Glaxo Smith Kline Pakistan Limited Commerce Essay

Glaxo Smith Kline Pakistan restrain doctor EssayGSK Pakistan particular was created on January 1st 2000 by the merger of SmithKline Beecham Pakistan and Glaxo Wellcome Pakistan and it stands as the largest pharmaceutic come with in Pakistan today.GSK leads the industry in nurture, volume and prescription market sh atomic number 18s. Some of their key brands include Augmentin, Panadol, Seretide, Betnovate, Zantac and Calpol in practice of medicine and ren avowed consumer wellness vexation brands include Horlicks, Aquafresh, Macleans and ENO.GlaxoSmithKline (GSK) is mavin of the Pakistans largest research-establish pharmaceutical corporations that disc everywheres, develops, manufactures and markets mark homo wellness products. GSK has devil main military control divisions, pharmaceuticals and consumer healthc atomic number 18. This profile deals with the pharmaceuticals division, which breaks 85% of GSKs gross sales.GlaxoSmithKline (GSK) is to a fault Pakistans leadi ng research-based pharmaceutical comp whatever with a powerful combination of skills and resources that provides a platform for delivering strong growth in todays speedyly changing healthcare environment.GSK also has leadership in four major therapeutic areas anti-invectives, primaeval nervous system (CNS), respiratory and gastro-intestinal/metabolic. Comp both produce medicines that treat cardinal major disease areas asthma, virus control, infections, mental health, diabetes and digestive conditions. In addition, GSK is a leader in the important area of vaccines and are developing newborn treatments for atomic number 50cer and has a growing portfolio of oncology products.The comp both also has a Consumer health care portfolio comprising over-the-counter (OTC) medicines, oral care products and nutritional healthcare drinks, tout ensemble of which are among the market leaders.GSK is primarily focused on the development, takings and distribution of its own products. GSK is an important contributor to the national skills pool in areas of chemical and pharmaceutical research, manufacturing, forethought practice and sales marketing.FACTORY LOCATIONSRegistered Office1. GlaxoSmithKline Pakistan Limited35-Dockyard, westside Wharf,Karachi -74000.Telephones 92-21-2315478-82Fax 92-21-2313632Other Offices1. GlaxoSmithKline Pakistan LimitedF-268, S.I.T.E.,Near Labour Square,Karachi-75700Telephones 92-21-2570665-69Fax 92-21-25726132. GlaxoSmithKline Pakistan Limited18.5 km, Ferozepur Road,P.O. Box No. 244,LahoreTelephones 5811931-35Fax 5820821GSKS FINANCIAL DATAFive eld gross salesYEARSSALES (rupees in billions)20026.920038.120048.820059.4 (Growth by 6.2%)200610.1 (Growth by 7.1%) graphic REPRESENTATION OF SALES (in millions)Comp alls Five Years ProfitYEARS simoleons (rupees in billions)20020.5420031.0220041.4720051.81 (Growth by 23.3%)20061.66 (Decrease by 8.2%)GRAPHICAL REPRESENTATION OF PROFIT (in millions) tax revenue breakupBenchmarkingRatio NameWYETHSEAR LEABBOTTGSKCurrentRatio4.101.7144.764.4Inventory turnover1.69 times10.11 times4.69 times3.0 timesTotal Asset perturbation60%10.2%1.17 times1.1 timesProfit Margin on gross revenue0.1820.0320.170.16Earnings Per Share1123.5310.2112.2 furnish on Assets10.93.219.921.5CORE VALUE OF GSKGSKs valuate is based on its research strength linked to production marketing. The union of value creation is from the inventories of new chemical entities and it captures value through a high intensive sales and marketing physical edge. Es moveial to the overall value pro agency is the synergy of RD, production and commercial activities. GSK has been committed to its social and health related activities. Good Corporate Citizen is core value of GSK.Core determine of GSKs locoweed be summed up as a belief in performance with integrity, coupled with entrepreneurial spirit, focus on innovation, a perceive of urgency and a passion for achievement.GSK are cash in ones chipsing to curb the gloss guides and informs everything they do by adhering to these core principles, they seek to create a humor in which the vanquish people can al modalitys achieve to their full authorisation difference, and in turn help millions of people live longer, healthier and happier lives. raw CHEMICAL INVENTROIES employment and commercial activitiesSynergy of RDGSKHigh intensive sales.Core Competencies of GSK GSK has the core competencies in genetics, to alter them to integrate genetics effectively and responsibly into their current practice. Competency