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A study on Supply chain management and warehousing methods in Euro


Life Health Care PVT at Alathur Chennai.

INTRODUCTION:
The word logistics originated from the ancient Greek logos, which means ratio, word,
calculation, reason, speech and oration.

Logistics is an idea considered to have transformed from the military needs to supply
them as they moved from their base to a forward position. In ancient Greek, roman and
byzantine empires, there were military officers with the title ‘logistikas’ who were
responsible for financial and supply distribution matters.

Logistics is the art of managing the supply chain and science of managing and
controlling the flow of goods information and other resources like energy and people between
the point of origin and the point of consumption in order to meet customer requirements. It
involves the integration of information, transportation, inventory, warehousing, material
handling and packing.

The operations responsibility of logistics is the geographical repositioning of raw


materials, work in progress and finished goods were required at the lowest cost possible.

Logistics management is a part of supply chain management which plans implements


and controls the efficient forward and reverses flow and storage of goods, services and
information between the points of origin to the point of consumption in order to meet
customers’ requirements. A professional working in the field of logistics management is
called logistician.

Logistics as a business concept evolved only in the 1950s. this mainly due to the
increasing complexity of supplying one’s business with materials and shipping out products
in the increasingly globalized supply chain, calling for experts in the field who are called
supply chain logisticians. This can be defined as having the right item in the right quantity at
right time at the right place for the right price and it is the science of process having its
presence in all sectors of the industry. The goal of logistics work is to manage the fruition of
project life cycle, supply chains and resultants efficiencies.

The international freight forwarders act as an agent for the exporters in moving cargo
to the overseas destination. These agents are familiar with the import rules and regulations of
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foreign countries, methods of shipping, government export regulations, and the documents
connected with foreign trade. Freight forwarders can assist with an order form the start by
advertising the exporter of the freight costs, port charges, consular fees, cost of special
documentation and insurance costs as well as their handling fees – all of which help in
preparing price quotation. Freight forwarders may also recommend the type of packing for
the best protection the merchandise in transit; they can arrange is a legitimate export cost that
should figure into the price to the customers.

A freight forwarders or a forwarding agent, is a person or a company that organizes


shipments for individual or corporations to get large orders from the manufactures or
producers to the market or final point of distribution. An increasing importance is being
placed upon the freight forwarders, as he takes over many of the functions of the traditional
ship owner/carrier yet retains interested in the cargo.

Currently the freight forwarders industry faces the problem of a fragmented structure,
inefficacy of related services, high operating costs, and low volume. This is because in
carrying out their operations, freight forwarders not only depend on other related services but
also use substantial foreign exchange in the procurement of services, booking for cargo
spaces and deciding on shipping lines, airlines and railways to be used. There are many
freight forwarders companies in the country with four member affiliated associations. This
fragmented industry has two tiers i.e., freight forwarders and custom brokers or agent and is
operating in a very competitive environment. However their contribution and growth
potential are limited due to the low level of professionalism, a non-uniform tariff structure
and high staff turnover.

Operational efficiency of the freight forwarders also depends on other services, such
as good freight containers facilities and haulage system, inland clearance depots (ICD),
inland ports, airports and ports. The industry also depends on the participation of all the
parties in the transport and logistics chain as well as the information technologies such as
electronic data interchanges (EDI).

Supply chain management is extremely current due to its success in other industries
and therefore considered to be the future in construction industry. Supply chain management
has been in use before the recent hype in the construction industry. Supply chain management
(SCM) is a concept that has flourished in manufacturing, originating from Just-In-Time (JIT)
production and logistics. Today, SCM represents an autonomous managerial concept,
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although still largely dominated by logistics. SCM endeavors to observe the entire scope of
the supply chain. All issues are viewed and resolved in a supply chain perspective, taking into
account the interdependency in the supply chain. SCM offers a methodology to relieve the
myopic control in the supply chain that has been reinforcing waste and problems.

Fiercecompetition in today’s global markets, the introduction of products with shorter


life cycles, and the heightened expectations of customers have forced business enterprises to
invest in, and focus attention on, their supply chains. This, together with continuing advances
in communications and transportation technologies (e.g., mobile communication, Internet,
and overnight delivery), has motivated the continuous evolution of the supply chain and of
the techniques to manage it effectively.
In a typical supply chain, raw materials are procured and items are produced at one or
more factories, shipped to warehouses for intermediate storage, and then shipped to retailers
or customers. Consequently, to reduce cost and improve service levels, effective supply chain
strategies must take into account the interactions at the various levels in the supply chain. The
supply chain, which is also referred to as the logistics network, consists of suppliers,
manufacturing centres, warehouses, distribution centres, and retail outlets, as well as raw
materials, work-in-process inventory, and finished products that flow between the facilities .

Supply chain management is a set of approaches utilized to efficiently integrate


suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and
distributed at the right quantities, to the right locations, and at the right time, in order to
minimize system wide costs while satisfying service level requirements.

This definition leads to several observations. First, supply chain management takes
into consideration every facility that has an impact on cost and plays a role in making the
product conform to customer requirements: from supplier and manufacturing facilities
through warehouses and distribution centres to retailers and stores. Indeed, in some supply
chain analysis, it is necessary to account for the suppliers’ suppliers and the customers’
customers because they have an impact on supply chain performance.

Second, the objective of supply chain management is to be efficient and cost-effective


across the entire system; total system wide costs, from transportation and distribution to
inventories of raw materials, work in process, and finished goods, are to be minimized. Thus,
the emphasis is not on simply minimizing transportation cost or reducing inventories but,
rather, on taking a systems approach to supply chain management.
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Finally, because supply chain management revolves around efficient integration of


suppliers, manufacturers, warehouses, and stores, it encompasses the firm’s activities at many
levels, from the strategic level through the tactical to the operational level.

Various companies, consultants, and academics have developed a variety of terms and
concepts to stress what they believe are the salient issues in supply chain management.
Although many of these concepts are useful and insightful, for the purposes of this text, we
will use supply chain mk2anagement as the generic name for the set of concepts, approaches,
strategies, and ideas that we are discussing.

Although we will discuss a variety of reasons throughout this text, they can all be
related to some or all of the following observations.

1. Supply chain strategies cannot be determined in isolation. They are directly affected by
another chain that most organizations have, the development chain that includes the set of
activities associated with new product introduction. At the same time, supply chain strategies
also should be aligned with the specific goals of the organization, such as maximizing market
share or increasing profit.

2. It is challenging to design and operate a supply chain so that total system wide costs are
minimized, and system wide service levels are maintained. Indeed, it is frequently difficult to
operate a single facility so that costs are minimized and service level is maintained. The
difficulty increases exponentially when an entire.

In the age of competition, no industry can survive without pondering much about
reducingexpenditures wherever possible. The same is true for health care industry, which
iswitnessing sharp rise in price in almost all its products and services. The alarmingly
highpace of upward movement of cost is making the produce of the industry beyond the
reach ofthe mass. Supply chain in this industry being a significant driver of cost is therefore
grabbingall the attention from industry stakeholders.

This study focuses on discussing the basic nature and components of supply chain
ofhealth care industry with considerable attention on future scopes along with present
trends.The supply chain in this industry is believed to be inherently complex and as a result it
isquite a tough task to recognize any magic button that will help remove the inefficiencies
todrive down costs. As part of the research for this paper we have done extensive studies
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ofliteratures and tried to gain insight on the complexity of health care supply chain
management(SCM).

The current trend shows that the industry struggles to meet on-time delivery.
Themajor drawback remains in the fact that each part of the supply chain works
independently,creating misaligned activities that prevents it from working as a system. We
have alsoanalysed the health care supply chain in Malaysia to have a better understanding of
thecurrent scenario in developing countries. The literature review throws light on issues
likeredesigning of inventory management systems in hospitals, aggregation of suppliers and
theirproducts through electronic catalogues, use of ERP system to address another bottleneck
inthe supply chain, namely: inefficient information flow in the system.

Finally the paper addresses certain new strategies emerging in the sector that
arecontributing towards efficient SCM practices. They are: RFID, Supply
UtilizationManagement, Virtual Centralization of the Supply Chain and Vendor Managed
Inventory.

The RFID helps attaining inventory visibility and accurate counts at every stage of the
supplychain and also helps reducing shrinkage and shipping errors. Supply Utilization
Managementhelps reducing wastages, value mismatch and misuse through standardization
and properspecification. Virtual centralization of the supply chain on the other hand helps
improvinglevel of cooperation in hospitals thereby helping them controlling costs and
improvingservices. How virtual centralization works is explained with the help of an example
of CSC :this is jointly owned and managed by multiple hospitals and healthcare units. CSC
bringstogether geographically dispersed healthcare units together and allows them to work
togetherto attain maximum efficiencies in procurement, contracting and customer service.

Presently hospitals are looking for new sources of competitive advantage and
costcutting measures wherever possible. It is imperative to look into the supply
chainmanagement aspects and identify areas in which they can improve the quality of service
forefficient patient care. Supply Chain Management in healthcare should ensure complete
end-to-end visibility of information among suppliers, manufacturers, distributors and
customers.

The healthcare supply chain involves the flow of many different product types and
theparticipation of several stakeholders. The main purpose of the healthcare supply chain is
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todeliver products in a timely manner, in order to fulfill the needs of providers. Based on
theirfunctions, stakeholders in the healthcare supply chain can be divided into three major
groups:producers, purchasers, and providers. (Figure 1)

Figure 1:

• Producer GOVERMENTS
• Purcasher
INSURACE COMPANIES

REGULATORY AGENCIES
• Provider
• Medical and • Hole saler • hospitals
surgical • Distributer • IDNS
supplies • GPO'S • Physicians
• medical
devices • Clinics
• pharmaceutical • Pharmacies
• Nursing homes

To add to the complexity of the system, there is also the involvement andparticipation
of governmental institutions, regulatory agencies, and insurance companies(Ryan
2005).Primary manufacture involves the creation of the active ingredient contained withinthe
medication. Because of the need to avoid contamination between products, there are
longdowntimes in production to allow for cleaning, leading to batch production (Shah 2004).
Ineffect, this represents mass production. Secondary production sees the active
ingredientconverted into useable products (such as tablets, capsules, etc.) This can potentially
lead to asignificant expansion in the number of product lines, especially once packaging is
taken intoconsideration. Altricher and Caillet (2004) suggest 200 times growth in products
across thisstage in the supply chain. With increasing globalisation in the pharmaceutical
industry, thelocation of manufacturing plants is often influenced by factors such as tax
benefits(Papageorgiou 2001). Indeed, secondary manufacturing may be geographically
separatedfrom primary manufacturing and serve local or regional markets (Shah 2004).

