Alphamed Formulations Pvt Ltd

CHAPTER 1

INTRODUCTION

TO

THE STUDY

1.1 INTRODUCTION

Prevalent from the birth of mankind, man involved himself in one or another business

through sole proprietorship and partnership form of business. But these forms appeared to be less

perpetual, because of unlimited liability and affections by natural factors viz death, insolvency or

lunacy of the owner or partners. Then company form of organization came into existence which

changed the ‘populi’ view of doing business.

An organization is defined as “a consciously coordinated social unit composed of two or

more people that functions on a relatively continuous basis to achieve a common goal or set of

goals”. In other way round it can also be defined as “a form of every human association for the

attainment of a common purpose or goal”. Thus in a way the term organization emphasizes upon

“the human groupings/associations and whose main objective is to meet certain predefined goals

that may vary from profit motive to serving the society as well as the nation”.

An organizational study is the study of individual and group dynamics in an

organizational setting, as well as the nature of the organizations themselves. Whenever people

interact in organizations, many factors come into play. Organizational studies attempts to

understand and model these factors.

Being a part of the curriculum under 2 years MBA program, we got the

opportunity to carry out one such organizational study in a large cap public company. The

objective of this study was to enjoin the students with the functioning of the organization, as also

of its departments.

The main aim of the organizational study is to acquire the knowledge regarding the

functional as well as the management aspects of an organization, and its sustainability towards

achieving its mission, vision and values set for growth.

1.2 TITLE OF THE STUDY:

Organization study on “Alphamed Formulation Pvt. Ltd”

1.3 OBJECTIVES OF THE STUDY:

To know about the market share and share of competitors.

To understand key issues in strategy deployment like mission, vision, goals,

objectives etc.

To study the organizational administrative structure.

To study key business levels functions and process like Marketing, Finance, HR,

Operations, etc.

1.4 SCOPE OF ORGANISATIONAL STUDY:

The study focuses on the overall structure of the organization. In this study, the researcher

analyzed the overall functioning of the firm and also the financial performance of the enterprise.

The researcher made a moderate attempt to have the SWOT analysis of the study. The researcher

also experienced practical application of the theoretical knowledge gained

1.5 LIMITATIONS of the Study:

As the project is prepared for the academic purpose only, it suffers from the limitation of

time, due to which the detailed report about the operations of the organization was not

possible.

The information given by the persons may not be complete because of their busy work

schedules

The report suffers from the limitation of unable meeting only the departmental heads

because of lack of permission to interact with other people.

Certain areas are restricted, so a detailed study is not possible.

1.6 METHODOLOGY used for Organization study:

Primary Data1. Personal Interview - There were interview sessions with each of the functional heads, and

there was a questionnaire that was followed as questions which were asked depending upon

situations.

2. Observation - There was a keen sense of observation followed during the study period to

follow the various functions of the company.

Secondary Data1. Internal Data - This includes data provided at the company’s office, like Organization

structures, Balance sheet, Annual reports etc.

2. External Data - It includes organization data derived from internet, and other information

media that gives a wide picture of the Organization with respect to the external world.

CHAPTER 2

INTRODUCTION

TO THE

PHARMACEUTICAL INDUSTRY

2.1 INTRODUCTION

The pharmaceutical industry develops, produces, and markets drugs licensed for use

as medications. Pharmaceutical companies can deal in generic and/or brand medications. They

are subject to a variety of laws and regulations regarding the patenting, testing and marketing of

drugs.

The earliest drugstores date back to the middle Ages. The first known drugstore was

opened by Arabian pharmacists in Baghdad in 754, and many more soon began operating

throughout the medieval Islamic world and eventually medieval Europe. By the 19th century,

many of the drug stores in Europe and North America had eventually developed into larger

pharmaceutical companies.

Most of today's major pharmaceutical companies were founded in the late 19th and early

20th centuries. Key discoveries of the 1920s and 1930s, such as insulin and penicillin, became

mass-manufactured and distributed. Switzerland, Germany and Italy had particularly strong

industries, with the UK, US, Belgium and the Netherlands following suit.

Legislation was enacted to test and approve drugs and to require appropriate labeling.

Prescription and non-prescription drugs became legally distinguished from one another as the

pharmaceutical industry matured. The industry got underway in earnest from the 1950s, due to

the development of systematic scientific approaches, understanding of human biology

(including DNA) and sophisticated manufacturing techniques.

Numerous new drugs were developed during the 1950s and mass-produced and marketed

through the 1960s. Cancer drugs were a feature of the 1970s. From 1978, India took over as the

primary center of pharmaceutical production without patent protection.  By the mid-1980s, small

biotechnology firms were struggling for survival, which led to the formation of mutually

beneficial partnerships with large pharmaceutical companies and a host of corporate buyouts of

the smaller firms. Pharmaceutical manufacturing became concentrated, with a few large

companies holding a dominant position throughout the world and with a few companies

producing medicines within each country.

2.2. Global Scenario:

Global pharmacy revenues $ 643 billion- growing by 7%.

Increase in bio tech products.10 %global sales.

Top five European markets-$123 billion, Japan $64 billion

With USA, all the three make up 80% of market.

31 new molecular entities introduced.

Top 10-12 research based MNC pharma companies from US and Europe dominate the

market.

One fourth of the 2300 products developed are biological.

Pfizer is at the top with $50 billion sales.

High potential launches- Gardasil (Vaccine for cervical cancer), Januvia (First in class for

type II diabetes), Sutent for Renal cancer.

Major therapeutic classes sold – lipid regulators ($35.2 Bil.) , Oncology products($34.6

Bil.) and respiratory agents ($ 24.6 Bil.)

Products loosing patent.

The pharmaceutical markets worldwide can be classified as Regulated, Semi Regulated and

Non Regulated markets.

a. The regulated markets constitute 88% of the global pharmaceutical market.

b. The semi and non regulated markets of Asia, Africa, Australia and Latin America have

been growing at a rapid pace (registering double digit growth in 2005) highlighting the

tremendous market potential of these regions.

Global Sales 2005:US $602 million

Top 14 Pharmaceuticals Markets, 2005 Top 14 Pharmaceuticals Markets,

2010US $ billion US $ billion

2.2.1 STRATEGIES ADOPTED BY GLOBAL MARKET PLAYERS

Generic Exports

The global generics market is expected to continue growing rapidly due to the underlying

demand drivers like an aging global population, growing healthcare expenditure and low

generic penetration across large geographical areas.

Currently the Indian industry is estimated to account for 22% of the world generics market

which is expected to reach 30% according to the forecasts of Assocham.

USA , the largest generics market globally, is also the single largest export market for Indian

generics. The Japanese market is poised to become an important destination for many global

generic players with the introduction of generic substitution in 2006.

Low production costs give India an edge over other generics-producing nations, especially

China and Israel .

CRAMS

Rising pricing pressure on global revenues and falling trend in R&D productivity is making it

imperative for global pharma players to increase outsourcing to sustain profitability.

Custom manufacturing operations in India or China offer unparalleled cost advantages and

increasing pricing pressures is forcing innovators to minimize manufacturing costs and shift

operations to India and China .

