`Inventory Management System of Beximco Pharmaceuticals limited

Internship Report
Inventory Management System of Beximco Pharmaceuticals Limited
Exam. Roll: 020023
Internship Report on
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`Inventory Management System of Beximco Pharmaceuticals limited

Inventory Management System of Beximco Pharmaceuticals Limited
Prepared For Chairman Internship Placement Committee
Prepared By Exam Roll: 020023 Registration No.: 18113 4th Year, 8th Semester Bat
ch no.: 11, BBA Program Academic Session: 2001-02
Department of Business Administration Jahangirnagar University Savar, Dhaka 1342
January 29, 2007
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`Inventory Management System of Beximco Pharmaceuticals limited

January 29, 2007 Chairman Internship placement Committee Department of Business
Administration Jahangirnagar University Savar, Dhaka-1342
Subject: Submission of the Internship report on Inventory Management System of Be
ximco Pharmaceuticals Limited
Dear Sir:
With due respect and honor I want to place my internship report entitled Inventor
y Management System of Beximco Pharmaceuticals Limited as part of the internship
program. The topic was selected to know the overall inventory management system
through the evaluation and to assess the efficacy of inventory management system
of Beximco Pharmaceuticals Ltd.
I found the task assigned to me as to fulfill the partial requirement of interns
hip program very interesting. I had to learn and perform several official tasks
to know the inventory management system and collect information and relevant dat
a to prepare this report. I thereby express my deep gratitude as you kindly give
me the opportunity to successfully prepare the report and fulfill the requireme
nt.
I can assure you that I have provided the most authentic information in the repo
rt. This report has perfectly matched my career objective and allowed me to devo
te my knowledge to gain the practical experience.
Thanking you
Sincerely Yours
Exam Roll No.020023 Registration No.18113 4th Year, 8th Semester Batch No.11, BB
A Program Academic Session: 2001-2002
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Acknowledgement
First of all I like to thank the almighty. I am very much grateful to Mr. Kamrul
Arefin, chairman of the Department of Business administration, Jahangirnagar Un
iversity, for his support through out the entire internship program. His comment
s and advises are most valuable assets to myself. I also like to thank to Mr. K.
M Zahidul Islam, batch manager of 11th batch for his excellent direction and sup
port as an supervisor of my total internship program. I gratefully remember the
help of Mr. Ali Nawaz, Finance director of Beximco Pharmaceuticals limited. I am
grateful to him for giving me the chance to do my internship in this organizati
on. I would like to express my sincere gratitude to Mr. Jamal Ahmed Chouhury, Se
nior Manager, Accounts and Finance departments, who was my supervisor in the org
anization and gave me the chance to show my practicability in the organization a
rena. His valuable suggestion and guidance helps me to complete this report at t
he best level. Without his help this report might not have been a comprehensive
one. Once again I would like to express my sincere appreciation and gratitude to
him for his help in the preparation of this report. I am very helpful to all co
operative staffs and officials of the Accounts and Finance Departments of Beximc
o Pharmaceuticals limited. I especially thank Asstt.Manager, Mr. Syed Rumman, Se
nior Accounts officer, Mr. Syed Zakir Hossain and Accounts officer, Mr. Abul Bas
her for their cordial and sincere aid. Finally I would like to thank all my clas
smates for giving me extraordinary help in every step. I also thank all my frien
ds at my university for giving me support. I would also like to thank all senior
s and juniors who assisted me time to time.