Turning to the distribution of finished products, there are a number of


differentchannels to the market. The dominant intermediary (in terms of volume at least) is
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thewholesaler. In the UK, approximately 80 per cent of volume flows through this channel
(Shah2004). Hospitals and retailers which have large demand requirements receive
shipmentsdirect from the manufacturers distribution centre. Equally, hospitals may leverage
economiesof scale by consolidating their purchasing power through, for example, Group
Purchasing Organisations (Roark 2005).

In terms of the characteristics of these supply chains, Shah (2004) provides


detailedinformation with regards to typical performance levels. There are long lead times,
withproducts taking between 1,000 and 8,000 hours to pass through the whole supply
chain.Coupled with this, inventory levels appear quite high with stock turns taking between
one andeight weeks. This is consistent with the findings of Haavik (2000) who reported that,
in 1994,stock turns in hospital store rooms lasted four to five weeks. Another theme raised by
severalauthors is demand amplification (Corrêa 2004, Shah 2004). Given the number
ofintermediaries within the supply chain, and the presence of batching within
primarymanufacturing, this should perhaps be expected.

The product flow (Figure 2) in the healthcare sector starts with the manufacturer
andends with the final customer at the healthcare provider. Depending on its type, a product
can be directly delivered by the manufacturer to the healthcare provider, or channelled
through adistributor before reaching the healthcare provider. The healthcare supply chain is
frequentlydescribed as highly fragmented and relatively inefficient (Schneller and Smeltzer
2006). Amajor problem with the traditional healthcare supply chain is that each stage of the
supplychain operates independently, leading to misaligned incentives and conflicting goals
thatprevent the supply chain from operating as a system. These conflicting goals, along
withother barriers, have hindered the adoption and implementation of SCM practices.
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Figure 2

DESIGNING AND MANAGING THE SUPPLY CHAIN

The logistics networks areSuppliers, Manufacturers, Customers, Warehouses and distribution


centre:

 Material costs
 Transportation costs
 Manufacturing costs
 Warehousing costs

Inventory costs system is being considered. The process of finding the best system wide
strategy is known as global optimization.

Uncertainty and risk are inherent in every supply chain; customer demand can never be
forecast exactly, travel times will never be certain, and machines and vehicles will break
down. Similarly, recent industry trends, including outsourcing, offshoring, and lean
manufacturing that focus on reducing supply chain costs, significantly increase the level of
risk in the supply chain. Thus, supply chains need to be designed and managed to eliminate as
much uncertainty and risk as possible as well as deal effectively with the uncertainty and risk
that remain.
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THE DEVELOPMENT CHAIN:

The development chain is the set of activities and processes associated with new
product introduction. It includes the product design phase, the associated capabilities and
knowledge that need to be developed internally, sourcing decisions, and production plans.
Specifically, the development chain includes decisions such as product architecture; what to
make internally and what to buy from outside suppliers, that is, make/buy decisions; supplier
selection; early supplier involvement; and strategic partnerships.

The development and supply chains intersect at the production point, as illustrated. It
is clear that the characteristics of and decisions made in the development chain will have an
impact on the supply chain. Similarly, it is intuitively clear that the characteristics of the
supply chain must have an impact on product design strategy and hence on the development
chain.

INTRODUCTION TO SUPPLY CHAIN MANAGEMENT:

Hewlett Packard was one of the first firms to recognize the intersection of the
development and supply chains. A case in point is the inkjet printer introduction, where
decisions about product architecture were made by taking into account not only labour and
material cost, but also total supply chain cost throughout the product life cycle. More
recently, HP has focused on making decisions such as what design activities to outsource and
the corresponding organizational structures needed to manage the outsource design process
by considering the characteristics of both the development and the supply chains.

Unfortunately, in most organizations, different managers are responsible for the


different activities that are part of these chains. Typically, the VP of engineering is
responsible for the development chain, the VP of manufacturing for the production portion of
the chains, and the VP of supply chain or logistics for the fulfilment ofcustomer demand.
Unless carefully addressed, the typical impact of this organizational structure is a
misalignment of product design and supply chain strategies.

To make matters worse, in many organizations, additional chains intersect with both
the development and the supply chains. These may include the reverse logistics chain, that is,
the chain associated with returns of products or components, as well as the spare-parts chain.
In this book, we explore the various characteristics of each of these supply chains in order to
better understand the impact of these on product and supply chain strategies. We illustrate
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how the consideration of these characteristics leads to the development of frameworks to


assist in matching products with strategies.

GLOBAL OPTIMIZATION:

A variety of factors make this a challenging problem:

The supply chain is a complex network of facilities dispersed over a large geography,
and, in many cases, all over the globe. The following example illustrates a network that is
fairly typical of today’s global companies.

DESIGNING AND MANAGING THE SUPPLY CHAIN

National Semiconductor, whose list of competitors includes Motorola Inc. and the
Intel Corporation, is one of the world’s largest manufacturers of analog devices and
subsystems that are used in fax machines, cellular phones, computers, and cars. Currently, the
company has four wafer fabrication facilities, two in the United States and one in Great
Britain, and has test and assembly sites in Malaysia, China, and Singapore. After assembly,
finished products are shipped to hundreds of manufacturing facilities all over the world,
including those of Apple, Canon, Delphi, Ford, IBM,

Hewlett-Packard and Siemens. Since the semiconductor industry is highly


competitive, short lead time specification and the ability to deliver within the committed due
date are critical capabilities. In1994, 95 precent of National Semiconductor’s customers
received their orders within 45 days from the time the order was placed, while the remaining
5 precent received their orders within 90 days.

These tight lead times required the company to involve 12 different airline carriers
using about 20,000 different routes. The difficulty, of course, was that no customer knew in
advance if they were going to be part of the 5 precent of customers who received their order
in 90 days or the 95 precentwho received their order within 45 days.

The enterprise development and supply chain development sources

 Plan/design
 Source
 Supply chain
 Supply Produce Distribute Sell
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 Product architecture
 Make/buy
 Early supplier involvement
 Strategic partnerships
 Supplier selection
 Supply contracts

Different facilities in the supply chain frequently have different, conflicting objectives.
For instance, suppliers typically want manufacturers to commit themselves to purchasing
large quantities in stable volumes with flexible delivery dates. Unfortunately, although most
manufacturers would like to implement long production runs, they need to be flexible to their
customers’ needs and changing demands. Thus, the suppliers’ goals are in direct conflict with
the manufacturerdesire for flexibility. Indeed, since production decisions are typically made
withoutprecise information about customer demand, the ability of manufacturers to match
supply and demand depends largely on their ability to change supply volume as information
about demand arrives. Similarly, the manufacturers’ objective of making large production
batches typically conflicts with the objectives of bothwarehouses and distribution centre to
reduce inventory. To make matters worse, this latter objective of reducing inventory levels
typically implies an increase in transportation costs.

The supply chain is a dynamic system that evolves over time. Indeed, not only do
customer demand and supplier capabilities change over time, but supply chain relationships
also evolve over time. For example, as customers’ power increases, there is increased
pressure placed on manufacturers and suppliers to produce an enormous variety of high-
quality products and, ultimately, to produce customized products.

System variations over time are also an important consideration. Even when demand is
known precisely (e.g., because of contractual agreements), the planning process needs to
account for demand and cost parameters varying over time due to the impact of seasonal
fluctuations, trends, advertising and promotions, competitors’ pricing strategies, and so forth.
These time-varying demand and cost parameters make it difficult to determine the most
effective supply chain strategy, the one that minimizes systemwide costs and conforms to
customer requirements. Of course, global optimization only implies that it is not only
important to optimize across supply chain facilities, but also across processes associated with
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the development and supply chains. That is, it is important to identify processes and strategies
that optimize, or, alternatively, synchronize, both chains simultaneously.

Managing uncertainty and risk:


Global optimization is made even more difficult because supply chains need to be designed
for, and operated in, uncertain environments, thus creating sometimes enormous risks to the
organization. A variety of factors contribute to this:

1. Matching supply and demand is a major challenge:

a. Boeing Aircraft announced a write-down of $2.6 billion in October 1997 due to “raw
material shortages, internal and supplier parts shortages and productivity inefficiencies”.

b. “Second quarter sales at U.S. Surgical Corporation declined 25 precent, resulting in a loss
of $22 million. The sales and earnings shortfall is attributed to larger than anticipated
inventories on the shelves of hospitals”.

c. “EMC Corp. said it missed its revenue guidance of $2.66 billion for the second quarter of
2006 by around $100 million, and said the discrepancy was due to higher than expected
orders for the new DMX-3 systems over the DMX-2,which resulted in an inventory snafu” .

d. “There are so many different ways inventory can enter our system it’s a constant challenge
to keep it under control” [Johnnie Dobbs, Wal-Mart Supply Chain and Logistics Executive].

e. “Intel, the world’s largest chip maker, reported a 38 precent decline in quarterly profit
Wednesday in the face of stiff competition from Advanced Micro Devices and a general
slowdown in the personal computer market that caused inventories to swell” .Obviously, this
difficulty stems from the fact that months before demand is realized, manufacturers have to
commit themselves to specific production levels.

These advance commitments imply huge financial and supply risks.

1. Inventory and back-order levels fluctuate considerably across the supply chain, even when
customer demand for specific products does not vary greatly. To illustrate this issue, consider
which suggests that in a typical supply chain, distributor orders to the factory fluctuate far
more than the underlying retailer demand.
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2. Forecasting doesn’t solve the problem. Indeed, we will argue that the first principle of
forecasting is that “forecasts are always wrong.” Thus, it is impossible to predict the precise
demand for a specific item, even with the most advanced forecasting techniques.

3. Demand is not the only source of uncertainty. Delivery lead times, manufacturing yields,
transportation times, and component availability also can have significant supply chain
impact.

4. Recent trends such as lean manufacturing, outsourcing, and offshoring that focus on cost
reduction increase risks significantly. For example, consider anautomotive manufacturer
whose parts suppliers are in Canada and Mexico. With little uncertainty in transportation and
a stable supply schedule, parts can be delivered to assembly plants “just-in-time” based on
fixed production schedules. However, in the event of an unforeseen disaster, such as the
September 11terrorist attacks, port strikes, or weather-related calamities, adherence to this
type of strategy could result in a shutdown of the production lines due to lack of parts.
Similarly, outsourcing and offshoring imply that the supply chains are more geographically
diverse and, as a result, natural and man-made disasters can have a tremendous impact.

