Internship Report Lisko

7/29/2019 Internship Report Lisko

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LISKOPHARMACEUTICAL1

LISKO PAKISTAN (PVT.) LTD.

Duration: From 1st May to 11th June, 2011

Report based on THEORIES LEARNED AND THEIR APPLICATION

Due date of the report 25th June, 2011

(2 weeks after the successful completion of internship)

Report submitted on 7nd July, 2011

Delayed by12 days

Reasons for delay: MBA exams scheduled on 25th June, 2011, leading to

delay in compilation.


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CONTENTSSUPPLY CHAIN AND ITS LINK WITH CORPORATE OBJECTIVES ....................................................................................... 4

CONTRIBUTIONS TO THE SUPPLY CHAIN DEPARTMENT ............................................................................................... 5

Introduction ................................................................................................................................................................... 6

Overview of the industry ............................................................................................................................................... 7

SUPPLY CHAIN DEPARTMENT ..................................................................................................................................... 10

THEORIES LEARNED AND THEIR APPLICATION .......................................................................................................... 10

SUPPLY CHAIN PROCESS [Supply chain mangement] ................................................................................................. 10

Logistics:[Supply chain mangement] ..................................................................................................................... 11

Quality Management: [Supply chain mangement] & [Production Management] ................................................ 11

Distribution .............................................................................................................................................................. 13

INVENTORY MANAGEMENT [Supply chain mangement] ....................................................................................... 13

INVENTORY PLACEMENT [Supply chain mangement] ............................................................................................ 13

AGGREGATE PLANNING [Supply chain mangement] & [Production Management] ............................................. 14

VENDOR EVALUATIONS PROCESS [Supply chain mangement]............................................................................... 15

ADEQUACY OF FECILITIES AT THE WORKING ENVIROMENT [Supply chain mangement] ...................................... 15

OUTSOURCING [Supply chain mangement] ........................................................................................................... 18

Practices for Lowering Costs and Increasing Sales .................................................................................................. 19

SOCIALLY RESPONSIBLE PRACTICES [Supply chain mangement]............................................................................ 20

E-commerce: [Supply chain mangement] .............................................................................................................. 20

TOTAL QUALITY MANAGEMENT .............................................................................................................................. 21

Enterprise Resource Planning [Supply chain mangement]..................................................................................... 21

WORKFORCE COSTING [Supply chain mangement] & [organizational behavior] ................................................. 22

PERFORMANCE GAUGING: [production management]........................................................................................... 23

ENVIRONMENTAL MANAGEMENT SYSTEM ............................................................................................................. 23

BALANCED SCORECARD: [Supply chain mangement] & [ Strategic Management] ................................................... 24

FAILURE MODE AND RISK ANALYSIS: [Supply chain mangement].............................................................................. 25

..................................................................................................................................................................................... 26

Process analysis [production management]............................................................................................................... 27

Process Evaluation Matrix[Production Management] ................................................................................................ 30

Conclusion and Recommendations ............................................................................................................................ 31

References................................................................................................................................................................... 32

Bibliography ................................................................................................................................................................ 32


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SUPPLYCHAINANDITSLINKWITHCORPORATEOBJECTIVES

Organizations increasingly find that they must rely on effective supply chains,

or networks, to compete in the global market, networked economy syncing itwith its corporate objectives. In Peter Drucker's (1998) new management

paradigms, this concept of business relationships extends beyond traditional

enterprise boundaries and seeks to organize entire business processes

throughout a value chain of multiple companies.

During the past decades, globalization, outsourcing and information technology

have enabled many organizations, such as Dell and Hewlett Packard, to

successfully operate solid collaborative supply networks in which each

specialized business partner focuses on only a few key strategic activities

enabling it to pursue its corporate objectives. This inter-organizational supplynetwork can be acknowledged as a new form of organization. However, with the

complicated interactions among the players, the network structure fits neither

"market" nor "hierarchy" categories (Powell, 1990). It is not clear what kind of

performance impacts different supply network structures could have on firms,

and little is known about the coordination conditions and trade-offs that may

exist among the players. From a systems perspective, a complex network

structure can be decomposed into individual component firms (Zhang and

Dilts, 2004). Traditionally, companies in a supply network concentrate on the

inputs and outputs of the processes, with little concern for the internal

management working of other individual players. Therefore, the choice of an

internal management control structure is known to impact local firm

performance causing to deviate from key goals and objectives.

In the 21st century, changes in the business environment have contributed to

the development of supply chain networks. First, as an outcome of

globalization and the proliferation of multinational companies, joint ventures,

strategic alliances and business partnerships, significant success factors were

identified, complementing the earlier "Just-In-Time", "Lean Manufacturing" and

"Agile Manufacturing" practices. Second, technological changes, particularlythe dramatic fall in information communication costs, which are a significant

component of transaction costs, have led to changes in coordination among the

members of the supply chain network allowing a more focused and integrated

approach to the firms mission, vision, and corporate goals.


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Many researchers have recognized these kinds of supply network structures as

a new organization form, using terms such as "Keiretsu", "Extended

Enterprise", "Virtual Corporation", "Global Production Network", and "Next

Generation Manufacturing System". In general, such a structure can be defined

as "a group of semi-independent organizations, each with their capabilities,

which collaborate in ever-changing constellations to serve one or more markets

in order to achieve some business goal specific to that collaboration"

(Akkermans, 2001).

