WORKING OF PPMC
(PRODUCTION PLANNING & MATERIAL CONTROLLLING)
A PROJECT REPORT
Under the guidance of
MR. IMRAN SHERA
Submitted by
KAUSHAL BHARATKUMAR DAVE
ROLL NO.: 1205017002
In partial fulfillment of the requirement
For the award of the degree
Of
MBA
IN
[Operations Management]
MARCH 2014
Bona Fide Certificate:
BONAFIDE CERTIFICATE
Certified that this project report titled “Working of PPMC in companies across
Pharmaceutical Industries” is the bona fide work of “Kaushal Bharatkumar Dave” who
carried out the project work under my supervision.
SIGNATURE SIGNATURE
HEAD OF THE DEPARTMENT FACULTY IN CHARGE
Sr. No Chapter Name and Content Page No.
1 Preface
2 Acknowledgement
3 Executive Summery
4 List of tables
5 List of figures
6 List of abbreviations
7 Research Methodology
Chapter: I
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
PREFACE
It gives us great pleasure in placing in hand of our esteemed department, this report
that, we believe, will go through the documentation of this project work made by us.
Today business unit can exist when only work smarter than working harder. Man’s true
knowledge is the “Experience” and “Observation”. Hence it is a good thing that the
business school offers such training to the student in all the aspects of the
business. Looking at the today’s world or scenario, the students is focused into the world
of commerce and management, but less are in the world of practical
knowledge. Only the bookish knowledge is not sufficient. So, the SIKKIM MANIPAL UNIVERSITY has decided to include the program of
practical knowledge in the 4th Semester of MBA Program to hire some practical
knowledge about the Operation management like inventory levels, just in time
production, supply chain management, etc.
Acknowledgment
Through this acknowledgement, I express my sincere gratitude towards all those people
who aided me in the preparation of this project report which has been a learning
experience.
I would like to thank, Mr. Imran Shera, Manager- Production, Rajesh Gupta, Asst.
manager – Production, Jayesh Chaudhari, Executive Production & Purusharth Detroja,
Sr. officer Production for giving me the best opportunity of this practical work
experience.
Again I express m y thanks to the M r . N a v i n K . S i n g h , D G M – H R &
Mr. Manoj More, Asst. Manager-HR who had given me remarkable information
regarding Human Resource position of Famycare Pharmaceuticals Ltd.
Words are inadequate in offering my thanks to the Project Trainees, for their
encouragement and cooperation in carrying out the project work.
Finally, yet importantly, I would like to express my heartfelt thanks to my beloved
parents for their blessings, my friends for their help and wishes for the successful
completion of this project.
Executive Summary
Supply chain management focuses on the management of the transfer of materials and
information along the entire chain from the suppliers to the final consumer. This chain
will generally include the suppliers, producers, distributors, retailers and then the final
customer.
One of the major problem areas of supply chain management is Inventory management.
Inventory can be defined as the stock of any item or a resource that will help the firm in
generating revenue. The inventory can be the raw materials, the work in progress
inventory or the finished goods that have not been dispatched. They all have some costs
associated with them and these extra costs can affect the margins of the company.
The pharmaceutical industry was selected for the study because the industry is very fast
moving and requires dealing with huge amount of inventory, in all forms. The companies
selected for the study were the companies having the highest market capitalization in the
year 2013. The inventory data was collected for all the companies and a comparative
study was done.
The data required for analysis was taken from reliable databases like ACE Equity
Database.
The study was done on the basis of some parameters (ratios) that are used to measure the
inventory management of a company.
The study also revealed the trends that are prevailing in the pharmaceutical industry since
the last five years. The results also indicated that better inventory handling can provide
good results, as was visible from the data analysis.
The dissertation project helped me understand in detail the parameters of a supply chain
and inventory analysis in better detail.
List of Tables:
Table 1 - Major pharmaceutical industry in India
Table 2 - Top selling medicinal brands
Table 3 - countries where medicines are exported
Table 4 - Domestic planning vs. export planning
Table 5 - Products deliverance time based on dosage
Table 6 - Purchase requisition
Table 7 - Lead time chart
Table 8 - BMR & BPR requisition
Table 9 - Theory of constraints
List of figures
Figure 1 - Flow chart for supply chain management process of company
Figure 2 - Flow chart for monthly production planning activity
Figure 3 - Health sector supply chain
Figure 4 - Industry challenge & responses
List of Abbreviations
CAGR : Compounded Annual Growth Rate
USD : United State Dollar
R & D : Research & Development
MAT : Moving Annual Total
CVS : Cardiovascular System
CNS : Central Nervous System
NDDS : Novel Drug Delivery System
PPMC : Production Planning & Material Control
HPLC : High Performance Liquid Chromatography
BMR : Batch Manufacturing Record
BPR : Batch Packing Record
GMP : Good Manufacturing Record
PAR : Product Availability Report
QC : Quality Control
RM : Raw Material
PM : Packing Material
QA : Quality Assurance
BSR : Bonded Store Room
RA : Regulatory Affairs
MTS : Make To Stock
MTO : Make To Order
F & D : Formulation & Development
MRP : Material Requirement Planning
BOM : Bill of Material
MRP II : Material Resource Planning
JIT : Just In Time
TOC : Theory of Constraints
TQC : Total Quality Control
SOP : Standard Operating Procedure
MFR : Master Formula Record
MMR : Master Manufacturing Record
SCM : Supply Chain Management
MFC : Master Formula Code
GRN : Goods Receipt Note
PR : Purchase Requisition
PO : Purchase Order
COA : Certificate of Analysis
CPFR : Collaborative Planning Forecasting & Replenishment
ERP : Enterprise Resource Planning
GRF : Goods Return Form
FIFO : First In First Out
TQM : Total Quality Management
VMI : Vendor Managed Inventory
Research Methodology:
The method adopted by the researcher for completing the study is called research
methodology. Data becomes information only when a proper methodology is adopted.
Thus we can say Methodology is a tool which processes the data in to reliable
information. The components of the research methodology are research design, type of
data, data collection, sampling plan and statistical tools used.
Percentage Analysis Percentage refers “for every hundred”. It is used to make easy comparisons of fractions. In the
study, fractions of respondents choosing different answers are converted into
percentages and interpretations are made.
Formula: No of respondents% = No of respondent *100 / Total No of respondent
a) Primary Data:
1. The data was collected by the questionnaire method. A questionnaire was prepared which consisted of 19 questions to be filled by the employees.
2. Basic information collected from the local sources as well a
from the company staff like senior managers, employees and
officers. Moreover information gathered through discussion with the
concern HR Personnel of the organization.
b) Secondary data:
Secondary collected from the below given sources.
1. From the HR department.
2. From internet.
3. From books like catalogue.
4. From the employees‟ training files and training record
1. INTRODUCTION OF PHARMACEUTICAL INDUSTRY :
The indian pharmaceutical industry currenty tops the chart among india's science based
industries with wide ranging capabilities in the complex field of drug manufacture
and technology. A highly organized sector, the Indian pharmaceutical industry is
estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks
very high amongst all the third world countries,in terms of technology, quality and the
vast range of medicines that are manufactured. It ranges from simple headache pills to
sophisticated antibiotics and complex cardiac compounds; almost every type of
medicine is now made in the Indian pharmaceutical industry.
The Indian pharmaceutical sector is highly fragmented with more than 20,000
registered units. It has expanded drastically in the last two decades. The
Pharmaceutical and Chemical industry in India is an extremely fragmented market
with severe price comptition and government price control. The Pharmaceutical
industry in India meets around 70% of the country's demand for bulk drugs, drug
intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and
injectable. There are approximatey 250 large units and about 8000 Small Scale
Units, which form the core of the pharmaceutical industry in India (including 5
Central Public Sector Units).
CURRENT SCENARIO :
India's pharmaceutical industry is now the third largest in the world in terms of
volume and stands 14th in terms of value. According to data published by the
Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, the total
turnover of India's pharmaceuticals industry between September 2008 and September
2009 was US$ 21.04 billion. Of this the domestic market was worth US$ 2.26 billion.
The Indian pharmaceuticals market is expected to reach US$ 55 billion in 2020
from US$ 12.6 billion in 2009. The market has the further potential to each US$ 70
billion by 2020 in an aggressive growth scenario. Moreover, the increasing population
of the higher-income group in the country will open a potential US$ 8 billion
market for multinational companies selling costly drugs by 2015. Besides, the
domestic pharma market is stimated to touch US$ 20 billion by 2015, making
India a lucrative destination for clinical trials for global giants. Further estimates the
healthcare market in India to reach US$ 31.59 billion by 2020.
Diagnostics Outsourcing/Clinical Trials:-
The Indian diagnostic services are projected to grow at a CAGR of more than
20 per cent during 2010-2012. Some of the major Indian pharmaceutical firms,
including Sun Pharma, Cadilla Healthcare and Piramal Life Sciences, had applied for
conducting clinical trials on at least 12 new drugs in 2010, indicating a growing interest
in new drug discovery research.
Generics:-
India tops the world in exporting generic medicines worth US$ 11 billion and
currently, the Indian pharmaceutical industry is one of the world's largest and most
developed. Moreover, the Indian generic drug market to grow at a CAGR of around
17 percent between 2010-11 and 2012-13. Union Minister of Commerce and Industry
and Minister for Trade and Industry, Singapore, have signed a 'Special Scheme
for Registration of Generic Medicinal Products from India' in May 2010, which
seeks to fast-track the registration process for Indian generic medicines in Singapore.
1.1 ADVANTAGE:
The Indian Pharmaceutical Industry, particularly, has been the front runner in a
wide range of specialties involving complex drugs' manufacture, development
and technology. With the advantage of being a highly organized sector, the
pharmaceutical companies in India are growing at the rate of $ 4.5 billion, registering
further growth of 8 to 9 % annually. More than 20,000 registered units are fragmented
across the country and reports say that 250 leading Indian pharmaceutical companies
control 70% of the market share with stark price competition and government price
regulations.
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.
Cost-effective chemical synthesis:-
Its track record ofdevelopment, 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.
Legal & Financial Framework:-
India has a 53 year old democracy and hence has a solid legal framework and strong
financial markets. There is already an established international industry and
business community.
Information & Technology:-
It has a good network of world-class educational institutions and established
strengths in Information Technology
Globalization:-
The country is committed to a free market economy and globalization. Above all, it
has a 70 million middle class market, which is continuously growing.
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.