THE EVOLUTION OF SUPPLY CHAIN MANAGEMENT:


In the 1980s, companies discovered new manufacturing technologies and strategies
that allowed them to reduce costs and better compete in different markets. Strategies such as
just-in-time manufacturing, kanban, lean manufacturing, total quality management, and
others became very popular, and vast amounts of resources were invested in implementing
these strategies. In the last few years, however, it has become clear that many companies
have reduced manufacturing costs as much as is practically possible. Many of these
companies are discovering that effective supply chain management is the next step they need
to take in order to increase profit and market share.

Indeed, logistics and supply chain costs play an important role in the U.S economy:
the annual “State of Logistics Report,” which is sponsored by the Council of Supply Chain
Management Professionals, first published in 1989, provides an accounting of the nation’s
total logistics bill and tracks trends in transportation costs, inventory-carrying costs, and total
logistics costs.

U.S. logistics costs were over 12 percentage of GDP in the early 80s, steadily decreasing until
2003.
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INDUSTRY PROFILE

Definition:

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 rules.

HISTORY

Mid-1800s – 1945: From botanicals to the first synthetic drugs

The modern pharmaceutical industry traces its roots to two sources. The first of these
were local apothecaries that expanded from their traditional role distributing botanical drugs
such as morphine and quinine to wholesale manufacture in the mid-1800s. Rational drug
discovery from plants started particularly with the isolation of morphine, analgesic and sleep-
inducing agent from opium, by the German apothecary assistant Friedrich Sertürner who
named the compound after the Greek god of dreams, Morpheus. Multinational corporations
including Merck, Hoffman-La Roche, Burroughs-Welcome (now part of Glaxo Smith Kline),
Abbott Laboratories, Eli Lilly and Upjohn (now part of Pfizer) began as local apothecary
shops in the mid-1800s. By the late 1880s, German dye manufacturers had perfected the
purification of individual organic compounds from coal tar and other mineral sources and had
also established rudimentary methods in organic chemical synthesis.[2] The development of
synthetic chemical methods allowed scientists to systematically vary the structure of
chemical substances, and growth in the emerging science of pharmacology expanded their
ability to evaluate the biological effects of these structural changes.

Epinephrine, norepinephrine, and amphetamine:

By the 1890s, the profound effect of adrenal extracts on many different tissue types
had been discovered, setting off a search both for the mechanism of chemical signalling and
efforts to exploit these observations for the development of new drugs. The blood pressure
raising and vasa constrictive effects of adrenal extracts were of particular interest to surgeons
as homeostatic agents and as treatment for shock, and a number of companies developed
products based on adrenal extracts containing varying purities of the active substance. In
1897, John Abel of Johns Hopkins University identified the active principle as epinephrine,
which he isolated in an impure state as the sulphate salt. Industrial chemist JokichiTakamine
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later developed a method for obtaining epinephrine in a pure state, and licensed the
technology to Parke-Davis. Parke-Davis marketed epinephrine under the trade name
Adrenalin. Injected epinephrine proved to be especially efficacious for the acute treatment of
asthma attacks, and an inhaled version was sold in the United States until 2011 (Primatene
Mist).By 1929 epinephrine had been formulated into an inhaler for use in the treatment of
nasal congestion.

While highly effective, the requirement for injection limited the use of epinephrine
and orally active derivatives were sought. A structurally similar compound, ephedrine,
(actually more similar to norepinephrine,) was identified by Japanese chemists in the Ma
Huang plant and marketed by Eli Lilly as an oral treatment for asthma. Following the work of
Henry Dale and George Barger at Burroughs-Welcome, academic chemist Gordon Alles
synthesized amphetamine and tested it in asthma patients in 1929. The drug proved to have
only modest anti-asthma effects, but produced sensations of exhilaration and palpitations.
Amphetamine was developed by Smith, Kline and French as a nasal decongestant under the
trade name Benzedrine Inhaler. Amphetamine was eventually developed for the treatment of
narcolepsy, post-encephalitic Parkinsonism, and mood elevation in depression and other
psychiatric indications. It received approval as a New and Nonofficial Remedy from the
American Medical Association for these uses in 1937 and remained in common use for
depression until the development of tricyclic antidepressants in the 1960s.

Sources of Pharmaceutical Supply Chain Risks:

According to Christopher (2003), supply chain risk pertains to any threat of


interruption to the well-functioning of supply chain operations. Risk, as stated by Deleris and
Erhum (2005), emanates from lack of knowledge about the nature of events that may disrupt
supply chain operations and its resiliency to disruptions. Holton (2004) described risk as
composed of exposure and uncertainty. Adams (1995) posits that “virtually all the formal
treatments of risk and uncertainty in game theory, operations research, economics and
management science require that the odds be known, that numbers be attachable to the
probabilities and magnitudes of possible outcomes.” Indeed, risk and uncertainty are the
quintessential part and parcel of doing business. Traditionally, the two general sources of risk
drivers discussed in the literature, as posited by Enyindaetal (2009), are the internal and
external risks. Internal risks are risks under the direct control of the organization, including
faulty machine, planning, production, and internal customers. Whereas external risks are risks
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beyond a firm’s control, including demand and supply risks, counterfeits, terrorism,
regulation and legislation, third-party relationship, currency and exchange rate fluctuations.
Because the internal risks are preventable, this review considers some of the important
external risks affecting Ghanaian pharmaceutical supply chain. In agreement with Bernstein
(1996), “the essence of risk management lies in maximizing areas where we have some
control over the outcome while minimizing the areas where we have absolutely no control
over the outcome and the linkage between effect and cause is hidden from rustications
Pharmaceuticals and or active pharmaceutical ingredients (APIs) include the aforementioned
external risks.

Pharmaceutical supply chain risk can manifest from a variety of sources.

In February 2008, the Ghanaian Ministry of Health adopted a five year program under
the Theme “CreatingIn February 2008, the Ghanaian Ministry of Health adopted a five year
k2program under the Theme “CreatingWealth through Health”. The program sets clear goals
and timelines for achievement. For the pharmaceutical sector, the main program focus areas
are access to medicines, improved supply management systems, quality assurance and
rational use. These objectives pointed at issues prevalent in all Sub-Saharan African
countries.

However, the emergence of health insurance as a major financing mechanism for


medicines, according to Seiterand Gyansa-Lutterodt (2009), should put Ghana into a
favourable position compared to other countries to implement the key objectives outlined in
the programme of work 2007-2011.

They also stated that, traditional policy makers such as Ministries of Health in Sub-
Saharan Africa have limited resources and usually focus on service delivery through
government owned or contracted outlets. Limitations in the availability or quality of
government sponsored services drive large parts of the population into buying health services
for cash and outside the regulatory reach of the public administration. In Ghana, Seiter and
Gyansa-Lutterodt(2009) stated the, the introduction of health insurance enabled pooling of
this purchasing power to the extent that has reached critical mass as a powerful driver of
change in the system. About half of the population has an insurance card, and about 40% of
the funds paid out by health insurance are for pharmaceuticals. This explains why secure
access to affordable, safe and effective drugs for their membership is high on the political
agenda for those who represent health insurance in Ghana. They also indicated that compared
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to a ministerial bureaucracy with limited enforcement capacity, a health insurance fund can
use its purchasing power to influence providers, which usually is more effective than
regulation and public sector management alone.

In the opinion of Seiter and Gyansa-Lutterodt (2009), the impact of the modified
power balance can already be felt in recent discussions between Ghana Health Service (GHS)
and other units of the Ministry of Health (MOH) regarding a liberalization of pharmaceutical
supply guidelines currently requiring GHS facilities to procure through the Central Medical
Stores – Regional Medical Stores (CMS-RMS) system (although exceptions are possible and
widely used already). Influence of National Health Insurance Authority (NHIA) policy
actions can also be felt in drug pricing decisions and an increasing awareness of drug quality
issues reflected in intensified monitoring activities by the Food and Drugs Board. In the
longer term, they identified that, there is potential for Ghana to “graduate” from the state of
chronic dysfunction of a publicly dominated pharmaceutical sector typical for many low-
income countries and reach a state in which contracting between health insurance and public
and/or private providers aligns incentives and ensures supply of quality essential drugs to
health care providers for all insured patients. The main role of the public sector, as they put it,
then would be to provide guidance in the form of a comprehensive policy framework and
ensure an adequate level of regulatory oversight.

COMPANY PROFILE:

Eurolife Acquires Baxter FFS in India

SandeepToshniwal, CEO, Eurolife, says, “With this acquisition Eurolife now


becomes one of India’s largest players in the Infusions business”

Thanks to our world-class quality and competitive rates. Eurolife’s products have
found immediate acceptance wherever they have been marketed. Eurolife Healthcare has
undergone a remarkable evolution in 2017 as we have acquired the I.V. Fluid business of
Baxter in India along with its manufacturing plants at Aurangabad and Chennai.

It offers quality products from state of art manufacturing plants, continuing the 100%
bench-marking quality assurance for last 27 years in the service of healthcare business and
.

working diligently to improvise and strengthen the No. 1 position in quality and volumes in
the I.V. fluid business.

He further adds, “Eurolife healthcare will also be the company with the entire basket
of products and SKU’s in IkV’s so that no doctor, hospitals or clinics will have to look at
combining quantities from different companies. The company manufactures a 5 ml / 10 ml
Sterilized Water for Injection, 50 ml, 100 ml, 250 ml, 300 ml, 350 ml, 400 ml, 500 ml, 1000
ml and 3000 ml Infusions. It also has all possible variants like nipple top, Eurotop amongst
others.”

EUROLIFE HEALTHCARE QUALITY OBJECTIVE:

Euro life has put into place a comprehensives quality policy which cover raw
materials all stage of product manufacturing as well as packing, storage and complies the
most exacting ICH standards.

Stringent quality control and continuous quality check are a part of every batch and
process at eurolife, in order to ensure the highest process integrity the company strives to
consistency improve its facilities its internal policy and procedures in order to maintain
quality standard that meet and exceed customers’expectations.

The in-house quality control laboratory staff by qualified and experienced team.

Its well equipped with latest analytical instruments as well as sophisticated


microbiological testing facilities to ensure the highest level of pharmaceutical quality, and
purity formulation accuracy.

All of those quality of efforts a part of euro life’s commitment that ensure that every
product that comes of it is production line meets the most of exacting ICH standards.

FUTURE OF EUROLIFE:

Exciting expansion plans:

The company plans to build its existing strength by creating stronger domestic network
and ramping up exports to CIS and Latin American countries.

