“The right processes, practices and tools can help in building a robust supply chain. Pharmaceutical supply chain management must be quick to detect and respond to changes in supply and demand. In line with this, Wallace Pharma’s supply chain focus has always been on strong integration of people, systems and core processes,” shares Sandeep Chudgar, General Manager – SCM – Logistics & Distribution, Wallace Pharmaceuticals Pvt. Ltd.
Pharmaceutical industry has been one of the most complex industries when it comes to adhering to stringent norms. Please highlight some of the challenges faced.
India is the third largest manufacturer of pharmaceutical products in terms of volume and it is growing steadily. The market has seen the entry of many foreign players as well as rise of many domestic manufacturers. Historically pharmaceutical industry has been dealing with malpractices across the value chain ranging from improper branding to masking safety information and disregarding quality manufacturing standards. This has led to regulators keeping a strict watch on the pharma companies. Any violation of regulatory methods or noncompliance of standards could tarnish a company’s reputation, risking its future. Enforcement agencies the world over have become more active. This for the pharma sector is a very positive sign but there are certain speed breakers on the road for the companies. The challenges faced by the companies are:
Compliance issues and Good Manufacturing Practices: This has somehow always been a problem for the companies. Approval of USFDA is very important for pharmaceutical manufacturing in India and regular inspections help maintain quality / GMP standards. The opinion of the USFDA is the standard in the sector as well. Companies are trying to improve their standards and this issue can be solved by having officials who are more stringent and inspections on a regular basis can be done.
Spurious Medicine: Fake versions of high value and/or high-volume brands of the pharmaceutical companies in India are adversely affecting their business performance, posing another major challenge, more than that it has a negative impact on the end consumer and ultimately a huge health hazard.
Low margin of profits due to government pricing policies: The main issue raised by most of the pharma companies is that the profits which they earn are basically peanuts and this income is not enough. Companies cite that government reforms for the essential medicines have resulted in companies lowering the prices of drugs. This has been done by the government for the betterment of the public. So, the government must think of a way to promote the pharma companies as well. Funding for the pharma companies might be a way to move forward.
In pharma, it’s all about reaching customers on time on demand. How do you ensure that the same is followed without any error?
Most of the pharma companies now have moved from traditional module of one or two supply to replenishment driven module and have made hub & spoke model within all the four regions of India. Multi-plants production is carried out at own manufacturing plants, loan licensing plants and on principle to principle basis, hence it is supplied to nearest central warehouse/ hub within region and from hub daily replenishment is made to selling points or state wise warehouses. This helps in the reduction of turn-around time and companies can act faster in reaching products during change in marketing dynamics /seasonality requirements. Companies are also trying digital platforms to get daily shelf stocks at wholesalers’ and retailers’ end so that the end user gets the medicine on time and the demand is met.
How do you make your supply chain foolproof?
The right processes, practices and tools can help in building a robust supply chain. Adopting demand-driven planning and business operating model based on real-time demand can be useful in demand shaping. Building an adaptive and agile supply chain with rapid planning and integrated execution can be another factor in creating full proof supply chain. Optimizing product designs and product management for supply, manufacturing, and sustainability accelerate profitable innovation. Additionally, aligning supply chain with business goals by integrating sales and operations planning with corporate business planning can ultimately bring sustainability into supply chain operations and ensure reliable and predictable supply.
What are the key pillars on which Wallace Pharma’s supply chain is based?
Wallace Pharma’s supply chain focus is on strong integration of people, systems and core processes. Strategy applied is capability assessment, goal setting and timely evaluation of skill metrics of people. Wallace is having multi-location manufacturing with a strong presence pan-India. We have warehouses across all states and our products are available with 2000+ stockists and more than 5000 retailers. Manufacturing and supply chain team works with latest tools and techniques to make quality products available to our patients.