The security management system for supply chains is described in ISO/IEC

28000 and ISO/IEC 28001 and related standards published jointly by ISO and

IEC

CONTRIBUTIONSTOTHESUPPLYCHAINDEPARTMENT

As an internee in the department my job included:

Assisting the supply chain officer in their routine activities for e.g. daily calls to key

clients for updates on requirement and market demand

Filing of documents and their history backup

Identifying weaknesses in the department and devising solutions to resolve them

Learning routine job activities by doing

Preparing a cost and benefit approach for all the activities

Costing for the business decision and promotional activities for the clients

Getting to know the nuts and bolts of the process in the department.


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INTRODUCTION

Lisko Pakistan (Pvt.) Ltd is one of the leading and deep-rooted National company that

specializes in the production of human medicines. The company was established in 1972 and in

No time, it managed to position itself at a very vanguard of the Pharmaceutical and Health

Sector.

The company operates in compliance with the good manufacturing practice on pattern set by

the WHO, owing to its un-remitted pursuit of perfection, the company got the ISO 9001:2000

performance certification and is continuing to work with consumer trust.

A major part of the companys success is attributed to its technical staff that incorporates a

number of highly qualified experts. Our employees from various prospects are continously

advancing through systematically kept special training programs, that are set periodically by

Board to ensure complete efficiency in work.

At Lisko Pakistan strategies are always drawn by keeping consumer satisfaction , needs, wants

& attitudes as our first priority. From the very beginning the company committed itself in

supplying consumers with reliable medicaments combining efficacious, quality, safeness and

economical price. These are with other factors that have made Lisko Pakistan a popular

performer over the years.

Due to Lisko Pakistans commitment with its consumers that highest quality medicines will

always be provided to them, therefore it is made sure that the Raw Materials present in their

products should be imported from quality & reliable world wide sources such as, U.K,

Netherlands, Italy, Spain, Japan, Belgium, France, Germany India and China etc.

Currently the company is manufacturing Antibiotic, Anti-allergy, Anti-malerial, Anti-depressent,

Anti-T.B, Anti fungal and General Health Care Products, that have established their names due

to their high quality & appropriate price. With this, not only in Pakistan but these products are

also highly trusted and demanded in international markets, that has enabled Lisko Pakistan to

export them in different parts of the world.


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The Pakistan pharma industry is relatively young in the international markets with an

export turnover of over $100 million as of 2007. Pakistan Pharma Industry boasts of

quality producers and many units are approved by regulatory authorities all over the

world. Like domestic market the sales in international market have gone almost

double during last five years. The pharma industry is focusing an Export Vision of $500million by 2013. In the meantime, exports are also likely to boost due to new regional

and global opportunities.

The Pakistan Pharmaceutical Industry is a success story, providing high quality

essential drugs at affordable prices to Millions. Technologically, strong and self reliant

national pharmaceutical industry is not only playing a key role in promoting and

sustaining development in the vital field of medicine within the country, but is also

well set to take on the international markets.

The country's pharmaceutical exports were $101 million in 2006-07 and growing at anannual rate of 22 per cent. In 2005-06 exports hit the mark of $83 million. Export

target for FY2008 had been projected at $125 million.

On the other side of the border, Indian pharmaceutical exports stand at $6 billion,

growing at a pace of 20 per cent. Country's spending on health as percentage of GDP

was only 0.8 per cent as compared 5-6 per cent in Sri Lanka, 3-4 per cent in

Bangladesh, 6-7 per cent in Algeria, 5-7 per cent in Mexico, 6-9 per cent in Iran and

10-15 per cent in Costa Rica and Cuba.

Economy contribution and Importance

Being one of the major indicators of economy, pharma industry has contributed

positively so far and has somehow managed to increase production by a meager 1 per

cent. Similarly industry contribution and weightage surged to 6.7 per cent in total

Large Scale Manufacturing (LSM) production during 1QFY09.

On the other hand, LSM posted 6.20 per cent negative growth in 1QFY09 over the

corresponding period of previous year mainly due to deteriorating economic of the

country.

Challenges

The fast-deteriorating business environment especially for the pharmaceutical

companies in the wake of high cost of production has been burdening the local

pharma sector.


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Also, the cap on drug price by the government for the last seven years has aggravated

the situation further. Last price increase, which was of 3 to 4 per cent, was allowed by

Ministry of Health in December 2001.

The prices of the Active Pharmaceutical Ingredients (APIs) used for the manufacturing

of drugs as well as of other raw materials like paper, plastic, glass, rubber, etc. have

increased manifold since 2001. The cost of oil, gas, electricity, transportation and

labour has also spiked dramatically during this period.

Bristol-Myers Squibb (BMS) has an annual turnover of around Rs 1.5 billion and is the

second multinational pharmaceutical, which is going to kiss Pakistan goodbye. Earlier,

Merck Sharp & Dohme (MSD) closed down its operation in Pakistan some months

back and was acquired by a local pharmaceutical firm Organon Bio Sciences (OBS).

"It is not the end but a new beginning for the pharmaceutical firms", said a pharma

industry lynchpin. "Especially MNCs are shutting down business because of tough

business conditions," added he. He also pointed out that more and more MNCs are

mulling to close operations in Pakistan.

"After MSD and BMS, two more firms will follow suit in the near future," he said and

added that the local pharmaceutical companies are also facing hard times as well and

they are opting for mergers to survive in the present situation. Recently two local

pharmaceutical companies Hilton Pharma and SAMI Pharmaceutical consolidated

their operations in order to survive in the current situation.