Indian custom manufacturing players have been aggressively acquiring custom development

companies in the EU in order to gain access to a wide gamut of valuable client relationships,

which would have been difficult to obtain otherwise.

India is also an apt destination for outsourcing of research services due to its large population

with relative underexposure to drugs, significant cost advantage and the availability of well

qualified investigators.

2.3 INDIAN SCENARIO

“The Indian pharmaceutical industry is a success story providing employment for millions and

ensuring that essential drugs at affordable prices are available to the vast population of this sub-

continent.”

Richard Gerster

The Indian Pharmaceutical Industry today is in the front rank of India’s science-based

industries with wide ranging capabilities in the complex field of drug manufacture and

technology. A highly organized sector, the Indian Pharma Industry is estimated to be worth $ 4.5

billion, growing at about 8 to 9 percent annually. It ranks very high in the third world, in terms of

technology, quality and range of medicines manufactured. From simple headache pills to

sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now

made indigenously.

India's emerging pharmaceutical industry has appeared as the world leader in the fabrication of

standard generic drugs, ever since the Patent Act 1970 permitted India to seriously approach and

contribute in the pharmaceutical market worldwide. India is the preferred nation for

pharmaceutical generation, with low charges for research and development as well as production

of drugs. And the pharmaceutical companies in India have made full use of the favorable

environment offered by the country to make it big. 

The workforce and technological proficiency of pharmaceutical companies in India ensures the

growth of the industry on a global scale as well as within India. The sector is predicted to value

about $3.1 billion (USD).

2.3.1. Growth of Indian Pharmaceutical Industry:

In the year 2008, Indian pharmaceutical market was assessed at $7,743m which

witnessed an augmentation of 4.0% over 2007. Business observers predict that the Indian

pharmaceutical market will escalate at an increasing mode as compared to the global

pharmaceutical market, at a CAGR of 13.2% during the fiscal years 2009-14 to reach an overall

worth of $15,490m in 2014. 

India has also appeared as the preferred location for the pharmaceutical companies of the world

because of its towering growth scenario furnished by elderly population, alteration in disease

Profile, developing patent system and socio-economic circumstances.

The competition in the Indian pharmaceutical market is cutthroat and the market is divided

among the top 10 pharma companies accounting for 36.1% of the overall R&H sales in the fiscal

year 2008.

India began to abide by the World Trade Organization's Trade Related Aspects of Intellectual

Property Rights (WTO-TRIPS) agreement and acknowledged product rights after the revision of

the Indian Patent Act in January 2005. Indian firms are laying out strategies to benefit from the

Japanese government proposal to endorse generic drugs to minimize healthcare charges. 

2.3.2. Major issues concerning the pharmaceutical companies in India:

Failure of the new patent system: Prerequisites associated with Sec 3(d) of the Patent

(Amendment) Act 2005 restrict the copyright of an existing drug. Moreover, mandatory

licensing permits Indian companies to keep producing generics of copyright products for

overseas selling to underdeveloped nations.

Lack of proper infrastructure: Issues associated with regular power cuts and lack of

suitable transport infrastructure will decelerate the expansion of the sector.

Inadequate funds: Restricted funding from FIs, venture capitalists and the government

may decelerate the expansion of biotechnology sector in India.

Regulatory impediments: Rising of due meticulousness and conformity with product

standards leads to high costs and interruption in the launch of new products.

Severe competition: Low margins and restricted capital to assist R&D is the result of

intense pricing competition among local producers. This rivalry will further deepen from

the joining in of the big drug companies in the Indian market to control the cost benefit

and large reserve source.

2.3.3. Key Players in Indian Pharmaceutical Industry:

There are several national and international pharmaceutical companies that operate in

India. Most of the country's requirements for pharmaceutical products are met by these

companies. Some of them are briefly described below:

Ranbaxy Laboratories Limited is the biggest pharmaceutical manufacturing company

in India. The company is ranked at the 8th position among the global generic

pharmaceutical companies and has presence in 48 countries including world class

manufacturing facilities in 10 countries and serves to customers from over 125 countries.

Ranbaxy Laboratories 2009-2010 Q3 Net Profit Results showed a profit of Rs 116.6

crore as compared to Rs 394.5 crore deficit, recorded during the corresponding period

last fiscal.

Dr. Reddy's Laboratories manufactures and markets a wide range of pharmaceuticals

both in India and abroad. The company has 60 active pharmaceutical ingredients to

manufacture drugs, critical care products, diagnostic kits and biotechnology products.

The company has 6 FDA plants that produce active pharma ingredients and 7 FDA

inspected and ISO 9001 and ISO 14001 certified plants. Dr. Reddy's Q1 FY10 result

shows the revenues of the company at Rs. 18,189 million which is up by 21%. During

this quarter the company introduced 24 new generic products, applied for 22 new generic

product registrations and filed 4 DMFs. 

Cipla is an Indian pharmaceutical company renowned for the manufacture of low cost

anti AIDS drugs. The company's product range comprises of anthelmintics, oncology,

anti-bacterials, cardiovascular drugs, antibiotics, nutritional supplements, anti-ulcerants,

anti-asthmatics and corticosteroids. Cipla also offers other services like quality control,

engineering, project appraisal, plant supply, consulting, commissioning and know-how

transfer, support. For the financial year 2008-09 the company registered an increase of

22% in sales and other income over the previous year.

Nicholas Piramal is the second largest pharmaceutical healthcare company in India. The

brands manufactured by the company include Gardenal, Ismo, Stemetil, Rejoint,

Supradyn, Phensedyl and Haemaccel. Nicholas Piramal has entered into join ventures

and alliances with several international corporations like Cheissi, Italy; IVAX Corp; UK,

F. Hoffmann-La Roche Ltd., Allergan Inc., USA etc. 

Glaxo Smithkline (GSK) is a United Kingdom based pharma company; it is the world's

second largest pharmaceutical company. The company's portfolio of pharma products

consist of central nervous system, respiratory, oncology, vaccines, anti-infectives and

gastro-intestinal/metabolic products among others. On November 2009, the FDA had

announced that the H1N1 vaccine manufactured by GSK would join the list of the four

vaccines approved. 

Zydus Cadila also known as Cadila Healthcare is an Indian pharmaceutical company

located in Gujarat. The company's 1QFY2010 results show the net sales at Rs880.3cr

which is higher than the estimated Rs773cr. The net profit was Rs124.8cr which was

increase of 39%; the increase was on account of higher sales and improvement in the

OPM.

India’s Domestic Pharmaceutical Market (12 months ended January 2009)

Company Size ($ Billion) Market Share (%) Growth Rate (%)Total Pharma Market 6.9 100.0 9.9Cipla .36 5.3 13.4Ranbaxy .34 5.0 11.5Glaxo Smithkline .29 4.3 -1.2Piramal Healthcare .27 3.9 11.7Zydus Cadila .24 3.6 6.8Source: ORG IMS

2.3.4. Globalization of Indian Pharmaceutical Industry:

Globalization of Indian Pharmaceutical Industry  started in the early 1990s when the

government opened its markets to foreign investments. Indian Pharmaceutical Industry's

Globalization took place with the coming of the foreign companies in the sector. 