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`Inventory Management System of Beximco Pharmaceuticals limited

Executive Summary
The history of Pharmaceuticals business of the company dates back to the early 7
0s, when it started to import market and distribute medicines from world renowne
d companies like Upjohn inc. of USA and Bayer AG of Germany. Since the very begi
nning, the company was highly successful in generating increased demand for its
products which eventually justified local production. According, a Pharmaceutica
l manufacturing facility was designed and constructed in 1980 under the technica
l supervision of Upjohn Inc. of USA, to manufacturing their products under licen
se. Product made under license of Bayer AG of Germany followed. After its initia
l years of struggle, Beximco Pharma broke ground with the launching of its own p
roducts in 1983. The company aims to build the most robust product portfolio in
the domestic market. In 2005, forty nine (49) new products were launched in the
domestic market. October 21, 2005 Beximco Pharma opened a new chapter in the cor
porate business history of Bangladesh by starting trading of its shares in the A
lternative Investment Market (AIM) of London Stock Exchange. The objective of th
is report is to know the overall `Inventory Management System of Beximco Pharmac
euticals Limited through the evaluation of inventory management system and to ass
ess the efficacy of inventory management of Beximco Pharmaceuticals Ltd. In orde
r to make the report more meaningful and presentable the report is based on two
sources of data and information called primary and secondary sources of data. In
ventory means the number of units and/or value of the stock of goods held. In th
e midst of the conversation of officials of the purchase department I competent
to know about their purchase department purchasing procedure from placing the or
der to store all the raw or packing materials needed for production. The purchas
e department is apprehensive with all the purchases (Pharmaceuticals raw materia
l, packaging materials, machinery etc) of the company. Import Authorization Form
ats are prepared by the planning department for the purchase of pharmaceuticals
materials. The format is then sent to the Director (commercial) for approval. Af
ter an L/C is opened, all information about its latest status is documented in a
` Purchase Consignment (PC) folder maintained by the purchase department. In cas
e of BPL the company basically uses cycle counting method. Talking with Mr. Jama
l Ahmed Choudhury, Senior Accounts manager of Beximco Pharmaceuticals Limited I
able to know Beximco Pharmaceuticals Limited does not consider ABC analysis. The
y impose equal importance to each and every item. This report is estranged into
three parts. These parts are; Introduction, Organization and Project part. The f
irst chapter deals with introduction that present the whole report in brief. It
includes; Origin of the Report, Objective of the Report, Scope, Methodology, Fac
ility and Report Instruction, Data Instruction, Time Schedule of the Report, Lim
itations. The second chapter encloses about the organization; Mission and Vissio
n of Beximco Group, Key Financial Data, The Company Profile, Management of the C
ompany, A Brief History of the Company, Divisions of Beximco Group, Departments
of BPL, Products Information of BPL, Major New Products that Launched in Domesti
c Market, Specialized Products, Exports, Winning the Export Trophy Gold, Future
Strategies, Listing in alternative investment market on LSM. In third chapter co
ntains the basic about inventory management system. It includes; Introduction, S
uccessful Inventory Management, The Purchasing Plan, Inventory Controlling Syste
m, Development of Inventory Management.
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In fourth chapter I try to work on how Beximco Pharmaceuticals Limited manages t
heir inventories, from purchasing of raw materials to finished goods and the dis
tribution process. In the project part of this report I try to focus on how the
purchasing department selects the supplier for raw or packing materials, shipmen
t procedure of the product. How Beximco Pharmaceuticals Limited manage their inv
entories like- maintain the materials using computer software, materials informa
tion and stock maintenance, Beximco Pharmaceuticals limited four production depar
tment and their product work-in-process. I also try to give some products orderi
ng, carrying and holding cost and but for insufficiency of data I fail to calcul
ate Economic Order of Quantity properly. In this report I also try to show the B
eximco Pharmaceuticals limited product distribution process through their I&I (Im
port and Indent) service limited-from the store to 13 depots of different places
.
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Table of Contents Heading Acknowledgement Executive summary Part I, Chapter 1 1.
0.Introduction 1.1. Origin of the Report 1.2. Objective of the Report 1.3. Scope
1.4. Methodology 1.5. Facility and Report Instruction 1.6. Data analysis 1.7. T
ime Schedule of the Report 1.8. Limitations Part II, Chapter 2 2.0.Organization
