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“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.
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Table of Contents1.0 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............................................................................7
1.3.1 Information Integration................................................................................................8
1.3.2 Co-Ordination and Resource Sharing..........................................................................9
1.3.3 Organizational Relationship Linkage...........................................................................9
1.4 Activities in SCM...............................................................................................................9
1.4.1 Strategic:.....................................................................................................................10
1.4.2 Tactical:......................................................................................................................10
1.4.3 Operational:................................................................................................................10
1.5 The management components of SCM.............................................................................11
1.5.1 Customer service management:.................................................................................12
1.5.2 Product development and commercialization:...........................................................12
1.5.3 Physical distribution, manufacturing support and procurement:...............................12
1.5.4 Performance measurement:........................................................................................12
1.5.5 Outsourcing:...............................................................................................................12
1.6 SCM in Pharmaceutical industry......................................................................................13
1.7 Pharmaceutical industry in Pakistan: Industry overview..................................................13
1.8 Pharmaceutical sector current scenario.............................................................................14
1.8.1 Top Pharmaceutical Companies in Pakistan..............................................................15
1.9 Introduction to Wyeth Pharmaceutical:................................................................................16
1 .9 .1List of products manufactured and/or sold in Pakistan:...................................................18
1.9.2 Hirarchy Of Wyeth Supply chain department...................................................................19
1.10 PROPOSAL PART 1:........................................................................................................20
1.10.2The problem statement:.................................................................................................20
1.10.3Main Research Questions:.........................................................................................20
1.10.4 Objectives of the study:...............................................................................................21
1.10.5 Justification:.................................................................................................................21
1.10.6 Limitations / Barriers...................................................................................................21
1.10.7Scope:............................................................................................................................22
1.10.8 Assumptions:................................................................................................................22
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1.10.9 Who will benefit from the study?.............................................................................22
2.0 CHAPTER 2 “LITERATURE REVIEW”...........................................................................23
2.1Supply Chain Management................................................................................................23
2.2Logistics and Supply chain management...........................................................................28
2.2.1The Evolution of Logistics..........................................................................................28
2.3Supply Chains and Flexibility............................................................................................29
2.3.1From Manufacturing Flexibility to Flexible Organizations........................................30
2.3.2Supply Chain Flexibility.............................................................................................31
2.4Challenges of SCM............................................................................................................32
2.4.1Information Integration...............................................................................................33
2.4.2 Co-Ordination and Resource Sharing........................................................................34
2.4.3Organizational Relationship Linkage..........................................................................34
2.5Oppertunities in SCM.........................................................................................................34
2.5.1Information Technology in SCM................................................................................34
2.5.2Supply chain management software’s.........................................................................35
2.5.3Supply Chain in Food Sector......................................................................................35
2.5.4 E-Financial Supply Chain Systems............................................................................36
2.5.5 SCM in Pharmaceutical industry................................................................................36
3.0 PROPOSAL PART 2: Research Methodology....................................................................37
3.1 Research Design:..............................................................................................................37
3.2 Procedure:.........................................................................................................................37
3.2.1 Population:.................................................................................................................37
3.2.2 Sample and Sampling Method:..................................................................................37
3.2.3 Measurement/Instrument Selection:...........................................................................38
4.0 Data Analysis:.......................................................................................................................38
4.1 Up stream Activities.............................................................................................................38
4.1.1 Vendor Analysis:...........................................................................................................38
4.2 Mid Stream Activities:..........................................................................................................40
4.2.1 Planning Department:....................................................................................................40
4.2.1.1 ABC Classification:................................................................................................41
4.2.1.2 Marketing Forecast:................................................................................................42
4.2.1.3 Master Production Schedule:..................................................................................42
4.2.1.4 Materials Requirement Planning:............................................................................44
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4.2.1.5 Schedule Adherence Report:...................................................................................45
4.2.2 Purchasing Department:.................................................................................................45
4.2.2.1Purchase Local:........................................................................................................46
4.2.2.2 Purchase Requisitions:............................................................................................46
4.2.3 Warehouse (Raw material packaging):..........................................................................49
4.2.4 Quality Assurance:.........................................................................................................50
4.5.1 Objectives of Wyeth’s QC:........................................................................................50
4.5.2 QC of purchase material:...........................................................................................51
4.3 Down Stream Activities........................................................................................................52
4.3.1 Shipping Department:....................................................................................................52
4.3.2 Key Role of Wyeth’s Distribution Manager:.............................................................52
4.3.3 Functions and Objectives of Wyeth’s Distributors:...................................................53
4.3.4 Distribution list of Wyeth:..........................................................................................54
5.0 CHAPTER 5CONCLUSION and RECCOMENDATIONS:...............................................58
References..................................................................................................................................59
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1.0 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.
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 Page | 6
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 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 managementThe 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
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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
· 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 IntegrationIt 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”
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1.3.2 Co-Ordination and Resource SharingHere 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 LinkageThis 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
1.4 Activities in SCMSupply 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
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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.