Tab. No. 1: MAJOR PHARMACEUTICAL COMPANIES IN INDIA
Rank Company Country Total Revenues
(USD millions)
1 Johnson & Johnson United States 63,747.0
2 Pfizer United States 48,296.0
3 GlaxoSmithKline United Kingdom 44,654.0
4 Roche Switzerland 44,267.5
5 Sanofi-Aventis France 42,179.0
6 Novartis Switzerland 41,459.0
7 AstraZeneca United Kingdom 31,601.0
8 Abbott Laboratories United States 29,527.6
9 Merck United States 23,850.3
10 Wyeth United States 22,833.9
Tab. No-2 TOP SELLING MEDICINAL BRANDS
No. Generic
Name
Brands Companies Indications Sales
( USD
Billions )
1 Atorvastatin Lipitor Pfizer, Astellas Cholesterol 12.66
2 Clopidrogel Plavix Bristol Myers Squibb, SanofiAventis
Atherosclerosis,
prevention of
clot related
events
8.82
3 Infliximab Remicade J&J, Merck,Mitsubishi Tanabe
RA, UC, CD, Ps,PsA, AS
6.04
4 Fluticasone
Salmetrol
Advair Glaxo Smith Kline
Asthma, COPD
8.47
5 Etanercept Enbrel Amgen, Pfizer, Takeda
RA, JIA, Ps,
PsA, AS
6.17
6 Bevacizumab Avastin Roche Cancer: lung,
colon, kidney,
glioblastoma
5.53
7 Aripiprazole Abilify Otsuka, BMS Schizophrenia, Depression,
Bipolar
5.43
8 Rituximab Rituxan Roche NHL, CLL, RA 5.03
9 Adalimumab Humira Abbott RA, Ps, JIA,
PsA, AS, CD
5.96
10 Valsartan Diovan Novartis Hypertension 4.16
11 Rosuvastatin Crestor Astra Zeneca, Shionoggi
Cholesterol 6.8
12 Enoxaparin Lovenox Sanofi Aventis Anticoagulant
DVT
4.28
13 Quetiapine Seroquel Astra Zenec Schizophrenia 5.6
14 Trastuzumab Herceptin Roche Breast Cancer 4.17
15 Esmoprazole Nexium Astra Zeneca Ulcer 8.36
16 Olanzapine Zyprexa Lilly Schizophrenia,
Depression,
Bipolar
5.74
17 Montelukast Singulair Merck Asthma, allergy 4.9
18 Insulin
Glargine
Lantus Sanofi Aventis Diabetes 4.69
19 Pioglitazone Actos Takeda Diabetes 4.32
20 Glatiramer Copaxone Teva, Sanofi Aventis
Multiple sclerosis
4.0
1.2 CHALLENGES AND FUTURE GROWTH:
Over the past decade, pharmaceutical companies have entered a difficult
period where shareholders, the market and regulators have created significant
pressures for change within the industry. The core issues for most of drug companies
are declining productivity of in-house R & D, patent expiration of number of block
buster drugs, increasing legal and regulatory concern, and pricing issue. As a
result larger pharmaceutical companies are shifting to new business model with
greater outsourcing of discovery services, clinical research and manufacturing.
Current global financial conditions and the threat of a broad recession accelerated
the timetable for implementing transformational changes in global organizations, as the
industry confronts lower corporate stock prices and an increasingly cost-averse
customer. Leaders of the largest global pharmaceutical companies recognize the need
for transformational change in their organizations, but will need to move swiftly to
ensure sustained growth. Transformations in the business model of larger
pharmaceutical industry spell more opportunities for Indian pharmaceutical companies.
Pharmaceutical production costs are almost 50 percent lower in India than in
western nations, while overall R&D costs are about one-eighth and clinical trial
expenses around one-tenth of western levels.
The Indian stock market may be dreading a possible recession but Indian
pharma companies seem unfazed by slowdown fears. Riding on better sales in the
domestic and export markets, Indian pharmaceutical industry is expected to
continue with its good performance. Today Indian pharmaceutical Industry can
look forward to the years to come, with great expectations. There are opportunities in
expanding the range of generic products as more molecule come off patent,
outsourcing, and above all, in focusing into drug discovery as more profits come from
traditional plays. At the same time, the Indian Pharma Industry would have to contend
with several challenges particularly
The Effects of new product patent
Drug price control
Regulatory reforms
Infrastructure development
Quality management and
Conformance to global standards.
GROWTH:
The Indian pharmaceutical market reached US$ 10.04 billion in size, with a
value-wise growth rate of 20.4 per cent over the previous year's corresponding period
on a Moving Annual Total (MAT) basis for the 12 months ended July 2010.
Cipla maintained its leadership position in the domestic market with 5.27 per cent
share, followed by Ranbaxy. The highest growth in the domestic market was for
Mankind Pharma, which grew 37.2 per cent. Leading companies in the domestic
market such as Sun Pharma (25.7 per cent), Abbott (25 per cent), Zydus Cadila (24.1 per
cent), Alkem Laboratories (23.3 per cent), Pfizer (23.6 per cent), GSK India (19 per
cent), Piramal Healthcare (18.6 per cent) and Lupin (18.8 per cent) had impressive
growth during July 2010, shows the data.
The pharmaceuticals industry in India will grow by over 100 per cent over
the next two years. The pharmaceutical industry is currently growing at the rate of
12 per cent, but this will accelerate soon. The sale of all types of medicines in
the country stands at US$ 9.61 billion, which is expected to reach around US$ 19.22
billion by 2012. India's domestic pharmaceutical market is valued approximately at
US$ 12 billion in 2010, and has shown a strong growth of 21.3 per cent for the
12 months ending September 2010. It estimates that over the next 10 years, the
domestic market will grow to US$ 49 billion, at a compounded annual growth rate
(CAGR) of 15 per cent.
COMPANY OVERVIEW
Name Type of Business
: -
: -
Famycare Ltd. Hormone –Pharmaceutical
Site Address
: -
Pharmaceutical Special Economic Zone,
Sarkhej-Bavla
NH.No-8A, Near Matoda Village,
Tal-Sanand
Dist-Ahmedabad-382213, Gujarat, India
Phone No :- 07930414500 / 592/593
Email I.D
(A) About the Company:-
Famy Care was incorporated in India in 1990 with the vision of becoming a Competitive force to reckon with in Female Health Care with a focus On Hormonal &
Reproductive Health Care Products.
Reproductive Health Care Segment :
The company engaged in the anufacturing of a wide range of Reproductive
Healthcare Products, like Oral Contraceptives, Emergency Contraceptives, Intra Uterine
Devices and Tubal Ligation Rings for the quality conscious customers through quality
research and development.
It is the one of the largest suppliers of Intra Uterine Contraceptive Devices (IUD)
And Oral Contraceptive Pills (OCPs) to various Ministries of Health & Family Welfare
and Social organizations across the World.
Its products and services are distributed and maximized through all appropriate channels
in each geographic market.
Famy care is a global player in the Female Health Care Segment with a focus on
Hormonal & Reproductive Health Care Products. Famy care believes in the right of
women to be informed about their reproductive healthcare choices and to make good
health accessible to all. In a very short span of time we have become the largest
manufacturer of Hormonal Tablets. We have four world class plants at two locations
supported by strong R&D facility for development of Complex Hormonal &
Reproductive Health Care formulations.
(B) BUSINESS :
Its products of Hormonal formulations and Medical devices are available in more
than 40 countries worldwide. It is an approved supplier of UNFPA, PSI, and Crown
Agents-UK & PAHO. Its Products are supplied to projects run by DKT, World Bank,
IPPF and Ministry of Health in various parts of the world.
Foreseeing the rising demand of Hormonal and Reproductive Health Care
Products in Global Market, the facilities have been upgraded to meet the US and EU
regulatory requirements. Eventually, this will enable us to become a dominant Global
Player in the Hormonal and Reproductive Health Care Segment.
The company regularly participates in various trade fairs, seminars and
conference across the globe to meet likeminded people for carrying out business
alliances.
Milestones in OCP Business
Largest producer and exporter of Oral Contraceptive Pills.
Exporting over 150 Million cycles of Pills annually to various countries around
the world.
Famy Care has a wide range of product to meet all specific needs of the Pill
user.
The manufacturing plant not only has a WHO-GMP certification but also is the
only plant in India that has gone through a number of international GMP
compliance audits.
First company to start OCP‟s export from India
Milestones in IUD Business
One of the world's largest producers of Copper-T having the largest capacity to
produce IUD's.
First indigenous supplier of Copper- T to the Ministry of Health & Family
Welfare, Government of India, since 1991 with an Excellent track record of
accomplishment for 16 years.
Regular supplier of IUD's to various National Family Welfare Programs
around the world like UNFPA, World Bank, and large NGOs like DKT.
First company to start exports of lUD's from India to UNFP
(C) PRODUCT :
Its Product Range includes Oral Contraceptive pills, Emergency Contraceptive Pills,
Progestagen Only Pill, Intra Uterine Devices, Rings for Tubal Ligation and Cancer
Detection Kit.
Oral Contraceptive
Ranges from a combined combination of estrogen and progesterone, which
ranges from a vast range of Monophasic pills to Triphasic pills.
Monophasic
Monophasic pills contain constant combination ratio of estrogen and
progesterone in all of the active pills in a pack. Famycare brands of Monophasic
pills includes the molecules like Ethinylestradiol, Levonorgestrel, Norgestrel,
Desogestrel, Gestodene, Cypterone acetate etc.
Biphasic
Biphasic pills contain two different ratios of progesterone and estrogen. The
hormonal variations in the active pills changes twice during the cycle.
Triphasic
Triphasic pills contain three different doses of hormones in the active pills, the
hormonal variations in the active pills mimic the female natural menstrual
cycle.
List of Products
Table 1 List of product name
Sr
No
Product Name
Brand/RLD Name
1
Ethinyl Estradiol Triturate 0.33% w/w Seasonique /
Lo - Seasonique
2
Medroxyprogestrone Acetate USP
Not Applicable
3
Levonorgestrel and Ethinyl Estradiol Tablets USP (0.1mg/0.02mg) with Inert Tablets
Lutera
4 Levonorgestrel and Ethinyl Estradiol Tablets USP
(0.15mg/0.03mg) with Inert Tablets
Nordette
5 Norethidrone and Ethinyl Estradiol Tablets USP
(0.5mg, 0.75mg & 1mg / 0.035mg) with Inert Tablets
Orthonovum
6 Levonorgestrel and Ethinyl Estradiol Tablets USP
(0.15mg/0.03mg) with Inert Tablets
Seasonal
7
Levonorgestrel Tablets (0.75mg)
Plan B
8
Levonorgestrel and Ethinyl Estradiol Tablets
(0.05/0.03mg, 0.075/0.04mg, 0.125mg/0.03mg) with
Inert Tablets
Trivora
9 Levonorgestrel and Ethinyl Estradiol Tablets
(0.05/0.03mg, 0.075/0.04mg, 0.125mg/0.03mg)
Trigynone
10 Levonorgestrel and Ethinyl Estradiol Tablets USP
(0.1mg/0.02mg) with Inert Tablets
Alasee
11
Norethindrone Tablets USP (0.35mg) Nor–QD
12
Norethindrone Tablets USP (0.35mg)
Orthomicronor
13 Norethindrone and Ethinyl Estradiol Tablets USP (0.4
mg / 0.035mg) with Inert tablet
Ovcon – 35
14 Norgestimate and Ethinyl Estradiol Tablets USP
(0.250mg / 0.035mg) with Inert Tablets
Ortho-cyclen
15 Norethindrone aceatate and Ethinyl Estradiol Tablets
USP with Ferrous Fumarate Tablets
Loestrin FE 1.5 / 30
(D) CAREERS :
For, Famy Care, Human Resource is the prime asset. The company
comprises of highly qualified & dedicated professionals who understand the
needs of the customers.