in these areas represents the minimum knowledge, skills, and attitudes necessary for health professionals from all disciplines (medicine, nursing, allied health, public health, dentistry, psychology, social work, etc.) to provide patient care that involves a run offness of genetic emerges and concerns. short letter PROFILEGlaxoSmithKline (GSK) is one of the Pakistans largest research-based pharmaceutical companies that that discovers, develops, manufactures and markets military man health products. It is an innovative company that produces branded products only, which it has developed itself. The company has two main divisions, pharmaceuticals and consumer healthcare. The consumer healthcare businesses of GSK consist of over-the-counter (OTC) medicines, oral care products, such(prenominal) as the toothpaste brands Aqua fresh, MacLeans and Sensodyne, and nutritional healthcare drinks. The pharmaceuticals division is the largest part of GSKs businesses and can be divided into prescription drugs and vaccines. The headquarters of GSK are located in the UK. The company operates in nigh 160 national markets. GSK conducts RD at more(prenominal) than 20 sites and employs 15,000 employees in RD. GSK is involved in many different RD partnerships with schoolman institutions, biotechnology companies and other pharmaceutical companies. The company has a leading position in genetics and in new drug discovery technologies.BUSINESS P ROFILEPharmaceuticalsConsumer healthcareVaccinesPrescription drugsOver-the-counter (OTC) medicinesOral care productsnutritional healthcare drinksViral VaccinationToothpasteBacterialMacleansAqua fresh plaza diseaseInfectionSkin conditionSensodyneBUSINESS STRATEGYGSKs business goal is to be a world leader in pharmaceutical industry. In order to achieve this, the company seeks to improve its RD pipeline, using a focused drug portfolio strategy and selective in-licensing agreements for the external contracting of RD. The company links RD closely to commercial operations to maximize the value of its RD portfolio. Furthermore, GSK seeks to summation brand name recognition among customers and to develop improved versions of older products, on which new patents can be obtained. It is a common strategy of branded drug producers to develop improved versions or more convenient formulations of drugs on which the patents have expired, and to persuade doctors and patients to use the enhanced ve rsion. rail line strategy existence best grade for best people to do their best workOptimising the performance of key productsDelivering the product pipeline for patientsImproving access to medicines generate Chain of GSK add up Chain Management according to GSK, is a form for ensuring persistency of come forth through the rapid identification of actual and potential come forth mountain range issues enabling pro-active concern and the prevention of low and knocked out(p) of railway line situations.SUPPLY CHAIN MISSION OF GSKGSKs sum Chain deputation is to construct, harmonize and improve grapheme of all the product and go with the retrieve of satisfying the chain of suppliers suppliers and customers customers by providing right product, at the right time, in the right quantity, to the right place and becoming highly recognized by our employees, customers and shareholders and abiding by Government laws and regulationsGSKs Objective of Supply Chain wall socket Management To prevent low and out of spud situations occurring. Pro-actively identify any potential go forth chain issues with the purpose ofpreventing low stocks and stock outs occurring. make up ones mind supply chain issues, at a local anaesthetic level where possible, exceptingissue types categorized for immediate escalation. Provide a fast and effective mechanics for escalation where issuescannot be proposed at local level. Enable delivery of simmer down cause abridgment complete with follow up action to see the causes of actual and potential low stocks and stock outs areunderstood. To have one information source for all supply chain issues. To have deviseetary visibility of all supply chain issues. To change rapid tactical response to commercial opport social unitiesSupply Chain IntegrationP R O D UC TFLOWsales force activity (SFA)Transportationproviderfactory WarehouseManufacturingSales stations/WarehouseCustomerPharmaciesDistributorsINFORMATIONFLOWGSKs Supply Chain Structu reMr. Ahmad Jamal Qudsi (Commercial)Distribution motorbusDISTRIBUTION motorbusMASTER SCHEDULERMASTER SCHEDULERCAPAPCITYplannerPRODUCTION