More future plans include entering regulated markets like the US and UK, as well as an
enhanced trust on R&D and contract research.
.

EUROLIFE’S VISSION:

To be recognized as reliable and quality conscious supplier of premium


pharmaceutical products, at the most of affordable prices to benefit the large number of
customer.

EUROLIFE’S MISSION:

Eurolife’s is dedicated to providing range of high quality pharmaceutical products, to


address a spectrum of medical needs to reach the maximum number of end user world-wide.

A DYNAMIC AND TALENTED TEAM

Since any company is only as good as it is people the Eurolife team comprises of high
qualified professionals complimented by experienced pharmaceutical representatives.

Utmost care is taken to hire the best possible talent in terms of both experience skill to
fit the organization culture.

To sharpen team skills and constantly improve productivity, continuous training


programs are held within the company for all levels of employeesfor specific training-on the
latest developments in FFS technology, manufacturing techniques,QA procedures, and much
more.

This concentrated focus ultimately translates into better product quality,better service
and better pricing for eurolife’s customers.

OBJECTIVES OF THE STUDY:

1. To Study the supply chain management process in Euro Life Health Care Pvt Ltd.
2. To study the methods followed for inventory stocks available in warehouses
3. To analyse the risk and Problems in Supply Chain Management at Euro Life Health
Care Pvt Ltd.

SCOPE OF THE STUDY:

The study conducted to improve the company more productivity and then company
creates that strategy plan for company development and it also gives create good image for
public and market. Because the company provided medicine product for public sectors and
.

more medicines provided to new clients. Safety to pay for goods and also labour safety is
more important for the company.

LIMITATIONS OF THE STUDY

 Time periods was limited to 45 days


 Company refused to provide some major details related to the project
 The study is limited to conduct in Eurolife healthcare
 The sample was limited only to some of the employees from the department.
.

CHAPTER-2
REVIEW OF LITERATURE

Literature on Supply Chain Management Practices in the Healthcare Sector

The following literature reviews portray the current status of the healthcare sector
relative to barriers and practices for implementation of SCM principles.

Heinbuch (1995) described an approach to meeting the challenge of healthcare cost


reduction through the hospital material management function. The work highlights the value
of taking a proactive stance to meet the challenge of transferring technology across industry
sectors.
Alverson (2003) discussed the importance of disciplined inventory management for
hospitals, and suggested serious consequences of traditional hospital purchasing including
lack of inventory control, missed contract compliance, excess inventory levels, frequent
stock-outs and costly emergency deliveries, workflow interruptions, expensive rework, and
increased health system labour requirements.
The literature on information technology (IT) provides some solutions to material
management in the healthcare sector. Burns (2002) discussed aggregation of suppliers and
their products through electronic catalogues, visibility of orders and materials, and efficiency
in procurement.
Schneller and Smeltzer (2006) suggested that e-procurement systems can help
tosignificantly reduce purchasing costs through the consolidation of supplier networks and
creation of supplier partnerships. They also suggested that transaction and administration
costs can be reduced through the use of ERP systems, which provide an automated and
paperless format for information to flow throughout an organization.
Current state of SCM in Healthcare industry
Within the healthcare industry, the supply chain associated with pharmaceutical
products is critical in ensuring a high standard of care for patients and providing adequate
supplies ofmedication for pharmacies. In terms of cost, it is estimated that supply accounts
for 25-30 precent of operational costs for hospitals (Roark 2005). Therefore, it is essential
that this is managed effectively to ensure both service and cost objectives are met. Various
issues existing at the distribution element, particularly from the wholesaler to the hospital are
as follows:
.

Product life cycle: Once the active ingredient is patented, it may take eight years to develop
the product into something that can be marketed (Papa Georgiou 2001). Once the patent
expires, alternative products may enter the market, or companies may reduce the product
price (Lauer 2004). New technology is shortening life cycles creating new pressures on the
distribution channels.

Profit margins: Despite pharmaceutical products having a high value per unit, operating
margins are small in the wholesaler sector particularly. One cause of this is the control over
pricing held by hospitals, retailers and manufacturers (Lauer 2004).

Forecasting:It is difficult to predict the exact demand for medicines. One of the issues is the
availability of accurate data on consumption. However, the lack of standard nomenclature
forhealthcare products, plus the preferences of clinicians creates further uncertainties (Lauer
2004).

Lack of supply chain education: Awareness of the concept of supply chain management,
particularly within hospitals, is low (Lauer 2004). Therefore, managers are not properly
equipped to control the supply of medication.

Given this context, a number of initiatives have been undertaken over recent
yearswith a view to reducing supply chain costs and improving customer service. Initial
improvements have been based around implementing just-in-time (JIT) approaches
(Kowalski 1986). Subsequently, this has been developed further with the introduction of
stockless inventory systems (Wilson 1992). The JIT and stockless approach can reduce
inventory holding costs in the organization, while maintaining service levels (Lynch 1991).
More recently, it has been suggested that the stockless system should only be used for high
volume products, with a more traditional approach for low volume medical supplies (Rivard-
Royer 2002). However, there is a requirement for improved information and
communicationtechnology (ICT) systems to support this, along with automated processing of
orders and suppliers (mainly wholesalers) close to the hospital to enable rapid replenishment.
Both JIT and stockless approaches represent “pull” type inventory management systems.

Literature and contemporary studies on supply chain management and logistics


management in Fertilizer Marketing Systems have been limited.
.

The Industry has been active only during the past two decades. The major policies and
operations had been in the area of developing adequate production capacity as a part of
import substitution and to generate base level demand for fertilizer products and improved
cultivation practices.
The supply chain management and logistics management in Fertilizer Marketing
Systems had been largely confined to distribution activities i.e. outbound logistics as the part
of inbound logistics is limited. Fertilizer marketing had been more on the lines of Public
Distribution System (PDS) and had little consumer orientation. The literatures available are
therefore not on supply chain management and logistics management in Fertilizer Marketing
Systems. In the recent times, Academicians, Researchers and Management executives are
focusing attention on the several aspects of the industry.
An elaborate review of the literature has been made with a view to analyse the nature
and scope of several studies pioneered so far in the fields of fertilizers supply chain
management and logistics management. The main objective of this review is to evaluate the
current level of knowledge and to focus on the objectives of the present study i.e. a shift from
known to unknown.
The thoughts and concepts of Academicians at Universities, including
Fertilizer Marketing executives, Professionals at the Fertilizer Association of India (FAI)
New-Delhi, Agricultural University, Management Schools (IIMs) The Contents in their
publications, have been critically reviewed. This overview brings out some of the highlights
of the literature.
Relevant books, Newspapers, Magazines, Journals seminar reports. Case study
materials containing key issues on several aspects of supply chain management and logistics
management in Fertilizer Marketing Systems such as primary and supportive activities of
supply chain management and logistics management in Fertilizer Marketing System,
distribution systems, inventory management, MIS, have been made. The highlights of the
concepts discussed, the suggestions and recommendations made in the several literatures
pertaining to supply chain management and logistics management in Fertilizer Marketing
System etc. are summarized.
The arrangement of the reviews / summaries are not in chronological order but placed
according to the international and Indian perspectives.
.

2.1 REVIEW OF LITERATURE ON SUPPLY CHAIN MANAGEMENT:


INTERNATIONAL PERSPECTIVE

The supply chain, also known as value chain is a concept from business management
that was first described and popularized by Michael Porter in his book, Competitive
Advantage: Creating and Sustaining Superior Performance.Porter, M. E. (1985).

The definitions provided by various authors vary according to their area of focus and
the industry they are trying to analyse. What can be seen from the bulk 5 ‘Competitive
Advantage: Creating and Sustaining Superior Performance. Porter, M. E. (1985)’ of the
literature on supply chain management in the area of particularly agricultural products?
A broader definition is given by Raphael Kaplinsky and Mike Morris (2000). Which
defines the value chainas the full range of activities which are required to bring a product or
service from conception, through the different phases of production (involving a combination
of physical transformation and the input of various producer services), delivery to final
consumers, and final disposal after use? The definition recognizes the flow of services as well
as products in value chains.

According to a USAID brief (2008)7 The premise underlying both value chain and
cluster approaches is that individual firms often face sector-level constraints that they cannot
address alone. Therefore, any effort to increase competitiveness must do more than support
individual firms, since inter-firm cooperation is important to achieving this goal. These two
approaches have common intellectual roots in Harvard’s Michael Porter, who played a key
role in developing both theories.

The differences betwek8en the approaches may be subtle. The value chainapproach
considers a broad market system and the development of products/services from input
suppliers to end market buyers. Essentially, the value chain focuses on the flow of a
developmental process. It differs from a supply chain in its emphasis on creating value in
each segment of the chain (2008).

Supply Chain Management is a network of facilities that produce raw materials,


transform them into intermediate goods and then final products, and deliver the products to
customers through a distribution system.
.

It spans procurement, manufacturing and distribution (Lee & Billington 1995) the
basic objective of supply chain management is to “optimize performance of the chain to add
as much value as possible for the least cost possible”. In other words, it aims to link all the
supply chain agents to jointly cooperate within the firm as a way to maximize productivity in
the supply chain and deliver the most benefits to all related parties (Finch 2006).

Adoption of Supply chain management practices in industries has steadily increased


since the 1980s. A number of definitions are proposed and the concept is discussed from
many perspectives. However Cousins et al. (2006); Sachan and Datta (2005); Storey et al.
(2006) provided excellent review on supply chain management literature. These papers define
the concept, principals, nature, and development of SCM and indicate that there is an intense
research being conducted around the world in this field they critically assessed developments
in the theory and practice of supply management.

SCM has been interpreted by various researchers. Based on the relatively recent
development of the supply chain literature, it is not surprising that there has been much
debate as to a specific SCM definition. Ganeshan and Harrison(1995) has defined SCM as a
network of facilities and distribution options that performs the functions of procurement of
materials, transformation of these materials into intermediate and finished products, and the
distribution of these finished products to customers. Lee & Corey (1995)stated that SCM
consists of the integration activities taking place among a network of facilities that procure
raw material, transform them into intermediate goods and then final products, & deliver
products to customers through a distribution system. Christopher (1998) defined the supply
chain as the network of organizations that are involved, through upstream and downstream
linkages, in the different processes and activities that produce value in the form of products
and services in the hands of the ultimate customer.