The core competency & ONE STOP SOLUTION achieved in the area of
Reproductive Health Care is due to consistent value addition through the people.
The core strength of "HUMAN ASSET" has enabled us to effectively bridge the
gap between product range requirement of donors, the markets and the varied
availability of quality raw materials.
The company believes that the Employees have a great contribution to make to
this evolving industry. To take Famy Care on a faster growth curve, the constantly
and closely work together with the Employees to forge a business partnership,
which is mutually beneficial and rewarding.
The Company is growing at a breathtaking speed where our people would be the
drivers to this growth and thereby getting an opportunity to grow at the same
speed.
High performance is very well recognized and rewarded.
Highly congenial and professional working atmosphere.
(E) OTHER LOCATIONS :
Corporate Office
3rd Floor, Brady House,
12/14, Veer Nariman Road, Fort,
Mumbai - 400 001.
India.
Tel: 91-22-3028 9655
Fax: 91-22-3028 9656
E-mail: [email protected]
Manufacturing Unit:
Plot No. 1608 & 1609,
G.I.D.C. Sarigam - 396 155
Gujarat, India.
Tel: 91-260-2780674, 2780502
Fax: 91-260-2780574
Manufacturing Unit:
Plot No. 688/10/11,
Siddhi Vinayak Industrial Estate,
Opp. Somnath Temple, Somnath,
Daman - 396 210. India.
Tel: 91-260- 224 2484, 224 3279
Fax: 91 -260-224 3279
Manufacturing Unit:
Famy Care Ltd
Verna ,Salcette
Goa – 403722
India
(F) VISION :
Famy Care strives to be a global player in the field of family welfare &
quality reproductive healthcare
The vision needs to be customer focused - describing a better world for people
and how the company can help them achieve that. It should not be about profit and
dividends.
To be the preferred and most trusted resource for the products and services
those enhances home and family life.
(G) MISSION :
The company committed to excellence in Reproductive Healthcare products and
Family Welfare Services for effective management in population control, world over.
It is the endeavor to seek unrivalled quality standards by incorporating the best
technology, human resources and quality management, thereby providing quality
products at affordable price.
(H) VALUES :
• The company is committed to create (or bring about) customer‟s delight.
• It ensures an environment of high self esteem, mutual respect and
• Teamwork.
• It is committed to setting high standards of performance.
• It believes in fulfilling its commitment and work with highest level of
integrity and honesty
(I) Promoters:-
The company being a deemed public limited company, has Board of Directors
Consisting of:
Chairman
Shri Jyotiprasad Taparia
(B.Sc with Honours in Chemistry)
Managing Director
Shri Sanjeev Taparia ,
(ACA)
Executive Director
Shri Ashutosh Taparia
(MBA, University of Texas, USA).
(J) Senior Leadership:-
(K) Milestone & Achievements:
Table 3 Milestone & Achievements
1990 First company in India to set up manufacturing of IUD for GOI
1993 Largest Supplier of IUD‟s to GOI
1994 First company to start exports of IUD‟s from India
1997 Entered Oral Contraceptive Pills (OCP) Market.
1998 Acquisition of hormonal formulation facility at Sarigam
2001
First company to start exports of hormonal contraceptives from India First export order from Bangladesh worth 15 crores.
2002
Opened up additional 18 countries for export and accredited UNFPA global Supplier
2005
Aggressive marketing strategy to become an international company Initiating the entry into regulated market through South Africa.
2006
Well equipped R & D Centre
Initiating entry into newer regions like Russia-CIS, Brazil
Initiating entry into Europe and US markets;
2008
Acquisition of Aurangabad Plant ( Condom Plant) Ultra modern manufacturing plant at Ahmedabad (hormonal inject able and
hormonal tablet)
Accessing biggest Pharma market - USA Getting
EU GMP for our manufacturing facility
Submission of first CTD dossier in 9 EU countries
2009
9 ANDA applications filed. More in the pipeline Breakthrough in Latin American Countries
Successful product registrations in South Africa
(L) DESIGNATION AND HIERARCHY :
TABLE – 4
(M) Department Name with no of Personnel:-
Table 5 Department Name with no of Personnel
Sr
Department
No of Staffs
Operator
Contract Person
1 Human Resources 06 NA 02
2 Warehouse 07 02 10
3 Tablet Manufacturing 20 10 15
4 Injection Manufacturing 7 5 10
5 Packing 10 7 40
6 Quality control 38 2 6
7 Quality Assurance 33 NA 8
8 Engineering 15 06 10
(N) List of Equipments:-
Table 6 List of Equipments
Sr. No Equipment Name
1 Dynamic Pass Box
2 Rapid Mixture Granulator
3 Starch Paste Kettle
4 FBP
5 Vibro Sifter
6 Multimill
7 Double cone Blender
8 Tablet Compression Machine
9 De-Duster Unit
10 Digital Metal Detactor
11 Auto coater
12 Stirrer
13 Static pass box
14 Rapid Mixture Granulator
(O) Introduction of the Department:-
Warehouse :-
To take receipt of all incoming Raw and Packing materials at plant.
To issuance of raw and packing materials as per production planning.
Handling of Rejected / Expired Raw and Packing Materials.
Maintain stock of Raw and Packing materials.
Handling of Retest Material.
To fill all cGMP required documentation.
To dispatch finished product as per customer requirement.
Production :-
Tablet Manufacturing Area
Dispensing :-
Granulation :-
Compression :-
Blending :-
Coating :-
Quality Assurance :-
(A) IPQA: - In process Quality Assurance
IPQA check product quality during manufacturing with
various type instruments.
In granulation use moisture analyzer for LOD checking.
During compression use ,
• Hardness tester – for hardness and thickness
checking.
• Disintegration tester: - For D.T. checking.
• Friability tester :- for Friability test
• Analytical balance: - for weight variance of
tablet.
During coating ,
• Hardness tester: - Thickness checking.
• Disintegration tester: - For D.T. checking.
• Analytical balance: - for weight variance of
tablet.
During Packing ,
• Leak test apparatus: - for ensure no any blister
leak after sealing.
IPQA give line clearance before every activity starts and then after start
manufacturing activities.
(B) QA-Document:- Documentation QA does the work for document work.
They prepare various types of Protocol and document
for supporting to manufacturing.
Engineering :-
To design, operate and maintain the predefine standard of specification of
any machine is called engineering.
Engineering is a wide field of technical education including soft and
hard work.
Engineering a wide discipline of machine and technology lead to make it
device into specific branches but only for better understanding of any
particular subject or matter like civil work, electrical work, mechanical
work and computer work etc.
So, we go for actual practical work, it is to be noted that any mistake in
operation, design or in maintenance of any machine.
So, in addition of theoretical concepts practical training is to be given to
concerned personnel.
In other word, we can say that by investing wealth in training we get
better opportunity by means of avoiding any operational mistakes.
QC (Quality Control):-
Main objective is to maintain Quality in specific criteria.
In Pharma, Quality assurance is assuring Quality but Quality control is the
quality by checking each and every critical step of process and product.
QC has mainly five parts:
1. GLP
2. RM
3. FP
4. MICRO
5. STABILITY
TABLE :- 8 INTRODUCTION OF QC PART
3. INTRODUCTION OF PRODUCTION PLANNING AND
MATERIAL CONTROLLING
3.1 Definition
Production planning and material controlling can be defined as the
process of planning the production in advance, setting the exact route of each
item, fixing the starting and finishing dates for each item, to give production
orders to shops and to follow up the progress of products according to orders.
In any manufacturing enterprise production is the driving force to
which most other functions react. This is particularly true with inventories; they
exist because of the needs of production. In this chapter the relationship o f
production & material planning controlling to work-in-process inventories is
stressed.
3.2 General Objectives of Production Planning Material Controlling:
The ultimate objective of production planning and Material controlling,
like, is to contribute to the profits of the enterprise. As with inventory
management and control, this is accomplished by keeping the customers
satisfied through the meeting of delivery schedules. Specific objectives of
production planning and control are to establish routes and schedules for work
that will ensure the optimum utilization of materials, workers,and machines
and to provide the means for ensuring the operation of the plant in
accordance with these plans.
The principle of production planning and Material controlling lies in the
statement ‘First Plan Your Work and then Work on Your Plan’. Main functions
of production planning and control includes planning, routing, scheduling,
dispatching and follow-up.
3.3 Working of PPMC
Planning is deciding in advance what to do, how to do it,
when to do it and who is to do it. Planning bridges the gap from
where we are, to where we want to go. It makes it possible for
things to occur which would not otherwise happen.
Routing may be defined as the selection of path which each
part of the product will follow which being transformed from raw
material to finished products. Routing determines the most
advantageous path to be followed from department to department
and machine to machine till raw material gets its final shape.
Scheduling determines the programmed for the operations.
Scheduling may be defined as ‘the fixation of time and date for each
operation’ as well as it determines the sequence of operations to be
followed.
Dispatching is concerned with the starting the processes. It gives
necessary authority so as to start a particular work, which has
already been planned under ‘Routing’ and ‘Scheduling’. Therefore,
dispatching is ‘release of orders and instruction for the starting of
production for any item in acceptance with the route sheet and
schedule charts’.
The function of follow-up is to report daily the progress of work in each
shop in a prescribed Preformed and to investigate the causes of deviations from
the planned performance.
3.4 Benefits of Production Planning and Material Controlling:
(1) Optimum Utilization of Capacity:
With the help of Production Planning and Material Control [PPMC] the
entrepreneur can schedule his tasks and production runs and thereby
ensure that his productive capacity does not remain idle and there is
no undue queuing up of tasks via proper allocation of tasks to the
production facilities. No order goes unattended and no machine
remains idle.
(2) Inventory control:
Proper PPMC will help the entrepreneur to resort to just- in- time systems and
thereby reduce the overall inventory. It will enable him to ensure that the
right available at the right time.
(3) Economy in production time:
PPMC will help the entrepreneur to reduce the cycle time and increase the
turnover via proper scheduling.
(4) Ensure quality:
A good PPMC will provide for adherence to the quality standards so that
quality of output is ensured. To sum up we may say that PPMC is of
immense value to the entrepreneur in capacity utilization and inventory control.
More importantly it improves his response time and quality. As such effective
PPMC contributes to time, quality and
cost parameters of entrepreneurial success.
Production schedule:
The main aim is to schedule that amount of work which can easily be
handled by plant and equipment without interference. It’s not
independent decision as it takes into account following factors.
(1) Physical plant facilities of the type required to process the material
being scheduled. (2) Personnel who possess the desired skills and
experience to operate the equipment and perform the type of work
involved. (3) Necessary materials and purchased parts.
Master Schedule:
Scheduling usually starts with preparation of master schedule which
is weekly or monthly break-down of the production requirement for each
product for a definite time period, by having this as a running record of
total production requirements the entrepreneur is in better position to shift the
production from one product to another as per the changed production
requirements. This forms a base for all subsequent scheduling acclivities.
A master schedule is followed by operator schedule which fixes total time
required to do a piece of work with a given machine or which shows the time
required to do each detailed operation of a given job with a given machine or
process.