PLANNERPRODUCTION PLANNERMr. Sajjad Zahid Shaikh (GMS)Manager procural, Shipping, Contracts, Regulatory aff diffuses.PROCUREMENT MANAGERExports mANAGERLocal/ merchandise PURCHASE mANAGERWarehouse mANAGERMr. Obaid (GMS)Purchase Managerb-65F-268w.wLHRSales Force Activity( imply Generated)Supply Chain cognitive operationManufacturing planning( accept Generated)Procurement readyingVendors( book of factss asked)LCFollow up import dispatches head Transit clipping bodily in WarehouseMaterial Available For employmentProductionReleased by LTRFO BatchesPacking lineFO Quarantine central DepotsDispatchesInstitutionsLab Test Results (LTR)Satellite Depots DistributionWholesalersRetailersGSKs globose Manufacturing Supply numberGMS site disposals get out be co-ordinated inside a consistent cultivate alongside duologue plans. A consistent process willing enable GMS in meeting the business case objectives. The process proposed will in general recommend findings to the CET based on a balance between Realising the synergy benefits from transferring production Maximising sale proceeds Minimising local labour pleonasm On outlet supply security Managing political and other local sensitivities primaeval features of the site disposal process are It is GMS-managed with involvement of key stakeholders at the sites and in LegalEntities External contracted assistance will enable global marketing of the sitesA phased and co-ordinated approachPhase 1 facilityPhase 2 searchPhase 3 negotiationThe Escalation ProcessStep 1Daily (regular)The regular dialogue between Demand and Supply managers is the rigation of SCIM. SCIM is only invoked when the agreed supply plan cannot be achieved and a firmness cannot be found by the implore and supply managers. Low stock and out of stock events are entered into the SOLS system or generated railw ay carmatically. Demand and Supply Managers discuss entered events as appropriate. Supply Managers make proposals to resolve the event. Demand managers read proposals and agree by accepting the suppliers response to events with the customer satisfaction flag as a default value of yes or disagree and move the flag to no. If no is selected then explanation may be entered into the escalation field. This enables a cross to be put up selecting any items marked for escalation. Demand and Supply Mangers proactively view trends, and any issues which might potentially stupor the supply of product.Step 2 WednesdayThe Supply Manager prepares for the PCM. Reports are in stock(predicate) from SOLS and other supporting computer systems identifying all issues. In particular, the SCIM invoice from the info Warehouse. This is to be run for All step ups (in SOLS issues are referred to as events). The Supply Manager cuts his answer for in preparation for the PCM at the latest this is make o n the Thursday morning.Step 3 ThursdayThe PCM is held. At sites of supply the PCM surveil all Low jobs, Out of Stocks and any issues and their potential touch on the sites ability to supply. Where no resolution to actual and potential issues is found then the Supply Manager invokes the escalation procedure with the ALM or equivalent. N.B. Issues can be escalated by either the Demand Manager or the Supply ManagerStep 4 Thursday/FridayThe ALM (or equivalent) is brought in by either the Demand or Supply Manager to help resolve the issue identified. The ALM (or equivalent) runs the SCIM report from the Data Warehouse filtering on Unresolved Issues. If resolution can lock in not be do then the ALM progresses the issue with the Regional Logistics handler (RLD). RLD chair conference call with ALMs (or equivalent) and any guest Demand or Supply Managers needful. RLD compiles consolidated market view for region of issues. RLD tries to find web solutions to supply issues. RLD flags un resolved issues as critical issues in SOLS.Step 5 MondayThe Area Logistics Managers / Directors are brought into the discussions to assist resolution if necessary especially where a potential stock rationing situation might occur. VP of Global Logistics (VPGL) runs the SCIM report from the Data Warehouse filtering on Critical Issues. VPGL chairs conference call with RLDs and any guest ALMs, Demand or Supply Managers call for. VP compiles consolidated market impact for issues. VPGL flags any unresolved critical issues as exceptional in SOLS. VPGL makes decision escalate critical issues and engage commercial and manufacturing executives.Step 6 Tuesday ball review by RSDs, Vice-President Global Logistics, Senior