Globalization means the dismantling of the trade barriers and the integration of the

economies of the nations through trade in goods and services, corporate investments, and

financial flow between nations. Globalization has increased the world over in recent years

due to the rapid progress that has been made in the field of technology especially in

communications and transport. The government of India opened its economy to foreign

companies through changes in its economic policy in 1991 and this led to the Globalization

of Indian Pharmaceutical Industry.

The various advantages of Globalization of Indian Pharmaceutical Industry are that it

brought in huge amounts of foreign currency into the industry which in its turn helped to

boost the Indian economy. With many foreign pharmaceutical companies entering the Indian

Pharmaceutical Industry it increased the number of jobs that were available to the people of

the country. The benefits of Globalization of Indian Pharmaceutical Industry are that the

foreign pharmaceutical companies also brought in highly advanced technology into the

industry and this improved the quality of medicines that were available to the people. Many

Indian pharmaceutical companies took over international pharmaceutical companies such as

Ranbaxy merged with Croslands, Wockhardt with Merind, and Nicholas Piramal with

Sumitra Pharma. This helped the Indian pharmaceutical companies to grow and make even

more profits.

Globalization of Indian Pharmaceutical Industry has had some positive as well as some

negative effects. The government of India must make sure that the Indian Pharmaceutical

industry’s globalization proves for the country.

2.3.5 Advantage India

(i) Competent workforce: India has a pool of personnel with high managerial and

technical competence as also skilled workforce. It has an educated work force and

English is commonly used. Professional services are easily available.

(ii) Cost-effective chemical synthesis: Its track record of development, particularly in the

area of improved cost-beneficial chemical synthesis for various drug molecules is

excellent. It provides a wide variety of bulk drugs and exports sophisticated bulk

drugs.

(iii) Legal & Financial Framework: India has a 58 year old democracy and hence has

a solid legal framework and strong financial markets. There is already an established

international industry and business community.

(iv) Information & Technology: It has a good network of world-class educational

institutions and established strengths in Information Technology.

(v) Globalization: The country is committed to a free market economy and globalization.

Above all, it has more than 70 million middle class market, which is continuously

growing.

(vi) Consolidation: For the first time in many years, the international pharmaceutical

industry is finding great opportunities in India. The process of consolidation, which

has become a generalized phenomenon in the world pharmaceutical industry, has

started taking place in India.

2.3.6 THE STRATEGIES ADOPTED BY MARKET PLAYERS

Business Strategies followed by Indian Pharmaceutical Companies

Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units and is

very top heavy. The leading 250 pharmaceutical companies control 70% of the market with

market leader holding nearly 7% of the market share.

There are also 5 Central Public Sector Units that manufacture drugs. These units produce

complete range of pharmaceuticals, which include medicines ready for consumption by patients

and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of

pharmaceutical formulations. India is largely self-sufficient in case of formulations.

More than 85% of the formulations produced in the country are sold in the domestic market.

Some life saving, new generation under-patent formulations are imported, by MNCs, which they

market in India. Over 60% of India's bulk drug production is exported and the balance is sold

locally to other formulations.

2.3.7. CHANGING SCENARIO OF INDIAN R&D

The acceptance of provisions of the agreement on TRIPS is expected to change the orientation of

Indian companies towards R & D. Indian companies have started investing in complex R & D

activities like novel drug delivery system and new drug discovery. The advantages of conducting

R&D in India are given below:

Lower costs: R&D expenditure in India is far lower than in the developed countries. The cost

differentials are due to lower costs in machinery and human capital. The cost advantages can

only be exploited if the necessary funds required can be sourced. Following India’s acceptance

of the provision of Trade Related Intellectual Property Rights (TRIPS) under the GATT

agreement, investments are expected to start flowing into the area of basic research.

Population advantages: A larger population base would facilitate clinical trials for diseases

especially prevalent in developing countries. Indian R&D efforts could be directed towards

infectious diseases that are especially prevalent in Asian countries. Such R&D activities will be

targeted towards segments such as antibiotics, anti-parasitics and other anti-bacterials.

2.4. PEST ANALYSIS

An organization’s success is influenced by factors operating in it’s internal and external

environment; an organization can increase it’s success by adopting strategies which manipulate

these factors to it’s advantage. A successful organisation will not only understand existing

factors but also forecast change, so that it can take advantage of change within the environments

in which it operates.

• Pest Factors – These are external forces which the organisation does not have direct control

over these factors. PEST is an acronym and each letter represents a type of factor (Political,

Economical, Social and Technological).

• Micro environmental factors – These are internal factors, which the organization can control.

Diagram: PEST analysis and the marketing mix.

POLITICAL FACTORS ANALYSIS

It is the first element of the study of PEST Analysis. Pharmaceutical Industry in India has

been de-licensed and industrial licensing for most of the drugs and pharmaceutical products has

been done away with. Manufacturers are now free to produce any drug duly approved by the

Drug Control Authority. Indian pharmaceutical industry got a major boost with the signing of

General Agreement on Tariffs and Trade in January 2005 with which India began recognizing

global patents. Besides the industry is also subjected to provisions under the TRIPS. The

application of provisions relating to Minimum Wages Act, Factories Act 1948 and allied labour

and industrial laws also affect the working in the industry, since the players have to function

within the desired provisions. Non conformance with these legislative obligations can lead to

sanctions such as fines, adverse publicity and imprisonment in certain cases. Ineffective

voluntary codes and practices will often lead to governments introducing legislation to regulate

the activities covered by the codes and practices. The pharmaceutical industry has thrived so far

on reverse engineering skills exploiting the lack of process patent in the country.

ECONOMIC FACTORS ANALYSIS

The second element of a PEST analysis involves a study of economic factors.

All businesses are affected by national and global economic factors. National and global interest

rate and fiscal policy will be set around economic conditions. The climate of the economy

dictates how consumers, suppliers and other organisational stakeholders such as suppliers and

creditors behave within society.

The top 10 Pharma companies are facing prospects of slowdown in sales as a large

number of blockbuster drugs that they possess are going off patent. Besides there have been a

number of regulatory developments since 2005, which includes implementation of VAT, a shift

in excise duty levy to MRP based levy and the enactment of product patent regime.

The rural markets grew by over 40 percent during the calendar year 2006. The higher growth in

acute therapy segments – pain/ analgesics and Anti-Infectives can be attributed to the fact that

epidemics (dengue & chikungunya) were more prominent in rural areas.

Prevalence rates of key chronic diseases in India    Percent of population

Looking at the recession period and in order to lower labor costs and savings in

manufacturing costs, several Indian pharmaceutical companies have acquired companies in the

US and Europe and many others are raising funds to do so. For example, Ranbaxy acquired

Romania's Terapia, Ethimed NV of Belgium and GSK's generic business Allen SpA in Italy. Dr

Reddy's acquired German generic drug maker Betapharm. Companies like Glenmark Pharma,

Lupin, Aurobindo and Jubilant Organosys are on the lookout for lucrative acquisitions.

SOCIAL FACTORS ANALYSIS

The third aspect of PEST focuses its attention on forces within society such as family,

friends, colleagues, neighbours and the media. Organisations must be able to offer products and

services that aim to complement and benefit people’s lifestyle and behaviour. If organisations do

not respond to changes in society they will lose market share and demand for their product or

service.

