2. Introduction
SJ&G is one of the oldest pharmaceutical company established in
1889 and started local manufacturing in 1967, in its well-
equipped manufacturing plant.
3. Pharmaceutical Industry Overview
Pharmaceuticals directly affect millions of people’s health,
industry manufacturers are very strict about ensuring the safety and quality of
drugs at each level of the supply chain. These companies use fixed, regulator-
certified suppliers of raw materials. Companies also store the raw and packaging
materials in separate warehouses.
4. Raw Material & Packaging Material
Material Warehouses
Distributors
Finished Goods Warehouses
Manufacturing Units
Consumers
Pharmacies / Hospitals
Supply Chain Model of Pharmaceutical Industry
5. Supply Chain Management
After a company processes the raw materials, it makes the final drug at the manufacturing
unit. A company that has a single manufacturing unit uses only one warehouse, while a
company with multiple manufacturing units stores its drugs in central and regional
warehouses.
Next, distributors and super stockists receive the drugs and supply them to entities in the
retail segment:
hospitals
pharmacy stores
health care centers
clinics
Then, retailers sell OTC drugs directly to consumers. A prescription drug purchase
requires authorization from a qualified doctor.
6. WHAT IS SUPPLY CHAIN MANAGEMENT?
Supply Chain Management (SCM) includes all the activities that must take place
to get the right product into the right consumer’s hands in the right quantity
and at the right time – from raw materials extraction to consumer purchase.
SCM focuses on planning and forecasting, purchasing, product assembly,
moving, storage, distribution, sales and customer service. SCM professionals
are involved in every facet of the business process as they strive to achieve a
sustainable competitive advantage by building and delivering products better,
faster and cheaper.
7. Planning and Forecasting
Demand forecasting: This is the investigation of the companies demand for an item or
SKU, to include current and projected demand by industry and product end use.
Supply forecasting: Is a collection of data about our current production and suppliers,
as well as technological and political trends that might affect supply.
Price forecast: This is based on information gathered and analyze about demand and
supply. It provides us prediction of short- and long-term prices of our products and the
underlying reasons for those trends.
8. Factors Effecting Planning and Forecasting
Season
Competition
Market Research
Project planned
Sales trend
9. Importance of Planning & Forecasting
Increasing customer satisfaction
Reducing inventory stock outs
Scheduling production more effectively
Lowering safety stock requirement
Reducing product obsolescence costs
Managing shipping better
Improving pricing and promotion management
11. Procurement / Purchasing
Procuring Raw Materials and Other Resources
One role of our purchasing department is to procure all necessary materials needed for production or
daily operation of the company.
Achieving the Best Possible Price
Our purchasing department also is charged with continuously evaluating whether it is receiving these
materials at the best possible price in order to maximize profitability.
Paperwork and Accounting
Purchasing department handle all of the paperwork involved with purchasing and delivery of supplies
and materials. Purchasing ensures timely delivery of materials from vendors, generates and tracks
purchase orders and works alongside the receiving department and the accounts payable department
to ensure that promised deliveries were received in full and are being paid for on time
12. Procurement steps
• Procurement life cycle in our organization consists of 7 steps:
1. Identification of need
2. Supplier Identification
3. Supplier Communication
4. Negotiation
5. Purchase Orders
6. Logistics Management: expediting, shipment, delivery
7. Payment
14. Transportation
Pharmaceuticals typically require special attention
and handling throughout the supply chain.
As temperature-sensitive biologically based products
continue to rise, so, too, do a myriad of obstacles for
freight forwarders and transportation companies.
The growing cold chain industry calls for adaptations
in pharmaceutical transportation in order to meet
and exceed growing temperature requirements and
safety compliance regulations.
15. Types of Products
Medical substances:
It is a wide category that covers natural and synthetic substances of various physical and chemical
origin. As cargo, most medical substances are fragile and sensitive to fluctuations in temperature and
humidity. For instance, medical liquids are bottled in glass tare. In order to keep cargo safe and
mechanically undamaged, medical liquids are secured within a vehicle with excess space filled with
soft packaging materials.
Medical supplies:
This category includes various instruments, equipment, materials, reagents, and appliances used for
medical purposes. During transportation of this kind of cargo, quality deterioration should be
prevented and exploitational characteristics should be preserved. Medical supplies, like medical
substances, must be marked accurately in order ensure appropriate transportation.
Medical equipment:
Hi-Tech equipment is categorized as expensive and fragile, therefore triggering certain transportation
requirements. In addition, medical equipment is often of non-standard configuration and size and
therefore classified as oversized cargo.
16. Warehousing
Pharmaceuticals are stringently regulated by the Food and Drug Administration
(FDA). The FDA’s regulatory standards for the industry are referred to as Current Good
Manufacturing Practice (CGMPs; also known as “Good Manufacturing Practice”
[GMP]) standards. These standards apply to warehouses, processes, and to the drugs
themselves.
17. CGMPs Related to Warehousing
CGMPs related to warehousing include:
Drugs must be stored to prevent contamination, and be positioned to allow for
inspection and cleaning of the area.
Each lot of drug products must be identified with a distinctive (and traceable) code,
and the lot’s status must be identified (approved, quarantined, rejected).
Written procedures must describe the distribution process for each drug. This includes
procedures for recalls.
Written procedures must describe the appropriate storage conditions for each drug.