Vice President Global Logistics and Strategy and any other appropriate senior manager. The SCIM report is run from the Data Warehouse filtering on Exceptional Issues. An output from this meeting (or teleconference) can be the establishment of a virtual aggroup to resolve th e issue. It will exist until the issue is resolved and is lead by the ALM (or equivalent) supported by the RLD. Where stock rationing is needful the RLD will trigger the Rationing process VPGL reports on the commercial impact of exceptional issues. The RLD assumes overall responsibility for resolution of the exceptional issue.Supply Chain ProcessSupply Chain Issue Management (SCIM) is a process for ensuring continuity of supply through the rapid identification of actual and potential supply chain issues enabling pro-active focussing and the prevention of low and out of stock situations and regular communication occurs between collect and supply managers. The process is driven from bottom up alternatively than top down. Issues are to be resolved at the lowest level. Trending analysis is to be done by the Supply Managers. The process is two way between penury and supply. Both supply performance and forecast trueness are to be reviewed.SCORE MODELPLANNINGBUYING applySTORESELLINGRM Manufacturer run intoDeliver fountainMakeDeliverMakeSourceDeliverSourceDeliverSourcePlanIndentersGSK, PakistanDistributorsReturnReturnReturnReturnReturnReturnSupplierSuppliersSupplierCompanyCustomerWholesalersCustomersCustomer homeworkPlanning in GSK, Pakistan, is done by the demand function unit of the finance subdivision. Below is a general diagram which shows how the planning takes placeThe ProcessThe process starts with the doctors which prescribes medicines to the patients. The patients then ask for the drugs from the chemist which is basically a retailer. From retailer an order is then passed on to the distributor which then simultaneously ask for the drugs from the company. Now the daily data on sales is sent to the SMART Department of GSK which uploads the information in the database. Finally the queries and reports which are generated by the SMART Software help the Demand Managers, in the finance department, to estimate the future demand for the specific drug.SMART Softwa re basically creates the trend which help managers see the rise and fall in a drugs demands over the years. This helps them to accurately tell the procural managers the demand required for the raw materials to be purchased for a specific drug.BUSINESS PLANNINGThe corporate executive team of GSK does strategic planning on every last day of week which is co-ordinate indoors a consistent process alongside communication plans. The process proposed will generally recommend decisions to the CET based on a balance between realizing the synergy benefits from transferring production, Maximizing sale proceeds, Ongoing supply security.Corporate executive team (CET)MeetingFinanceDepartment wrangleCET VP, Planning SourcingNegotiationCET approvalCorporate executive team. petition FORCASTAs mentioned above the demand in GSK is forecasted by the Demand give-up the ghost Unit of Finance Department. Finance department provides 24 months rolling immix demand forecast, which is know as ADS (Appro ved Demand Statement). This statement shows individual demands for all product lines demanded by end users. The softwares used by the finance department to predicts demands are BIPEX (also known as BPCS) and JD-Edwards.On the demand side markets review their sales plans on a regular introduction (at least periodic depending on size of market) and feed into the supply sites Production control Meetings through the Supply ManagersUNPLANNED DEMANDUn think demand is a demand, which comes incidentally Like at the time of War, NATURAL DISASTERS OR ANY EPIDEMICS tally to GSK, they have a policy to maintain four weeks safety stock to handle the uncertainties.Stock, in the three categories, intended to maintain supply continuity resulting from a significant event that is unplanned.Top 20 Products (as defined by GSK annual sales, Pharma/Consumer healthcare)Medically Critical and Access to Medicines productsNew chemical Entities (NCEs), including Product Line Extensions (PLEs)SUPPLY STRUC TURESupply Issues (potential and actual) are reviewed officially each week. At the supply sites this is done at the weekly Production match Meeting. Supply Issues are managed on a daily basis but the formal weekly meeting brings all aspects of supply and demand together for review it adds