Indian people, to a great extent, are becoming health conscious. Gone were the days

when medicines and herbs used to be purchased based on monetary factor. The standard of living

of people has increased to a great extent, and they desire to spend more for maintaining their

health and status. A number of pharmaceutical companies have therefore come out with such

drugs and syrups that will help people to maintain health and be happy, ex.Revital. Besides the

growing population of India, also provides ample market place for the pharmaceutical companies

to diversify their selling area.

The companies have also to a great extent been able to change the philosophy of timid

Indian towards spending on medicines through aggravating marketing advertisements. Here to,

doctors and physicians play an important role in furthering the advantages of medicines.

TECHNOLOGICAL FACTORS ANALYSIS

The last element in the PEST study is the analysis of technological factors, which

includes the machinery, software and hardware equipments used in information exchange system

and in managing the business.

A distinguishing feature of the pharmaceutical industries in India is the large scale

investment by big pharma companies in the research and development. According to industry

statistics at global level, only about one in ten thousand chemical compounds discovered by

pharmaceutical industry researchers proves to be both medically effective and safe enough to

become an approved medicine, and about half of all new medicines fail in the late stages of

clinical trials.

Leading Indian companies have started to look beyond generics and are investing in

discovery R&D (NCE/ NDDS research) for sustainable long term growth. The discovery R&D

pipeline of Indian pharma players has been seeing a steady build up over the years.

Technology has created a society which expects instant results. This technological

revolution has increased the rate at which information is exchanged between stakeholders. A

faster exchange of information can benefit businesses as they are able to react quickly to changes

within their operating environment. However an ability to react quickly also creates extra

pressure as businesses are expected to deliver on their promises within ever decreasing

timescales.Company Overview of discovery R&D programme

Dr Reddy's Labs2 NCEs in Phase II and another 4 NCEs in Phase I along with a significant number of pre-clinical candidates. Also partnering with innovative companies on specialty drugs; has a very strong biogenerics programme

Sun Pharma One NCE in Phase II trials in USA ; Also focused on 3 other NCE projects and 4 very promising NDDS platforms

Ranbaxy Has out-licensed a novel statin to PPD ; Has 1 Malaria NCE in Phase II

Biocon Conducting clinical trials on Oral Insulin and Monoclonal Antibody for inflammation Has launched another Monoclonal Antibody for head and neck cancer

NPIL Has 1 oncology NCE in Phase II and plans to have 7-8 NCEs in clinical trials over the next few quarters

Lupin Conducting phase II trials on the anti-psoriasis NCE

Glenmark Has out-licensed 2 of its NCEs to global pharma companies

2.5 PORTER’S FIVE FORCES ANALYSIS

The most influential analytical model for assessing the nature of competition in an industry is

Michael Porter's Five Forces Model, which is described below:

Figure: Porter’s Five Forces Model for Industry Analysis

Porter explains that there are five forces that determine industry attractiveness and long-run industry profitability. These five "competitive forces" are:

The threat of entry of new competitors (new entrants) The threat of substitutes The bargaining power of buyers The bargaining power of suppliers The degree of rivalry between existing competitors

Threat of New Entrants

New entrants to an industry can raise the level of competition, which may cause in reducing

its attractiveness. The threat of new entrants largely depends on the barriers to entry. In

Pharmaceutical industry it is easy to enter but talking about Products it is tough because it

depend on the reliability of customer. Key barriers to entry include

In industry Economies of scale is very slow because it take time to achieve to customer

loyalty and whole growth is dependant on the loyalty factor only.

For new entrants, it’s a very big challenge to establish business because heavy amount of

capital and investment is required.

Distribution of drugs and vaccines plays a major role with out which it is not possible for

manufacturer to reach prospective customers. The New entrants find it difficult to cope

up with this problem.

We can also infer here the entry of consolidated/amalgamated corporates or newly

acquired organization, which are generally taken up by already substantiable organizations.

These type of co-existence also affects to a great extent the functioning of small and medium

scale organizations. Recent acquisition of Ranbaxy by Daiichi Sankyo will not only help

Daiichi to strengthen its roots in the Indian Pharmaceutical industry, but will affect the

market share of other pharmaceutical organizations also.

Threat of Substitutes

The presence of substitute products in pharmaceutical industry can lower industry

attractiveness and profitability because they limit price levels. The threat of substitute products

depends on:

● In pharmaceutical industry, once competitor gets customer reliability(loyalty), it’s difficult

thereafter to divert customer mind to other substitutes.

● In pharmaceutical industry, price plays a major role and it’s totally dependant on market

price of the goods i.e. substitutes price. The relative price and performance of substitutes

affects the usage of the organizations drugs.

Bargaining Power of Suppliers

Suppliers are those business houses that supply raw materials & other products to the

industry, which go a long way in manufacturing the product. The cost of items bought from

suppliers (e.g. raw materials, components) can have a significant impact on a company's

profitability. Supplier is said to have high bargaining power where the product sold by him has

no substitute or even very close substitute. If suppliers have high bargaining power over a

company, then in theory the company's industry is less attractive. The bargaining power of

suppliers will be high when:

➢ In an industry there are many buyers and few suppliers. But in pharmaceutical industry

there are many buyers and many suppliers so bargaining power over a company is not

much. This factor may apply to new entrants in industry.

➢ The industry is not a key customer group to the suppliers.

The pharmaceutical industry is the key customer to the supplier because for suppliers other

buyers are few. Pharmaceutical companies that offer patented drugs with distinctive medical

benefits have more power over hospitals, health maintenance organizations, and other drug

buyers than those drug companies offering generic (non-patented) products.

Bargaining power of Buyers

Powerful customers – the flip side of powerful suppliers – can capture more value by

forcing down prices, demanding better quality or more service (thereby driving up costs), and

generally playing industry participants off against one another, all at the expense of industry

profitability. But in case of pharmaceutical industry, if we talk of retail buyer, then he can be said

to have low or no bargaining power in case of necessary drugs or vaccines. In case of Industrial

buyers, they can be said to have a moderate bargaining power, since it is a business to business

market and the buyer here are the wholesalers, who can force the organization to produce only

such class of drugs or vaccines which is more popular among their potential customers. But this

situation varies in case of drugs of extreme necessity viz. cancer drugs, where there can be no

expectation of bargaining by the buyers against the manufacturing industries.

Rivalry among existing competitors

Rivalry among existing competitors takes many familiar forms, including price discounting,

new product introductions, advertising campaigns, and service improvements. High rivalry limits

the profitability of an industry. The degree to which rivalry drives down an industry’s profit

potential depends, first, on the intensity with which companies compete and, secondly, on the

basis on which they compete.

In pharmaceutical industry, the intensity of rivalry is very high because there are more

than 20000 registered units, more or less on an equal size and out of which about 250 are

big pharma companies controlling 70% of the market share.

Despite the exit barriers, small pharma companies find it profitable to remain on track,

and progress through R & D.

Big pharma companies in India are competing on the basis of R & D facility and through

scheme of new drugs and vaccines.