SCM is the strategic and systematic coordination of the traditional business functions
and the tactics across these business functions within a particular firm and across businesses
within a supply chain, for the purposes of improving the long-term performance of the
individual companies and the supply chain as a whole"(Mentzeretal.2001). Now from
author’s point of view the definition of supply chain and supply chain management can be
depicted as “supply chain is the stream of processes of moving goods from the customer
order through the raw materials stage, supply, production, and distribution of products to the
customer. All firms have supply chains of varying degrees, depending upon the size of the
.

organization and the type of product manufactured. These networks obtain supplies and
components, change these materials into finished products and then distribute them to the
customer. Managing the chain of events in this process is what is known as supply chain
management. Effective management must take into account coordinating all the different
pieces of this chain as quickly as possible without losing any of the quality or customer
satisfaction while still keeping costs down”.

Numerous articles dealing with the theory and practice of SCM have been published
over the reviewed period of last 18years, but the topic is still under considerable development
and debate. Richard Lamming (1996) has given a general review on lean supply chain in
which Lean supply has been characterized as “beyond partnership”. Lean supply is the
system of purchasing and supply chain management required to underpin lean production. .
Ben Daa et al. (2008) explored the topic in a particular. The industrial district (ID), that
constitutes a specific production model where complex SC networks can be identified. SC
cooperation monteay take on several forms in IDs and may produce several benefits (e.g.
Upgrading quality and reducing costs). Vaart and Pieter(2003) drawn conclusions on the need
for an inter-disciplinary approach, combining the technical and relational aspects from the
respective fields of system dynamics and collaboration in order to deliver superior order
replenishment performance. Gunasekaran and Ngai (2005) indicated that E-Business,
product, and service-quality, all have a significant direct effect on customer behavioral
intentions to purchase again. Balakrishnan and Cheng (2005) reviewed and update the
methodology based on spreadsheet that provided enhanced solutions in complex
environments with multiple products and bottleneck situations. Nagarajan and Sosic (2004)
reviewed literature dealing with buyer vendor coordination models that have used quantity
discount as coordination mechanism under deterministic environment and classified the
various models.

THE CONCEPT OF SUPPLYCHAIN MANAGEMENT

Supply chain as postulated by Duby and Kumar (2007), “is the network of
organisations that are involved, through upstream and downstream linkages, in the different
process and activities that produce value in the form of products and services delivered to the
ultimate consumer”. According to Chopra and Miendel (2005), supply chain management “is
the management of a network of retailers, distributors, transporters, storage facilities and
suppliers that participate in the sale, delivery and production of a particular product”. hand
.

field and Nichols (1999) defined pharmaceutical supply chain as “the integration of all
activities associated with the flow of and transformation of raw materials through to the end-
user, as well as associated information flows, through improved supply chain relationships to
achieve a sustainable competitive advantage”.

Dubey and Kumar (2007) indicated that effective supply chain management can
impact and improve upon virtually all business processes, such as data accuracy, operational
complexity reduction, supplier selection, purchasing, warehousing and distribution. Other
benefits include:

1. Quicker customer response and fulfilment rates

2. Shorter lead timek

3. Greater productivity and lower costs

4. Reduced inventory supply throughout the chain

5. Improved forecasting precision

6. Fewer suppliers and shorter planning cycles

The pharmaceutical industry, as pointed out by Kaye (2010), is a $500 billion global
business that requires a tight, safe, and efficient supply chain. Modern pharmaceutical
products rely on ingredients and materials from across the globe. The line between a
company’s internal operations and its external environment, in the opinion of Graves (2009),
are becoming increasingly blurred. He stated that no area exemplifies this better than the
supply chain where pharmaceutical manufacturers have to coordinate their own activities
with those of partner organisations, healthcare providers and patients. He also noted that
without a clear understanding of the context surrounding the process of delivering a drug to
market, the chain can become a tangled web.

Commenting on the challenges of supply chain management, hand field and


Dhinagaravel (2005) stated that, multiple events occurring on a daily basis are shaping the
competitive and regulatory environment in which channel members operate their business.
They pointed out that, regulators are demanding that wholesalers and manufacturers reveal
pricing and are challenging the cost of pharmaceutical distribution. Market channels such as
.

mail order, direct shipping and website pharmacies are also important competitive channels
to consider.

Another major driver of change, according to Handfield and Dhinagaravel (2005), is


the increasing share of generics that are coming into the market, as some largest branded
drugs go off patent. They observed that although the process of manufacturing and
distributing branded and generic drugs is quite similar, the design of the distribution channel
might be substantially different. They also noted that many generic companies are exploring
relationships with Indian and Chinese manufacturers to market their products. Given these
changes, it is little wonder manufacturers, wholesalers, pharmacies, hospitals, and other
participants are bewildered with the array of different competitive challenges that face them.
They indicated that the unfortunate result is, poor perception has been created at different
points in the supply and distribution chain; and channel participants have failed to
communicate and work together to resolve the problems caused by this poor perception.
Svantesson (2009) has stated that pharmaceuticals, being high value goods, demand a safe
process at all hubs in the chain, and security measurements must be harmonized and
rigorously checked across the operating lanes with its sub-warehouses and on/off loading
places. He further stated that the importance of utilizing as few on/off loading places and
changes of transport mode is one of the challenges for a time effective and secure solution;
this at a minimized cost level.

According to Svantesson (2009), the market demands global solutions and customers
are requesting the ability to order correct quantities and lower inventory levels. This situation
he observed, brings a change to the order profile; with orders becoming smaller and
production changing accordingly.

This is a challenge to the distribution of pharmaceuticals and consolidation


possibilities that can meet with the lead time demand to the end customer are highly valuable.
Svantesson (2009) noted that a change of routine in the supply chain can have dramatic
effects if not properly implemented at all levels. With clear communication, the cost of
change reduces dramatically. Global harmonisation enhances the possibility of maximising
effects in a supply chain.

The goals of the pharmaceutical supply chain, as indicated by Chopra and Miendel
(2005), obviously emphasize regulatory compliance and safety of products, but also include
leveraging information to be more responsive to the needs of consumers. They noted that, the
.

unique nature of the supply chain for pharmaceuticals makes managing complex information
for supply chain effectiveness challenging, but clearly the rewards for doing so are
significant. They also indicated that, companies that excel in supply chain operations perform
better in almost every financial measure of success. Supply chain excellence that improves
demand-forecast accuracy leads to 5% higher profit margins, 15% less inventory, up to 17%
stronger “perfect order” ratings, and 35% shorter cash-to-cash cycle times (VeriSign Inc.,
2006). According to Chopra and Miendel (2005), many of these findings come from the
Consumer Products (CP) industry, where supply chain excellence means tightly aligning
operations with consumer demand to become “demand driven”.

Dubey and Kumar (2007) observed that, the shift to a demand-driven focus has been
taking place within the CPindustry for years. While perhaps leading the way in implementing
demand-driven processes, the CP industry is not alone in this interest or intent. They noted
that leading pharmaceutical manufacturers also recognize thevalue of adopting demand-
driven supply chain practices and are benchmarking their organizations against
CPmanufacturers, and finding that their industry is generally behind the pace. They also
indicated that thepharmaceutical industry is hindered by silos of information and a general
lack of timely and reliable data as a result of historical business models and trading practices.

In the perception of Chopra and Miendel(2005), to robustly and reliably enhance


patient safety and to become more demand driven, the pharmaceutical supply chain needs a
ubiquitous technology framework that includes:

1. Item-level data management;

2. Standards for available data and how it will be accessed and maintained;

3. Data sharing infrastructure to accommodate cost efficient management and retrieval of


data;

4. Reliable trust environment to determine who can access information, if information


provided can be certified as authentic, and what can be done with information provided or
accessed.

Item-Level Data Management Most enterprises in the pharmaceutical supply chain, as


noted by Dubey and Kumar (2005), have the ability to manage integrated business
information at a transactional level (orders, shipments, payments, etc.), which provides
visibility into operational and financial events. They noted that, item-level data can extend
.

this visibility to provide rich insight into the physical movement of particular products
involved in these transactions and also enhance visibility of end-user demand, contract
compliance, and reverse logistics. Achieving this level of visibility, as indicated by
DubeyandKumar (2005), requires unique identifiers in product labels or packaging.

They further stated that, technologies such as barcodes enable packages to carry a
unique identifier, and when coupled with an infrastructure of readers, can generate data about
the events related to products. Commonly, this data would be stored in an event repository;
either a single central item event repository or a network of local event repositories across
geographies or business units within an enterprise.

The Need of Standards:

In the opinion of Chopra and Miendel (2005), while item-level data management
related to events within theenterprise may provide someincremental value, the potential for
revolutionary value comes from the ability to link item-level data to events and observations
outside the enterprise. In order to leverage item-level data across enterprises, standards are
needed to ensure interoperability.

Data Sharing Infrastructure

According to DubeyandKumar (2007), what is clear from early initiatives in item-


level data sharing is that new types of data will be generated at unprecedented scale and will
need to be exchanged in order to achieve

Measurable benefits across the supply chain. Conventional systems for business-to-
business communications, as Observed by Dubey and Kumar (2005), were not designed to
manage this volume of data, and therefore will need to be augmented for item-level data
management.

System architecture, as observed by ChopraandMiendel (2005), that allows owners


of products to “pull” Information about item level events and observations without costly
forwarding and storage of large data sets would create significant cost savings to all players
in the supply chain. This architecture requires open network Services to which participants
can publish item observation information, and then subscribe to certain levels of information
access. This infrastructure, they indicated, is not a “database in the sky” but rather a directory
.

Infrastructure that establishes linkage between item-level event repositories throughout the
supply chain.

In the opinion of Chopra and Miendel (2005),, when data sharing needs to occur
between multiple points and at multiple levels or tiers, this infrastructure will locate and
identify event data, authorize and certify the event data and monitor and control the
dissemination of event data based on the desires of the data’s owner.

Trust Environment:

Chopra and Miendel (2005) have stated that, information technology professionals within
the pharmaceutical industry are likely to challenge the notion of exposing data to anyone
beyond their immediate trading partners. Similarly, companies accustomed to selling
transactional data might be concerned about the impact of these data sharing infrastructures
on existing business models. Implementing change is never easy, as earlier stated. They noted
that, vital to the success of any standardized platform for information sharing within any
industry is the inherent trust in the system to protect proprietary and valuable information
from misuse or unauthorized access.

Thus, trust management (the process of maintaining user authentication, access


control and data protection) is probably the most significant challenge to network-based data
sharing in the pharmaceutical supply chain.