a framework. Then after the supply plan has been made it is forwarded it to the Procurement Department.Master Production agendumThe entire production is based on this plan weather it is Tablet, syrup, or injectables manufacturing. This is set up on the bases of forecasted and some times unplanned demand as well. sequence for all the batches is set up according to this plan but when there is a sense of urgency then there are some changes made. The figure below shows this process is generatedMaster Production ArrivalThis is the instrument, which is going to arrive in multitude, and it is the job of Master Production Scheduler to arrange the bulk. This bulk can either be for export or for the m arket demand done through forecast. He also sets up when to make the required batch on which date.STOCK MANAGEMENTGSK used inventory management system First in First out (FIFO). Inventory management (FIFO) of strategic stock to ensure proper rotation and reduce the potential of data used. Items at stock keeping unit level where, based on the forward sales forecast/ sales orders, the level of inventory is predicted to fall below 50% of the agreed safety stock within the next 90 days.SAFETY STOCKGSK stores stock in ware houses for maximum flexibility of supply purpose. The stock is taken into account within 1 month of time.Material Management PlanningGSK, Pakistan is using BIPEX (also known as BPCS) to effectively and efficiently handle the Material issues. All minutes are made electronically into BPCS known as Business Planning Control System. If there is an additional requirement due to abnormal demand then there are some changes made in MRP. susceptibility PlanningCapacity means a measured ability to get to work. Capacity planning is a process in which capacity is planned based upon expected demand and it needs to be balanced with required capacity utilization and it also outlines the capacity requirements for the production, availability of machines and what are the banal hours, which they are required to meet the forecasted demand. And to manage the capacity control process GSK Pakistan is using 2 systems known as JD-Edwards and BIPEX which is also called as Business Process Control System (BPCS).SUPPLY CHAIN CONFIGURATIONSupply chain manager act upon the process enabling pro-active management of potential and actual supply issues in order that the impact on preoccupied sales is minimized. Supply chain manager resolve supply chain issues, at a local level. The Supply Manager prepares for the PCM. Reports are available from SOLS and other supporting computer systems identifying all issues. In particular, the SCIM report from the Data Warehouse. .MAKE OR BUY DECISIONGSK Pakistan is currently importing 72 drugs, which includes all its vaccines and expensive oncology medicines such as Hycamtin. The reason why GSK imports these products are because there manufacturing is very expensive and Pakistan is not self sufficient in the raw materials which are required to make these products. Infact the climate of Pakistan makes it very gravely for GSK to manufacture vaccines here. Thus all its vaccines are imported from Belgium. Also, these products cater to a very small market segment and manufacturing them here would not be profitable.SOURCINGGsk Medicines contain active ingredients. They also contain other, additional ingredients called Excipients that help ensure the stability, safety and effectiveness of the medicine. They are also added to improve the medicines taste and way and to make it easier to take. Some may be used to prolong the livelihood of the medicinePharmaceutical ingredients include both synthetic chemical substances as well as material with biological orgin. Various control methods with chemical, microscopic and microbiological testing is covered during the course. In addition, the different national and international quality control regulations for pharmaceutical ingredients are taught.SOURCING PROCESSThe Weekly ProcessAt the day-to-day level the Demand and Supply Managers are engaged in managing the fulfillment of the order book, ensuring forecasts are kept up to date, handling any un-forecasted (abnormal) demand, and resolving any issues. This is normal daily activity. Any issues arising must be discussed with the objective of resolving at local level. Issues can come from either the Demand or the Supply side. The Stock Out and Low Stock (SOLS) Data Warehouse system is the main vehicle for recording and reportage issues and actions taken between Demand