“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

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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

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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

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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

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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

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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

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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

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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

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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.

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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?

21

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

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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.

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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

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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

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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

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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.

.“Building Supply Chain Capabilities in the Pharmaceutical Industry Part 1: Trends impacting

the supply chain”, A UPS Supply Chain Solutions White Paper

.Kamal Raza, Syed Irfan Ul Hasan (2006) “Use of IT in Pakistan and multinational

pharmaceutical firms in Korangi industrial area”, PAF-KIET, Market Forces 2006 Vol. 1 no. 4

.Chopra, Sunil, and Peter Meindl, (2001), “Supply Chain Management: Strategy, Planning, and

Operations”

.S, Sandeep (2007) “opportunities and challenges of supply chain management”, school of

management studies, Cusat, India.

.Lambert, Douglas M., James R. Stock, and Lisa M. Ellram, (1998), “Fundamentals of Logistics

Management”

.Caroline Emberson, Janet Godsell , “Customer Responsive Supply Chains: an exploratory view

of concepts and definitions.”

.Mentzer, John T.,William DeWitt, James S. Keebler, Soonhong Min, Nancy W. Nix, Carlo D.

Smith, and Zach G. Zacharia, (2001), “Defining Supply Chain Management,” Journal of

Business Logistics,Vol. 22

.Ganeshan, Ram, and Terry P. Harrison, 1995, “An Introduction to Supply Chain Management,”

.Dr. Kevin McCormack, Dr. Archie Lockamy III,”The Development of a Supply Chain

Management Process Maturity Model Using the Concepts of Business Process Orientation”

2004 publication in the Supply Chain Management journal

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.Harrison, A., Christopher, M. and Van Hoek, R. (1999) ‘Creating the Agile Supply Chain,’

Institute of Logistics and Transportation.

.Day, George S. (1998), “The capabilities of market driven organizations”, Journal of

Marketing.

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Investigation”

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Supply Chain’, Industrial Marketing Management

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Supply Chain Agility through Outsourcing”, International Journal of Physical Distribution and

Logistics Management

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Distribution and Logistics Management

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Dimensions of Manufacturing Flexibility”, Journal of Operations Management

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Flexible Manufacturing Systems

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New Model” 2004 Global Journal of Flexible Systems Management.

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.Chris Zimmerman (2006),” Protecting the Pharmaceutical Supply Channel” Journal of

Pharmacy practice 2006.

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Study. The Journal of Supply Chain Management

Bibliography

http://en.wikipedia.org/wiki/Supply_Chain_Management

http://en.wikipedia.org/wiki/Inventory_control_system

http://lcm.csa.iisc.ernet.in/scm/supply_chain_intro.html

http://www.work.com/inventory-management-systems-127/

http://en.wikipedia.org/wiki/Customer_relationship_management

http://en.wikipedia.org/wiki/Service_management

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