UNIVERSITY OF LUCKNOW

Business Process Re-engineering

ASSIGNMENT ON
Quality Management in Pharmaceutical industry
Group Members: Pragati Bharti, Amit Kumar, Shailendra Singh
CLASS: MBA 3RD Sem, Marketing
ACKNOWLEDGEMENT

The words put on paper are mere ink marks but when they have a purpose,
there exist a thought behind them. We too have a purpose to express our
gratitude towards the individuals without which the project would not have
been possible.

We owes a deep sense of gratitude to Dr. Anu Kohli, for her active guidance
and constant supervision together with time to time providing of necessary
information connected with the project following active support in the
completion of project.

Finally we would also like to express our earnest gratitude to our friends and
family members for their constant support and encouragement without which
the assignment would not have been completed besides the constant blessings
of Almighty.

Pragati Bharti

Amit Kumar

Shailendra Singh
Pharmaceuticals industry:
The pharmaceutical industry discovers, develops, produces, and
markets drugs or pharmaceutical drugs for use as medications.
Pharmaceutical companies may deal in generic or brand medications
and medical devices. They are subject to a variety of laws and regulations
that govern the patenting, testing, safety, efficacy and marketing of
drugs.

Pharmaceutical industry involves discovery, development, and

manufacture of drugs and medications (pharmaceuticals) by public and
private organizations.
The modern era of the pharmaceutical industry—of isolation and
purification of compounds, chemical synthesis, and computer-aided
drug design—is considered to have begun in the 19th century, thousands
of years after intuition and trial and error led humans to believe that
plants, animals, and minerals contained medicinal properties. The
unification of research in the 20th century in fields such
as chemistry and physiology increased the understanding of basic drug-
discovery processes. Identifying new drug targets, attaining regulatory
approval from government agencies, and refining techniques in drug
discovery and development are among the challenges that face the
pharmaceutical industry today. The continual evolution and
advancement of the pharmaceutical industry is fundamental in the
control and elimination of disease around the world.

The pharmaceutical industry has become a large and very complex

enterprise. At the end of the 20th century, most of the world’s largest
pharmaceutical companies were located in North America, Europe, and
Japan; many of the largest were multinational, having research,
manufacturing, and sales taking place in multiple countries. Since
pharmaceuticals can be quite profitable, many countries are trying to
develop the infrastructure necessary for drug companies in their
countries to become larger and to compete on a worldwide scale. The
industry has also come to be characterized by outsourcing. That is, many
companies contract with specialty manufacturers or research firms to
carry out parts of the drug development process for them. Others try to
retain most of the processes within their own company. Since the
pharmaceutical industry is driven largely by profits and competition—
each company striving to be the first to find cures for specific diseases—it
is anticipated that the industry will continue to change and evolve over
time.

GENERAL CHARACTERISTICS:

Several characteristics distinguish the pharmaceutical industry from

other industries. A newly released pharmaceutical agent is usually
available only by physician prescription. Patients in effect transfer
decision-making authority on the appropriateness of medications for
their ailments to the gate-keeping physicians (or pharmacists and nurses
in some countries). Generally, a prescription may become available OTC
(i.e., without physician prescription) for a non-chronic condition that is
relatively easy to self-diagnose and has low potential for harm from self-
medication under conditions of widespread availability.

Another important industry characteristic is the availability of health

insurance coverage for prescribed medications. Most often, private
insurers or government entities subsidize retail drug purchases.
Consumers make a co-payment (a fixed sum for each prescription
regardless of the full price) or pay a coinsurance (a fixed percentage of
the full price) that is less than the full market price. Co-payments tend to
vary depending on the drug classification. Consumer payment of far less
than full cost of prescriptions creates the familiar “moral
hazard” (excessive use) problem.

Quality management:
Quality management ensures that an organization, product or service is
consistent. It has four main components: quality planning, quality
assurance, quality control and quality improvement. Quality
management is focused not only on product and service quality, but also
on the means to achieve it. Quality management, therefore, uses quality
assurance and control of processes as well as products to achieve more
consistent quality.

Quality management is a recent phenomenon but important for an

organization. Civilizations that supported the arts and crafts allowed
clients to choose goods meeting higher quality standards rather than
normal goods.

In societies where arts and crafts are the responsibility of master

craftsmen or artists, these masters would lead their studios and train and
supervise others. The importance of craftsmen diminished as mass
production and repetitive work practices were instituted. The aim was to
produce large numbers of the same goods. The first proponent in the US
for this approach was Eli Whitney who proposed (interchangeable) parts
manufacture for muskets, hence producing the identical components
and creating a musket assembly line. The next step forward was
promoted by several people including Frederick Winslow Taylor, a
mechanical engineer who sought to improve industrial efficiency. He is
sometimes called "the father of scientific management." He was one of
the intellectual leaders of the Efficiency Movement and part of his
approach laid a further foundation for quality management, including
aspects like standardization and adopting improved practices. Henry
Ford was also important in bringing process and quality management
practices into operation in his assembly lines.