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SUPPLYCHAINDEPARTMENT

THEORIESLEARNEDANDTHEIRAPPLICATION

SUPPLY CHAIN PROCESS[SUPPLY CHAIN MANGEMENT]

LISKO basically operates on quota system basis. On country level, planning is done and the

budget is prepared. How much demand is there to be met is the question that is to be

answered. For example, providing vaccines for swine flu. Another example relating to Pakistan

is that of Hajj Mencevax. Vaccine tender is placed every year before Hajj around august.

Normally, LISKO Pakistan wins the tender. Then further preparations are made by LISKO

Pakistan. When do they have to supply the vaccines, in which quarter? The demand is to be

met across the globe for the Hajj Mencevax Vaccines.

CEVA is the clearing agent for LISKO. CEVA works with Cargo Lux. They work only wherever

Cargo Lux is operating. For example, the product is manufactured at Belgium site. It is then to

be transported by road to the airport. Then the flight and the destination the product has to

arrive at. Furthermore, there are different shipping terms and regulations present in different

countries and they vary from country to country.

Now LISKO has its global insurance partners which manage its CIP (Carriage and Insurance

Paid). They believe that keeping a central insurance company backing them would save the

premium that has to be paid, would result in further cost savings and other advantages that

come as a result of the pooling in. However in Pakistan, insurance is to be done locally. It is a

one of the biggest challenges faced by LISKO Pakistan. For example, there might be an

insurance claim that may arise because of the suppliers mistake. So the local insurance

company wont be willing to accept the claim as it the problem occurred at the end of Belgium

when supplying the product

MKTGForecast

Finance

BOM

SCM

Rawmaterials

Packaging

SupplierWarehouse

QualityControl

Production

Warehouse

Distributor


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The vaccines LISKO produces normally are to be kept in the temperature range of 2C 8C. For

the vaccines, an order has to be placed at least 2 months to 3 months in advance on the JD

Edwards system being used at LISKO. Once all this is done, the shipment takes place.

The shipment has to change hands. For this to happen, very crystal clear documentation

system has been implemented by LISKO. There are certain documents a person should have

before the shipment can change hands. The requirements include the invoice, Bill of Label,

Certificate of Analysis, Batch Certificate (it includes the expiry, technicalities of the product, its

components). Furthermore, the local approval for the shipment is required. Country approval

maybe required, whether the vaccines have been approved in Pakistan. After this the logistics

gets involved and take it a step further. Cold Chain Management is an important part of it. Cold

Chain Management (CCM) requires active monitoring. LISKO recently has accepted DHLs

services. DHL provides LISKO with end to end services. DHL is well equipped and acquainted

with latest technology. From the time a particular carton of vaccines is lifted from the factory

to the time it reaches the warehouses here, DHL provides tracking services and keeps LISKO

updated on the transportation status.

LOGISTICS:[SUPPLY CHAIN MANGEMENT]

When logistics is brought up, LISKO recently did a very thorough route analysis. It wanted to

minimize its transportation time. LISKO wanted to find out the fastest possible route. They

evaluated airlines they were using for the transportation of medicines from one country to

another it was operating in. Cargolux flight frequency was lesser than Emirates which flew 4

times a week, twice as more. Furthermore, there was another advantage associated with

Emirates. Sometimes there might be a few small packages to be transported. Emirates took

these few small packages even on its commercial flights. Other than this, the time it took for

the vaccines or medicines to be transported to reach the airport was also calculated taking the

shortest route possible by road.

QUALITY MANAGEMENT:[SUPPLY CHAIN MANGEMENT]&[PRODUCTION MANAGEMENT]

LISKO made its documentation robust. How did it do this? Lets take their vaccines. The

vaccines required a temperature between 2C to 8C. The vaccines cant be exposed to less than

2C temperature for more than 10 minutes or it becomes useless. They are Do-Not-Freeze

products. The vaccines are very costly and special care needs to be taken of them. So on the

cartons which carry these vaccines, it is very clearly stated DO NOT FREEZE. So in the

transit, everyone putting their hands on the package read the instruction and act accordingly

and deal with it more delicately. The same way for fragile goods it has a warning that they

might break. Furthermore, these instructions are important as incase of something going


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wrong, LISKO can place a claim against the airline as clear instructions were issued from their

end about the product.

Local surveys were done with the objective to reduce cost. Ground handling operations were

checked, the facilities they had and were using. CargoLux are using SAPS (Shaheen Airport

Services) while Emirates is using Gerrys DNATA. The costs of using them were evaluated.

Inspection was done. They checked for things like if the Temperature System was present or

not and of what quality? Is there any Technical staff? The Automation level present?

The insurance policy that LISKO has for vaccine insurance is a separate from the marine

insurance. The marine insurance does not cover all of it. The premium paid for such insurance

is higher. Furthermore, there are some complications. Claims less than $1,000 cant be claimed

for. The company doesnt want to waste its resources on small claims as evaluating the claim is

costly and time consuming. The good thing that LISKO Pakistan experiences now is that this

comes under the global coverage provided by the multinational.