Manufacturing schedule:
It is prepared on the basis of type of manufacturing process involved. It is very
useful where single or few products are manufactured repeatedly at regular
intervals. Thus it would show the required quality of each product and sequence
in which the same to be operated Scheduling of Job order manufacturing:
Scheduling acquires greater importance in job order manufacturing. This will
enable the speedy execution of job at each center point
3.5 Limitation of PPMC function :
• Production planning and control function is based on certain assumptions or
forecasts of customer’s demand, plant capacity, availability of materials,
power etc. If this assumption go wrong, PPMC becomes ineffective.
• Employee may resist changes is production levels set as per production plans
if such plans are rigid.
• The production planning process is time consuming when it is necessary to
carry out routing and scheduling functions for and complex products consisting
of a large no of parts going into the product.
• Production planning and control function becomes extremely difficult when
the environmental factors change very rapidly such as technology,
Customer’s taste regarding fashion or style of products needed, government
policy and controls change frequently, stoppage of power supply by electricity
boards due power cuts, break in supply chain due to natural calamities such as
floods, earthquakes, war etc.
3.6 OBJETIVE OF THE STUDY
To increase the efficiency and performance of supply chain by co-
ordinating all departments works smoothly.
To monitor Throughput monitoring sheet and know the reason behind
delay in each and every department.
To understand the process of production planning process based on
domestic and export sales order.
To identify the issues related to production planning and material
controlling.
To suggest some management concepts which will be helpful to
resolve the PPMC issues.
To supply products in to domestic and international market on time
and to avoid delay for supplying products.
3.7 Limitations of the study:
Period of 3 Months are too short to study the Production
Planning and Material Controlling in detail. Also, it is very
difficult to study sufficient samples from the existing population
in such a short period of time. Hence, further research and
study is required for the above mentioned topics.
Some problems discussed in this project cannot be
generalized because it may have existed only at that particular
moment of time rather than being a regular phenomenon.
Respecting the policies that govern the confidentiality of certain
critical data within the organization, it was not possible to explore the
problem using such information and incorporate the same in this report.
This report attempts to provide suggestions for improving
PPMC function. These suggestions may or may not serve as the
final solution for existing problems in the organization.
Implementation of suggestions mentioned depends to a large
extent on the willingness of management.
This supply chain process is very complex in pharma field and
for understanding this process need experience in this field.
6. SUPPLY CHAIN MANAGEMENT PROCESS OF COMPANY
Vender (raw material & packaging material)
Purchasing department
Ware house company changodar
Thol plant & dehradun plant (store department) (excise duty dep, accounting
depart,
store management department) (good receive note)
QC testing ( raw material – floride,sulphate
limit,chloride,purity,HPLC,crometography
test,concentrationtest,)(packagingmaterial–
cartons,foils,insert,vials,strip,bottles,ampules,
test – sterility test, visual inspection,)
Production planning and material controlling department [production planning
1).daily,
2) weekly,3) monthly,4) yearly]
Raw material planning & packaging material planning
Production department
1. Parental 2. Tablet 3. Liquid
Finish quarantine goods (testing of parenteral & tablet by respective
department (runtime testing)
Finish product testing by QC (they release certificate of analysis for respective
country)
Packaging
1. Packaging 2. Packaging and development & international regulatory affair
PACKAGING finish product packaging with batch manufacturing record
(BMR) &
batch packaging record (BPR)
2. Packaging and development & international regulatory affair - artwork code
(new & revised) generated by Packaging & development department
QA department
Review batch BPR &BMR, GMP documentation
Finish product storage goods department
Distribution department
For trade dispatch (domestic & export) Tender (Gov.) dispatch (domestic & export)
C & F (4 C&F in India hydrabad,delhi,culcata,gujrat)
Packaging
1. Packaging 2. Packaging and development & international regulatory affair
PACKAGING finish product packaging with batch manufacturing record
(BMR) &
batch packaging record (BPR)
2. Packaging and development & international regulatory affair - artwork code
(new & revised) generated by Packaging & development department
QA department
Review batch BPR &BMR, GMP documentation
Finish product storage goods department
Distribution department
For trade dispatch (domestic & export)
Tender (Gov.) dispatch (domestic & export)
C & F (4 C&F in India hydrabad,delhi,culcata,gujrat)
Distributors Retailers
(4) PROCEDURE FOLLOWED BY PPMC DEPARTMENT
4.1 PRODUCT AVAIBILITY REPORT FOR DOMESTIC PRODUCT
PAR is containing list of products which have pending orders.
Distribution department is giving PAR for TRADE and TENDER sale
list to the PPMC department and they also give Novagen PAR which
is separate division and Par for the third party division is given from
the supply chain management department and narcotic PAR is given
from excise department another four divisions are in Troikaa
A. Hospitroy division
PPMC department shall prepare separate sheet of the product list for
Thol, Dehradhun and third party and shall forward to Thol and
Dehradhun for filling purpose.
Procedure for filling of Par by plant in charge:
B. Plant in charge with coordinate with QC in charge and shall fill
up the expected quantity, batch number and expected date of
receipt. Only for those products which are work in process or
which plan in next week basis of following criteria.
1) For parenteral product 16 days should be provided and that is for finish
product.
1 day for washing of sterile and non-sterile product, 2day for
manufacturing of product in sterile tank, 3 day for filling in
ampoules and vials. And then next 13
days for sterility purpose including Q.C and packing purpose.
2) For the tablet/capsule products 11 days shall be provided from the
date of granulation to final product viability
1st day for Dispensing
2nd day for granulation
3rd and 4th day for compression
5th day for coating
And then tablet goes for finish goods Quara ntine.
After that another 6 days for testing of Q.C release including packing.
So total 11 days are taking for finish product availability
3) For Liquid-cap products 21 days shall be provided from the date of filling to
final date of finish product availability.
4) For Bifosa 35/70, 15 days shall be provided from the date of granulation to
final date of granulation to final date of finish product availability.
5) For Torero sachet 15 days shall be provided from the date of granulation to
final date of granulation to final date of finish product availability.
6) For Myonit SR 2.6/6.4,15 days shall be provided from the date of granulation
to final date of granulation to final date of finish product availability.
PPMC officer shall also observe the expected date of receipt of two consecutive
PARS given by the production department if any date is changed then PPMC
department ask reason for the same.
PPMC officer shall daily fill up PAR deviation report with reference to
manufacturing date of particular batch.
4.2 PROCEDURE FOR FILLING OF EXPORT ORDER STATUS REPORT AT PRELIMINARY STAGE BY PPMC DEPARTMENT: At the time of receipt of new order PPMC department shall fill up
indent for raw materials required in particular order and shall forward it to
purchase department. If proposed execution date (planned date) is longer
than shipment date then ppmc department shall inform to purchase department
for urgent procurement for the same.
If purchase department don’t conveys than it’s impossible to prepone
delivery dates due to shortage material in the market, than ppmc department shall
derive the ADC date and inform to export department to extend the last shipment
date.
Ppmc department shall mention the purposed ADC date and execution
date based on availability of RM/PM and production schedule.
Procedure of filling Non availability of product list before 23rd by ppmc
department
department shall mention product (domestic) if product is available in
the month after 23 rd in Non availability of product list before 23 rd of
month and forward the report to distribution department by every Monday
with PAR report.
Distribution department have to take following action
1) Inter branch transfer of Ppmc existing stock
2) Transfer the Guj stock to C&F
Procedure for filling order execution date based on product ion plan by
production department.
On receipt of export order status, production department shall mention
the ADC dates on the basis of actual weekly production plan and production
norms after filling the ADC dates the report shall be forwarded to Q.C head
Q.C head shall fill up the ADC date based on the actual release of the
batch, and shall forward the report to ppmc department
Ppmc department shall mention the ADC submission date in the export
order status.
FINAL EXECUTION DATE:
The final execution date shall be given by ppmc department. Execution date
shall be two days from the date of ADC submission date.
4.3 GUIDELINE TO FINALIZE EXPORT ORDER QUANTITY
OBJECTIVE
To lay down a procedure for finalizing the export order quantity to match with
standard batch size before confirming the export order to the agent/associate.
SCOPE
This guideline is applicable to all export orders of THOL /
DEHARADUN, except below categories of export order
Government /Tender supply
All ointments
Product promoted ethically in export market
Production planning and material control dept. must try to combine these
orders with domestic order if possible.
RESPONSIBILITY
Order finalization: Head – International Marketing
Production planning according to standard batch size-Head-
PPMC
ACCOUNTABILITY
Head –PPMC
Prior to finalization of order of Purchase indent, International Marketing shall
finalize the order Quantity, as per following.
PEXO sending from international marketing department
International marketing department shall send PEXO to PMC / QC / QA /
PLANT HEAD/BSR with remarks on PEXO as follows:
Government tender order. (Part shipment/part quantity not allowed)
Government tender order ( part shipment is allowed but total
quantity to be fulfilled)
Trade order (2% Minus quantities is allowed for closing of
the PO Quantities)/Part shipment allowed
PPMC dept. shall forward the same PEXO to production dept. for
information purpose.
Procedure of excess quantity to be packed
OPTION I
(product exclusively manufactured for export and domestic)
If the excess quantity found in export trade order, production head shall
intimate to ppmc officer /executive in well advance (before packing of the
product).ppmc shall take approval from international business to pack the
excess qty. in same order. Some time it is used for domestic supply.
OPTION II (Products are manufactured execlusively for export)
If order quantity manufactured is excess against the PEXO and cannot be
packed in present PEXO or in domestic supply, such quantity shall be
reflected as excess quantity in “excess unpacked quantity after export order
completed Report, which is prepared by production head and submit to
ppmc department every week.
PPMC officer shall forward this report to IB team with his
proposed remarks to accommodate the excess quantity in
pending PEXO.
IB team shall confirm their remarks and forwarded the same
report to ppmc department.
Ppmc officer shall take action in pending PEXO and forwarded
the same report to production department.
If excess quantity found very minor quantity like 600 ampls
and vials and 3500 tabs and if it cannot be packed than
withdrawing the sample for RA if required and rest of the
quantity should be destroyed.
For products listed in Annex I : (slow moving & exclusively export
product list)
International Marketing dept. shall review the qty mentioned
Order quantity shall be considered as combined quantity of
sale as well as free scheme samples, which should match the
same qty.
If order quantity matching as per Annex-I qty, international
marketing department shall raise PEXO with highlight the order value
of each product with US $ for the further decision.
GMP aspects of the product
Order value of the order
Impact of not supplying the product in to the international market.
For the products listed in annex II (fast moving products):
If order quantity matching with specified qty in annex II,
international marketing department shall raise the purchase
indent and release the PEXO.
PPMC shall review planning of such product for domestic
purpose & shall club export quantities with domestic
quantity to have standardize batch size as per annex II.
PPMC department shall inform the export department for
the execution of such order which shall be approx .55 days
from the date of the receipt of the order.
4.4 Domestic planning Vs Export Planning
Domestic Planning Export Planning
Domestic production planning is
done based on Demand
forecast data given by
marketing department.
Make To Stock: MTS is a
usually technique, where in
anticipation of demand vast
quantities of goods are Produced
and stocked in warehouses.