Such degree is very much required between the players in the pharmaceutical industry,

because they are also the provider of great employment opportunities in urban as well as

rural sectors.

Overall, the pharmaceutical industry shows an upward trend in its core markets. The industry

remains highly valued has a favorable market position with strong financial make-up and strong

earnings growth. Its future potential demand trend is positive and despite increased competition

the industry still shows a continuing upward growth momentum. The forecast of the leading 16

pharmaceutical companies for 2001 to 2007 suggests that combined sales will grow at a

minimum rate of 5.2 percent based on the potential of their product pipeline.

CHAPTER 3

COMPANY PROFILE

3.1 BACKGROUND AND HISTORY:

The Pharmaceutical sector is one where trends and technologies are in a state of flux. New

breakthroughs in the world & Healthcare occur at a hectic pace. This demands for expertise &

skill to stay ahead. Alphamed Formulations Pvt. Limited exemplifies an organization displaying

these very traits.

Alphamed Formulations Pvt. Ltd. is one of the leading Indian companies marketing a

wide range of pharmaceutical formulations, nutritional supplements for a host of companies. The

company scores high on each of the key drivers of your decision-making process – offering an

off-shoring location that is cost effective, world-class and easily accessible. Discover why

reputed multi-national companies trust. Among the largest 'Vertically Integrated' pharmaceutical

companies in India, Alphamed formulations has robust product portfolio spread over major

product areas encompassing CVS, CNS, Anti-Retroviral, Antibiotics, Gastroenterological, Anti-

Diabetics and Anti-Allergic with approved manufacturing facilities by USFDA, UKMHRA,

WHO, MCC-SA, ANVISA-Brazil for formulations and has global presence with own

infrastructure. They believe that access to quality healthcare is a right, not a privilege. There

endeavor is to ensure the availability of world class, quality medicines at affordable prices,

across the globe. They are committed to work towards a healthier & happier world. Company’s

India operations are a dominant force in a number of participating therapeutic segments, for

example Anti-invectives, Statins, Dermatology and Pain Management. Scientific Advancements

have made life the way it is today. While several life threatening infections have been

vanquished, many lifestyle diseases have taken their place demanding innovations &

breakthrough from healthcare professionals. It still remains a challenge not just to provide for

absence of disease, but to nurture a state of health that is conducive to physical, mental and

social wellbeing. Health Care across the world is shifting its focus to these goals, and Indian

pharmaceutical companies are not far behind.

Incorporated in 2006, Alphamed formulations Pvt. Ltd. is a Private limited company

registered under the Companies Act prevailing in India. The company started out with

manufacturing Oral dosage forms. Over the last decade, the company has expanded its

operations to manufacture tablets, ointments. The facility at Hyderabad was commissioned in

2006 and the facility at Aliabad (Andhra Pradesh) was commissioned in 2008. The units, having

expanded its operations considerably, are truly world-class. They are geared to meet your

exact requirements. Alphamed formulations Pvt. Ltd. was incorporated in 1996, as  a public

limited company registered under Companies Act.  The operations started on a humble beginning

with the manufacture of pharmaceutical liquid orals, which in due course of time, expanded into

manufacturing of other pharmaceuticals such as tablets, ointments, creams. The unit, having

expanded its operations considerably, is well established and geared to meet the requirements of

its customers who are frontline MNCs. Alphamed formulations Pvt. Ltd. is a multi-million dollar

company engaged in manufacture of of pharmaceutical liquid orals.  The company enjoys the

confidence of many multi-national companies within India and abroad. Having expanded its

operations considerably, it is well established and geared to meet all the requirements of its

customers, both Domestic & International. Alphamed formulations Pvt. Ltd. has been identified

by many multinational pharmaceutical giants as one of the leading manufacturers of

pharmaceutical liquid oral products on the basis of production facilities and skills of international

standards. Alphamed formulations Pvt. Ltd. has been awarded ISO 9001(2000), EMS

14000(2004), Certificates by TUV. GMP & Schedule M (FDA India), with an objective of

providing quality healthcare products at affordable prices by G.Shankar reddy, it is a diversified

pharmaceuticals manufacturing company with products ranging from oral solids, oral liquids.

With a constant aim to excel, the inspiration of the company is to exceed expectations globally,

placing quality and efficiency at the top end of company values. Growing rapidly in Indian

Pharmaceutical Market, it is well poised to achieve unparalleled status in the international market

through business expansion plans.

3.2. Company Vision and Mission:

3.2.1. Company Vision:

Having pioneered the contract manufacturing trend in India, to be the global leader in

producing Pharmaceutical products for discerning customers. To be a leader in the development,

manufacture and sales of the premium generic & pharmaceutical products across the globe.

3.2.2. Company Mission:

Alphamed formulations Pvt. Ltd. pledges to adhere to globally accepted manufacturing

practices and be the source of high quality products companies can depend on at all times.

3.3 SWOT ANALYSIS:

Strengths

Marketing of branded generics through own and outsourced distribution networks

Marketing and distribution set up in more than 30 countries and exports to about 60

countries

Subsidiaries / Representative offices in 10 countries including UK, Russia, Vietnam &

Ukraine, Mexico, etc.

MOH / Regulatory Approvals from USA, UK, Indonesia, Australia, New Zealand,

Canada and South Africa

Over 300 strong sales force exclusively promoting brands to doctors

Weaknesses;

The organization faces the problem of meeting to the excess order requirements of the

clients, and that too because of the quality drugs manufactured by it. Many a times, the order

quantity poses a risk to production pattern and hence results in capacity constraint.

Opportunities:

Alphamed Formulations Pvt. Ltd has great potentiality in the foreign markets because of

its quality assurance it provdes. Presently, the company is exporting its products to countries like

Africa, Singapore. South states in the domestic sector, some of which are Mumbai, Andhra

Pradesh and Bangalore. The company sees a bright market prospect in the continents of Africa

and America. The reason why it places high dependence on export sales is because of its superior

quality drugs and processes, which makes it one of the better manufacturers among its sector.

Threats

Competition from Indian organizations operating outside India

Operating in the foreign markets requires huge investment besides facing a tough

competition from the operation of domestic organizations in the foreign markets. The

organization is comprehended to the threat of operations of major domestic players like Ranbaxy

Laboratories, Glaxo SmithKline, and others.