An enterprise’s own item level data management infrastructure (tags and identifiers,
devices, and item event repository) are protected within its umbrella of security controls,
procedures and policies, according to Dubey and Kumar (2007). Each stakeholder within the
supply chain needs a reliable, standards-based system to manage information that can be
accessed, how that information can be used and to certify authenticity of information.

Enterprises, they noted, define the level of authorization and certification necessary
for other stakeholders to access information in their repositories and to update or use the
information. They further stated that, all parties in the supply chain will be able to define
what information they provide to whom and under what terms the information can be used
within the context of the unique trading relationship.

The increasing number of incidents involving raw materials supplied to the


pharmaceutical industry, in the opinion of Frankcom (2009), has put the regulatory spotlight
.

firmly on the issue of managing suppliers. Regulatory bodies, he noted, such as the Food and
Drugs Authority (FDA) have themselves come under congressional pressure due to
deaths/illness caused by raw materials.

Powder issues of 2008 are examples which have increased public concern. The industry and
regulatory bodies are now looking for systematic improvements in managing supply chains
and suppliers. According to Kaye (2010), at every stage of the supply chain, shippers must be
intimately familiar with the customs and regulations of every country through which freight
will pass. He indicated that, they have to observe any quarantine or inspection requirements
in addition to understanding the associated service parameters and costs.

Kaye (2010) has observed that lack of understanding about the freight marketplace can delay
or prohibit the importation of vendor shipments and—more likely—add unanticipated and
unnecessary customs costs and possible exam fees. Also, a pharmaceutical company can
incur unanticipated freight costs or surcharges as a result of improper or inefficient routing of
cargo. All of these problems must be designed out of the supply chain before it can work
properly. Since time-sensitive ingredients are often sent by air, as observed by Frankcom
(2009), the regulatory logistics challenges that air cargo shippers face at a time when clients
are already stressed owing to recession-reduced demand and high energy costs must be
considered.

While the pharmaceutical industry can learn many lessons from the automotive and
electronics sectors about managing risk, as observed by Frankcom (2009), there are
characteristics unique to the industry that make implementing supplier quality management
challenging with regard to risk management. In this study the term pharmaceuticals is used to
embrace both the traditional pharmaceuticals as well as the biotechnology sector.

As pointed out by Frankcom (2009), all industries face the issue of multiple
stakeholders. The pharmaceutical industry, according to Frankcom (2009), has five primary
groups of stakeholders – Research and Development (R&D), Operations, Procurement,
Corporate Compliance and Risk Management. He observed that, their interactions and the
inherent risks are amplified by the long development cycle of a new drug (typically 10 years
or longer), and the long period of commercialization thereafter (up to 20 years or more).
During this extended lifecycle, the influences of various stakeholders and suppliers change.
This, he further pointed out, takes place in a highly regulated environment; whereas product
recalls and regulatory actions can severely impact the shareholder value.
.

In the opinion of Enyindaetal(2009), no modern supply chain is immune to both predictable


and unpredictable risks. Because modern pharmaceutical supply chains are more than ever
exposed to risks, it behoves on the global pharmaceutical industry to implement strategic risk
management. They stated that, to prosper and flourish, it is imperative for the Ghanaian
pharmaceutical industry to assess risks and develop comprehensive risk management
strategies. One of the crucial factors of effective strategic risk management, according to
Enyindaetal (2009), is risk identification and analysis. When risks are identified, they noted,
firms can analyse them in order to understand their impact on business objectives. Thus, the
Ghanaian pharmaceutical industry should have a methodology for identifying and evaluating
the risks it faces and a process for generating intervention plans to mitigate the risks to an
acceptable level.

Again, Enyindaetal (2009) identified the need for companies to achieve a sustainable
competitive advantage by moving supply chain risk management issues up the corporate
agenda. Although supply chain risk management, in the opinion of Enyinda (2008), is an
important discussion in the academic and practitioner arenas, there is little or no research that
has examined risks within the Ghanaian pharmaceutical supply chain. Indeed, “the link
between risk and reward has never been more important than it is now in the pharmaceutical
industry as with the challenges of delivering profitable, new solutions for better healthcare in
the global marketplace”.

Challenges and Constraints in the Ghanaian Pharmaceutical Industry From the


publication posted by the United Nations Industrial Development Organization (UNIDO)
(2010), the previous decade witnessed significant increases in the supply of life-saving
essential medicines in developing countries. Notwithstanding this development, UNIDO
(2010) recognised that, the gap between the drugs needed and those available remained
profound. This gap, however, is most apparent with regard to three of the most significant
pandemic diseases — HIV/AIDS, malaria and tuberculosis. UNIDO (2010), also identified at
the same time that insufficient access to quality assured essential drugs to treat other diseases
remained a major burden for developing and Least Developed Countries (LDCs).

In recent years, the potential role that pharmaceutical manufacturers in the developing
world, in the opinion ofUNIDO (2010), could play in a means of easing the access-to-drugs
challenge has received renewed andincreasingattention, with particular emphasis on Africa.
The local production of medicines has for instance been identified as an important
.

development objective by the African Union (AU) through its 2007 Pharmaceutical
Manufacturing Plan. In addition, the domestic pharmaceutical industry has also been
earmarked as a priority sector in a number of countries by UNIDO (2010), including
Botswana, Ghana, Kenya and United Republic of Tanzania.

According to Harper and Gyansa-Lutterodt (2009), although Ghana possesses a


well established and developing pharmaceutical manufacturing sector, its pharmaceutical
market encompasses roughly 30% locally produced and 70% imported products from India
and China. The Ghanaian pharmaceutical industry, they pointed, is faced with the critical
challenge of surviving and striving in today’s environment which is laden with uncertainty
and risks.

To reduce reliance on imported pharmaceuticals, in the opinion of Enyinda et al


(2009), that are draining foreign exchange resources, the Ghanaian Pharmaceutical industry is
grappling with how to improve its capacity. For example, industry commentators suggest that
out of 3,000 drugs registered by the Food and Drugs Board (FDB) only 900 are produced
locally.

According to Mahama (2007), one of the remedies to importation of drugs is to


source raw materials locally in order to contain cost of production and improve the
competitiveness of the Ghanaian pharmaceutical manufacturing industry. The growth and
capacity of pharmaceutical industry production is notably marginal, hampered by
government’s free market policy, and absence of tax exemptions for raw materials that
severely impacts production and competition (Republic of Ghana, 2004). Ghanaian
Pharmaceutical industry, in the opinion of Harper and Gyansa-Lutterodt (2009), is confronted
with daunting challenges for its future development and growth. A major challenge that is
confronting it is abject under employment of manufacturing capacity, often greater than 50%.
They also stated some other major challenges facing the development of the pharmaceutical
industry in Ghana encompasses are:

1. A chaotic and unregulated pharmaceutical distribution chain that leads to high prices and
compromising of pharmaceutical chain security;

2. A focus of local production on over the counter product manufacturing;

3. Inability to produce essential medicines that meet the standards for international tenders;
.

4. Relatively high manufacturing costs for locally manufactured pharmaceutical products as


compared to imports from Asia;

5. Lack of or absence of an enabling environment;

6. Difficult access to cost-effective investment;

7. Limited focus and support for pharmaceutical research and development, when clear
opportunities exist;

8. Weaknesses in implementation of intellectual property right (IPR) issues related to trade


aspects of intellectual property rights (TRIPS) flexibilities and inefficiencies in the utilization
of in-licensing;

9. Unmet professional human resource development/capacity building needs;

10. Poor perceptions of sub-region produced medicinal products;

11. He growing threat of counterfeit and diverted medicines from Asia;

12. Local inaction and in-coordination leading to increasing reliance on imported medicines
from Asia and other parts of Africa; and

13. Inadequate and in-coordinated sub-region pharmaceutical regulatory framework. Sources


of Pharmaceutical Supply Chain Risks

According to Christopher (2003), supply chain risk pertains to any threat of


interruption to the well functioningof supply chain operations. Risk, as stated by Deleris and
Erhum (2005), emanates from lack of knowledge about the nature of events that may disrupt
supply chain operations and its resiliency to disruptions. Holton (2004) described risk as
composed of exposure and uncertainty. Adams (1995) posits that “virtually all the formal
treatments of risk and uncertainty in game theory, operations research, economics and
management science require that the odds be known, that numbers be attachable to the
probabilities and magnitudes of possible outcomes.” Indeed, risk and uncertainty are the
quintessential part and parcel of doing business.

Traditionally, the two general sources of risk drivers discussed in the literature, as
posited by Enyinda et al (2009), are the internal and external risks. Internal risks are risks
under the direct control of the organization, including faulty machine, planning, production,
.

and internal customers. Whereas external risks are risks beyonda firm’s control, including
demand and supply risks, counterfeits, terrorism, regulation and legislation, thirdparty
relationship, currency and exchange rate fluctuations. Because the internal risks are
preventable, this review considers some of the important external risks affecting Ghanaian
pharmaceutical supply chain. In agreement with Bernstein (1996), “the essence of risk
management lies in maximizing areas where we have some control over the outcome while
minimizing the areas where we have absolutely no control over the outcome and the linkage
between effect and cause is hidden from us.”

Pharmaceuticals and or active pharmaceutical ingredients (APIs) include the


aforementioned external risks. Pharmaceutical supply chain risk can manifest from a variety
of sources.

In February 2008, the Ghanaian Ministry of Health adopted a five year program under
the Theme “Creating Wealth Through Health”. The program sets clear goals and timelines for
achievement. For the pharmaceutical sector, the main program focus areas are access to
medicines, improved supply management systems, quality assurance and rational use. These
objectives pointed at issues prevalent in all Sub-Saharan African countries.

However, the emergence of health insurance as a major financing mechanism for


medicines, according to Seiterand Gyansa-Lutterodt (2009), should put Ghana into a
favourable position compared to other countries to implement the key objectives outlined in
the programme of work 2007-2011.

They also stated that, traditional policy makers such as Ministries of Health in Sub-
Saharan Africa have limited resources and usually focus on service delivery through
government owned or contracted outlets. Limitations in the availability or quality of
government sponsored services drive large parts of the population into buying health services
for cash and outside the regulatory reach of the public administration. In Ghana, Seiter and
Gyansa- Lutterodt (2009) stated the, the introduction of health insurance enabled pooling of
this purchasing power to the extent that has reached critical mass as a powerful driver of
change in the system. About half of the population has an insurance card, and about 40% of
the funds paid out by health insurance are for pharmaceuticals.
.