Wallace has implemented a digital business network, which is the foundation of a multi-enterprise supply chain. This connects all the supply chain partners electronically. When pharmaceutical supply chain partners are connected, it allows them to work together in sync. This provides end-to- end visibility and an opportunity to collaborate with different business interactions. As a pharmaceutical company, you must ensure end-to-end traceability. Pharmaceutical supply chain management must be quick to detect and respond to changes in supply and demand. We have implemented robust planning and forecasting tools, end to end process for procurement, quality check, production, distribution and execution through ERP SAP S4 HANA.
How can one achieve supply chain network optimization?
Supply chain network optimization empowers companies to compare the current state of their supply chains to multiple “what-if” scenarios. The essence of supply chain optimization exercise is to provide results that enable companies to move forward in a secure manner. There are various ways to achieve supply chain network optimization. It can be achieved through strategic planning, focus on core strengths and outsource all other activities, improve collaboration between manufacturer/supplier and retailer for demand data driven forecasting and inventory management.
How is technology enhancing the supply chain network?
Technology would be the key enabler to achieve the goals of logistics efficiency and will play a crucial role across efficiencies in ports, warehouses and transport. Supply chain technology enables to create greater visibility within your supply chain network, improved visibility and accountability, gain more control over your inventory, reduce operating costs, and, ultimately, outpace the competition. Technology has led the way enabling supply chain to become faster and more efficient. With technology, through warehouse and transport systems, businesses are able to provide data-capture, improve labor management, monitor resource and reduce stock losses with real-time stock checking.
With improved technology and systems now, pharmaceutical industry is having more control on storage and transportation. We can have real-time data of temperature monitoring system whether at pan-India warehouses or during transportation. Refrigerated Vans are having temperature monitoring systems. One can see on mobile at any moment whether in office or while traveling the temperature at which the medicines are stored or transported, which help us in adhering to compliances.
What’s that one mantra you follow to stay ahead of your competitors?
A simple mantra we follow is to know our internal and external customers. Customers’ expectation can change dramatically. Supply chain is all about flow of goods and communication. Response time to our internal and external customers is extremely important in this competitive era and apart from service levels for supply chain they need quick response. Our sales team is meeting doctors across India to generate demand of prescription, thereby pushing sales and ultimately growth for the company.
Please share with us one of the most crucial projects managed by you at Wallace Pharma.
To make our supply chain more agile, we initiated “Project Eagle” at Wallace Pharmaceuticals. This project was to increase the availability of all products by placing the right inventory at the right place at the right time by redesigning and optimizing the supply chain processes to achieve higher levels of operational excellence and ensuring a smooth and harmonious inter-departmental relationship. This project achieved success in improving availability or products in the market and also contributing to the increase in sales of the company.
What are the international best practices that our country can imbibe within pharma domain?
I feel that Good Manufacturing Practices (GMP) and Good Distribution Practices (GDP) in pharmaceutical supply chain are better in other countries and India needs to fast catch up to them to stay ahead. GMP regulations require a quality approach to manufacturing, enabling companies to minimize or eliminate instances of contamination, mix-ups, and errors. This protects the consumer from purchasing a product which is ineffective or even dangerous. Failure of firms to comply with GMP regulations can result in very serious consequences including recall, seizure, fines, and jail time. GMP regulations address issues including record keeping, personnel qualifications, sanitation, cleanliness, equipment verification, process validation, and complaint handling. Most GMP requirements are very general and open-ended, allowing each manufacturer to decide individually how to best implement the necessary controls. This provides much flexibility, but also requires that the manufacturer interprets the requirements in a manner which makes sense for each individual business.