Push Based Supply Chain : In
this type of supply chain,
Products are manufactured in
advanced of customer’s order,
stored into warehouse and then
pushes distribution chain to sell the
products.
Inventory
Less inventory keeping stock
compared export product
stock.
Domestic PPMC Planning
It is not a critical process compared to
International planning.
Export production planning is
done based on Export Sales
Orders.
Make To Order :
MTO is a production approach
where once a confirmed order for
products is received, and then
products are built.
Pull Based Supply
Chain : In this type of
supply chain,
Customer’s orders act as pull
factor and according to that
products are manufactured.
Inventory
High inventory stock compared
to domestic product.
International PPMC Planning
It is very critical and time taking process
Compared to domestic planning.
8 FINDINGS
Major Finding 1
F1 WORKING OF PPMC (PRODUCTION PLANNING AND
MATERIAL CONTROLLING)
F1.1 Step: 1 Demand forecasting of domestic and export product
Demand forecasting is used for estimating future demand of
product for domestic market and international market. Most of
companies are used time series method for estimating future
demand .However some large companies both domestic and
multinational employees Business economists or outsource
it from business consulting or market research firms.
Here some of the methods are given which are generally used by the
company:
OPTION II (Products are manufactured execlusively for export) If order quantity manufactured is excess against the PEXO and
cannot be packed in present PEXO or in domestic supply, such
quantity shall be reflected as excess quantity in “excess unpacked
quantity after export order completed Report, which is prepared
by production head and submit to ppmc department every week.
PPMC officer shall forward this report to IB team with his
proposed remarks to accommodate the excess quantity in
pending PEXO.
IB team shall confirm their remarks and forwarded the same
report to ppmc department.
Ppmc officer shall take action in pending PEXO and forwarded
the same report to production department.
If excess quantity found very minor quantity like 600 ampls
and vials and 3500 tabs and if it cannot be packed than
withdrawing the sample for RA if required and rest of the
quantity should be destroyed.
For products listed in Annex I : (slow moving & exclusively export
product list)
International Marketing dept. shall review the qty mentioned
Order quantity shall be considered as combined quantity of
sale as well as free scheme samples, which should match the
same qty.
If order quantity matching as per Annex-I qty, international
marketing department shall raise PEXO with highlight the order value of
each product with US $ for the further decision.
GMP aspects of the product
Order value of the order
Impact of not supplying the product in to the international market.
For the products listed in annex II (fast moving products):
If order quantity matching with specified qty in annex II,
international marketing department shall raise the purchase
indent and release the PEXO.
PPMC shall review planning of such product for domestic
purpose & shall club export quantities with domestic quantity
to have standardize batch size as per annex II.
PPMC department shall inform the export department for the
execution of such order which shall be approx .55 days from the
date of the receipt of the order.
4.4 Domestic planning Vs Export Planning
Domestic Planning Export Planning
Domestic production planning is
done based on Demand
forecast data given by
marketing department.
Make To Stock: MTS is a
usuallytechnique, where in
anticipation of demand vast
quantities of goods are Produced
and stocked in warehouses.
Push Based Supply Chain :
In this type of supply chain,
Products are manufactured in
advanced of customer’s order,
stored into warehouse and then
pushes distribution chain to sell the
products.
Inventory
Less inventory keeping stock
compared export product
stock.
Export production planning is
done based on Export Sales
Orders.
Make To Order :
MTO is a production approach
where once a confirmed order for
products is received, and then
products are built.
Pull Based Supply Chain : In
this type of supply chain,
Customer’s orders act as pull
factor and according to that
products are manufactured.
Inventory
High inventory stock compared
to domestic product.
5 FINDINGS
Major Finding 1 WORKING OF PPMC (PRODUCTION PLANNING
AND MATERIAL CONTROLLING)
F1.1 Step: 1 Demand forecasting of domestic and export product
Demand forecasting is used for estimating future demand of product for
domestic market and international market. Most of companies are used
time series method for estimating future demand .However some large
companies both domestic and multinational employees Business
economists or outsource it from business
consulting or market research firms.
Here some of the methods are given which are generally used by the
company:
Composite of sales fore opinions: company is deciding sales forecast
for particular product.By ask its sales representatives to estimates their
future sales.
Expert opinion: company will obtain forecasts from experts including
dealers, distributors,Suppliers, marketing consultants and trade
associations. Occasionallycompany will invite group of experts to prepare
a forecast
Past sale analysis: sales forecasts can be developed on the basis of
past sales.
1)Time series analysis: breaking down past time series in to four
components. Trend, cycle, seasonal and erratic and projecting these
components in the future.
2) Exponential smoothing method: projecting next period sales by
combining the Average of past sales and most recent sales
3) Statistical demand analysis Consists of measuring the impact level of
each of a set of causal factor: income, marketing expenditures ,price on the
sales level
4) Market-Test method: used for forecasting new- product sales.
After that, calculate net following formula:
production quantities based on sales forecasting by using
Production plan of next month = Sales forecast of
current month + Inventory
norms - Opening stock–
Production plan of current month
Convert production quantities into multiple of batches as per standard
batch size.
Export Sales Orders:
For international market, production is done based on specific Export Sales
order.
Regulatory
Finance
Pack F&D
PRODUCT EXPORT OREDR
It is internal communication document which is prepared by business co-
ordination team and executed by Supply Chain Management Team, describes
customer’s orders and their requirements.
Product export order involves following information:
Consignee’s Name & Address
country
Delivery terms
Payment terms
Mode of shipment like by Air or Sea
Product information ( code, pack, quantity, value)
Special Instructions if any
Last date of submission of ADC
Name of the manufacturer and Location
Name of the buyer
Trade or Tender
After approval of international business team, planning concerned compile the
Product export order for following elements viz.
Batch size
Production feasibility
Process time
Additional specific remarks, if any in product export order.
Products deliverance time based on dosage viz. after receipt of approved
product export order.
Product export order
Shelf life Total Qty Remark value
($ or euro)
Product, strength, brand
Freshly 30000 tabs
Shelf life and pack size Manufactured
1. ATORVASTATIN TABLET
10 MG (Lesstrol 10)
Shelf life: 2 years
3x10 TAB BLISTER
F1.2 STEP-II: Next step is MRP (Material Requirement Planning).
Material Requirement Planning is a production planning and inventory
control system used to manage manufacturing processes.
To run MRP on PHARMASUITE, first of all we have to enter
inputs into PHARMASUITE system.
MRP Inputs:
Bill of Material
Material master
Export order & forecast data
Inventory status file
Bill of Material:
For material requirement planning first get enter in to the
PHARMASUITE and then select location like THOL or DEHARADUN.
Then select Production than go for purchasing than material
requirement planning, we have to select.
n a
c P c
a
e
Whatever Raw material and packaging material is required are
to be planned for EXPORTING (TENDER OR TRADE),
DOMESTIC ORDER (TENDER OR TRADE) Order is come
by export order status and by check list for domestic and PAR
from distribution which are pending orders which have to
provide by production department.
Whatever material is required for manufacturing product and its
material availability status can be known by go into the production
than production planning and then select Material availability status and
then select RM or PM.
MRP (Material Requirements Planning)" is a concept of creating material
plan and production schedules based on the lead times of a supply chain
However, even if you create an MRP-based plan based on an ideal factory
model, problems may still actually occur.
Traditional MRP (or MRP II: Manufacturing Resource Planning) and DRP-based
planning are both techniques of supply chain management. If we collectively call
those methods MR -based supply chain planning, what are the haracteristics
and what are the differences between MRP-based supply chain constraint-
based supply chain planning?
In MRP-based planning, demand plans i.e. sales plans, are created
independently from constraints on created based on the production and
material plans, and production plans are lead times of the supply chain.
If a schedule is created by determining the "product remix", i.e. products to
manufacture and their BOM (Bill of Materials) then exploding processes
and imposing loads on each operation will result in a schedule that
exceeds operation capacity because capacity constraints are not reflected on the
M
m
s
a
p
schedule. If the operation capacity is sufficient then the MRP-based schedule will
be an optimal just-in-time schedule in which the lead time is minimized and
throughput is maximized.
However, in reality, it's often the case that materials are input and production
schedules are carried out exceeding production capacity. This results in in-
process inventory that waits for resources. Even with schedules created for an
ideal factory, there will be in-process inventory that waits for resources, a
build up of excess inventory occur and some operations that are susended due to
insufficient raw materials.
If there is leeway in operation capacity, the MRP can be used as an initial plan
and the difference between the schedule and the actual capacity can be solved by
the schedule controlled by the shop floor. However, if you try to match MRP
directly with actual production then demand should be adjusted so as not to
exceed the actual capacity and you should repeatedly execute the MRP over
and over again. Therefore, an extremely high-speed MRP system will be
required.
Historically, MRP was not as widely spread in Japan as it was in Europe and the
United States. This may have been because there was a gap between the ideal
factory and the actual factory and that lead to the development of "KKD" ("kan"
meaning sense, "keiken" meaning experience, and "dokyo" meaning courage)
to respond to the reality of the shop floor
The planning system of supply chain management emerged as a form of
planning that replaced the "KDD" part with information technology that
furthered scientific planning. JIT (Just-in-Time) is a constraint-based process
management system. If we replace the word "constraint" with "reality", most
Japanese companies will respond that it makes sense.
0s However, in Europe and the U.S., since the planning system was developed
from an MRP-based ideal factory model, the concept of "constraints" is
regarded as a fresh and new concept. TOC (Theory of Constraints) is a
methodology that caused, together with Japan's TQC (Total Quality Control), a
paradigm shift for production management in the U.S. in the 1980s.
CREATION OF MASTER FORMULA RECORD & ARTWORK IN
PHARMASUITE:
First of all Master formula record has been prepared by F & D department.
MFR involves all detailed work instructions. After that F & D shall forward the
duly approved original MFR to Quality Assurance documentation cell for
issuance and distribution to the Technology Transfer department.
Based on MFR, Technology Transfer department shall prepare MMR
(Master Manufacturing RECORD) I,II and forward the duly approved original
MMR-I,II to Quality Assurance department for issuance and distribution to
SCM department for purpose of creating ARTWORK and Material Master on
pharmasuite. After receiving approved MMR-I & II, authorized executive of
supply chain will create Material Master Code and ARTWORK CODE in
PHARMASUITE.
MMR-I: (for Raw Materials)
MMR-II: (for Packaging Materials)
MFC (Master Formula Card)
MMR-I and II (Master Manufacturing Record)
Artwork code, Material Master (PHARMASUITE)
ARTWORK GENERATION BY P&D (PACKAGING AND DEVELOPMENT).
Packaging and development department create ARTWORK which is NEW or
REVISED for different products for different countries and whatever raw material
and packaging material required for that is also indented and revised artwork
is there than code is changed from previous one.Like from 01 to 02.
F 1.4 Step-3: (Raw material / Packaging Material) indenting:-
As we run MRP on PHARMASUITE system, Based on the Purchase
requisition memo, forecast data or orders and current inventory stock
of materials PHARMASUITE system itself raise RM/PM indent
list.RM/PM indent list involves only that RM/PM with their quantities
which have to purchase from vendors.
