Supply string management in modern day pharmaceutical industry

Supply string management is the management of any relationship and moves between the string of businesses and processes; it is the topic that combines all the problems regarding the delivery of product and services ( Slack et al. , pg. 212).

Main aims of supply chain management are proper management between demand and supply, synchronisation between processing and marketing, maintaining equilibrium between organic material demand and supply, inventory management, keeping balance between inflow and outflow between of finished goods and finally maintaining a proper network between marketers, retailers and An effective supply chain management works as the backbone of your company which if disturbed the complete organization are certain to get negatively afflicted.

Indian Pharmaceutical industry - Quick: Pharmaceutical industry provides a huge contribution to GDP of any country and plays an exceptionally important role in physical condition of every region. In comparison with other establishments pharmaceutical industry falls behind other progressive industries in terms of putting into action modern supply string practises and rules. This is due to the fact that Indian pharmaceutical industry is relatively resistant to simply accept solid rules credited to cut neck competition and needless squeezing methods from market forces. Pharmaceutical industry includes Allopathy, Homoeopathy, and Ayurveda which is the historic Indian pathy. Hence pharmaceutical industry is as old as mankind. For a long time pharmaceutical industry likes the status of all profitable industry. According to the studies placed at various centres one simple fact about drugs has been proved that each additional USD spent on new medication design will save you USD 4. 44 on hospitalization and era of new medications increase 40% of life expectancy( Source : www. phrma. org).

Executive conclusion:

This assignment set out to evaluation of resource string management process in Medicare Private Limited, India where I worked well for about nine years. During the whole project my findings were totally based on supply chain management. I started out assignment with an advantages of Indian pharmaceutical industry scenario and last mentioned provided a short release of Medicare Private Small, India, where i worked for. Further i detailed manufacturing procedure for the company and discussed source chain fundamentals in that along with opportunities to explore removal of extra man power from developing process.

After discussing preclinical and specialized medical trials, i discussed the objectives, tendencies and complexities of supply chain management. I attempted to implement trim synchronization to marketing stream of supply chain management where i found that there surely is lot of scope to reduce some marketing stations and in so doing company can reduce some pointless expenses and cost. After slim synchronization, i have gone through the inventory subject areas, discussed advantages and disadvantages of low and high inventory management. During SWOT analysis, i came across that company should focus after its weaknesses like less product range, oily distribution channel network, risks like cut throat competition and provided my recommendation to the company to extend in overseas market.

Medicare private Small: Company profile

Medicare private limited a 0. 28 billion group was mainly in manufacturing, marketing and export of bulk drugs. Main earnings generating products were Paracetamol and Tricholine citrate. Besides creation and marketing of Products Company was into agreement creation and R&D work. Company was based in Northern Province of India.

Manufacturing process: Medicare pharma is at manufacturing of varied products out which main were Syrups, micronized powders, capsules etc.

Flow graph of creation process is really as follows -

Brief information of production process was initially of all vessels were washed properly in bottle cleansing section. Afterwards product was examined in the laboratory after intensive trials product was crammed in the bottles

Some unique top features of pharmaceutical supply chain: Supply chain function comes under the creation division. The detailed production strategy and offer string areas are the following -



Global source chain

Operational procedures

During new product development the likelihood of success is very less and the whole procedure for new medicine development drains a very high capital.

Entry barriers in a variety of aspects are extremely high so that industry encounters a great deal of regulatory types of procedures.

After reviewing above mentioned points the truth is very well proven that development of newer medicine is not a simple job as it includes a great deal of business risks. Regardless of these professional hazards pharmaceutical industries spend a great deal of capital in R&D activities.

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After analysing above amount we can very well observe that new medicine development is an extremely lengthy process and involves a great deal of efforts, manpower planning and capital investment.

Despite all probabilities pharmaceutical industry looks forward to a global expansion of around 11% per anum and is unaffected by any type of market hazards like recession etc.

Share of global market sales for pharmaceutical industry

The global market share for pharmaceutical countries where we can easily see very evidently that THE UNITED STATES tops among all with a global sales share of 45%. European countries stands on the second place with a total show of 20%.