Managing quality of medicines during distribution is a challenging operation. The challenges of the pharmaceutical products supply chain are due to their specified shelf life and storage conditions. The various dosage forms tablets, syrups, injectables, etc., are to be transported and stored at different environmental conditions, hence all medicines cannot be handled with a general rule. viz., the requirement of handling tablets, syrups and injectables shall widely vary. Cold chain product range of medicines are stored at temperatures between 2o to 8oC. For cold chain products, therefore the degree of carefulness shall be more due to the fear of product failures during quality control testing by customers. The GDP guidelines are intended to be applicable to all persons and outlets involved in any aspect of the storage and distribution of pharmaceutical products from the premises of the manufacturer of the product to the person dispensing or providing pharmaceutical products directly to a patient or his or her agent. This scheme ensures that consistent quality management systems are in place throughout your entire supply chain from the early delivery of raw materials to the manufacturing plants, to the final shipment of finished drugs to the end user.
Does reverse logistics form big part of the supply chain?
Yes, reverse logistics forms a major part of the supply chain. Reverse logistics refers to the monitoring the life cycle of products after they arrive at the end consumer. This includes how your product could potentially be reused, how it should be properly disposed of after use, and any other way where your expired product to be collected back. The reverse logistics that directly impacts supply chains the most is the return of products from the end consumer back to the manufacturer. To ensure FDA and regulatory norms of any expired or breakage medicine stocks returned as per industry norm by stockist or retailer, all companies need to collect back across India and send it for destruction. Any leakage in reverse supply chain can prove risky for a company since medicines are to be discarded after expiry.
What inventory management strategies should be followed?
An effective inventory management system enables a company to react quickly to market demands and stops them from falling into either having too much or too little stock: both highly undesirable scenarios. Below are few strategies which can help:
Automation of inventory management system: Manual inventory counts are time consuming and drain precious manpower resources that could be dedicated to more productive work. An automated inventory management system can take care of this arduous task with much greater precision and efficiency. Inventory levels are tracked and provided in real-time, entailing that a customer query about whether a product is in stock can be answered immediately. Modern inventory management systems can incorporate barcode technology, using wireless technology to transmit information to a central computer and store data in the cloud.
Using data analytics: Having access to real-time inventory data and analytics enables you to have accurate product and sales forecasts instantly. The data can be used to predict market demand, helping a business to scale its inventory up or down at the correct time, resulting in increased profits. It helps in
Improving customer service by providing more accurate availability of merchandise
Predicting the appropriate amount of inventory necessary to meet demand
Improving profit margins by limiting the discounting or scrapping of old stock
Once you have the data for your sales forecasts available, you can use this to market your business to specific areas of your audience/customer base. This means you can refine your approach with each campaign that you run, evolving your strategy at each stage and making sure that your available inventory matches the demand of your customer base.
How do you keep your team motivated amid such pressure conditions?
There are several reasons why employee motivation is important mainly because it allows management to meet the company’s goals. Motivated employees can lead to increased productivity and allow an organization to achieve higher levels of output. We keep motivating the team by giving them equal opportunity for self -development, collaboration within the team, set clear goals and never micromanage them. Leaders who appreciate the work performed by their employees build confidence in them and motivate them to improve their performance. No one In the system thinks about individual KRAs, everyone is working towards one common organization goal and that’s what has been driving team seamlessly.
How do you view the supply chain landscape of the country going ahead?
I think service chain will become more important than product chain going ahead. Technology to support SCM will primarily be the top priority. Investment into India’s supply chain infrastructure is gaining momentum. The introduction of GST, liberalizing FDI rules, and increased government spending have helped spur growth in the sector. India’s aspiration to become a global manufacturing powerhouse and the government’s spotlight on ‘Make in India’ has also propelled nationwide supply chain reform, prompting several federal and state-based schemes. The time is right for first movers to benefit from the changing landscape of India’s supply chain ecosystem. With greater participation from the private sector and increased government spending, opportunities for foreign investors in the country’s supply chain are on the rise. This includes the steady transformation of India’s digital infrastructure as well, with federal campaigns like Digital India working to promote the growth of technology startups and enterprises. Foreign firms with little knowledge of the Indian landscape can benefit from partnerships with established Indian firms in the sector to make it easier to do business in the country.
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