Part 2.1. Mission and Vission of Beximco Group 2.2. 2.3. 2.4. 2.5. 2.6. 2.7. Key
Financial Data The Company Profile Management of the Company A Brief History of
the Company Divisions of Beximco Group Departments of BPL 4 4 5 6 7-8 9 9 10-11
11 11 11 13 Page Number 1 1 1-2 2 3 3 3 3 Page Number Iv v- vi
2.8. Products Information of BPL 2.9. Major New Products that Launched in Domest
ic Market 2.10. Exports 2.11. Winning the Export Trophy Gold 2.12. Future Strate
gies Heading
2.13. Listing in alternative investment market on LSM Part III, Chapter 3 3.0.Pr
oject Part :Inventory Management 3.1. Introduction 3.2. Successful Inventory Man
agement 3.3. The Purchasing Plan 3.4. Development of Inventory Management Part I
II, Chapter 4 4.0. Project Part: Inventory Management System of BPL 4.1. The Pur
chasing Plan of Inventories
13
13 13 14 14
15
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4.2. Supplier of Inventories & Terms of Condition 4.2.1. Supplier of Inventories
4.2.2. Terms and condition 4.3. Inventories of Beximco Pharmaceuticals Limited
4.4. Lead time 4.5. Cycle counting method 4.6. Ordering and Carrying Cost 4.7. A
BC analysis 4.8. Types of Inventory Systems 4.9. Inventory Management technique
of BPL 4.9.1 Raw materials 4.9.1.1. Receiving and Maintaining of Raw and Packing
Materials 4.9.2. Work-in-process (WIP) 4.9.3. Finished goods 4.10. Economic Ord
er of Quantity (EOQ) 4.11. Calculation of Economic Order of Quantity 4.12. Distr
ibution Process 5.0. Conclusion 6.0. Findings and Recommendation Appendix: Bibli
ography
16 16 16 17 18 18 19 19 20-21 21-22 22-23 23-28 29-30 31 32-36 37-38 39 40 41 42
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List of Tables and Charts Heading Table-1: Key Financial Data Table- 2: Closing
Inventories Table- 3: Product Information Table- 4: Material Information and Sto
ck Maintenance Table- 5: Material Received Information Table- 6: Daily Issued St
atement Table- 7: Raw Material Requisition Slip Table- 8: Raw material received
statement, Sodium Chloride Table- 9: Raw material received statement, Sodium Sta
rch Glycolate. Table- 10: Raw material received statement, Liquid Paraffin Heavy
BP. TableTableTableTable11: 12: 13: 14: Raw material received statement, Self A
dhesive Lactameal. Holding Cost Ordering Cost, Sodium Chloride Ordering Cost, Li
quid Paraffin Heavy BP. Page Number 4 17 24 25 26 27 28 32 33 34 34 35 35 36 36
36
Table- 15: Ordering Cost, Sodium Starch Glycolate. Table- 16: Ordering Cost, Sel
f Adhesive Lactameal
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1.0. INTRODUCTION 1.1. ORIGIN OF THE REPORT: Upon completion of the 7th semester
a student of BBA program of Jahangirnagar University has to undertake internshi
p training in business organization as a requirement of academic curriculum. As
the classroom discussion alone cannot make students to know about the real life
situation, therefore it is an opportunity for the students to know about the pra
ctical environment of the real business world through this program. The duration
of internship program is three months. The internee student is then required to
carry out an extensive analysis of real world business problem and thereby prep
are a report on the solution to the problem. In relation to that I have been ass
igned a report on Inventory Management System of Beximco Pharmaceuticals Ltd. The
issue has been assigned by the host organization Beximco Pharmaceuticals Limited
and by the internship supervisor Mr. K.M Zahidul Islam.
1.2. OBLECTIVE OF THE REPORT:
The objective of the report is classified into two sections: 1. Primary objectiv
e: The academic objective of this report is to fulfill a partial requirement of
BBA program. 2. Secondary objective:
To evaluation inventory management system i
n Beximco Pharmaceuticals Ltd. To assess the efficacy of inventory management of
Beximco Pharmaceuticals Ltd.
To gather some practical knowledge about Beximco P
harmaceuticals Ltd. and its inventory management system. 1.3. SCOPE: During thes
e three months period, I worked at the Accounts Department. So, I acquired knowl
edge in these departments and my report is based on especially in Inventory Mana
gement System. The report covered organizational overview, management and organi
zational structure and overall Inventory Management System of Beximco Pharmaceut
icals Limited
Management of inventory is a vast filed of production management. Here the scope
is as follows: Theoretical aspects of inventory management, Inventory managemen
t adopted in Beximco Pharmaceuticals Ltd. from raw materials ordering to finish
goods delivery,
Reasons behind the deviation and weakness in inventory managemen
t and some recommendations for the better of inventory management. 1.4. METHODOL
OGY: The methodology followed in this report is as under:
Overall flow of invent
ory, their issuing and receiving procedures and record keeping system, To find o
ut and to understand the indicators that reveal an organizations performance in t
he market and how they can also be used as tools for a presignaling systems,
To
make comments on the overall findings of the report that the company, if require
d could resort to mitigate its inefficiencies.