LISKO doesnt like its shipment lying at airports overnight. They believe they can take better

care and handle the shipment better than anyone as they have the state-of-the-art

technology. So they contact DHL, which then heads to the airport with its containers and

transport the shipment to LISKO warehouses. LISKO made DHL place automated temperature

devices in its containers because the product could be damaged if the right temperature is not

maintained. They have USB devices which form graphs as soon as they are plugged in. The

person at the warehouse sees all these temperature logs before signing the receiving. The

insurance firm is contacted before every shipment. They are kept in the loop on every stage

and this shows us that LISKO shares it information in an efficient manner with its partners.

Once the product comes to the LISKO warehouse, they take good care of it. The warehouses

LISKO has in Pakistan were made in accordance to the World Class standards and have hi-fi

cold chain management facilities.

There are several measures which check that the product is not tampered and is in its original

state. Electronic measures are placed in such as the 3M monitor which displays graphs on a

scale of 10 and can be programmed for updates every 10 seconds or 20 seconds. Other than

this, there are chemical measures which ensure the validity. If the product is exposed to the

temperature of less than 2C for more than 10 minutes, it freezes. So the color would change

automatically as soon as the product freezes. Furthermore in case of vaccines, q-tags (above

8C for max are than 10 min) and freeze tags (below 2C for more than 20 min) are used.

LISKO places a strong emphasis on quality and practices GQMS. The process it uses are

following European Quality Laws


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When choosing an airport, LISKO always checks whether the ground handlers its using are

IATA certified or not? Are they ISO certified or not?

DISTRIBUTION:

Vikor Distributor is a provider of normal finished goods. LISKO does business with it for backuppurposes. There was a time when there were a lot of freezing claims come up. LISKO decided

to look into it in depth. They re-evaluated and checked the packaging that was being used.

Previously, they were using cartons and other packages but now they have decided for

vaccines, pallet shippers are the best for this purpose

INVENTORYMANAGEMENT[SUPPLY CHAIN MANGEMENT]

Inventory management at LISKO is efficiently managed with a vast area of warehouse, havingseparate portion for raw materials inventory, cold storage room for finished products, and a

shelf area for the products to be dispatched in a short time. The raw material

INVENTORYPLACEMENT[SUPPLY CHAIN MANGEMENT]

Several techniques for inventory placement are used by LISKO in order to fulfill the demand on

time, as they believe in On-Time-delivery. As said by their production manager and Supply

Chain manager; We do not believe in delays.

The methods used for inventory placements are;

Centralized Placement

Inventory pooling

Vendor managed inventories

Forward placement with wholesalers

Continuous replenishment

Radio Frequency Identification ( about to introduce in near future)


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AGGREGATEPLANNING[SUPPLY CHAIN MANGEMENT]&[PRODUCTION MANAGEMENT]

Unlike food and other products, products of pharma are taken special care of expiry. Hence

products cannot be manufactured pre-schedule years in advance in anticipation or through

aggregate planning. Medicines made 6 months in advance are already 6months short of its 2

year life when it is supplied at the shop, shop keepers do not accept. Hence products arestarted with the process of manufacturing 2 months before the months demand, as the

process takes 55-60days. Though for cyclic demands products are produced as demand is

forecast are 95% above probable. Products for winter season such as cough, Anti-allergic etc.

For winter season, demand peaks, hence RM is imported 2 months in advance to meet the

demand. In addition, government tenders for supply takes months to finalize, and production is

started before their finalization in order to be to supply the products on the first day of the

contract.

Figure 1: Demand and production schedule of cough syrup

Months Forecasted demand

(,000)(in units)

Raw material import order

January 3047 1012

February 2034 1045

March 1012 1056

April 1045 1002

May 1056 1098

June 1002 1007

July 1098 1506

August 1007 2200

September 1506 3500

October 2200 3002

November 3500 3047

December 3002 2034

However, LISKO operates on quota system basis. On country level, planning is done

and the budget is prepared. How much demand is there to be met is the question that is

to be answered. For example, providing vaccines for swine flu. Another example


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relating to Pakistan is that of Hajj Mencevax. Vaccine tender is placed every year before

Hajj around august. Normally, LISKO Pakistan wins the tender. Then further

preparations are made by LISKO Pakistan. When do they have to supply the vaccines,

in which quarter? The demand is to be met across the globe for the Hajj Mencevax

Vaccines.

VENDOREVALUATIONSPROCESS[SUPPLY CHAIN MANGEMENT]

Different vendors have different reliability tests at multi nationals while in local firms, most

business is on the terms of goodwill and trust.

Printer vendor: Some offer cheap rates and good package, then check by giving orders

of small quantity to check reliability. Choose the best by trial and error Distilled Water vendor: Water of charge 2+ is requirement. Check consistency of water

charge through different segments and different weeks.

Carton pack vendor: Check strength of carton, if matches by 6layer and 4 layer

specification quoted. Variation in the amount of layers will cause deformity. Skilled

workers check for carton strength, if variation then vendor dumped as blacklisted.

According to Amir Idrees head of Supply Chain at LISKO At LISKO there is very comprehensive

set of forms, involving many requirements such as educational background, skilled labor. Thevendors are requirement to submit three quotations amongst which the best one is chosen.

Explaining further he stated that there is different vendor for fixture and fittings, gifts, printing,

packaging, toll manufacturing etc. The evaluation process is so strict that only handfuls are able

to qualify.

His major concerns were that at LISKO the supply chain it is lacking with a consistent value

chain, from the procurement and distribution side both. For e.g. Products used for dialysis and

cancer patients are stored in refrigerated rooms with temperature maintained at 2-8 Degree

Centigrade, but when it comes to distribution, the distributors does not have temperaturemaintained carriers, and ice jelly slabs are used to cool the product during transport to end

users. Hence one the primary concerns to improve in value chain because of which they are

looking for distributors which offer these kind of services.

