170 B, Drug Channel Latifabad-7 Hyderabad 022/3862955,3861246 Block-D Drug Channel House # B-6, Block Mirpurkhas Mirpurkhas 023- 363088 Pharmaceutical 14 Unit 3, Satellite
58 Distributors Town Opp. Town Drug Exchange Medicine Plaza Multan 061/4542932,4513932 Hall Medicine Plaza, Drug Exchange Dera Ghazi Dera Ghazi Block-18, Bulkh 0641/462200, 470436 DG Khan Khan Khan Sarwar City Y Block, Main Drug Exchange Road, Tariq Bin Sahiwal Sahiwal 040/4221819, 4221719 Sahiwal Ziad Colony Drug Exchange 154/3, Block G, Vehari Vehari 0693/60603 Vehari Near Chungi No.5 Madina Opposite Police 0946/700710,711221, Mardan Mardan Enterprises Line 700505 Madina Enterprises DC Road Chitral Chitral 0943-414339 Chitral Madina Inside Keri Ali Zai Enterprises D.I.Khan D.I.Khan ------Gate D.I.K. Madina Maidan Road, Near Enterprises FC Camp Timergara Timergara 0945-826670 Timergara Timergara Madina Medical Madina Medical Complex Haji Baba Mingora Swat 0946/700710,700221 Store Road Rahim Yar Rahim Yar Millat Agencies 11- Factory Area 068/5872553,5872551 Khan Khan 15-W-12, Madina 041/8717699, 8723600, Noor Pharma Faisalabad Faisalabad Town 8545198 Noor Pharma Saddar 3-Yousaf Sah Road Saddar Jhang 047-622354, 611622 Jhang Jhang Noor Pharma 3 Session Road Sargodha Sargodha ------Sargodha Real Channel 1st Floor CC-5 Block 8, Karachi 021-35837472
59 Clifton Bunder Road, Sambara Medicine Plaza Mr. Sukkur 071/5615612-13 Distribtors Nawazish Sambara Jan Mohammad Larkana Larkana 074/4043764,4045564 Larkana Junejo Road Sambara Sakrand Ayaz Gul Manzil Nawabshah 0244/330255-56 Nawabshah Road 021-34547850-54, UDL 14-H, Block 6 P.E.C.H.S. Karachi 111555444 Karachi Centre, Plot Khasra No. 2066, Khasra UDL Mouza Shaikhul Abbottabad Abbottabad 099-2334225 Abbottabad Band Chandni Chowk, Iqbal Road, Sikandarabad H.#.3781/E Opp Office Store, UDL DIK D.I.KHAN 0966/718078 Wapda Revenue Fort Road Near Coca P-247 Al- Jannat Cola Factory, UDL Faisalabad Faisalabad 041/2564951, 2564950 Complex Samundri Road Plot No.14-14/C, UDL Sharif Pura, Small Industries Gujranwala 055-3840378 Gujranawalla Jinnah Road. State-01 Sector I-10/3, Plot # 5-N, Street # UDL Islamabad Industrial Islamabad 051/4442962, 4446140 1 Area House # B-111, 307, Chaudary UDL Jhang Jhang Jhang 047-7652013-14 Colony, Gojra Road UDL Jhelum Khekashan Jhelum Jhelum 0544-623611 Marriage Hall,
60 Rohtas Road UDL Karachi 73-K, Block # 6 P.E.C.H.S. Karachi 4545910,4530092,4542902 East UDL Karachi North F-94, Block-B Karachi 021-36647315, 36675975 North Nazimabad UDL Karachi 15-C, KPT. M.T. Khan Karachi 021-35612183 South Warehousing Area Road UDL Lahore 8-D, Davis Road Lahore (East) Lahore 042/6363993,6363989 Al-Aziz House, Bagh Stop, Near UDL Lahore Niaz Baig Army Lahore Lahore 042-35425380-81-82 West Depot, Thokar (West) (West) Niaz Baig, 13Km- Multan Road Charsada UDL Peshawar Block-F, Gul Plaza Peshawar 091-2041456, 2040516 Road House # 267, Sattelite UDL Sargodha Sargodha 0483/222224 Block-A Town 062/2884193,2877749, United Pharma Griganj Bazar Bahawalpur Bahawalpur 2880974
61 5.0 CHAPTER 5 :CONCLUSION and RECCOMENDATIONS:
As after being acquired by Pfizar in February 2009, Wyeth Pakistan is still facing
management issues, which may affect its performance in both the short and long run.