The main objective of RM/PM indenting is in view of “Optimization of Raw
and Packing materials Inventory”, to determine the net requirement of raw
material and packing material to be procured to deliver the current month (if any
revision) and sub sequent next two month of domestic and export products.
There are five types of scenario, wherein Indents gets generated in
P HARMASUITE system viz.
1) System automated collective generation of Indents
In this type of scenario, PHARMASUITE system automatically generate
RM/PM indent on collective basis after seeing all order and forecast data.
2) New products, RM/PM based on supply chain head approvals
For new product RM/PM, indent shall be raised after approval of supply chain
head approval. And for New product launch proposal
3) Export RM/PM, that is imported from foreign supplier or from domestic
supplier.And all information regarding indenting to material receipt register
can be get from PHARMASUITE.
Indent Details
1) Indent No:
2) Date:
3) Description Code:
4) UOM:
5) Sch qty:
6) Req.Qty:
P.O. Details
1) P.O No:
2) DATE:
3) Name of Supplier:
4) Rate:
5) Delivery due date:
6) G.R.N. No
4) Subjective, as advised by Purchase head, to take price benefit from market
Sometimes purchase head advised to SCM dept to raise indent of
particular RM/PM to get price benefit from market.
After checking of MRP end results, net requirement of Raw and Packing
materials line by line is being checked by material planner. If any correction
in current month and subsequent next two productions plan, appropriate call is
taken for addition and deletion of RM/PM requirement.
F 1.5 Step: 4 Purchase Requisition
After that Purchase department make Purchase Order and it will place the
Purchase order to the approved vendor and send the copy of order to the vendor.
If there is new product, purchase department will approach for 3 quotations
from approved vendors and after that negotiate with vendors and approved one of
them after getting confirmation from Finance department and receiving the
materials on the credit basis.
LEAD TIME CHART
PARAMETERS PRODUCT NORMS
Finish product
process time
Tablet
General
Categary
11 days
Parentals 16 days
Manufacturing
week
Tablets Last day of
asssigned week
Parenterals Last day of
asssigned week
QC release time Sterile 15 days
Non sterile 10 days
Buffer time For all products 7 days
Procurement Packing material 20 days
Raw material 20 days
Imported material
(By air)
15 days
Imported material
(By sea)
30 days
Lead time is the time from the moment the customer places an order (the
moment you learn of the requirement) to the moment it is received by the
customer.
Lead time is made of:
Preprocessing Lead Time: It represents the time required to release a purchase
order (if you buy an item) or create a job (if you manufacture an item) from the
time you learn of the requirement.
Processing Lead Time: It is the time required to procure or manufacture
an item.
Post processing Lead Time: It represents the time to make a purchased item
available in inventory from the time you receive it (including quarantine,
inspection, etc.)
Generally for all the RM/PM, lead time is 30 days at Famycare ltd.
After receiving materials, purchase department send the GR (Goods Receipt) to
SCM and sampling department send the sample to QC for Specification as per the
SOP of Raw material specification.
Purchase Requisition
Purchase order
Goods Receipt
Then QC people test the sample and prepare the ROA and decide the lot number
(BMR& BPR). Head of the QC send this ROA to the purchase dept and SCM.
As per the ROA, prepare the production schedule consulting with the production
dept.
BPR/ BMR form containing the manufacturing and expiry date of the product. As
per the order from the country, lot is divided into the batch depends on the
machine capacity. After this materials are transferred to production dept for
convert into the tablets.
F 1.6 Step-5: Production Scheduling:-
Production scheduling is done with the coordination of production dept,
considering product requirement, material availability, capacity availability and
uniform loading is given by Production department. Production plan of next
month is given to production for scheduling by 6th of every month.
The main objective of production scheduling is to determine the delivery dates
of next month’s production plan.
By taking expected delivery date of RM/PM from purchase department,
production scheduler shall prepared granulation plan for next month and every
day “Granulation plan Vs Actual” shall be generated by production
scheduler. If any deviation in granulation shall be discussed on daily basis as to
meet current month plan.
Scheduling is done in such a manner, that it fulfills market requirement for
domestic products and meet dispatch deadline in case of export orders. Production
schedule should show uniform loading on each machine and effective capacity
utilization.
Products required for next month’s sale are scheduled before 23th so that
product can reach the C&F in time. Priority is given for the products, which are
having higher value and volume to be loaded first and then product with lower
value and volume to be loaded next in scheduling.
Projected capacity utilization report shall be generated (Dosage-wise) for next
month plan by every 5th of succeeding month. After the month end,
“Projected capacity Vs Actual utilization” shall be prepared to show previous
month performance.
Production schedule show all details like which machine are working and
which resources are working and which one is free. How much time require to
produce the listed lot, it show the starting and ending time. Also show the
sequence of the products and total number of batches.
F1.7 Step-6: Production Order:-
To create production order on the basis of planed production and
packaging requirements and advance scheduling, SC will convert planned
production order into production orders, after evaluating the ground situation and
consulting production executive.
As per the production order, SCM will continue check and in contact with the
production department and get the daily report from the production office.
Production dept try to deliver the goods in the bond room or warehouse.
Semi finished goods i.e. sample of tablets (before labeling) are again transfer to
QC. QC will test the all tests as per the SOP prepare the report and send to
packaging department. QC will perform the various test like Dissolution test,
HPLC test, Friability test, GC test, Weight variation etc. and the entire test have
their limit. Semi finished goods must pass all test within the prescribed limit.
Packaging department will pack the semi finished goods as per the order and
use the packing materials which are prescribed in the list of PM. First pack into
primary packing as per the PO i.e. 28 Tablets in one strip. In secondary packing
number of strips in one box i.e. 1×28 T.In Final packing, as per total weight of the
carton - number of box are put into one carton.
On every carton, stick the slip which containing the weight, product name, batch
no, mfg date and expiry date. After all this steps goods are store in bond room.
F2 ISSUES IN PRODUCTION PLANNING AND MATERIAL
CONTROLLING (INBOUND LOGISTIC MANAGEMENT)
1. Inappropriate Material Management
In Famycare pharma company lead time for Raw material and packaging material
is fixed whether it is imported or from domestic.
Lead time for Raw material which is imported is 30 days
Lead time for Raw material which is from domestic company is 20 days
Lead time for packaging material which is from domestic (printed or non-
printed) 20 days
Whenever lead time is increase from vendor due to many reasons whole
production schedule is delayed because of non availability of material and if
company can’t fulfill order of TENDER SALE for domestic and export then
company have to pay fine for that.
Many reasons are there for delaying in packaging and raw material:
1) Inappropriate transportation system that is by sea, railway and road it will take
more time due to many reasons.
2) No response of vendor because of not comfortable of business with company and
less profit.
3) Delay in payment by the company so vendor may not respond next time.
4) There is not matching of quality of material criteria between company and
vendor.
5) If there is excess material sent by vendor to store department.
6) In appropriate material quality given by vendor.
2. Issues Related to new product launching and product management:
When new product is launched by company at domestic level at all states there are
big challenges of supply chain for supplying drugs at all distributors. And it’s
challenge because company don’t know demand of their new product so
appropriate market research study have to carry out by company so at least
company can assume the demand of product otherwise stock out problem can be
occur which is create wrong implication. And whenever company wants to launch
their products, proper stock availability of raw material and packaging material
should be there. Otherwise delay in production schedule and disturbance in
production schedule.
3. Rejection of Raw material and packaging material
Whenever PPMC department had already planned regarding production and
material has already came to the store and it is tested by Q.C department and if
it is rejected then there will be delay in production. This type of problem
arises when there are no similarities in testing criteria of vendor and Q.C
department of company.
4. Machine break down
Some time when machine get breaks down due to many reasons wholly
production schedule has been disturbed because in Famycare pharma there
is no extra shift or machines for avoiding production delay so delay occur.
The causes for breakdown can be:
Failure to identify and replace worn-out parts.
Excessive work load
Inefficient or neglected cooling system.
Too low or too high voltage.
Lack of lubrication etc.
All machines deteriorate with use an exposure, fatigue, impact and
corrosion. Such deterioration indicated by:
Inability of the machine to take specified load.
Reduction in the speed of the machine.
Deterioration in quality of the output by any machine.
Reduction in operational life of the machine.
5. Fulfillment
Some time production order for domestic and export is rejected because it too
small or too big in which production capacity is not matching with the order or
STD batch is not matching. So order can’t not be fulfilled by production.
6. Rejection of contract manufacturing work of other company’s due to busy
production schedule and pending orders which have to complete fastly as
much as possible
Some time in contract manufacturing company (Famycare) has already taken
order but it cannot provide order on time because of busy production schedule and
company’s reputation gets spoiled. Some time whatever order is taken by company
in which finance, costing department are also involved and it is not matching
with standard batch size of production and actual transfer quantity.
7. Material availability status for urgent and additional production planning.
It’s difficult situation in the production for urgent planning or additional
production planning in material availability status have to prepare on urgent
planning bases in which list is prepared from software and have to give to the
Q.C department. So that time if Q.C department can’t release it on time than
Urgent production planning is delayed. So this is big issue.
8. Inappropriate man power in production department.
This is big issue in all companies because if there are not workers in
production department than lot of work is pending and production schedule gets
delayed.
9. Urgent ADC COA of products which are used for export purpose.
Some time export department intimate to the PPMC department and
distribution department for urgent ADC COA for export purpose so PPMC
department will intimate to the parenteral and tablet packing department and
Q.C department for urgent release so planning of packing and Q.C department
gets disturbed.
10. Daily Receipt Transfer stock statement
According to this statement actual product dispatch date for export product
and sale product for India like tender and trade, under release product can
be removed by checking daily release product COA and BMR and BPR status.
11. Bull whip effect
Some time due to continuously change in demand forecasting of particular
product and some time due to urgent production planning of particular product due
to urgent demand there is lot of problem in inventory management of that
materials which are required for that product manufacturing and some time supply
chain management department can’t provide product on time to distribution
department and due to this stock out problem is to be created and company image
is not good in front of customer and consumer.
Many factors are there for breaking of supply chain management.
In appropriate dealing with vendors.
Inappropriate transportation system of vendors or company.
Transportation delay due to many reasons.
Material rejection by Quality control department.
Rejection of contract manufacturing work of other company’s due to busy
production schedule and pending orders which have to complete fastly as much as
possible.
There is inappropriate manpower in production department and other department.
In appropriate documentation work by Quality assurance department.
Inappropriate artwork code generation by packaging and development department
and inappropriate labelling.
Inappropriate rules and regulations followed by regulatory affair department.
Inappropriate production schedule and inventory management which is done by
production planning and material management department.
12. Urgent testing of material which is given to the outside laboratory
For testing of material, and whatever date has given by them is not
correct or whatever date they have committed they are not following.
13. Transfer product
Some time due to urgent production order, production schedule is suddenly
changed, and whatever product is running in at any stage is stopped, and after
considering clearance time product which are on urgent basis is to be run on
production, so for this urgent indenting, continuously follow up with purchase
department, after completing production whatever product is removed from
schedule or transferred is carried out and another extra COA is required for
that.