ADEQUACYOFFECILITIESATTHEWORKINGENVIROMENT[SUPPLY CHAIN

MANGEMENT]


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Land:

Industrial area is an expensive area from the start to establish a plant at. Furthermore the area

should be separate and away for contaminated areas like sewerage areas, poultry farm, cow

shelter, waste dumps etc. An approximate of 2000sq yards is to be purchased to fulfill the

minimum requirement.

Layout plan

A layout plan would be of only 3 batches, tablet, capsules, and syrup as a minimum

requirement. This would be guided and approved by the ministry of Health, Islamabad. Where a

drug manual is provided according to which all the production activities take place.

Tablet dept requirement900 sq yards/min requirement

Capsule dept requirement300 sq yards/min requirement

Syrup dept requirement 600 sq yards/min requirement

Machinery

As a standard specification and regulations separate machines are requirement for each

department, where one cannot be used for the other.

The cost of machines double as every unit has be of pure Aluminum to prevent rotting and

unstable compounds.

Labor

Essentials of labour have to be fulfilled before the task of the labor starts itself.

Hire production manager

Quality control staff

Pharmacists

In actual the expenses of labor start before the actual production or sales itself.

Lab equipment

The entire production and experimentation lab has to built from pure stainless steel to avoid

content dilution and compound instability while the experimentation process. This almost

doubles the costs of setup.


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Registration file

Before any production process or transactions start a registration file has to come into being

involving testing methods, types and specifications of equipments and machinery etc. This

provides all the essentials of what the firms assets comprise of and how will the firm go about

the manufacturing process.

Unlike any consumer good production firm, which can switch its line of production by extending

the brand name and diversifying, the pharmaceutical industry cannot deviate an inch in its

batches, areas of production, methods of production and product category etc. Registration of

syrups and capsules requirement is pre-specified by this manual.

Official registration charges comprise of almost Rs 8000/product.

License application

Federal drug inspector with its panel of inspection pays multiple visits to the facility to inspect

the line of process. After thorough observation and audit the decision is carried out under

licensing board meeting. Special report is published which is then approved later.

Special requirements:

HVAC ducting & Power plants

In compliance with the WTO standard protocols, the HVAC (Heating, ventilation and Air

Conditioning) is a compulsory requirement for all pharmaceutical production facilities in

Pakistan. Ducting around the premises and around every department and operation room

forms the initial process. Further, chiller plants generating cool air through the duck are the

second step, of almost 24-30 tones power.

Generators

Power generation plants have also been occurred to be of essentiality due to excessive power

failure upsetting the whole process of production. Standby generators to ensure smooth

electric supply and continuous operations are necessary ensuring lesser problems. A minimum

requirement of 200KW.

De-ionizer water plant

High capacity water deionizer plant is necessary, due to high water requirement in cleaning

floors, washing bottles, cooling, etc. This is installed in case purchased de-ionized water falls

short of requirement.


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Category Requirement(Minimum) Cost/Unit

Land 2000sq yards Rs 20 Million

Layout plan 3 batches Rs 5 Lakhs

Machinery Aluminum made Rs 10 Million

Labor Pre operational staff Rs. 5 Lakhs

Lab equipment Stainless steel Rs 8 Lakhs

Registration file Procedure and product

registration

Rs 16 Lakhs

License application Panel inspection Rs 1lakh

Special requirements:

HVAC ducting &

Power plants

Standby generators

De-ionizer water plant

Chiller Plants

Continuous power supply

Hi-capacity

Rs 15 Million

Rs. 15lakhs

Rs 10lakh

Total cost of facilities Rs 45,580,000

OUTSOURCING[SUPPLY CHAIN MANGEMENT]

Mainly three categories of outsourcing activities are being carried out:

1. Distilled waterPlants used to purify water have a high cost of setup. These activities are outsourced due to

shortage of water at the source of industrial spots.

The water providers have access to plentiful amount of water as their stations are at

commercial spots and near pumping plants. Their costs are low due to plentiful supply and

no pumping issues, as the water is pumped at high pressure from the source.

2. Toll manufacturingFour words are enough to describing this phenomenon, From manufacturer to

manufacturer. This is carried out in two typical cases:


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1. Incase when more burden of supply and capacity limit has been achieved, then other

manufacturers are contracted with to produce the required material/product. Only

labor charges are requirement to be paid though. Standard processes are followed

hence no manufacturing constraints are encountered

2. If you are making capsules and have not yet been authorized to make liquids. Hence you

can toll manufacture it from some other producer and start marketing and supplying

your products by the time you get authorization from the ministry, an estimated time of

6months. Once you have achieved the authorization, you will be in the market 6months

earlier, and will have market stance, gained market recognition and share already,

increasing competitiveness.

3. LogisticsTypically small company owned transports, mostly Shehzor and Suzuki Pickup are used

within the region to fulfill the material flow requirement.

However, for cross regional supply requirements automobiles are needed which can carry

bulk of material allowing lower per unit costs.

40 wheeler trucks are ideal, but are not feasible to be purchased because of high cost and

infrequent usage. In addition, it proves to be cheaper as only one way petrol charges need

to be paid. Whereas if the truck was company owned 2 way petrol charges would have

been incurred. This leads to significant cost savings in case of long journeys. I.e. Quetta,

Peshawar, Khyber Pakhtunkhuwa etc.