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In order to make the report more meaningful and presentable the report is based
on two sources of data and information; The primary Sources of data and informat
ions are;
Face to face conversation with the respective officers of the organizat
ion, Practical work exposures on different desks of the office,
Relevant file st
udy as provided by the officers concerned. The Secondary Sources are as bellow;
Annual Repot, Cost Sheet, Books of Accounts, and other records of the company, I
nternet also used as a theoretical source of information. 1.5. FACILITY AND REPO
RT INSTRUCTION: Instructions and directions regarding the related article are pr
ovided by the academic supervisor and the organizational supervisor. In addition
I got this greatest opportunity from Mr. Jamal Ahmed Choudhury, Senior Manager,
Accounts and Finance Department, Beximco Pharmaceuticals Limited, to conduct th
e study as an internship program. 1.6. DATA ANALYSIS: The data obtained through
analyzing the information from different cross-functional areas of the Accounts
and Finance department of Beximco Pharmaceuticals Ltd. 1.7. TIME SCHEDULE OF THE
REPORT: According to the requirement of the internship program the maximum time
for the completion of the report is near about three months. So, maximum two mo
nths can be taken for collecting and analyzing the data. So, to make the report
more effective I try to get testimony to my academic supervisor and the organiza
tional supervisor with their valuable suggestion to make the report a successful
one. 1.8. LIMITATIONS: Despite the diligent efforts that have given in preparat
ion of this report, I have only succeeded to skin the surface of the ocean of th
e subject. Therefore the views expressed in this report are likely to be limited
by the lack of extensive knowledge and understanding. As I have worked only thr
ee months in the Be ximco P harmaceuticals Ltd, I have got just the overall idea
about the Inventory Management System of Beximco Pharmaceuticals Ltd. As I was
not the employee of that organization I couldnt get access to all the departments
. The followings are the limitations that I have faced during the report: 1. Res
triction on internal information availability by the authority of Beximco Pharma
ceuticals Ltd, 2. The data that seems insufficient may be suffering from lack of
reliability to some extent, 3. Besides these there were some confidential areas
that were not provided to me by the organization, 4. Lack of adequate relevant
formal report work on Beximco Pharmaceuticals Ltd, 5. My lack of experience also
hampered a lot to fulfill my knowledge.
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2.0. ORGANIZATION PART 2.1. MISSION AND VISSION OF BEXIMCO GROUP: Mission: Each o
f our activities must benefit and add value to the common wealth of our society.
We firmly believe that, in the final analysis we are accountable to each of the
constituents with whom we interact, namely: our employees, our customers, our b
usiness associates, our fellow citizens and share holders. Source: Annual Report
of Beximco Pharmaceuticals Limited, in year 2005. Vision: If there is one charact
eristic that has typified the Beximco approach it is Vision to be the best of ou
r nature and human resources. A vision to establish our group and country as res
pected and valued regional presence. Source: Annual Report of Beximco Pharmaceuti
cals Limited, in year 2005. 2.2. KEY FINANCIAL DATA: Key Financial Data (Figure
in Million Taka) Table- 01: 2005 Net Sales Domestic Export Gross Profit Net Prof
it Net Profit on Sales (%) Total Assets (Gross) Total Equity Equity Ratio Earnin
gs Per Share (Taka) 3,327.02 3,238.16 88.86 1,558.50 489.26 14.71 10,945.48 6,82
0.93 62.32 6.36 2004 2,402.70 2,323.21 79.49 1,023.77 329.38 13.71 8,658.50 4,83
6.01 55.85 4.71 %Change 38.47 39.38 11.79 52.23 48.54 7.27 26.41 41.04 11.57 35.
03
Source: Annual Report of Beximco Pharmaceuticals Limited, In Year2005
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2.3. THE COMPANY PROFILE: Corporate Headquarters
17 Dhanmondi R/A,Road No.2 Dhaka 1205, Bangladesh Phones: 880-2-868220, 861891 F
ax: 880-2-863470, 867647 19 Dhanmondi R/A,Road No.7 Dhaka 1205, Bangladesh Phone
s: 880-2-869151(to 5) Fax: 880-2-863888, 863470 Cherag Ali Market, Auspara, Tong
i I/A, Gazipur. 1976 1980 Public Limited Company Manufacturing and Marketing of
Finished Pharmaceutical Formulations and Raw Materials Dhaka (DSE), Chittagong (
CSE) and London stock Exchande. Pakistan, Myanmar, Singapore, UK, USA, Yemen, Ke
nya, Nepal, Vietnam, Sri Lanka. Bhutan, Georgia, Germany, Hong Kong, Iran, Kenya
, Malaysia, Myanmar, Nepal, Pakistan, Russia, Singapore, South Korea, Taiwan, Th
ailand, Ukraine, Vietnam, Yemen Iraq, Cambodia, Sri Lanka.