This explains why secure access to affordable, safe and effective drugs for their
membership is high on the political agenda for those who represent health insurance in
Ghana. They also indicated that compared to a ministerial bureaucracy with limited
enforcement capacity, a health insurance fund can use its purchasing power to influence
providers, which usually is more effective than regulation and public sector management
alone.

In the opinion of Seiter and Gyansa-Lutterodt(2009), the impact of the modified


power balance can already be felt in recent discussions between Ghana Health Service (GHS)
and other units of the Ministry of Health (MOH) regarding a liberalization of pharmaceutical
supply guidelines currently requiring GHS facilities to procure through the Central Medical
Stores – Regional Medical Stores (CMS-RMS) system (although exceptions are possible and
widely used already). Influence of National Health Insurance Authority (NHIA) policy
actions can also be felt in drug pricing decisions and an increasing awareness of drug quality
issues reflected in intensified monitoring activities by the Food and Drugs Board. In the
longer term, they identified that, there is potential for Ghana to “graduate” from the state of
chronic dysfunction of a publicly dominated pharmaceutical sector typical for many low-
income countries and reach a state in which contracting between health insurance and public
and/or private providers aligns incentives and ensures supply of quality essential drugs to
health care providers for all insured patients. The main role of the public sector, as they put it,
then would be to provide guidance in the form of a comprehensive policy framework and
ensure an adequate level of regulatory oversight.

Supply chain process

Healthcare supply chain in a developing country is analysed from data available in


literature. The process referred to below details supply chain management practices in
healthcare industry in Malaysia. We have used Malaysia as a reference to study the health
care supply chain practices followed in a developing country. The major issues faced are
analysed and we have proposed various supply chain integration methods to improve the
existing practices.

In Malaysia, each clinic is responsible for monitoring and managing their


owninventory and they place an order to the wholesaler when required. The decision on
which products to order at each period and the quantity required relies upon the experience
and skill of staff at the clinics. Clinics make an order directly using the online Purchase Order
.

(PO) system. Generally, orders are placed during the first and third week of every month. All
the orders will be processed and delivered within five days. Each order is referred to by the
PO number, which is automatically generated in the system. The first stage of order
processing at the wholesaler is to check the order details and the availability of the products
for delivery. If the product is not in stock, the supply manager is informed. If an order for the
products is outstanding, contact is made with the supplier to identify its status. Otherwise a
new order on the supplier is produced. In this case the delivery will be delayed until the
product is available in stock. Sometimes certain products will be replaced by others where the
alternative product can perform the same purpose. For example, orange lozenges can replace
herbal lozenges because the only difference is the flavour.

The next process is the packaging where products will be packed based on the PO.
Allproducts required for one clinic are packed together to make delivery easier. This process
should be done three days before the delivery date. All products delivered to the specific
branch are listed on the Delivery order (DO) form, each of which has a unique number. The
stock keeper needs to update the inventory status in the record book based on the information
in the DO to ensure the inventory status at the wholesaler is up-to-date. Deliveries are
madebased on a schedule which takes into account the availability of the company's transport
fleet (one van and one lorry) and drivers. Usually, deliveries will be made twice a month,
with vehicles adopting a milk-run approach and delivering to a number of branches in the
area.

When the order arrives at the clinic, they check whether the products delivered tothem
are the same as those on the DO forms. If satisfied, the products are moved as soon as
possible to the store or fridge, depending upon whether the medication needs to be kept
chilled. The DO and the delivery form need to be signed as a proof of delivery, with a copy
being returned back to the wholesaler through the driver. If the product delivered is different
to the DO, the clinic should inform the wholesaler as soon as possible by phone and indicate
the errors on the DO. If the product has been left behind or delivered to the wrong branch, a
revised delivery will be scheduled to correct this error.

The common issues faced are in case of urgent orders and stock unavailability at
thewholesaler. Urgent orders can be placed if a product reaches a critical inventory level.
This occurs because orders are generated manually and based only on the experience of
individuals at the clinics. With normal orders, there is a delivery lead time of five days,
.

increasing the risk of a stock out. Unlike consumer products, where the customer can either
defer their purchase or acquire an alternative, this can be critical in providing patient care as
there may be no alternative treatment for the patient. Therefore, urgent orders need to be
delivered immediately. Just a few products are delivered in each urgent shipment and, due to
the scattered locations of clinics; vehicle fill is lower with increased transportation costs.
Inventory replenishment at the wholesaler is based on the orders placed by clinics. Because
of the nature of decision making at the clinics, it is difficult to forecast their requirements.
Coupled with two major peaks in orders each month, the wholesaler may face difficulty if the
many clinics order the same products at the same time. This will cause out of stock problem
at the wholesaler. Some clinics will get the products ordered while others need to wait until
the new stock arrives.

Proposed Solution - Supply Chain Integration

In hospitals, the supply chain strategy should be to maximize patient care. The hospital
supply chain enables this strategy by:

 Ensuring product availability


 Minimizing storage space
 Maximizing patient care space
 Reduce material handling time and costs for all medical staff (nurses,
pharmacists,doctors)
 Minimizing non-liquid assets (inventory)

New Strategies

This paper looks in detail the following new strategies practiced in the hospital
industry to optimize the supply chain. Virtual centralization of the supply chain Cooperation
using virtually centralized supply chain management can set hospitals on the path to
controlling costs and improving service. Virtual centralization is integrating operations from
the perspective of the market rather than the health system. The most developed example is a
consolidated service centre (CSC) that is jointly owned and managed by multiple hospitals
and healthcare systems. A CSC brings together geographically based groups of hospitals to
form single entities that work together to centralize contracting, procurement, distribution,
and logistical operations. The CSC serves as the focal point not only of distribution, hut also
of centralized contracting, procurement, and customer service.
.

This innovative approach helps to solve critical problems relating to staff, time,
andbudget shortages. And while saving money is the top priority, a CSC also provides
networking opportunities for participants. Being able to share best practices, conflict
resolution, and advice will help to improve the bottom line.

Hospitals would be empowered to have much more control over product selection and
distribution. Consolidation of supply services would result in significantly improved visibility
of a hospital's supply chain expenses, improved product pricing through standardization and
volume aggregation, reduced inventory, lower distribution costs, and reduced inbound freight
costs. Other benefits include elimination of distribution mark-up costs and lower product
prices, inventories, and inbound freight costs.

This type of arrangement would be especially beneficial to rural, small, and mid-size
hospitals because they would not have to manage or install complex IT systems and could
share with others the expense of these systems as well as the staff who use them. They might
also be able to outsource their procurement functions to these collaborative logistics centres.
This arrangement would not only have a major impact on the bottom line, but also would
.

allow them to focus more effort into working with clinical quality value analysis teams that
help to support clinical product selection.

RFID Applications in Healthcare

Radio Frequency Identification (RFID) is a technology that connects objects to the


Internet, so that they can be traced, and companies can share data about them. In contrast to
bar codes application, RFID tags are robust and do not require line-of-sight identification,
thus eliminating the need for human intervention. The tags are programmable and contain
information regarding destination, weight, and a time stamp. The tags allow automation
throughout the supply chain which includes warehouse space optimization and efficient
goods tracking in order to bring down the cost and enhance customer service. RFID tags offer
real-time, accurate information and compel applications and processes across the
organizations to provide value to service.

Supply Utilization Management

Newly uncovered savings come not from reduced prices, but from eliminating waste,
inefficiency, misuse, and value mismatches of the products, services, and technologies
healthcare organizations employ. The following types of utilization misalignment are
common in healthcare organizations.

Standardization.

Customizing products to customers' exact requirements can reduce an organization's


supply chain expenses. Otherwise, the healthcare organization's money is wasted on
unnecessary functions and features. Hence customization is preferred over standardization.

Over-specification

Hospitals often purchase products with components or features that are not medically,
legally, or functionally required.

Under-specification

Too few components, wrong components, or missing critical features in products,


services, and technologies are another common cause of utilization misalignment. Value
mismatches. Many healthcare organizations bloat their supply budgets with costly products,
services, and technologies that are not functionally required. These organizations often fail to
.

look for available lower cost functional alternatives that can meet or exceed the customer's
requirements.

New technology

All new technology needs to be closely monitored for at least three months to ensure
that it is meeting or exceeding the manufacturer's performance specifications.

Old technology

All technology-whether elevators, IV pumps, anaesthesia machines, or imaging


systems-has a useful life of a certain number of years, and is not cost effective for the hospital
to continue to maintain it beyond its useful life.

Vendor Managed Inventory

Under Vendor Managed Inventory (VMI), the supplier assumes responsibility for the
management of inventory at the customer, and takes decisions regarding replenishment
(Waller et al. 1999). To some extent, this builds on the information requirements of stockless
inventory systems. The main difference is moving responsibility for stock control to the
supplier, as the ordering process remains automated. For VMI to work successfully there is a
need for accurate information on current stock levels and consumption. However, providing
such information within hospitals can be difficult (Haavik 2000 and McKone-Sweet 2005). In
Kim (2005), VMI has brought a number of benefits including less administration at the
hospital, fewer errors, improved information reliability and a 30 per cent reduction in
inventory. By contrast, Altricher and Caillet (2004) found that, because of a lack of trust in
the supply chain, the hospital kept over-ruling the VMI system, holding more stock and
eliminating any benefits that accrued.

Conclusions

Today, healthcare providers are under enormous pressure due to increasing


competition, government regulations, rising costs, demand for higher quality of service.
Undoubtedly, healthcare becomes tremendously complex as a business activity to manage
diversified locations, changing organizational structures, mergers, employees, and multiple
information systems across the globe. Healthcare organisations must strive for value addition
across entire supply chain by monitoring supply chain performance. The latest innovations in
RFID technology, Supply Utilization management &Virtually centralized Supply chain
.

management holds the key to the future. Looking to the future, supply utilization
management is an emerging recommended practice that will enable healthcare organizations
to dig deeper and more broadly into their supply chain expenses to harvest new and even
better supply savings. Exploiting the power of RFID technology is not simply about replacing
bar codes with tags. The specific benefits that RFID tags offer over bar codes present an
entirely new way of working in the competitive business environment.

To summarize: the health care industry is highly interdependent and only one part can’t attain
efficiency leaving behind others. That is the reason why strategy such as Virtual
Centralization is proving to be popular and successful. That is not the end of the road, the
industry has to look forward to each and every minute development in the supply chain
ofrelated industries to reap the benefit of being alert and quick to adapt to.
.

CHAPTER-3

RESEARCH METHODOLOGY

The type of the research used in this project is descriptive research. Descriptive
research includes survey and fact-finding enquires of different kinds. The major purpose of
descriptive research of the stage of affairs as it exists at present.