One such issue is of the name. The name of Wyeth has changed throughout the world
but due to some share holders issues the name of the company still remains Pfizer.
Another problem that has aroused is of the placement of the top management, though
some of the directors and vast number of employees have been downsized, their
experience and the services have also left a vacuum, which is to be filled and managed
accordingly as it may and will directly affect the performance and hence the
performance and workability of its effective and efficient supply chain department.
As from the website, we can read the slogan
“At Pfizer (Wyeth), we put your health first!”
It’s true and valid in every sense and is reflected from the dedication and commitment of its thousands of employees spread all over the world. It respects their dignity and hard work
62 and In return the employees continuously thrive to bring the company to new heights of profitability and diversification. Pfizer should come up with a system that guarantees employees job security, especially of the acquired company, as after the downsizing, demotivaton and unsatisfaction with the work seem to grow and hence it affects the overall performance of the new acquired and parent company.
Pfizer (Wyeth Pakistan) had been involved in seminars, conferences and other events and activities related to health and it also educate and make aware the community about the newly discovered diseases and the new break through in health sciences. One such event related to health sciences was held in October 2010, with a Prominent Oncologist, Professor
Manzoor Zaidi, who is also a professor at Baqai University.
Apart from it service to the health industry we see little or no progress where it organizes events and activities and involve academic institutions, to educate and guide them about the processes of its business and especially of its supply chain as, the supply chain is a growing industry and it suit the profile of Business Graduates. More events should be organized with its suppliers and distributors. The involment of other players in supply chain events will only help in evolving new and improved methods of managing it and also educating others of its complex functions and its future requirement and evolution.
63 References .Robin Koh, Edmund W. Schuster, Indy Chackrabarti, Attilio Bellman (2003) “Securing the Pharmaceutical Supply Chain”, Massachusetts institute of technology, USA.
.“Building Supply Chain Capabilities in the Pharmaceutical Industry Part 1: Trends impacting the supply chain”, A UPS Supply Chain Solutions White Paper
.Kamal Raza, Syed Irfan Ul Hasan (2006) “Use of IT in Pakistan and multinational pharmaceutical firms in Korangi industrial area”, PAF-KIET, Market Forces 2006 Vol. 1 no. 4
.Chopra, Sunil, and Peter Meindl, (2001), “Supply Chain Management: Strategy, Planning, and Operations”
.S, Sandeep (2007) “opportunities and challenges of supply chain management”, school of management studies, Cusat, India.
.Lambert, Douglas M., James R. Stock, and Lisa M. Ellram, (1998), “Fundamentals of Logistics Management”
.Caroline Emberson, Janet Godsell , “Customer Responsive Supply Chains: an exploratory view of concepts and definitions.”
64 .Mentzer, John T.,William DeWitt, James S. Keebler, Soonhong Min, Nancy W. Nix, Carlo D. Smith, and Zach G. Zacharia, (2001), “Defining Supply Chain Management,” Journal of Business Logistics,Vol. 22
.Ganeshan, Ram, and Terry P. Harrison, 1995, “An Introduction to Supply Chain Management,”
.Dr. Kevin McCormack, Dr. Archie Lockamy III,”The Development of a Supply Chain Management Process Maturity Model Using the Concepts of Business Process Orientation” 2004 publication in the Supply Chain Management journal
.Harrison, A., Christopher, M. and Van Hoek, R. (1999) ‘Creating the Agile Supply Chain,’ Institute of Logistics and Transportation.