Operational Headquarters
Factory Year of establishment Commercial Production Status Type of business
Stock exchange listing
Overseas Offices and Associates
Export activities
Source: Annual Report of Beximco Pharmaceuticals Limited, In Year2005 2.4. MANAG
EMENT OF THE COMPANY: Beximco Pharmaceuticals limited is managed by the Board of
Directors, an Executive Committee and a Management Committee. Board of Director
s is responsible for the corporate governance. The Executive Committee is accoun
table for both operational and financial performance of the company. This commit
tee is also responsible for changes, new project review, compliance audit etc. t
he Management committee reviews and manages day-to-day business operation and re
commends strategy options to the Executive committed. The Chief Executive Office
r (CEO) is responsible for the overall management of the business.
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BOARD OF DIRECTORS Ahmed Sohail Fazlur Rahman Ahmed Salman Fazlur Rahman Iqbal A
hmed Mohammad Abul Qasem O K Chowdhury Dr. Abdul Alim Khan A B S Rahman Dr. Fard
ia Huq Chowdhury Hafizur Rahman Faheemul Huq Ahsanul Karim EXECUTIVE COMMITTEE N
azmul Hassan Ali Nawaz Afsar Uddin Ahmed Nadim Shafiqullah MANAGEMENT COMMITTEE
Lutfur Rahman Rabbur Reza Zakaria Seraj Chowdhury Director, Works Director, Mark
eting Director, Sales Chief Executive Officer Chief Executive Officer Director C
ommercial Consultant Chairman Vice Chairman Director Director Director Director
Director Director Director Director Director
Source: Annual Report of Beximco Pharmaceuticals Limited, In Year2005 2.5. A BRI
EF HISTORY OF THE COMPANY: The history of Pharmaceuticals business of the compan
y dates back to the early 70s, when it started to import market and distribute m
edicines from world renowned companies like Upjohn inc. of USA and Bayer AG of G
ermany. Since the very beginning, the company was highly successful in generatin
g increased demand for its products which eventually justified local production.
According, a Pharmaceutical manufacturing facility was designed and constructed
in 1980 under the technical supervision of Upjohn Inc. of USA, to manufacturing
their products under license. Product made under license of Bayer AG of Germany
followed. After its initial years of struggle, Beximco Pharma broke ground with
the launching of its own products in 1983. This was the beginning of company wi
th a vision to go a long way. YEAR 1976 1980 ACTIVITIES Registration of the comp
any. Started manufacturing and marketing of licensee products of Bayer AG of Ger
many and Upjohn Inc. of USA. Listing in the Dhaka Limited Company (PLC). Stock E
xchange (DSE) as a Public
1985
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1990 1992 1993 1994-1995 1996 1997
Commissioning of Basic Chemical Unit. Started export operation with Active Pharm
aceutical Ingredients (APIs). First export market operation with finished pharma
ceutical products. Achievement of National Export Trophy (Gold) as the pharmaceu
tical company of the country. Introduction of sustained release dosage form in t
he market. first
Commissioning of Metered Dose Inhaler (MDI) plant and introduction of suppositor
y dosage form. Introduction of Metered Dose Nasal Spray. UNICEF approval of BPL
as an enlisted supplier. Agreement to manufacture GlaxoSmithKline. Metered Dose
Inhaler (MDI) for
1998 1999 2000 2001
Introduction of Small Volume Parenteral (SVP) products; Establishment of Analges
ic-Antiinflammatory bulk drug plant.
2002
Won the first prize of ICAB National Awards 2000 for Best Published Accounts an
d Reports in Non-Financial Sector Category; The first Bangladeshi company to su
pply pharmaceuticals to Raffles Hospitalthe most prestigious hospital of Singapo
re.
2003
2004
2005
Received National Export trophy (Gold) for consecutive 2 years (1998-99, 1999-2000
).Won the Silver prize of ICAB National Awards 2003for Best Published Accounts an
d Reports' in Non-Financial Sector Category.Won a tender to supply Neoceptin R a
nd Neofloxin to Raffles Hospital of Singapore for the whole years consumption.Int
roduced Anti-HIV Drugs for the first time in Bangladesh.Diversification into Ant
i-Cancer therapeutic class. Signed contract with Novartis to manufacture their l
iquid , cream, ointment and suppository products under Toll Manufacturing agreemen
t Visit of Saudi Delegates Headed by Honble Health Minister, Kingdom of Saudi Ara
bia. Merger of Beximco Infusions Ltd. with Beximco Pharmaceuticals Ltd. Admissio
n to Alternative Investment Market (AIM) of London Stock Exchange (LSE).