and Supply Managers. It is used as a formal means of identifying and tracking issues and the actions taken to resolve them. It is a dialogue a pplication for use by the Demand and Supply Managers. Demand nodes will accept the proposals or escalate through the hierarchy. Data can be manually entered into SOLS. Supply sites must respond to recorded stock-out and low stock events according to SCIM time tablePROCUREMENTGSK has an extremely large procurement organization largely left over from the 2001 merger between Glaxo incur and SmithKline Beecham. The purchasing group set a goal of developing what it called best value purchasing strategies, ensuring that GSK is getting the best possible price and greet for everything it buys. That means negotiating the best prices and making sure those contracts are adhered to.GSK has two types of purchases i.e. local purchases and foreign purchasesPURCHASESLOCAL PURCHASES inappropriate PURCHASESRaw Packing Material host purchasesNon Group purchases (party purchases))NIP (non inventory purchases)PROCESS FLOW FOR PURCHASEPR incorporated inIncorporated ByAgainst Requisition ofBIPEXPPICPu rchasesJD EdwardsConcern dept.NIPPurchase of inventory is clear through Firm Plan Order (FPO) by Purchase Planning and Inventory Control Dept (PPIC) and incorporates in system N.I.P. Concern department generate approved Purchase Receipt. Procurement Department (P.D.) received signed imitate of FPO by PPIC and PR for N.I.P. geek of PurchasePURCHASE FLOW OF PRODUCT AFOREIGN PURCHJASESLOCAL PURCHASESPurchasesRaw MaterialPacking MaterialN.I.P.Fixed Assets expendable itemsQuotation callingSelection of Supplier through Quotation paygrade FormPlacement of Purchase Order (PO) by P.D.Information in POSupplier nameDelivery scheduleQuantity involveRate (as decided with supplier)ASUPPLY of GOODSNature of MaterialMaterial Supplied atPurchasesStores.NIPConcern Dept.3way chase awayInvoice WITH P.R. P.O. by Commercial FinanceIssuance of INVOICE by Supplier.Information in invoiceDelivery Challan .P.O.Recording of Liability depends on LTR.DOCUMENTS ISSUED BY DEPT.AFTER RECEIPT of MATERIAL from SUPPLIERSupply ofDocuments IssuedBYTOPurchasesReceivers Ticket.(RT)Delivery Challan.Stores Dept.Quality Control (QC) Dept.NIPMaterial Receipt Note (MRN)Concern Dept.Incorporated in System.Lab Test Report (LTR) internalisation of approved lots in BIPEX by QCUp to the QualityAccounts Dept. runs an auto report identify refreshed LTRsEntries made by Accounts Dept. for new LTRs DebitCredit portal for NEW LTRStock (Standard rate)thirtyPurchases Price Variance (PPV)-GSTxxx PPV- Other than GSTxxx Provision for purchases(actual payable amount)xxx PPV pas seul (with the Diff.) Fav/ (Un-Fav)xxxxxxPurchases (actual payable amount)xxx Purchases ContraxxxENTRY for NEW INVOICE (after approval of QC)Provision for Purchasesxxx Vendor Control A/cxxxBEntries made by Accounts Dept. for new MRN DebitCreditENTRY for NEW MRNExpense A/C (NIP)xxx NIP Commitment A/C xxx ENTRY for NEW INVOICE NIP Commitment A/C xxx Vendor Control A/CxxxPayment to VENDOREntries made by Accounts Dept. at Payment StageDebitCr editVendor Control A/Cxxx Bankxxx Tax LiabilityxxxRaw MaterialPacking MaterialPurchase FROMQuotation Calling3RD PARTYSelection of SupplierRaw MaterialFinished GoodsGROUPPrices are already decided between GlaxoSmithKline Pakistan Limited Group Companies.Placement of Purchase Order (PO) by PD they incorporates PO, in BIPEX.Receives PERFORMA INVOICE (an agreement to sell) by Supplier.Type of L/C go-ahead of Letter of Credit (L/C) with Bank.Information in L/C L/C .Mode of transportation.Type of L/C. (Usance / Sight)Receipt of Shipment Schedule (SS), Suppliers Invoice Bill of Lading B/L ( passable Non-Negotiable Copy).Information in SSDate of Shipment.Type of freight paid.At usage at sightC unveiling of Negotiable Copy of B/L to Shipping Co.Submission of Non- Negotiable Copy of B/L to Ministry of Health for Approval of Material (as required under Drugs Act).Delivery Order (Delivery Challan) receives from Shipping Co.Submission to Custom for Clearance of Shipment.Receipt of SHIPMENTCe rtificate of Approval for Material by Ministry of Health alongwith exemption certificate (if any).LTR Up to the QualityReceipt of Agents Bill interrogatory of Shipment by QCMaterials Average Lead TimeGSK Pakistan only uses air freight to acquire imported materials and its lead time is approximately long hundred days. Note that when materials arrive they also take clearance time which is most 4-5 days for air freight