Alphamed has an extensive basket of generics covering a broad range of categories, including:

S.No. Name of category Name of Drug

01 Anti-depressants 1. amitriptyline tablets

(25/50mg)

2. clomipramine tablets

25mg

3. desipramine tablets 25mg

4. doxepin tablets 3/6mg

5. lofepramine tablets 70mg

02 Analgesics (for pain relief) 1. Acetylsalicylic Acid

2. Diclofenac sodium 3. Tolmetin sodium

4. Piroxicam

03 Anti-hypertensive (for high blood pressure)

04 Bronchodilators (for the treatment of asthma)

05 Anti-bacterial (to treat bacterial infections)

06 Anti-gout agents

07 Anti-inflammatory agents

08 Anti-fungal agents

09 Anti-histamines (for the treatment of allergies)

10 Decongestants

11 Gastro-intestinal agents

12 Dermatological

13 Anti-retroviral (ARVs)

The following companies are presently outsourcing their products from Alphamed formulations

Pvt. Ltd.:

1. Dr. Reddy's Laboratories Limited, Hyderabad

2. Bayer Polychem (India) Limited, Mumbai

3. Pfizer Limited, Mumbai

4. Hetero Drugs Limited, Hyderabad

5. Ashian Herbex Limited, Hyderabad

6.  Wen Ken Group Companies, Singapore

7. Wipro Ltd., Banglore,

8. Cipla Ltd., Mumbai

3.5 BALANCED SCORE-CARD

Analysis of the Organization using Balanced Score Card Approach:

The success of any organization is reflected upon by its performance which is in turn

highly dependent upon its strategies. In this era of cut-throat competition, what an organisation

requires is not just framing the right strategies, but also managing the same. The impact of the

right strategies will automatically be reflected in the results. Moreover, any organisation has to

understand that it needs to give impetus not only towards the financial results but also towards

satisfaction of the customers, development of state-of-the-art technologies and creation of an

environment of learning and growth. The Balanced Scorecard is such an innovative tool which

has considered not just the financial indices but also the non-financial indicators as equally

critical in determining organizational performance. This tool brings a link between strategy and

action. Due to these, the framework is gaining increasing importance among different business

houses.

The balanced scorecard is a strategic performance management tool for measuring

whether the smaller-scale operational activities of a company are aligned with its larger-scale

objectives in terms of vision and strategy.By focusing not only on financial outcomes but also on

the operational, marketing and developmental inputs to these, the Balanced Scorecard helps

provide a more comprehensive view of a business, which in turn helps organizations act in their

best long-term interests.

Balance Scorecard Phases

The long-term success of any organization is determined by the capabilities and the

competencies it has developed. One of the tools for organizational appraisal that is gaining

immense popularity is the Balanced Scorecard, developed by Robert S Kaplan and David P

Norton in 1992. This innovative tool is unique in two ways compared to the traditional

performance measurement tools. They are–

(i) It considers the financial indices as well the non-financial ones in determining the corporate

performance level; and

(ii) It is not just a performance measurement tool but is also a performance management system.

The tool has given stress on the other areas which are required to ‘balance’ the financial

perspective in order to get a total view about the organizational performance and improve the

same. The framework tries to bring a balance and linkage between the –

(a) Financial and the Non-Financial indicators,

(b) Tangible and the Intangible measures,

(c) Internal and the External aspects and

(d) Leading and the Lagging indicators.

Advantages of using Balanced Scorecard approach :

1. It translates vision and strategy into action.

2. It defines the strategic linkages to integrate performance across organizations.

3. It communicates the objectives and measures to a business unit.

4. It aligns the strategic initiatives in order to attain the long-term goals.

5. It aligns everyone within an organization so that all employees understand how they

support the strategy.

6. It provides a basis for compensation for performance.

7. The scorecard provides a feedback to the senior management if the strategy is working.

CHAPTER 4

ORGANISATION STRUCTURE

AND

CRITICAL REVIEW

4.1.1 Why Organizational Design?

Organizations have become the primary form of social institution in contemporary

society. The way in which an organization is structured creates/restrains opportunities for

interactions with other organizational members, influencing the attitudes and social relations that

emerge over time and the ways in which work related tasks are completed.

4.1.2 Organizational structure

The formal system of task and authority relationship that control how people coordinate their

actions and use resources to achieve goals

Structure facilitates effective response to problems of coordination and motivation

4.1.3 What is Organizational design ?

It is the process by which managers select and manage aspects of structure and culture so that an

organization can control the activities necessary to achieve its goals.

Organization structures may take different forms. Following are the broad types of structural

forms:

1. Functional and Divisional structures

2. Vertical and Horizontal structures

3. Mechanistic and Organic structures

4. The Matrix Structure.

5. Federations

A brief introduction to the above forms of organization structures is given below:

Functional and Divisional structures

The oldest and commonly used organization structure is functional structure. In functional

structure, the organization is departmentalized on the basis of various functions performed by it

viz. production, operations, R & D, Maintenance, Human Resources, etc. In case of divisional

structure, organization is departmentalized on the basis of products, customer, or region.

Vertical and Horizontal structures

In an organization, both absolute centralization and decentralization are neither desirable nor

possible. Hence, the writers and organizations began to explore ways to modify the two

structures. The essence of modified structure lies in the modifications to the classical principles

of delegation of authority and standard of control. Accordingly, organizations having a series of

narrow span of control were termed as vertical structures.

On the contrary, structures incorporating wide spans and limited layers of control at horizontal

levels were called horizontal structures. However, both these structure have their own advantages

and disadvantages.

Mechanistic and Organic structures:

Two contrasting types of organizational structure were recommended by Bruns and Stalker in

their study of twenty industrial firms in England. Accordingly, the organizational structure

suitable to stable conditions was termed as mechanistic structure, while the organizational

structure which was considered appropriate to changing conditions was called organic structure.

Matrix Structure:

The matrix organization structure was proposed by Dairs and Lawrence for Aero space

programme of the United States. In this structure, attempts were made to combine the advantage

of product and functional departmentalization to achieve the organizational goals. In other

words, this dual structure simultaneously organizes part of organization along product lines and

part of the organization along functional lines to gain the advantages of both.

In a matrix organization, each department reports simultaneously to both product managers and

functional managers. The product managers and functional managers have equal authority within

the organization, and employees report to both of them.

Matrix forms of management can be regarded as an early form of 'network' structure. They focus

on project teams, bringing skilled individuals together from different parts of the organization.

Individuals were made responsible both to their line manager and the project manager involved.

Federations:

This form is a variant of the divisional organizational structure which has great importance

because of its human resource factor. The federations is a loosely connected arrangement of

businesses with a single holding company or separate firms in alliance. But this form of

organization has attracted criticism from stock market analysts who find difficulty in

comprehending its subtle informality.

4.2 ORGANISATION STRUCTURE OF ALPHAMED FORMULATIONS PVT. LTD:

Alphamed Formulations Pvt. Ltd follows Horizontal form of organizational structure, since the

power of management control is divided between the Financial Director and Executive Director

from the Managing Director.

CHAIRMAN

MANAGING DIRECTOR

FINANCIAL DIRECTOR EXECUTIVE DIRECTOR

PURCHASE OFFICER

A/C OFFICER

EDP ERP ADMIN. OFFICER

HR MANAGER

INWARD /OUTWARDINCHARGE

SECURITY

ASST.PURCHASE

ACCOUNTANT

ALL ASST. ALL ASST.

ADMIN.ASST.

VPBDD

QC

INTERNAL AUDIT INCHARGE

QA MANAGER

MANAGERR & D

V.P. OPERATION

PROJECTINCHARGE

OSD

ALL ASST.

ALL ASST.

ALL ASST.

ALL ASST.

R&DSR.EXEC

PRODUCTION OFFICER ALL

ASST.

MAINTENANCE ENGG.

PRODUCTIONMANAGER

STOREINCHARGE (FG)

STOREINCHARGE (RM)

STOREINCHARGE (PM)

PERSONNELOFFICER

ALL ASST.