.Day, George S. (1998), “The capabilities of market driven organizations”, Journal of Marketing.
.Christopher M. (1998): “The agile supply chain and how to create it”
.Goffin, K., Szwejczewski, M. and New, C. (1996) “Supplier Base Management: An Empirical Investigation”
.Ellinger, A.E. (2000) ‘Improving Marketing/ Logistics Cross-functional Collaboration in the Supply Chain’, Industrial Marketing Management
.Mason S.J., Cole M.H., Ulrey B.T. and Yan L. (2002),” Improving Electronics Manufacturing Supply Chain Agility through Outsourcing”, International Journal of Physical Distribution and Logistics Management
65 .New, S.J. and Payne, P.,” Research Frameworks in Logistics:” International Journal of Physical Distribution and Logistics Management
.Koste L.L. and Malhotra M.K. (1999), “A Theoretical Framework for Analyzing the Dimensions of Manufacturing Flexibility”, Journal of Operations Management
Sethi A.K. and Sethi S.P. (1990) Flexibility in Manufacturing: A Survey, International Journal of Flexible Manufacturing Systems
.Lummus, Rhonda R, Duclos, Leslie K, Vokurka, Robert J,”Supply Chain Flexibility: Building a New Model” 2004 Global Journal of Flexible Systems Management.
.Chris Zimmerman (2006),” Protecting the Pharmaceutical Supply Channel” Journal of Pharmacy practice 2006.
.Vickery S., Calantone R. and Droge C. (1999) Supply Chain Flexibility: An Empirical Study. The Journal of Supply Chain Management
Bibliography
http://en.wikipedia.org/wiki/Supply_Chain_Management
http://en.wikipedia.org/wiki/Inventory_control_system
http://lcm.csa.iisc.ernet.in/scm/supply_chain_intro.html
http://www.work.com/inventory-management-systems-127/
http://en.wikipedia.org/wiki/Customer_relationship_management
http://en.wikipedia.org/wiki/Service_management
66 http://www.pfizer.com.pk/NewsAndPress.aspx http://www.pfizer.com.pk/ http://pharmaceuticalsupplychain.org/downloads/psci_guidance.pdf http://pdf.usaid.gov/pdf_docs/PNADO703.pdf
67 APPENDIX
68 Analysis of SCM. A case study of Phizer (wyeth) Pharmaceutical company Pakistan. Research Project Questionaire.
Upstream Activities –Supply Side:
1: What are the criteria for the selection of vendors? 2: How much information sharing is done with vendors? 3: How much involvement of suppliers is there in important meetings of the company and the Supply chain department? 4: How is quality of the raw materials by the suppliers measured? Is there any standard for the vendors to maintain certain quality? 5: What payment method is used by the company with its suppliers?
Mid stream activities –Supply chain department side:
1: What is the structure of the supply chain department? 2: What role each unit of the supply chain department plays in the transformation of raw material into finished goods? 3: What software’s are used by the supply chain department? And how do they help in the supply chain processes? 4: How different are the functions of supply chains as compared to other departments of the company? 5: Some experts distinguish SCM and logistics, while others consider the terms to be interchangeable. How does the Wyeth view these two terms? 6: In the recent age experts believe that rather then companies competing with each other, the battle is between the supply chains of the companies? How do you see the statement in the light of Wyeth Pharmaceuticals?
69 Downstream activities- Distribution side:
1: How much of the distribution is outsourced?
2: How much difference there exists between the companies based distributors and the outsourcing distribution company?
3: How much information sharing is done with the distributors?
4: Does the company take part in the distribution of its product through any trade shows and exhibitions?
5: What criteria are used by the distributors to market the products?
6: How does the company take part in the retailing of products?
70