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. Page | 10
. 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 SCMThe 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 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
Page | 11
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 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:
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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 industryOutsourcing- 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, 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
Page | 13
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
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.
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
Page | 14
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 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;
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Pfizer
GlaxoSmithKline Pakistan
Abbott Laboratories
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 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
Page | 16
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
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
(Pakistan)
23rd August 1949
Page | 17
Headcount (Pakistan) 400 (120 workers, 150 field staff and 130 management officer
grade employees
Net Revenue Worldwide
(2009)
$22.8 Billion
Profit after tax in Pakistan
(2009)
PKR 144 Million
1.9.1 List of products manufactured and/or sold in Pakistan:
1. Ativan Tablets
2. Entox - P Tablets
3. Efexor Tablets
4. Efexor - XR Tablets
5. Enbrel PFS
6. Mucaine Suspension
7. Omnipen N Injection
8. Myambutol Inh Forte Tablets
9. Myrin- P Forte Tablets
10. Prevenar Pre- Filled Syringe 0.5
11. Premarin
12. S-26 Infant Milk Powder
13. S-26 Gold
14. Promil Gold
15. S-26 LF Infant Formula
16. Progress Gold
17. Tygacil
18. Wymox Capsules
Page | 18
19. Wymox Suspension
20. Wymox Injection
21. Stresstabs
22. Lederplex Liquid
23. Vi-Magna Syrup
24. Myambutol Tablets
25. Myambutol Inh
26. Pyrazinamide Tablets
27. Lederiff Tablets
28. Nilstat Drops
29. Myrin Tablets
30. Tussivil Syrup
31. Incremin Syrup
32. Tazocin Injection
33. Lederiff Suspension
34. Caltrate Tablets
35. Myrin – P Tablets
36. Trihemic
Page | 19
1.9.2 Hirarchy
Zakwan Zakwan Ahmed
Assistant Director MMD
Khurram Siddiqui Manager Planning
Basharat Ali Assistant Manager Planning
Kamal Murtaza
Purchase Manager
Tahir Qureshi
Snr. Material Manager
Naeem. AM Purchase, packaging, supplies
Arif Deen Snr officer Raw materials
Absar
Am non inventories supplies
Aftab Amir Siddiqui. Manager planning and ware houses, Hawks bay Plant
Javed Khan
Manager warehouse SITE B2
General engineering supplies
Raw material warehouse
Packaging material warehouse
Finished goods warehouse.
20
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?
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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.
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
22
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.
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.
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2.0 CHAPTER 2 “LITERATURE REVIEW”
2.1Supply Chain ManagementToday’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 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
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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 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
25
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 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)
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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.
2.2Logistics and Supply chain managementThere 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
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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.
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
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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.
2.3Supply Chains and FlexibilityIn 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 OrganizationsA 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
29
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.
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 FlexibilityA 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.
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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 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 supply chain which may improve supply
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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 SCMThe 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
· Complexity- increasingly complex supply chain processes impede best practice decision
making and management of data transfers.
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· 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 IntegrationIt 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 SharingHere 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 LinkageThis 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).
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2.5Oppertunities in SCM
2.5.1Information Technology in SCMThe 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
2.5.2Supply chain management software’sSupply 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
34
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 SectorThe 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.
2.5.4 E-Financial Supply Chain SystemsCross 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
35
the cost of working capital and improve supplier relationship management by providing speedy
payment. (Sandeep.S 2007).
2.5.5 SCM in Pharmaceutical industryOutsourcing- 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
· Fast and cheaper to have discovery work outsourced as it reduces the drug development cost
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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.
37
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
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.
38
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).
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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 so much
vigilance, at Planning Department in creating the plan. They are mentioned below:
1. Amount of production capacity
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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
‘B’ Class Material - 3 to 5 months
‘C’ Class Material - 5 to 9 months
41
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.
42
Figure 1: This is a screen that shows the user options for SCM in Jd Edwards
43
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?
• 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.
44
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 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
45
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 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
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•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) 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
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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.
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
48
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
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.
49
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).
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.
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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
• Monitoring suppliers’ quality
• Vendors performance evaluation
51
4.3 Down Stream Activities
4.3.1 Shipping Department:
52
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.
Monitoring institutional sales
53
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
Timely Submission of Claims
Timely Submission of Sales data
Smart penetration in Institutions
Better co-ordination for institutional sales
54
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 Name
Address Location City PhoneNumber
Ali Traders 6-B, Model Town Quetta Cantt.Quetta Cantt.