ALL ASST.

ALL ASST.

ALL ASST.

ALL ASST.

CHAPTER 5

BUSINESS LEVEL FUNCTIONS

AND

PROCESSES

5.1 FUNCTIONAL DEPARTMENTS OF Alphamed Formulation Pvt. Ltd.:

1. Business Development Department

2. Administrative Department

3. Purchase Department

4. Accounts Department

5. Research & Development

6. EDP & ERP

7. Quality Assurance

8. Quality Control

9. Production Department

10. Materials Department

a. Raw Materials

b. Packing Materials

c. Finished Goods & Dispatch

11. Maintenance Department

12. Personnel Department

13. Human Resources Department

14. Marketing Department

5.2 HUMAN RESOURCES DEPARTMENT

5.2.1 Recruitment / Training and Development Process

Selected candidates are called for Preliminary Interview

Vacancies Arise in the Respective department

Job advertisement is given in the newspaper & Applications are collected

The Resumes received are then scrutinized

The Respective Head of Department further scrutinizes the application

A Committee Panel is established and a date & time is decided from the Panel

Candidates selected from Preliminary Interview are called for Final Interview

5.2.2 Promotion Policy, Performance, Incentives and Leaves

It was informed that there were no extra incentives to the employees apart from the monetary

allowances. Extra incentives are pointed out here in the sense of overtime work. There is no

payment for overtime work. Instead, these credit hours are adjusted the emergency hours i.e.

whenever employee wants to work less on any particular day of the week, then if he/she has done

some overtime work before, then that overtime work hour is adjusted towards in such emergency

situation. This generally happens in case of family or social functions at the employees residence

or in case of accident or other uncertainity of any of his/her family members.

5.3. Marketing Department:

Method of Marketing:

The organization has not employed any of the direct marketing strategies i.e. no

questionnaires nor behavioral method. Instead customers visit the factory outlets and place direct

orders with the organization. In case of exports, there are also frequent visits by the Health

Ministers and other top officials of the health department of the foreign country.

In case of transaction with governments and institutions, the usual process adopted is:

Tender participation

Tender awarded

Performance Appraisal (Self-Appraisal by employees)

Appraisal by the Head of Department whose employees are evaluated

Selection and Disbursal of Offer letters

Appointment and Joining Formalities

Induction Process

Internal Training and Development

Review with Committee Panel

Finally, supply of goods.

5.4 FINANCE DEPARTMENT

The recording of transactions with respect to purchase of raw materials, payment of revenue

expenditure and receipts is regulated and functioned by the finance department in any

organization. In fact, finance is considered to be the backbone of any organization, since it brings

forth the true and correct position of the organization.

The recording of transactions relating to raw material starts with the security check and entry in

the Register Inward kept for the purpose at the entry gate of Alphamed Formulations Pvt. Ltd.

Materials in this case usually consists of :

i. Inputs (Raw Materials or Packing Materials)

ii. Capital Goods (generally Machinery)

iii. Spares & Consumables (Factory Expenses)

Thereafter, they are transferred to respective departments after making an entry in the Outgoing

Register. Input goods are transferred to Raw Materials/Packing Materials Department, Capital

Goods are transferred to Production Department, and Spares & consumables are transferred to

Stores Department.

A Goods Receipt Note (G.R.N) is issued by the respective departments on receipt of raw

materials/capital goods.

5.4.1 Posting of Transactions

After issue of GRN, there is made an entry of receipts in registers kept for the purpose :

i. Receipt Register (Raw/Packing Materials)

ii. Inward/Fixed Assets Register (Production Department)

iii. Receipt Register (Stores Department)

5.4.2 Dispensing / Basis of Issue of Raw Materials

On the receipt of requisition from respective user department, a slip is issued in favor of the

respective department and finally an entry in made in outward register. Accordingly,

i. Issue Slip (by Raw/Packing Department) and entry made in Outward /Issue Register.

ii. Delivery Memo to Stores (by Production Department). It also acts as register entry.

iii. Issue Slip (by Stores Department) and entry made in Issue Register.

5.4.3 Posting of Issues

After issue of raw materials or spares and entry in department outgoing register, the issue is

posted in Ledger (financial effect) and Invoice/Sale-Book(Inventory effect).

5.4.4 Financial and Inventory effects of transactions

Only payment related details are entered in the financial books viz. date, cheque no., amount, etc.

and in case of inventory books the unit price per material is entered along with issue slip issued

by the raw materials or stores department. In case of deviation from the required quantity, a

Debit Note is issued by the department in favor of the party for verification and variation. After

the entire cross verification, entry is made in the financial accounts.

5.4.5 Payment method

Generally, payment for raw material purchases is done on cash or cheque basis. In case of cash

payment, payment entry is posted in Party account by cash register. Similarly, on payment

through cheque, entry is posted in respective Party account by Bank Register.

5.4.7 Books of Accounts maintained

1. Cash Book

2. Bank Book

3. Journal

4. Purchase Registers

5. Sale Registers

6. Credit Note Register

7. Debit Note Register

Credit note and Debit note Registers are maintained by the organization for entering Rate

Difference and Short quantity.

8. Ledger Accounts

5.4.8 Budgets

In consonance with the general practices and like other organizations, ALPHAMED

FORMULATIONS PVT. LTDalso concerns itself with the preparation of various budgets viz.

1. Cash Budget

2. Sales Budget

3. Purchase Budget

4. Financial Budget

5. Overheads Budget / Cost Budget

5.6 PRODUCTION DEPARTMENT

5.6.1. Production Processes

The normal production process followed by ALPHAMED FORMULATIONS PVT. LTDis

given below :

1. Receipt of order from the customer.

2. Raw Material and Packing Material planning

3. Material requirement planning

4. Receipt of Inputs

5. Testing of Inputs received.

6. Actual manufacturing of products (drugs or processes)

7. Testing of the manufactured product.

8. Packing of products.

9. Sampling and re-testing of products packed.

10. Transfer of packaged products to Finished Goods store for dispatch.

Steps involved in CAPSULE PROCESSING

1. Bringing in Raw Material (Active/Inactive)

2. Checking; Sifting; Blending & Weighing

3. Analysis & Release

4. Passing to Quarantine area

5. Empty capsule loading

6. Capsule filling

7. Inspection and Polishing of the Capsule

8. In Process Quality Control Check and Release

9. Unit Packing and re-IPQC Check and Release

10. Final Packing of the Capsules

11. Quality Assurance Analysis and release

12. Passing to Quarantine section

13. Passing to Finished Goods and Packing Material Stores

Finally, the capsules are ready for packing and distribution. Capsule section is divided into

following:

1. Mixing / Blending

2. Polishing Section.

Steps involved in the process of PELLETS and TABLETS Manufacturing

1. First, Powder is prepared

2. The defective tablets are purified using the Bulk Tablet Machine.

3. Thereafter using PVC Sheets, the tablets are covered in the Blister Cell. The

Double track machine.

4. Then there is weighing of the powder and tablets using the electronic balance.

5. After weighing, preparation of Binder and there is drug layering through coating

the pan.

6. Then the tablets/pellets are dried using an Oven and passed through vibratory

sifter.