Supply chain composition of Medicare Private Limited India - Medicare Private Small a leading maker and exporter of drugs and pharmaceutical volume drugs was working on two way resource chain structures at a time. One was developing new medicine delivery system and other was marketing of existing drugs. The essential aim of both of both resource string were different as you chain was directed to complete all the necessary regulatory affairs from acceptance of new formula to completion of their medical trials and second one was mainly concerned with achieving sales targets.

Complexities of scientific trial supply chain: This stage of supply chain was very complex natured as it was very hard go through an extremely lengthy and highly regulated procedure. Total time period in a specialized medical trial process used to be around 2-3 years and entire process was much controlled. Another problem with this chain was that it was difficult to see the number of patients as through the clinical trials the batch size of medication was very small and most of the times during lot of volunteer patient input this was very hard to do trials on them.

Complexities of pharma source chain: Following the completion of medical trials the whole focus shifts towards the other priorities of the business enterprise. One of the major priorities was to release the drug in to the market after analysing market feasibility. Major cause of not following supply chain management technique by Medicare private limited was due to the fact that every treatment of pharma supply chain was associated with previous medical trial supply string and the majority of the days things weren't so sure and correct during the durations.

Supply chain aims and their complexities:

Objectives and Trends



High cost involve in new medicine delivery system

High regulatory requirements

Less alternatives of products

High sales pressure on marketing personnel to accomplish high targets.

Prescription drugs

More and much more pressure from prescriber from the company

More pressure on the company to lessen the retail prices of product.

Rapid growth and decreased monopoly of drugs on expiry of patents

Less deal of OTC drugs therefore of high market competition

Fewer sales lead to hampering expansion of group and employees.

More do it yourself medication patterns of patients

Less sale of medicines

Hampering of growth of both employees and organisation

Issue of counterfeit drugs

Medicine sales decline

No developmental activities on part of organisation.

Flow of supply chain

Above stream is representing the distribution network of Drugs at Medicare private limited. As per the flow there were two means of supply of drugs. One was immediate supply of medications in the form of institutional sales to big commercial hospitals to minimise expanses which were distributed between intermediate systems and the other channel was typically traditional. The normal traditional channel begins from having and forwarding agent to distributor - stockiest - dealer -finally consumer. Major disadvantage with this type of supply string network was over participation of maximum intermediate realtors due to which cost of the merchandise increases and that leads to minimal profit to consumer.

Pharmaceutical manufacturers play an essential role in proper way to obtain medications to the patients and other intermediaries also play a essential role in enough resource but sometimes anticipated for some factors supply of medicines get afflicted causing hassle to patient.

Lean Synchronisation: Low fat synchronisation aspires to meet up with the demand instantaneously, with perfect quality no waste. This involves supplying products and services in perfect synchronisation with the demand for the coffee lover, using lean or just in time (JIT) theory ( Slack et al. ). This theory is mainly centered upon cutting the unneeded cost, burden to the company and ultimately resulting into more benefits to the organisation.

Here case of Medicare private limited applying lean synchronisation gives rise to trim in the excess marketing cost of the business and finally producing into more income to the company. Here we can see that there is distributor as an extra website link which is taking around 4% of the margin, so if we remove him from the string company can save 4% of his margin, utilise that margin in virtually any other cause and additionally in so doing company can decrease the unnecessary expectation of the channel.

As company does with the institutional sales, once more company can think over removing of one other channel which is C&F agent who's in charge of another 10% of share can be taken off the chain and hence once more company can save another 10% of income that can be utilised in virtually any other work.

Factors responsible for product lack (Tyler and Tag-2002)

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Inventory priorities - the ABC system: According to the ABC system of inventory control all the inventory material is divided into 3 groupings viz A, B and C.

In category A we should maintain 20% of the total inventory of 80% high consumption items.

In category B we ought to maintain 30% of the products of around 10% of total usage value.

In course C we ought to maintain 50% of goods whose value is around 10% of the full total usage.

Inventory control: Inventory control is a must kind of part of order to check on unneeded overheads to the company. High inventory costs to high drain of working capital so the best thing is to keep control over ---- Inventory can entail an extremely high administrative and insurance cost.

Inventory might take up excessive storage space likened its value.

Inventory can become obsolete as alternatives become available.

Inventory can be broken or deteriorate.

Inventory can be totally lost or be very expensive to retrieve.