“Research means a search for knowledge sometimes”, it may refer to scientific and
systematic search pertinent information on a specific topic. Intact research is an art of
scientific investigation.

Methodology is plan of action for a research project and explain in details how data to
be collected and analysed and analysed and presented , so that they will provide meaningful
information.

SOURCES OF DATA

Primary data’s are collected in this project report

A) PRIMARY DATA

Primary data those data that are collected a fresh for the first time and ordinal in nature.
The primary data is collected through the questionnaire, personal interview, where the data is
collected by face to face interaction.

SAMPLING TECHNIQUES

Random sampling technique is used for this study random sampling refers to the
sampling technique in which each and every item of the population is given in equal chanc of
being include in the sample.

RANDOM SAMPLING

Random sampling is one of the simplest forms of collecting data from the total
population. Under random sampling, each member of the subset carries an equal opportunity
of being chosen as part of the sampling process.
.

SAMPLE DESIGN

A sample design is definite plan for obtaining sample from given population. It refers
to the technology or procedures for selecting item for the sample. 50 sample were collected
from the employees and workers in which the total sample size 50.

SAMPLE SIZE

Sample size refers to the number of elements to be included in the study. In this study
the sample size is 50.

POPULATION

Population of this study consists of the employees from the lower level management.
The total number of employees in that firm is 250.

ANALYTICAL TOOLS

The data collected were edited, coded and processed. The following techniques are used
to analyse the collected data and information.

 ANOVA
 Chi square analysis

ANOVA

ANOVA is a statistical technique that assesses potential difference in a scale-level


dependent variable by a normal-level variable having two or more categories One way
ANOVA.

A ONE WAY ANOVA:

Anova is used to compare to independent (unrelated) groups using the F-distribution.


The null hypothesis for the test is that the two means are equal. Therefore, a significant result
means are unequal.

PERIOD OF THE STUDY

This study conducted for a period of two months. During this period, the present
researcher has collected the necessary primary data and relevant information needed to carry
out the study successfully.
.

Table1: Indicating the frequency and percentage of gender distribution of respondents

GENTER FREQUENCY PRECENT

MALE 44 88.00

FEMALE 6 12.00

TOTAL 50 100
.

Table 2: Indicating the frequency and percentage of age distribution responded

Age Frequency Precent

15 30.0
25-30

35 70.0
30-40

50 100.0
Total
.

Table 3:

Qualification Frequency Percent

SSLC/HSC 13 26.0

ITI 12 24.0
DIPLOMA 11 22.0
Degree 11 22.0
PROFESSIONAL 3 6.0
QUALIFICATION
Total 50 100.0
.

Table 4:

experience

Frequency Percent Valid Percent Cumulative Percent

Below 5 yrs 9 18.0 18.0 18.0

6-10 YRS 12 24.0 24.0 42.0

11-15 YRS 11 22.0 22.0 64.0


Valid
16-20 YRS 12 24.0 24.0 88.0

ABOVE 20 YRS 6 12.0 12.0 100.0

Total 50 100.0 100.0


.

All communication to and from eurolife healthcare pvt.ltd is satisfactory (email,telephone,ect)

Frequency Percent Valid Percent Cumulative Percent

excellent 21 42.0 42.0 42.0

Valid good 29 58.0 58.0 100.0

Total 50 100.0 100.0


.

Do you think is your company in managing its supply chain in general

Frequency Precent Valid Precent Cumulative Precent

very successful 19 38.0 38.0 38.0

successful 23 46.0 46.0 84.0

somewhatsuccessful 8 16.0 16.0 100.0

Total 50 100.0 100.0


.

how do you rate the delivery activity and inventory management of the department

Frequency Precent Valid Precent Cumulative Precent

Excellent 13 26.0 26.0 26.0

very effective 26 52.0 52.0 78.0


Valid
Good 11 22.0 22.0 100.0

Total 50 100.0 100.0


.

your overall impression of our service

Frequency Precent Valid Percent Cumulative


Percent

outstanding 19 38.0 38.8 38.8

excellent 19 38.0 38.8 77.6


Valid
Good 11 22.0 22.4 100.0

Total 49 98.0 100.0


Missing System 1 2.0

Total 50 100.0
.

ANOVA TEST
H0: There is no significance difference between successful supply chains towards
working strategies.
H1: There is a significance difference between successful supply chains towards
working strategies.

Sum of Squares df Mean Square F Sig.

Between Groups .180 1 .180 .354 .026

Within Groups 24.400 48 .508

Total 24.580 49

INTERPRETATION

Table no indicate the analysis variances for successful supply chain of the company and
working strategic of management. The significant value for the test are given above and
found to be less than 0.05 in the case of working strategic. Therefore the null hypothesis
.

rejected .this means that there is a relationship between successful supply chain management
and working strategic of company.

ANOVA
According to the current growth process of the organization, which of the
following needs much attention and progress to boost the production
Sum of Squares df Mean Square F Sig.

Between Groups .021 1 .021 .082 .776


Within Groups 12.479 48 .260
Total 12.500 49
H0: There is no significance difference between successful supply chain towards working
strategies.
H1: There is a significance difference between successful supply chain towards working
strategies.
INTERPRETATION:

Table no indicate the analysis variances for current growth process of the
organization . The significant value for the test are given above and found to be higher than
0.05 in the case of working strategic. Therefore the null hypothesis accepted .this means that
there is a no relationship between current growth and process to boost the production.
.

CHI SQUARE:

7vs10

Case Processing Summary

Cases

Valid Missing Total

N Percent N Percent N Percent

how satisfied are you 50 100.0% 0 0.0% 50 100.0%


with the current
inventory policy
regarding SCM *
choose the right
option,where the
supply chai
department is facing
problem in taking care
of the raw material
.

how satisfied are you with the current inventory policy regarding SCM * choose the right option,where the
supply chai department is facing problem in taking care of the raw material Crosstabulation

choose the right option,where the supply Total


chai department is facing problem in taking
care of the raw material

testing of evaluton of average


package defective raw
material

Count 3 5 3 11
nutral Expected 4.0 5.3 1.8 11.0
Count
how satisfied are you
Count 6 11 3 20
with the current
disagree Expected 7.2 9.6 3.2 20.0
inventory policy
Count
regarding SCM
Count 9 8 2 19
strongly
Expected 6.8 9.1 3.0 19.0
disagree
Count
Count 18 24 8 50
Total Expected 18.0 24.0 8.0 50.0
Count

Chi-Square Tests

Value df Asymp. Sig. (2-


sided)

Pearson Chi-Square 2.713a 4 .607


Likelihood Ratio 2.578 4 .631
Linear-by-Linear Association 2.073 1 .150
N of Valid Cases 50

a. 4 cells (44.4%) have expected count less than 5. The minimum


expected count is 1.76.

INTERPRETATION:

The chi square analysis show that 0.607 is greater than 0.05 at 5% level of significant
so Ho is accepted there is no relationship between operation stragetic plan and problems
facing raw materials.
.

14vs25

Case Processing Summary

Cases

Valid Missing Total

N Percent N Percent N Percent

how do you rate the delivery 50 100.0% 0 0.0% 50 100.0%


activity and inventory
management of the
department * The crewing
department demonstrate
good problem solving skills

how do you rate the delivery activity and inventory management of the department * The crewing department demonstrate good
problem solving skills Crosstabulation

The crewing department demonstrate good problem Total


solving skills

strongly agree agree Neutral

Count 7 6 0 13
excellent
how do you rate the delivery Expected Count 6.0 4.7 2.3 13.0

activity and inventory Count 12 8 6 26


very effective
management of the Expected Count 12.0 9.4 4.7 26.0
department Count 4 4 3 11
Good
Expected Count 5.1 4.0 2.0 11.0
Count 23 18 9 50
Total
Expected Count 23.0 18.0 9.0 50.0

Chi-Square Tests

Value df Asymp. Sig. (2-


sided)

Pearson Chi-Square 4.204a 4 .379


Likelihood Ratio 6.429 4 .169
Linear-by-Linear Association 2.159 1 .142
N of Valid Cases 50

a. 5 cells (55.6%) have expected count less than 5. The minimum


expected count is 1.98.
.

INTERPRETATION:
The chi square analysis show that 0.379 is greater than 0.05 at 5% level of significant
so Ho is accepted there is no relationship between delivery activity of the department and
crewing department

12vs15

Case Processing Summary

Cases

Valid Missing Total

N Precent N Precent N Precent

: Is the supply chain 50 100.0% 0 0.0% 50 100.0%


management department is
having sufficient
transportation? * there are
case recorded by the supply
chain department in which
the production department
complained late delivery of
raw materials

: Is the supply chain management department is having sufficient transportation? * there are case recorded by the
supply chain department in which the production department complained late delivery of raw materials
Crosstabulation
.

there are case recorded by the supply chain Total


department in which the production department
complained late delivery of raw materials

agree nutral disagree

Count 9 14 8 31
strongly agree
: Is the supply chain Expected Count 9.3 15.5 6.2 31.0

management department Count 5 8 0 13


agree
is having sufficient Expected Count 3.9 6.5 2.6 13.0
transportation? Count 1 3 2 6
nutral
Expected Count 1.8 3.0 1.2 6.0
Count 15 25 10 50
Total
Expected Count 15.0 25.0 10.0 50.0

‘8

Chi-Square Tests

Value df Asymp. Sig. (2-


sided)

Pearson Chi-Square 4.823a 4 .306


Likelihood Ratio 7.313 4 .120
Linear-by-Linear Association .020 1 .886
N of Valid Cases 50

a. 5 cells (55.6%) have expected count less than 5. The minimum


expected count is 1.20.

INTERPRETATION:
The chi square analysis show that 0.306 is greater than 0.05 at 5% level of significant
so Ho is accepted there is no relationship between sufficient transportation and late delivery
of raw materials.
.

Suggestion

 Increase Transparency Waste, mistakes and even fraud are permanent supply chain
strategy problems that can be fixed with the right ERP system. One of the biggest
problems of inventory management is reconciling the software numbers with a physical
inventory count can be improved.

 Technological model: Manufacturing centres of excellence are formed around new


production or process technologies and innovative practices.

 Geographic model: Plants are set up in numerous regions around the world on the basis of
local demand for products.

 Complexity model: Some plants are dedicated to high-volume/low-complexity products


and others to low-volume/high-complexity products, with resources allocated according
to demand, competition, and whether high-margin pricing opportunities exist.