7. It is then proceeded by an IPQC checking with regards to Moisture content, bulk

density and total assay & drug release.

8. The products are then coated and dried using a coating pan/fluid bed coater.

9. There is re-IPQC checking.

10. Finally, the tablets and pellets are packed after electronic balance checking.

The above steps lay down the general process for the production of tablets and pellets. However

there are certain additional steps in the preparation and processing of tablets.

5.7 R & D DEPARTMENT

5.7.1 Research and Development wing at Alphamed Formulations Pvt. Ltd

The requirement of a sophisticated research and development wing is very essential from the

point of view of pharma industries. R & D requires not only a good technical team but also

following of Quality check and Quality policy.

Alpahemed Formulations Pvt. Ltd possesses an exceptional technical team, an independent

Research & Development department and a full fledged quality Assurance department. The R &

D and Technical Services departments are key focus areas. A good number of talented

professionals are engaged in the unending endeavor to break new grounds and bring forth fresh

solutions.

These talented team members ensure that the company’s customers, to a great extent and even

perpetually, derive the advantage of Innovative, cost-effective and Quality products being

produced after much research & development. This ensures the company an unbeatable edge in

the competitive market place.

5.7.2 The Technology path

Alphamed Formulations Pvt. Ltd provides its customers a wide spectrum of value-added & cost-

effective services whether pertaining to manufacturing, product development, pharmaceutical &

analytical method development, technical assistance or regulatory affairs. Customers at

Alpahamed Formulations Pvt. Ltd obtain high-tech product advantage, new therapeutic classes

besides renewing the interest for the older drug molecules by their continual improvisation

through elimination of their negative attributes which otherwise would have rendered those

molecules obsolescent.

Products in several categories are available with diverse attributes that include conversion of

Hygroscopic molecules to Non-Hygroscopic forms, Solubility and Stability enhancement, Site

specific/Target release characterization, Enteric Release specifically for Acid-labile drugs, Taste-

masking and flavouring technology for masking bitterness and obnoxious odour of active drug

ingredients, and Ready for Compression Granules for unstable, or, corrosive and hazardous, and

otherwise conventionally unworkable materials rendering them Environmental friendly or

processable.

5.7.3 Activities undertaken at R & D Department

1. Formulation Development

Whenever an order is placed by a customer regarding manufacturing of a new drug or

process, the company’s R & D department comes into play and develops the product

through its sophisticated technical department and panel of technical team members.

ALPHAMED FORMULATIONS PVT. LTDhas a team of researchers, scientists and

technical personnel who have great competence and experience to provide a range of

services, including development and validation of formulations. The formula is

developed after great research and experimentation required specifically in the field of

medicines and drugs.

2. Formulation Redesigning

ALPHAMED FORMULATIONS PVT. LTDalso undertakes the redesigning of

formulations pertaining to products already in the market. Formulation redesigning is

done only after receiving the requisition from the client regarding redesigning of product

subject to change in the processes previously involved in the manufacture of the product.

The company generally carries out this activity with regard to the products already

manufactured by it.

CHAPTER 6

OBSERVATIONS

LEARNINGS

AND

CONCLUSIONS

It was an interesting and practical experience that was gained at Alphamed Formulations Pvt Ltd

during the study .The company Heads and Managers have been highly cooperative and had made

good arrangements for the interactions despite their tight schedule.

6.1 OBSERVATIONS

1. For efficient functioning of its departments, ALPHAMED FORMULATIONS PVT. LTD

has divided them into 15 different departments. This ensures timely implementation of

functions concerned.

2. The company has excellent research and development wing, which ensures quality

products and processes.

3. The company has ensured following of the quality policy through quality control and

assurance department.

4. The company in consonance with point 2 facilitates international quality standards with

innovative services tailored to users need.

5. The company’s market strategies which comprises of seven different models are unique

and distinguishing.

6. The machinery used in the production of powders, pellets, tablets and capsules have all

been imported from China, which can be operated using the touch-screen system.

7. Despite the general performance appraisal procedures, ALPHAMED FORMULATIONS

PVT. LTD goes for self-appraisal, which ensures evaluation of the true and correct

productivity of the employees. The self-appraisal forms are then re-evaluated by a

separate team of members appointed from each department, specially the department

heads.

8. The company has not involved itself in the providing of extra incentives to its workers

and employees, but follows the simple and lucid system of crediting of excess worked

hours towards emergency hours required by the workers.

6.2 KEY LEARNINGS

The study has facilitated me in learning the following things:

1. Understanding the functioning of the various departments in the organization.

2. Requirement of better co-ordination between the departments for their effective

functioning.

3. Placing Customer care and Customer Service at the apex of objectives list.

4. Necessity of great division of labour and technical skills in such an industry is of vital

importance, and that no organization can succeed without taking into consideration this

fact.

5. Learned how to carry on the SWOT, PEST and Porter’s Five Forces analysis.

6. Understanding the organization structure and the decision making process, as also the

reporting procedure between the departments.

6.3 CONCLUSIONS

An organization is a unified group of individuals who work laterally to achieve the desired goals

and objectives. But what comes of more importance is the functions of the organization, or to be

more specific, the departments comprised in the organization. The working of an organization is

very well reflected by the working of its departments. The better the co-ordination between the

departments more will be the growth of the organization. Through this organizational study, we

get to know the working of organization and have an overview of its functional departments.

Thus the overall study in Alphamed Formulations Pvt. Ltd was a learning experience. The

company believes in providing “Affordable Quality Healthcare through Zeal and Innovation in

Medicine”.

The main focus on the study in ALPHAMED FORMULATIONS PVT. LTD was on coverage of

all the departments in average. The unique feature observed was that the Business Development

Department was the intermediary between the customer and the organization. All the

departments are linked with each other. They maintain good relation within the employees as

well as with the customers.

There is healthy competition in the industry with entry of global giants. The Indian firms should

put in good efforts to overcome the competition. By having joint venture and collaboration with

the foreign companies the industry can overcome the competition and at the same time it can

upgrade its production technology. The company has good marketing strategy for export and

domestic market.

Thus the company has enabled me to learn the various aspects of management, production,

marketing, finance which will be useful for my further studies.

ABBREVIATIONS AND MEANING OF TERMS

NDDS - New / Novel Drug Delivery System.

Drug discovery is the process by which potential drugs are discovered or designed.

Drug development refers to activities undertaken after a compound is identified as a potential drug in order to establish its suitability as a medication. Objectives of drug development are to determine appropriate Formulation and Dosing, as well as to establish safety.

Insulin is a polypeptide pancreatic hormone which lowers the glucose levels in the blood, a lack

of which causes diabetes.

Penicillin is an antibiotic produced naturally by certain blue moulds, and which is now prepared

synthetically.

Generic Drug is a drug which is produced and distributed without patent protection.

BIBLIOGRAPHY

Websites

1. www.special.rediff.com

2. www.marksonspharma.com

3. www.learnmarketing.net

4. www.wikipedia.org

5. www.hrmguide.net (organization structure)

6. www.marketingteacher.com (balance scorecard)

7. www.balancedscorecard.org

8. www.managementhelp.org