(Source - Slack et al. )

Benefits of preserving high inventory:

Maintaining relatively high inventory can often be beneficial through the times of high fluctuating demand of products.

High purchase of inventory can be beneficial whenever a good deal is made available from supplier.

Sometimes during popular inventory can provide lucrative benefits.

Raw material quality has a exceptional effect on efficacy of the merchandise. So far as raw material inventory can be involved company procedures were very clear about high stock maintenance of organic material. High fresh materials inventory was looked after in the organisation because almost all of the days demand of the product was very fluctuating and as a result which less inventory storage space cost to irregularity between demand and offer of orders

Reverse Logistics: Management of product return in pharmaceutical industry is a herculean task. This practise is very common in pharma industry. Common cause for this menace can be anything as vested passions, incapability to pay, day barring of the merchandise etc may be the probable reasons behind reverse logistics.

Major problems related to reverse logistics are financial reduction to the company and accounts discrepancies.

Hierarchy in source chain organisations:

Basic hierarchy of supply chain is like the head of the resource string is vice president under whom comes the Mature Manger. After mature supervisor hierarchy includes supervisor then executive and lastly the last hyperlink is supervisor.

Lean Synchronisation: As mentioned earlier also by using Trim synchronisation we can check if there is any extra link that includes a low or nil production company can think of eliminating that hyperlink, utilising that link to anywhere else and subsequently reducing the price.

In production range company can think of eliminating senior director and manager from the string, utilising them somewhere else and reducing the repeating cost of the task.

Long term strategy: Long lasting strategy of Medicare Private limited was to target more on R&D activities, exploration of new abroad markets, unveiling of new product range etc. . To be able to get the required goals company must continue working with determination with an increase of focus on improving quality approach and a good source string management.

Key performance signals:

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Organisations where supply chain management is practised use many performance indicators to verify the smooth operating of procedures. A couple of five types of indications viz. Quality, rate, dependability, versatility and cost. These performance indications are further composed of many smaller elements, e. g. Procedure cost is assessed by purchasing efficiency, staff productivity, direct and indirect employee proportion etc. These steps provide a partial view of performing of supply chain management.

SWOT Research:



Products having a good growth rate in less time

Less product range resulting into less market share

Fatty circulation network causing siphoning off earnings margins



Expansion in overseas market


Cut throat competition.


Company should develop clear perspective and primary competency.

Company should focus on balancing supply chain management system.

Implementing low fat synchronization unnecessary expenses should be trim brief so that there should be more profit to the business and once the business gets gain that will link the whole chain from expansion and development of organization and employees as well. Final output of progress and development of firm will result into high morale of the employees.

Keeping in mind the SWOT evaluation, company should take into account the opportunities of growing its procedures in abroad market and product diversification so that business makes more benefits.

Company should significantly think over main dangers which are trim throat competition. Company can conquer this problem by launching some very good products in the market so a kind of monopoly should be proven.

About weakness - less product range causes less market share of earnings so company should raise the selection of products to be able to get more market share and lastly growth.

Company should focus on research and development activities so that new products may come into the market.

Another thing which requires immediate activities of the company is lowering manpower from development cycle and trim short its marketing circulation route network.

Reverse logistics is a major factor which takes a serious attention because reverse logistics gives surge to needless financial overheads.

Company should think over E-procurement techniques merely to make the procedure fast plus more accurate.

Conclusion: Within the concluding part we can see that the key advantages of keeping a good circulation of supply string management leads to - More generation of revenue

Design and operate new strategies

: Long term goal achievement

: Keeping quality of product

: Earning good market reliability.

Apart from this any business want to progress, contend with others in this competition edge should think about other things also like the company should have a definite vision, key competence and goal selection capacities. Without these qualities no company can go much and achieve great goals. According to the CEO of Pfizer, Henry Mckinnell, "the golden age of pharma obviously lies before us. " But, if pharmaceutical supply chain infrastructure will not change itself towards positivity the complete industry will not be able to get anything from the changing atmosphere.


Slack, N. , Chambers, S. , Johnston, J. , and Betts, A. , (2009), Functions and Process Management, Second Edition, Harlow: FT-Prentice Hall.

2) www. phrma. com reached on 12/01/2011

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