In Germany, Karl Friedrich Benz, often called the inventor of the motor
car, was pursuing similar assembly and production practices, although
real mass production was properly initiated in Volkswagen after World
War II. From this period onwards, North American companies focused
predominantly upon production against lower cost with increased
efficiency.

“Quality management” ensures superior quality products and

services. Quality of a product can be measured in terms of
performance, reliability and durability. Quality is a crucial parameter
which differentiates an organization from its competitors. Quality
management tools ensure changes in the systems and processes which
eventually result in superior quality products and services. Quality
management methods such as Total Quality management or Six Sigma
have a common goal - to deliver a high quality product. Quality
management is essential to create superior quality products which not
only meet but also exceed customer satisfaction. Customers need to be
satisfied with your brand. Business marketers are successful only when
they emphasize on quality rather than quantity. Quality products ensure
that you survive the cut throat competition with a smile.
Quality management is essential for customer satisfaction
which eventually leads to customer loyalty. It is important for
every business to have some loyal customers. Customers would return to
your organization only if they are satisfied with your products and
services. Make sure the end-user is happy with your product. Remember,
a customer would be happy and satisfied only when your product meets
his expectations and fulfills his needs. Understand what the customer
expects from you? Find out what actually his need is? Collect relevant
data which would give you more insight into customer’s needs and
demands. Customer feedbacks should be collected on a regular basis and
carefully monitored. Quality management ensures high quality products
and services by eliminating defects and incorporating continuous
changes and improvements in the system. High quality products in turn
lead to loyal and satisfied customers who bring ten new customers along
with them. Do not forget that you might save some money by ignoring
quality management processes but ultimately lose out on your major
customers, thus incurring huge losses. Quality management ensures that
you deliver products as per promises made to the customers through
various modes of promotions. Quality management tools help an
organization to design and create a product which the
customer actually wants and desires.
Quality Management ensures increased revenues and higher
productivity for the organization. Remember, if an organization is
earning, employees are also earning. Employees are frustrated only when
their salaries or other payments are not released on time. Yes, money is a
strong motivating factor. Salaries are released on time only when there is
free cash flow. Implementing Quality management tools ensure high
customer loyalty, thus better business, increased cash flow, satisfied
employees, healthy workplace and so on. Quality management processes
make the organization a better place to work.

Quality Management Tools:

Quality Management tools help organization collect and analyze data for
employees to easily understand and interpret information. Quality
Management models require extensive planning and collecting relevant
information about end-users. Customer feedbacks and expectations need
to be carefully monitored and evaluated to deliver superior quality
products.
Quality Management tools help employees identify the
common problems which are occurring repeatedly and also
their root causes. Quality Management tools play a crucial role in
improving the quality of products and services. With the help of Quality
Management tools employees can easily collect the data as well as
organize the collected data which would further help in analyzing the
same and eventually come to concrete solutions for better quality
products.
Quality Management tools make the data easy to understand and enable
employees to identify processes to rectify defects and find solutions to
specific problems.
Following are the quality management tools:

 Check List - Check lists are useful in collecting data and

information easily .Check list also helps employees to identify
problems which prevent an organization to deliver quality products
which would meet and exceed customer expectations. Check lists
are nothing but a long list of identified problems which need to be
addressed. Once you find a solution to a particular problem, tick it
immediately. Employees refer to check list to understand whether
the changes incorporated in the system have brought permanent
improvement in the organization or not?
 Pareto Chart - The credit for Pareto Chart goes to Italian
Economist - Wilfredo Pareto. Pareto Chart helps employees to
identify the problems, prioritize them and also determine their
frequency in the system. Pareto Chart often represented by both
bars and a line graph identifies the most common causes of
problems and the most frequently occurring defects. Pareto Chart
records the reasons which lead to maximum customer complaints
and eventually enables employees to formulate relevant strategies
to rectify the most common defects.
 The Cause and Effect Diagram - Also referred to as “Fishbone
Chart” (because of its shape which resembles the side view of a fish
skeleton)and Ishikawa diagrams after its creator Kaoru Ishikawa,
Cause and Effect Diagram records causes of a particular and
specific problem .The cause and effect diagram plays a crucial role
in identifying the root cause of a particular problem and also
potential factors which give rise to a common problem at the
workplace.
 Histogram - Histogram, introduced by Karl Pearson is nothing
but a graphical representation showing intensity of a particular
problem. Histogram helps identify the cause of problems in the
system by the shape as well as width of the distribution.
 Scatter Diagram - Scatter Diagram is a quality management tool
which helps to analyze relationship between two variables. In a
 scatter chart, data is represented as points, where each point
denotes a value on the horizontal axis and vertical axis.