PRACTICES FOR LOWERING COSTS AND INCREASING SALES [Supply Chain Mangement] &

[Principles Of Marketing]

o Lowering costs:

Achieve economies of scale

Search for different RM sources around the world. Different rates/Kg

allows more competition dragging down prices and lowering costs.

Difference of 1 rupee saves millions.

o Increasing sales:

Direct marketing is not allowed.


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Indirect promotion through doctors convinced by Medical reps, to

prescribe a particular product

Heavily invest in promotional activities, discount packages, free gifts, 100

on 100 offers (sell 100, the next 100 go free to you), Pakistan tour

packages.

SOCIALLYRESPONSIBLEPRACTICES[SUPPLY CHAIN MANGEMENT]

Great lists of corporations are involved in socially responsible practices, some fund to the

NGOs, while some randomly all over the world. However they:

Donate appreciable amounts of funds to NGOs such as Behbud, Dar-ul-sukun etc. They

are also up whenever the country faces crises, like in the recent flood havoc, the firm

donated many good quantity of painkillers, anti-allergic and anti-septic.

There are a list of programs carried out at these frims. The list of activities include the:

GIPAP program, Glivec International Patient Assistance program

Glivec is a breakthrough product by LISKO used for breast cancer treatment and Myeloid

leukemia patients. One pack the product of which costs around Rs. 1.5 lakhs. But still

worth millions of dollars are being donated to NGOs and cancer treatment hospitals

and patients to help establish a company-patient connection.

LEPROSY programs for assisting people in need

LISKO active partner of WHO and is also working in collaboration with WHO to treat

anti-malaria patients. An

Exfal program involving providing patients with medicines at subsidized rates or free of

cost to some

E-COMMERCE:[SUPPLY CHAIN MANGEMENT]

LISKO and LISKO are working actively to perfect their process of supply chain, in collaboration

with IT world forum. This will enable them to get more and more organized, systematic and

efficient in their value chain synchronization.

SAP has also been implemented in LISKO throughout the world since August 2006. Other

softwares include Oracle financial planning.

LISKO has its own software for forecasts and predicting future trends for production and sales

known as FUTURE CAST SOFTWARE implemented around 150 countries. FCS has been pushed

to produce results with an accuracy of 85%, currently LISKO is operating at 83.9% accuracy. FCS


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predicts keeping past trends, market plan strategies and cyclic trends in focus. Quantity levels

are forecasted for the next 72 months, updated each quarter. E-commerce has enabled to

operate at less than 3 months of inventory level and struggling to get it to 2months

According to Amir Idrees,

It is ourvision to use inventory at the optimal level.

TOTALQUALITYMANAGEMENT [Supply chain mangement]

Total Quality Management forms the essential of every firm irrespective of the type of industry.

Amongst the locals not many practices are popular but in MNCs

Six sigma has been implemented at Production and warehousing departments

Kaizen approach has been thoroughly used in logistics Lean manufacturing has been introduced as a new practice. This involves sending

associates and employees abroad for training purposes, after which they come back

here and train the local employees. Popularly known as Trainee to trainer approach

Amongst special practices are:

cGMP (Current Good Managerial Practices), which continuously improves it

policies and managerial approaches in line with the new developments in the

field of management. Famously new theoretical reviews made by Harvard and

Stanford.

GWK (Good warehousing practices) HSE (Health Safety Environment): Many standards are being followed in

obligations with LISKO International and WHO. For e.g. Previously the supply

containers where not protected properly and only a sheet was used to cover the

RM. But now all of the imported material is heavily cushioned with loose fill or

raw-paper, with containers being used for cross regional transport. The

containers provide safety against rain and are dirt free either surface or inside.

POO (Process Oriented Organization)

ENTERPRISE RESOURCE PLANNING [SUPPLY CHAIN MANGEMENT]LISKO believe in providing ease of understanding to their lower level workers and staff. This is

highlighted in the case of their ERP system even, where they have introduced a simple and

easy form of ERP system i.e. VISUAL FOX PRO 9 in order to link all departments together and

to enhance the pace of communication between each department.


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Enterprise resource planning is carried out throughout the system and has been an essential

part of working. Helps keep track of daily procurement process, warehousing, level of

inventory, material checking in and out, on the basis of which other decisions are based which

is more realistic.

LISKO and multi-national corps is struggling for a consistent value chain. Their concern revolves

around the improper synchronization with their supplying partners. Only if the distributors also

had the ERP softwares implemented which was synced with the firms and suppliers, a more

realistic view of the whole data would be reflected, facilitating market scenario analysis and

easing decision making.

WORKFORCECOSTING[SUPPLY CHAIN MANGEMENT]&[ORGANIZATIONAL BEHAVIOR]

To meet the demand and production needs a number of strategies are followed:

Chase Strategy

Level work force plus overtime strategy

A mix of both strategies is followed to fulfill the requirements in different departments. as an

overall process. Overall labour requirement is revised every quarter, allowing recruitment and

layoffs of contractual workforce. Overtime and bonuses are a part of strategy allowing meeting

the divisional requirement of logistics, warehousing, production etc.


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PERFORMANCEGAUGING:[PRODUCTION MANAGEMENT]

Sampling is part of the practices to ensure consistency in the functions and processes.