F2.1 SUGGESTION
1. Inappropriate material management
This is big issue for PPMC and purchasing both because both are involved in this
process, here for avoiding material shortage proper buffer stock is keeping for
particular product for which demand is continuously grown day by day. Based
on demand forecasting data PPMC can know for supply of product and it’s
planning, if material is not receiving as per the company’s specification criteria
than it should be rejected by company. Proper vendor dealing should be there and
material is rejected by Q.C then urgent indenting is to be done by software.
2. Issues Related to new product launching and product management:
Co-operation: Collaborative planning, forecasting and replenishment (CPFR) is
longer term commitment, joint work on quality and support by the a buyer of
the suppliers, managerial, technological and capacity development. This
relationship allows a company to have access to current, reliable information,
obtain lower inventory levels, cut lead times, enhance product quality, improve
forecasting accuracy and ultimately improve customer service and overall
profits.However, it may be noted that while supply chain management
provides several opportunities to the companies in a competitive business
environment, there are certain problems which supply chain managers must
address.
1) Distribution network configuration: number and location of suppliers,
production ,facilities, distribution centers, warehouses and customers.
2) Distribution strategy: centralized versus decentralized, direct shipment,
cross-docking, pull or push strategies, third party logistics etc.
3) Information: integrate systems and processes through the supply chain to
share valuable information, including demand forecasts, inventory and
transportation.
4) Inventory management: Quantity and location of inventory including raw
materials, work in process and finished goods.
3. Rejection of Raw material and packaging material
This create big issue when RM and PM is rejected by Q.C department so proper
vendor is to be selected and urgent re indenting is to be done by company to
vendor for re supply of that RM and PM. And separate folder should be there for
urgent indenting.
4. Machine breakdown.
Suggestion
Plant maintenance is of great importance as it provides a means to maintain the
plant and equipment in a high state of operating efficiency and enhance its
productivity.
Breakdown Maintenance should be attended on the sudden break down of
machine in emergency.
Preventive maintenance is an activity which prevents breakdowns, cut operating
costs and improve quality of the product. It is a systematic maintenance procedure
wherein the condition of the equipment is constantly watched through systematic
inspection and preventive action is taken to reduce the incidence of breakdown.
5. Fulfilment
Ensuring the right quantity of parts for production or products for sale arrives at
the right time when they are needed in right quantities and quality. This is
accomplished through efficient communication, ensuring that orders are placed
with the appropriate amount of time available to be filled.
6. Contract manufacturing and pending export order
In Famycare phatma for different products standard batch size are decided so if
order is too much high or too much low then PPMC department or internal
logistic management department will reject order & they intimate international
business department for rejecting order & they also intimate to costing department
for intimating the suitable amendmend with party which want to give contract to
this company.
7. Material availability status for urgent production planning
Some time Raw Material And Packaging material are keeping in to buffer stock
which are most of used in company’s famous brand. So buffer inventory stock
should be kept in go down and proper inventory management should be done by
the company. Additional plan is prepared for urgent production planning and
vendor should be more responsive compared to the other vendor which is taking
longer time.
8. Inappropriate manpower in production department
This is biggest challenge for the human resource management department to
manage effective man power at production site because in parenteral and tablet
production department, for parenteral washing, manufacturing and filling is
involved and for each stage clearance time is required and workers are
needed and also for tablet packing area workers are required.
At different stages of production of tablet workers and more employees are
required. If there is in deficiency then delay in production schedule.
9. Urgent ADC COA requirement for partial shipment
Some time for export department want urgent ADC COA because they want
partial shipment but at that time product shows failure in Q.C department than
company have to give that product for outside testing.
10. Bull whip effect
Due to continuously change of the demand of the product in the market there will
be lot of problem creating in to the material availability status & PPMC can’t
accept order some time which is very less order as per the std batch size. Some
time order is so much high so company doesn’t have production capacity to
fulfill order so proper demand forecasting should be there by marketing
department so there is no problem at all.
11. Daily receipt transfer stock statement.
By observing this statement the product in which state that can be
identified like production, packing, QA or Q.C that can be known and product
can be released by pressurize all departments for effective co-ordination of all
department. So lead time of finish product and material transit time can be
decreased.
12. Urgent testing of material given by company to the laboratory.
This creates critical condition some time because whatever commitment has
given by the laboratory to the company to the laboratory is not followed by them
than unnecessary delay occur and ADC COA can’t send to the drug commissioner
on time and due to this shipment of product can be delay and there is loss of the
company’s repo.
13 .Transferring product.
In this situation production department give intimation to the Q.C department
for this matter. Whenever remaining packing is done by the packing department
then Q.C department prepare second time same COA for that and again COA
with sample is sending again.
F3 SUGGESTED MANAGEMENT CONCEPT FOR IMPROVING
PRODUCTIVITY OF PRODUCTION LINE AND MAKING
EFFECTIVE INVENTORY MANAGEMENT
F3.1 INVENTORY MANAGEMENT
Effective management of your inventory
Improved inventory efficiency can release cash back to the business. The demands
of greater service at lower cost are unrelenting and this becomes even more acute
when you have extended supply chains in place, often including sourcing in
low cost countries.
The amount of inventory you hold and its location are critical elements
in determining product availability to customers and can also significantly
influence the time-to-market for your new products.
The sophisticated ERP system you have in place to manage your supply chains
may only deliver usable management information with huge effort.
Inventory as a strategic asset
By deploying inventory as a strategic asset rather than a tactical sticking
plaster, you can achieve:
1) Higher service levels with reduced inventory
2) Simplified planning processes
3) Reduced obsolescence
4) Significant liberation of cash.
However, this can only really be delivered in a sustainable way if the current
inventory deployment can be modelled and assessed, and alternative strategies
developed and tested in a ‘safe environment’ before any implementation of
change.
The inventory profile can then be reviewed and re- aligned as the business
evolves into new market or new products come on stream.
The benefits of inventory optimization In our experience the effective
long term management of inventory –
1) Acts as the catalyst for balancing supply chain activities by repositioning
inventory around business.
2) Integrates inventory and distribution strategies to provide lowest overall
operational cost
3) Creates an environment for market leading product availability.
Practically, inventory management is all about ensuring that everything about
your stock is well planned and organized such that there is easy flow of stock
within and outside the firm.
This means that you must have enough stocks to satisfy all orders and ensure that
customers continue to have stocks at all time. It is a complex things and quite
challenging. However, some programs have helped in reducing the stress of
using varieties of formulas in getting reorder level, maximum and minimum
stock level, warning level, annual demand, etc. This is about INVENTORY
OR STOCK CONTROL.
In managing you stocks in a pharmaceutical company, you must learn first
how to keep proper records. You must be very versatile in this and like
figures especially when you handle over 100 different types of drugs and some
have different strengths e.g. 10mg, 25mg, 50mg, 100mg, 500mg, 1g,
4000iu, 10000iu, 20000iu, etc. Some of the documents you must have and
make use of it.
DELIVERY NOTE (DN): This records all drugs and materials leaving the store
to the customers, office workers and donations to institutions. It must have
Date, Particular (for drug name, expiry date, batch number and strength),
packaging details (e.g. bottles, vial, PC, etc), Name and Address of the consignee,
serial number, signature space for the store manager and the receiver. It could be
duplicated in pink or be in triplicate.
GOODS RETURN FORM (GRF): It records all goods return and in good
condition.
GOOD RECEIVE NOTE (GRN): It records all imported stocks as they enter the
store i.e. stocks imported from manufacturer and being received into the store or
stocks received from the production department into the store and ready to be
issued out.
PRODUCT REQUSITION NOTE (PRN): It records all requests for order
placement forwarded to the purchasing manager or procurement department
when stocks reach reorder level. It should specify which stock needs to be
replenished and the quantity to be ordered (though the procurement
manager may know the right quantity to procure within the financial
constraint of the organization).
WAYBILL: This is a store document that accompanies stocks being moved out
of the organization which must be presented when stopped on the way either by
the organization's security men or force on the way to the customer's
warehouse or store.
BIN CARD: This is a document showing daily incoming and outgoing of
stocks in and out of the store or warehouse. It must show the consignee's name
and address, batch number, expiry date, quantity, signature and the balance (on
continuous basis). FIFO should be strictly applied so as to avoid loss due to
expiration of drugs.
INVENTORY SOFTWARE: Inventory management and control software could
be installed on the office system for daily posting and accurate report as enerated
by the tested and tried program. Good ones include inflow inventory rogram,
Chromos stock Card, Inventorial Manager Stock etc.
The stock control strategy is also necessary for effective and efficient management
of the warehouse. Lots of software now exists to remove difficulties in this area.
In controlling the warehouse stocks, the control measure/software/program should
be able to determine the following upon which right decision should/could be
taken.
1. MAXIMUM STOCK LEVEL
2. MINIMUM STOCK LEVEL
3. REORDER LEVEL OF STOCK
4. REORDER QUANTITY
5. WARNING LEVEL FOR STOCK
6. NORMAL CONSUMPTION
7. NORMAL REORDER PERIOD
8. ANNUAL DEMAND OR QUANTITY
The manual method of stock control is fast fading out though some organizations
still make use of it. However, daily check is needed to ensure efficiency.
Computers these days have helped to save such time because alert props up when
stocks need to be reorder, below minimum level, when over stock, etc.
F3.2 SOME IMPORTANT MANAGEMENT CONCEPTS:
Before moving on to conclusion, a few important Management tools that
can help increase the efficiency of PPC in an organization are described below
F3.2.1 Just In Time Concept:
Just in time (JIT) is a production strategy that strives to improve a business
return on investment by reducing in-process inventory and associated carrying
costs.
Just in Time approach suggests that inventories should be available when a firm
needs them not earlier, not later. Generally just-in-time systems are designed to
manage lead times and to eliminate waste. Effective implementation of the JIT
concept can greatly reduce inventories of raw materials and finished goods. This
concept relies heavily on the quality of manufactured products, components
and also on a capable and precise logistics system to manage supply of incoming
materials (i.e. out-bound logistics).
Four major elements of JIT concept are:
(1) Zero Inventories
(2) Short lead times
(3) Frequent replenishment quantities
(4) High quality or zero defects
JIT is a modern approach for procurement, production, inventory and
distribution management all integrated into one single system. It includes a
comprehensive culture of quality (Total Quality Management), vendor partnerships
and employee teams. Just-In- Time employs small lot sizes (as small as one unit)
and very short lead times for both procurement and production, thereby reducing
the production cycle time.
Salient features of JIT systems as follows:
JIT attempts to eliminate excess inventories for both the seller and the buyer
JIT systems involve short production runs due to small lot sizes. However it
requires techniques to reduce production set-up times and to control and
minimize cost of frequent changeovers.
JIT minimizes waiting lines by delivering materials and components when and
where firms need them.
JIT concept uses short, consistent lead times to satisfy the need for more
inventories in a timely manner. This requires suppliers to be located as near as
possible to the buyer firms (manufacturing facilities)
JIT based systems rely on high-quality incoming materials and parts and on
highly efficient inbound logistics operations.
JIT concept requires a strong, mutual commitment between the buyer and seller,
the one that emphasize quality and seeks win-win types of relationship between
both parties.