081/2836710-11
Al-Madina2nd Floor, Gul Plaza
Charsadda Road
Peshawar 091-2042455, 2041755
Baloch Enterprises
151-B/F Near Ali Masjid
Civil Line, Gulistan Road
Sahiwal 040/4221819
Baloch Enterprises DG Khan
Medicine Plaza, Block-18, Bulkh Sarwar City
Dera Ghazi Khan
Dera Ghazi Khan
0641/462200, 470436
Drug ChannelBungalow #.170 B, Block-D
Latifabad-7 Hyderabad 022/3862955,3861246
Drug Channel Pharmaceutical Distributors
House # B-6, Block 14 Unit 3, Satellite Town
Mirpurkhas Mirpurkhas 023- 363088
Drug Exchange Medicine PlazaOpp. Town Hall
Multan 061/4542932,4513932
Drug Exchange DG Khan
Medicine Plaza, Block-18, Bulkh Sarwar City
Dera Ghazi Khan
Dera Ghazi Khan
0641/462200, 470436
55
Drug Exchange Sahiwal
Y Block, Main Road, Tariq Bin Ziad Colony
Sahiwal Sahiwal 040/4221819, 4221719
Drug Exchange Vehari
154/3, Block G, Near Chungi No.5
Vehari Vehari 0693/60603
Madina Enterprises
Opposite Police Line
Mardan Mardan0946/700710,711221, 700505
Madina Enterprises Chitral
DC Road Chitral Chitral 0943-414339
Madina Enterprises D.I.K.
Inside Keri Ali Zai Gate
D.I.Khan D.I.Khan ---------------
Madina Enterprises Timergara
Maidan Road, Near FC Camp Timergara
Timergara Timergara 0945-826670
Madina Medical Store
Madina Medical Complex Haji Baba Road
Mingora Swat 0946/700710,700221
Millat Agencies 11- Factory AreaRahim Yar Khan
Rahim Yar Khan
068/5872553,5872551
Noor Pharma15-W-12, Madina Town
Faisalabad Faisalabad041/8717699, 8723600, 8545198
Noor Pharma Jhang
3-Yousaf Sah Road
Saddar JhangSaddar Jhang
047-622354, 611622
Noor Pharma Sargodha
3 Session Road Sargodha Sargodha ----------
Real Channel 1st Floor CC-5Block 8, Clifton
Karachi 021-35837472
Sambara Distribtors
Medicine PlazaBunder Road, Mr. Nawazish
Sukkur 071/5615612-13
Sambara Larkana
Jan Mohammad Junejo Road
Larkana Larkana 074/4043764,4045564
Sambara Ayaz Gul Manzil Sakrand Nawabshah 0244/330255-56
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Nawabshah Road
UDL 14-H, Block 6 P.E.C.H.S. Karachi021-34547850-54, 111555444
UDL Abbottabad
Karachi Centre, Plot Khasra No. 2066, Khasra Mouza Shaikhul Band Chandni Chowk, Iqbal Road, Sikandarabad
Abbottabad Abbottabad 099-2334225
UDL DIKH.#.3781/E Opp Wapda Revenue
Office Store, Fort Road
D.I.KHAN 0966/718078
UDL FaisalabadP-247 Al- Jannat Complex
Near Coca Cola Factory, Samundri Road
Faisalabad 041/2564951, 2564950
UDL Gujranawalla
Plot No.14-14/C, Small Industries State-01
Sharif Pura, Jinnah Road.
Gujranwala 055-3840378
UDL IslamabadPlot # 5-N, Street # 1
Sector I-10/3, Industrial Area
Islamabad 051/4442962, 4446140
UDL Jhang
House # B-111, 307, Chaudary Colony, Gojra Road
Jhang Jhang 047-7652013-14
UDL JhelumKhekashan Marriage Hall, Rohtas Road
Jhelum Jhelum 0544-623611
UDL Karachi East
73-K, Block # 6 P.E.C.H.S. Karachi4545910,4530092,4542902
UDL Karachi North
F-94, Block-BNorth Nazimabad
Karachi 021-36647315, 36675975
UDL Karachi South
15-C, KPT. Warehousing Area
M.T. Khan Road
Karachi 021-35612183
57
UDL Lahore 8-D, Davis RoadLahore (East)
Lahore 042/6363993,6363989
UDL Lahore West
Al-Aziz House, Bagh Stop, Near Niaz Baig Army Depot, Thokar Niaz Baig, 13Km-Multan Road
Lahore (West)
Lahore (West)
042-35425380-81-82
UDL Peshawar Block-F, Gul PlazaCharsada Road
Peshawar 091-2041456, 2040516
UDL SargodhaHouse # 267, Block-A
Sattelite Town
Sargodha 0483/222224
United Pharma Griganj Bazar Bahawalpur Bahawalpur062/2884193,2877749, 2880974
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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 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.
59
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.
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Pharmaceutical Supply Chain”, Massachusetts institute of technology, USA.
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the supply chain”, A UPS Supply Chain Solutions White Paper
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pharmaceutical firms in Korangi industrial area”, PAF-KIET, Market Forces 2006 Vol. 1 no. 4
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Operations”
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management studies, Cusat, India.
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Management”
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Management Process Maturity Model Using the Concepts of Business Process Orientation”
2004 publication in the Supply Chain Management journal
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.Harrison, A., Christopher, M. and Van Hoek, R. (1999) ‘Creating the Agile Supply Chain,’
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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
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
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APPENDIX
64
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?
65
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?
66