Involves Key Performance Indicators that allow gauging performance and measuring its

progress. Some KPIs are Days Inventory Outstanding [DIO], Months of coverage [MOC].

This sampling is been carried out every year, as a part of the company policy andRegulatory Compliance which differs from country to country, as every country has

different regulations and standards to abide by.

Warehousing and distribution costs/ freight are also kept in mind.

ENVIRONMENTAL MANAGEMENTSYSTEM: [PRODUCTION MANAGEMENT]

EMS system of Genix is in line with the international standards of ecology in order to highlight

and promote ethical business practices by keeping the importance of concern for ecology.

They have a unique system for effluents drain out by the Genix. The drain situated in korangi

area always showed a high reading of COD in it. The genix decided to dump out their solid

materials by vendor management while the liquid flowing out of Genix is now stored and tested

on material sheets to check the hazardous chemicals. This way, Genix is now incorporating a

system of flowing out the waste in the drain in an efficient and meeting the standards of

environmental concerns as laid down by NEQS.

The liquid draining out of Genix is stored in a container before leaving the premise, which is

then tested and the most hazardous material are fetched out by the management. The system

is redesigned and now the quality of raw material used at Genix ensures the least hazardous

materials in it. The process is re-engineered in a way that now the chemicals draining out of the

production and quality control are now been reduced by using the methods of material testing

by sheets. The process of EMS has been certified by ISO: 140


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BALANCED SCORECARD:[SUPPLY CHAIN MANGEMENT]&[STRATEGIC MANAGEMENT]

Strategic Theme:

Operations Excellence

Objectives Measures Targets Initiatives

FinancialCost recovery

Profitability

Increased market

share in the

category of

cancer medicine

Increase return

on investment

Recovery of

costs by June

2012

Controlling cost

of

manufacturing,

warehousing,

transportation

Customer

Retain

existingcustomers

and

attract new

ones

Sustain top 5

position on anti-biotic market

Design products

(service packages)

according to usage

patterns in the

past and the future

demands of

customers

Cater to

customersaccording to

needs:

o Need

o Perception

Market

research forthe purpose of

usage patterns

Product

Development

Programs

TICSS service

quality

program

Order Fill Rate,

Backorder

Levels, OnTime

Delivery

Internal

Continually

struggle to

improve the

skilled people

and processes

Recruit, growth

and retain

Continually work

for process

improvement

Increase

standards

and training

processes

ASPIRE (Achine

sustained

productivity

through

innovation and

recognition

enforcement)

program

Profitability

People

Retain existing

customers and

attract newones

Commercial

packages

Corporate

packages

Processes


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Learning

Innovation of

product and

service

Employee training

and development

Emphasis on

technicians and

engineers

x

employees tobe hired

y

employees to

be trained

Senior

technicians to

be trained

through externaltraining

programs

Subordinates to

be trained by

the senior

technicians

through in-

house training

programs

APICSMembership

FAILURE MODE AND RISK ANALYSIS:[SUPPLY CHAIN MANGEMENT]

Occurrence:High no. Likely

Low no. Unlikely

Severity:High no. High severity

Low no. Low severity

Detection:High no. Unlikely to detect

Low no. Likely to detect

Innovation ofproduct and


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Process analysis[PRODUCTION MANAGEMENT]

The firm produces a number of products categorized according to their diseases. However

there are four major categories of medicines, processes of which will be analyzed below.

For TABLETS:

1. WeighingFor the mixture to be prepared the right amount of active and inactive ingredients shall

be mixed together. Hence they are weighed before mixed to ensure a fix percentage of

each ingredient.

2. SievingBefore any mixture is prepared it is filtered for any impurities. Only when these

impurities are removed, the content is ready for manufacturing.

3. Mixing and Blending4. Wet granulation

Wet granulation is a process of using a liquid binder to lightly agglomerate the powder

mixture. The amount of liquid has to be properly controlled, as over-wetting will cause

the granules to be too hard and under-wetting will cause them to be too soft and

friable. Aqueous solutions have the advantage of being safer to deal with than solvent-

based systems.

Procedure

o Step 1: The active ingredient and excipients are weighed and mixed.

o Step 2: The wet granulate is prepared by adding the liquid binderadhesive to

the powder blend and mixing thoroughly. Examples of binders/adhesives include

aqueous preparations of cornstarch, natural gums such as acacia, cellulose

derivatives such as methyl cellulose, gelatin, and povidone.

o Step 3: Screening the damp mass through a mesh to form pellets or granules.

o Step 4: Drying the granulation. A conventional tray-dryer or fluid-bed dryer are

most commonly used.

o Step 5: After the granules are dried, they are passed through a screen of smaller

size than the one used for the wet mass to create granules of uniform size.

Low shear wet granulation processes use very simple mixing equipment, and can take a

considerable time to achieve a uniformly mixed state. High shear wet granulationprocesses use equipment that mixes the powder and liquid at a very fast rate, and thus

speeds up the manufacturing process. Fluid bed granulation is a multiple-step wet

granulation process performed in the same vessel to pre-heat, granulate, and dry the

powders. It is used because it allows close control of the granulation process.
http://en.wikipedia.org/wiki/Gelatinhttp://en.wikipedia.org/wiki/Gelatin


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5. DryingDry granulation processes create granules by light compaction of the powder blend

under low pressures. The compacts so-formed are broken up gently to produce granules

(agglomerates). This process is often used when the product to be granulated is

sensitive to moisture and heat. Dry granulation can be conducted on a tablet press usingslugging tooling or on a roll press called a roller compactor. Dry granulation equipment

offers a wide range of pressures to attain proper densification and granule formation.