PHILOSOPHY:
The philosophy of JIT is simple: inventory is waste. JIT inventory systems
expose hidden cost of keeping inventory, and are therefore not a simple solution
for a company to adopt. The company must follow an array of new
methods to manage the consequences of the change. The ideas in this way of
working come from many different disciplines including statistics, industrial
engineering, production management, and behavioral science. The JIT inventory
philosophy defines how inventory is viewed and how it relates to management.
Inventory is seen as incurring costs, or waste, instead of adding and storing
value, contrary to traditional accounting. This does not mean to say JIT is
implemented without awareness that removing inventory exposes pre-existing
manufacturing issues. This way of working encourages businesses to eliminate
inventory that does not compensate for manufacturing process issues, and to
constantly improve those processes to require less inventory. Secondly, allowing
any stock habituates management to stock keeping. Management may be tempted
to keep stock to hide production problems. These problems include backups at
work centers, machine reliability, and process variability, lack of flexibility of
employees and equipment, and inadequate capacity. In short, the Just-in-Time
inventory system focus is having “the right material, at the right time, at the
right place, and in the exact amount”.
Benefits
Main benefits of JIT include:
Reduced setup time. Cutting setup time allows the company to reduce or
eliminate inventory for "changeover" time.
The flow of goods from warehouse to shelves improves. Small or individual
piece lot sizes reduce lot delay inventories, which simplifies inventory flow and
its management.
Employees with multiple skills are used more efficiently. Having employees
trained to work on different parts of the process allows companies to move
workers where they are needed.
Production scheduling and work hour consistency synchronized with
demand. If there is no demand for a product at the time, it is not made. This
saves the company money, either by not having to pay workers overtime or by
having them focus on other work or participate in training.
Increased emphasis on supplier relationships. A company without inventory
does not want a supply system problem that creates a part shortage. This makes
supplier relationships extremely important.
Supplies come in at regular intervals throughout the production day. Supply
is synchronized with production demand and the optimal amount of inventory is
on hand at any time. When parts move directly from the truck to the point of
assembly, the need for storage facilities is reduced.
Minimizes storage space needed.
Smaller chance of inventory breaking/expiring.
F3.2.2. Collaborative Planning, Forecasting, and Replenishment (CPFR):
The objective of CPFR is to optimize supply chain through improved demand
forecasts,with the right product delivered at right time to the right
location,with reduced inventories, avoidance of stock-outs, and improved
customer service. The value of CPFR lies in the broad exchange of forecasting
information to improve forecasting accuracy when both the buyer and seller
collaborate through joint knowledge of sales, promotions,and relevant supply and
demand information.
Major activities of CPFR:
Three major activities constitute CPFR: they are planning, forecasting,
and replenishment. There are a few steps involved in each activity. Planning:
Planning starts with a contract that details the responsibilities of the
companies that will collaborate with each other in providing the right
products for customers. Contract terms should be negotiated first. Then a
joint business plan regarding demand management, sales promotion, production
quantity, timing, inventory level, will be developed.
Forecasting: First, customer demand is predicted for all the participating
firms. Any differences in demand among participating firms will then be
identified and resolved. Finally, a feasible sales forecast for all participating
firms is developed. Modifications may be done periodically to reflect the changes
in market demand.
Replenishment: First, orders for all participating firms are estimated. Any
difference among participating firms are identified and resolved. Finally, an
efficient production and delivery schedule is developed. Orders are fulfilled.
Vendor Managed Inventory
Vendor managed inventory is a modification of quick response system that
eliminates the need for replenishment orders. It is a customer service strategy used
to manage the customer’s inventory for reducing cost and improving services.
VMI establishes a supply chain arrangement which is so flexible and efficient that
retail industry is continuously replenished.
Vendor-managed inventory (VMI) employs the same principles as those of
JIT inventory, however, the responsibilities of managing inventory is placed with
the vendor in a vendor/customer relationship. Whether it’s a manufacturer
managing inventory for a distributor, or a distributor managing inventory for their
customers, the management role goes to the vendor.
An advantage of this business model is that the vendor may have industry experie
nce and expertise that lets them better anticipates demand and inventory needs. The
inventory planning and controlling is facilitated by applications that allow vendors
access to their customer's inventory data.
In quick response system the buyer (retailer) makes the decision regarding setting
target inventory levels and restocking (or replenishment orders). But in VMI,
the supplier assumes more responsibility and actually manages a category of
inventory for the customers (buyer or retailer). The supplier (or vendor) receives
the information regarding the daily retail sales or sizes, varieties and styles of the
products needed by the customers (retailer). In some situations, replenishment
involves cross docking or direct store delivery which eliminate the need for
warehousing between the manufacturing firm and retail stores.
F3.2.3 Total Quality Management
TQM is an integrative philosophy of management for continuously improving the
quality of products and processes. It is used around the world in many
organizations.TQM functions on the premise that the quality of products
and processes is the responsibility of everyone who is involved with the
creation or consumption of the products or services offered by an organization.
In other words, TQM capitalizes on the involvement of management,
workforce, suppliers, and even customers, in order to meet or exceed customer
expectations. Considering the practices of TQM as discussed in six empirical
studies, Cue, Mc Kone, and Schroeder (2001) identified the nine common
TQM practices as cross-functional product design, process management,
supplier quality management, customer involvement, information and
feedback, committed leadership, strategic planning, cross- functional training, and
employee involvement.
TQM benefits:
Reduced cost of operations
Implementation of TQM delivers better products and service quality,
number of errors/defects, the reduction of total quality costs, better processes
and productivity. These terms will help to reduce cost of operations.
Improvement in company morale
Employee’s empowerment through the use of teamwork, education and
h
training, employee involvement, better employee relations, giving employees
incentives and rewards, and responsibilities for making decisions will also
cultivate friendly and a happy working environment.
Establishing a process of continuous improvement and innovation
TQM is the best way to improve organizational output through continuously
improved performance. TQM is a good management practice which helps in
developing new and innovative ideas to satisfy its customers, this helps in
continuous improvement of quality services.
Increased customer satisfaction
TQM takes care of customer’ expectation through quality information and
performance measurement principles and thus, maintaining continuous
improvement in quality of services and demand of customers.
F3.2.4 Theory of Constraints:
The Theory of Constraints (TOC) is an overall management philosopy
introduced by Eliyahu Mr. Gold rat in his 1984 book titled , that is geared to
help organizations continually achieve their goals.
The theory of constraints is both descriptive and prescriptive in nature; it not
only describes the cause of system constraints, but also provides guidance on how
to resolve them. Theory of Constraints implementations around the world found
that huge results were consistently achieved:
m
e o
Lead Times Reduced 69%
Cycle Times Reduced 66%
Due Date Performance Improved 60%
Inventory Levels Reduced 50%
Revenue / Throughput Increased 68%
Five Focusing Steps:
1. Identify the constraint (the resource or policy that prevents the organization from
obtaining more of the goal)
2. Decide how to exploit the constraint (get the most capacity out of the constrained
process)
3. Subordinate all other processes to above decision (align the whole system or
organization to support the decision made above)
4. Elevate the constraint (make other major changes needed to break the constraint)
5. If, as a result of these steps, the constraint has moved, return to Step 1.
Application of the Principles:
At any point of time an organization can have one constraining area which
limits the ability of the organization to make more money. The constraining
area can be in manufacturing (not able to deliver despite having a good
backlog) or distribution (not able to make right product available at right place) or
new product development (a faster pace of development will increase rate of
sales) or the market (sales is stagnant and price reduction appears as the only way
to increase sales).
Drum Buffer Rope: developed to exploit the manufacturing resource constraint.
The application of drum-buffer-rope and buffer management helps
manufacturing organizations release hidden capacity while improving reliability
of deliveries with lead time reduction.
TOC Replenishment: develop for organization in the distribution and retail
business. This application helps making right product available at right time and
place with much lower inventory. TOC replenishment helps plug the loss sales
due to unavailability.
Throughput Accounting:
Throughput accounting was developed to improve effectiveness of
financial decision making. Most business decisions made using cost
accounting rules can be erroneous and can lead to cost or revenue leakages.
9 What is Benchmarking?
• Qualitative Benchmarking
– Comparing best practices among organizations
– Maturity Assessments
• Quantitative Benchmarking
– Comparing levels of measured performance
– Assessment of Performance Gaps
• Competitive Benchmarking
– Quantitative Benchmarking between companies
– Identifies superior relative performance
Planning Data Gathering: Sources of Data
• Financial Data
– 10-K data, Company Annual Reports, Cost Center Reports
– Must be Verified by Financial Team (Controller)
• Non-Financial Data
– Customers
• Delivery Performance
• Total Cycle-Time Performance
– IT Systems
• Process-to-Process Transactions
• Planning System Parameters (Lead Times)
– Suppliers
– 3PL Providers
Health Sector Supply Chain
Industry Challenges & Responses
Benchmarking Success
Health Care Industry
Tends to drive change through looking outside their organizations
Benchmarks tend to be outcome measures & provide “gap”
analysis
10. INITIALFINDINGS: HEALTH SECTOR SUPPLY CHAIN
Metric-benchmarking used to target cost reductions or negotiate lower prices
Little emphasis placed on agility, sustainability, and safety
Very few organizations measure supplier performance and customer
satisfaction
Limited measures of internal-facing supply chain capabilities
Emerging process measurement through technology implementations and six
sigma projects.
Measures of customer service and relationship management need to be
developed.
Substantial amount of effort on compliance and accuracy measures.
Proper vendor management should be improved for increase the
efficiency of the supply chain management.
It is very critical process because if any constrain created in the process than
wholl chain get disturbed and supply chain management have to continuously
monitor this process and stabilize it and prevent to break it, and decrease material
transit time between all department.
11 CONCLUSION
1) Complexity of the health sector supply chain is not likely to be reduced.
2) Unique health sector service processes need to be considered.
3) Not all “best practices” from the manufacturing industries will, or should
be,transferred to the health sector industry.
4) Industry-wide benchmarking should lead to sustained improvement
without comprising a critical link in the chain
5) Production planning and control function is the nerve centre or heart of the
production management function. It coordinates all phases of the production
system. An efficient production planning and control function results in higher
quality, better utilization ofresources, reduced inventories, reduced
manufacturing cycle time, faster delivery, better customer service, lower
production costs, timely delivery and right quality of goods/services at the
right cost.
6) An efficient production planning and control system enables the firm to
improve its sales turnover, market share and profitability and provides a
competitive advantage for the firm due to balanced inventory levels and higher
quality, flexibility and dependability and lower prices which are the performance
factor for the firm.
7) It put more effort to reduce material transit time from vendor to finished goods in
to domestic and international market.
8) To provide strong presence in foreign market and to supply products smoothly
in national and international market.
9) Time is money, if we can’t improve efficiency beyond some specific point
because there is limit of supply chain so if we want to make it more effective
than we have to reduce expenses at each and every stages.
So supply chain expense saving = profit
12. REFERANCE
1) www.Famycarepharma.com
2) Inventory-Wikipedia .com
3) www.Filehippo.com
4) www.newagepublishers.com
5) www.thehackettgroup.com
6) Logistic and supply chain management by aswathappa
Publication year:2010, Edition: 4th