Scatter Diagram shows many points which show a relation between

two variables.

 Graphs - Graphs are the simplest and most commonly used

quality management tools. Graphs help to identify whether
processes and systems are as per the expected level or not and if
not also record the level of deviation from the standard
specifications.

Total Quality Management:

Total Quality Management is a combined effort of both top level
management as well as employees of an organization to formulate
effective strategies and policies to deliver high quality products which
not only meet but also exceed customer satisfaction.
Total Quality management enables employees to focus on quality than
quantity and strive hard to excel in whatever they do. According to total
quality management, customer feedbacks and expectations are most
essential when it comes to formulating and implementing new strategies
to deliver superior products than competitors and eventually yield higher
revenues and profits for the organization.
Credits for the process of total quality management go to many
philosophers and their teachings. Drucker, Juran, Deming, Ishikawa,
Crosby, Feigenbaum and many other individuals who have in due course
of time studied organizational management have contributed effectively
to the process of total quality management.
Customers and their feedbacks are the foundation of every Total Quality
Management model. In simpler words, Total Quality Management
begins with understanding customers, their needs and what they expect
from the organization. Design foolproof processes and systems to collect
customer data, information to further study, analyze and act accordingly.
Such activities not only help you understand your target customers but
also predict customer behaviour.
As a business marketer, you need to know the age group of your target
customers, their preferences and needs. Employees need to know how
their products or services can fulfil customer needs and demands.
Total Quality Management model requires meticulous planning and
research. Every total quality management model integrates customer
feedbacks with relevant information and plans accordingly to design
effective strategies to achieve high quality products.
Strategies formulated to yield better quality products need to be
evaluated and reviewed from time to time. Remember, customers are
satisfied only when products meet their expectations, fulfil their needs
and are value for money. Their overall experience with the organization
needs to be pleasant for them to be happy and return to the organization
even the next time.
Continuous improvements, changes and modifications in the existing
processes according to customer expectations are necessary to yield
higher profits. Processes can’t be same always. If a customer complaints
about a particular product of yours, find out the root cause of problem.
Understand and implement necessary total quality management models
to rectify the problem, remove the defect for a high quality product.
The successful implementation of Total quality Management
model needs extensive planning and most importantly
participation of every single member who is benefitted out of
the organization(Management, suppliers, clients and even
customers). Without the participation of each and every employee,
total quality management model would be a complete failure.
Total Quality Management model begins with research and collecting
information about end-users followed by planning and full participation
of employees for successful implementation. Top level Management
needs to make other team members aware of the benefits of total quality
management process, importance of quality to survive in the long run
and how they can implement various TQM models by prioritizing their
customers and their feedbacks.
Importance of TQM in Pharmaceutical Industry:
1. Handling:

 Containers should be opened and closed subsequently

resealed in an approved manner
  Highly sensitising materials such as penicillines should be
handled in separate production areas.

 Highly activated or toxic API should be made in separate

areas.

 Pure and final API should be handled in an environment

which should be free from contamination.
2. Storage:

 Secure storage facilities should be designated for use to

prevent damage or deterioration of material.

 These should be kept clean and tidy and subject to

appropriate pest measure.

 Environmental conditions should be recorded.

 Storage condition for api should be based upon stability

studies taking into account time, temperature and humidity
etc.
3. Packaging:

 Labelling and packaging should be defined and controlled to

ensure that current packaging material are used correctly.

 Printed labels should be securely stored to avoid mix ups

arising.

 Marking and labelling should be legible and durable.

4. Facilities and Equipments:

 The location, design and construction of building should be

suitable for the type and stage of manufacture involved,
protecting the product from contamination and protecting
operators and environment from the product.

 Equipment surfaces in contact with material used in api

manufacture should be non-reactive.
5. Sterile area:
  Personnel suffering from an infectious disease or having
open lesions on the exposed surface of the body should avoid
activities which could compromise the quality of api.

 Smoking, drinking, eating, chewing and storage of food

should be restricted to designated areas separated from
production or control areas.
6. Labelling:

 Each container should be identified by an appropriate label,

showing atleast the product identification and the assigned
batch code, or any other easily understandable combination
of both.

 Containers for external distribution may require additional

labels.
7. Computerised system:

 Computer system should be designed and operated to

prevent unauthorised entries or changes to the programme.

 In the case of manual entry of quality critical data there

should be a second independent check to verify accuracy of
the initial entry.

 A back-up system should be provided for all quality critical

data.