Dry granulation is simpler than wet granulation, therefore the cost is reduced. However,

dry granulation often produces a higher percentage of fine granules, which can

compromise the quality or create yield problems for the tablet. Dry granulation requires

drugs or excipients with cohesive properties, and a 'dry binder' may need to be added to

the formulation to facilitate the formation of granules.

6. Sieving according to required mash size7. Weight of granules according to formulation8. Final mixing and lubrication

After granulation, a final lubrication step is used to ensure that the tableting blend does

not stick to the equipment during the tableting process. This usually involves low shear

blending of the granules with a powdered lubricant, such as magnesium stearate or

stearic acid.

9. Compression(Quality control check)This is achieved using tablet presses machines. The tablet press is an essential piece of

machinery for any pharmaceutical and nutraceutical manufacturer. Common

manufacturers of tablet presses include Fette, Korsch, Kikusui, Manesty and Courtoy.

Tablet presses must allow the operator to adjust the position of the lower and upper

punches accurately, so that the tablet weight, thickness and density can each be

controlled.

10.Cleaning and de-dusting(Quality control check)Once the tablets have been compressed, the tablets are de-dusted to remove any

granules present on the surface on the tablet. This is all done under the supervision of

the quality control staff.

11.Weight check for variation(Quality control check)The final product is eventually weighted for any variation in the mixture. This process is

carried out under the International standard requirment. If the variation is above 105%

or below 90%, then the product is discarded and has to repeat the whole process again.

12.Blister(Quality control check)Many tablets today are coated after being pressed. Although sugar-coating was popular

in the past, the process has many drawbacks. Modern tablet coatings are polymer and

polysaccharide based, with plasticizers and pigments included. Tablet coatings must be
http://en.wikipedia.org/wiki/Polymerhttp://en.wikipedia.org/wiki/Polysaccharidehttp://en.wikipedia.org/wiki/Plasticizerhttp://en.wikipedia.org/wiki/Pigmenthttp://en.wikipedia.org/wiki/Pigmenthttp://en.wikipedia.org/wiki/Plasticizerhttp://en.wikipedia.org/wiki/Polysaccharidehttp://en.wikipedia.org/wiki/Polymer


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stable and strong enough to survive the handling of the tablet, must not make tablets

stick together during the coating process, and must follow the fine contours of

embossed characters or logos on tablets. Coatings are necessary for tablets that have an

unpleasant taste, and a smoother finish makes large tablets easier to swallow.


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Process Evaluation Matrix[PRODUCTION MANAGEMENT]

S.NO EVALUATIO

N IN

TERMS OF:

TABLETS(GEN

ERAL)

SYRUP(LIQUI

D)

INJECTABLES(VI

ALS &

AMPULES)

OINTEMENT

1. TIME 2

DAYS/BATCH

2

DAYS/BATCH

-2 DAYS/BATCH

-Exception with

regard to the

evaluation of

stability studies

2 DAYS/BATCH

2. MACHINER

Y/WORKERS

50% Machine

50% Worker

50% Machine

50% Worker

50% Machine

50% Worker

50% Machine

50% Worker

3. EFFECIENC

Y

Efficiency

requirement

met under

United States

Pharmacopia,

British

Pharmacopia

United States

Pharmacopia,

British

Pharmacopia

United States

Pharmacopia,

British

Pharmacopia

United States

Pharmacopia,

British

Pharmacopia

4. DEFECTIVEPERCENTA

GE

4-5% 4-5% 4-5% 4-5%

5. CAPACITY 20000/8Hrs 50000/8Hrs 24000/8Hrs 20000/8Hrs

6. ENVIROME

NT

Heating,

Ventilating,

and Air

Conditioning

Heating,

Ventilating,

and Air

Conditioning

-Most sensitive

-Heating,

Ventilating, and

Air Conditioning

Heating,

Ventilating, and

Air Conditioning


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CONCLUSION AND RECOMMENDATIONS

Not much can be recommended of this industry. The processes are very fixed, all the final

products tested and approved under the same standards.

In the pharmaceutical industry, the manufacturing process is precisely defined and hence the

productivity of labor cannot be increased by offering more incentives. This is because

production time is fixed, and the worker cannot take out the product before time to increase

productivity, as it would affect the quality of the product. However there are certain factor,

which can make a difference on the standards the firm operates in:

Technological reforms should be brought in the firm/industry. Our pharmaceutical

industry lacks latest equipment and machinery, which handicaps the industry from the

manufacturing of latest ointments and medicines which then eventually have to beimported. If the latest machinery are bought, they would increase the production

capacity of the firm and also enable the production of low cost groundbreaking

medications which have to be imported at high cost.

A good working environment always supports the business environment. If the workers

are offered a clean and cool working environment the productivity of the workers would

increase, the workers would require less breaks, in addition they would even fall less

sick and hence take fewer leaves.

Only if the raw material used are of good quality standards and provides a high quality

output, then the industry can boost its performance. Most of the local firms today are

producing low quality products with the exception of some for e.g. Getz pharma.


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REFERENCES

Nazar Talib

Chief Executive

Sohail Talib

Director

BIBLIOGRAPHY

WWW.WIKIPEDIA.COM

WWW.LISKOPAKISTAN.COM

Documents

Internship Report Lisko