Source: Annual Report of Beximco Pharmaceuticals Limited, In Year2005
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2.6. DIVISIONS OF BEXIMCO GROUP: Division Textile Division Company Padma Textile
s Mills Ltd, Beximce Synthetics Ltd, Beximce Apparels Ltd, Beximce Knitting Ltd,
Beximce Textiles Ltd, Beximce Denims Ltd, Beximce Fashions Ltd, Beximce Fabrics
Ltd. Chemical Division Beximce Pharmaceuticals Ltd, Beximce Infusion Ltd. Basic
Chemical Unit, Land Nitrogen Plant, Pharmtatek Chemicals Ltd, Shuktara Printers
, I & I services Ltd. Construction Division Beximce Engineering Ltd, Shinepukur
Holdings Ltd. Trading Division Bangladesh Export Import Ltd, Beximce Holdings Lt
d Jute division New Dhaka Industries Ltd, Sonali Ansh Ltd. Esses exports Ltd. Ma
rine food Division Beximco Foods Ltd, Fisheries Ltd. Media Division Beximce Medi
a Ltd. Information Technology Division Beximce Softech Ltd, Beximce systems Ltd,
Beximce Computers Ltd, Bangladesh onlie Ltd. Others Shinepukur Ceramics, Gammat
ech Ltd. Source: Annual Report of Beximco Pharmaceuticals Limited, In Year2005.
2.7. DEPARTMENTS OF BEXIMCO PHARMACEUTICALS LIMITED: BPL has highly qualified pr
ofessional staffs for handling all the condition of the company. Introduction of
various divisions are as follows: Central Product Management (CPM) Department P
urchase Department Financial System Development (FSD) Department Sales Departmen
t Human Resource Department Finance And Accounts Department BPL Factory (Works D
epartment) Management Information System (MIS) Department Multimedia Medical Ser
vices Department (MSD) 2.8. PRODUCTS INFORMATION OF BEXIMCO PHARMACEUTICALS LIMI
TED: Beximco Pharma is manufacturing and marketing various types of pharmaceutic
al finished formulations covering almost all major therapeutic classes, dosage f
orms and strengths. BPL is into various therapeutic classes, with major emphasis
on : i) Antibiotics, ii) Antiulcerants and Antacids iii) Cardiovascular Drugs,
iv) NSAIDs, v) Analgesics and Antipyretics, vi) Vitamins and Iron Supplements, v
ii) Antidiabetics, viii) Antifungals, ix) Asthma Prophylactics and Bronchodilato
rs and x) Nasal Decongestant and Anti-inflammatory Drugs.Apart from producing ta
blets, capsules, syrups, suspensions, solutions, drops, creams, ointments, gel e
tc., currently we are also into specialized products like i) Inhalers, ii) Nasal
Sprays and iii) Suppositories.
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Top Brand Successful blending of its scientific knowledge with innovative market
ing approaches have positioned these blockbuster drugs as the engine of its driv
e for the success Blockbuster Products: Napa: Brand in pain and fever since 1990
. Neoceptin R: The leader in the antiulcerant market for the last 5 years. Neofl
oxin: Very powerful weapon against difficult to treat infections. Tycil : A trus
ted name among amoxycillin preparations. Aristovit M: Aesthetically the most bea
utiful multivitamin & mineral preparation in Bangladesh. Source: Annual Report o
f Beximco Pharmaceuticals Limited, in year 2005. 2.9. MAJOR NEW PRODUCTS THAT LA
UNCHED IN DOMESTIC MARKET: The company aims to build the most robust product por
tfolio in the domestic market. In 2005, forty nine (49) new products were launch
ed in the domestic market. Some major new products are: Amdopril, Atralin, Cefida,
Iprasol, Odrel Plus, Pantobex, Valcap, Vivis, Vomec, Zolmit, Zybex SR, Bexitrol -F,
ol, Napa, Neoceptin R, Amdocal, Atova, Diapro, Bextrum Gold, Aristocal D, Zybex SR e
.10. EXPORTS: In Bangladesh, Beximco Pharma always remained as the pioneer in al
l its activities and moves towards internationalization. Beximco Pharma was the
first company from Bangladesh to fulfill the national aspiration of turning a do
mestic based pharmaceutical industry into an exporter of quality medicines. As i
ts first move towards internationalization, BPL entered overseas market with the
export of Basic Chemicals to Hong Kong in 1992. So far, Beximco Pharma exported
its basic chemicals to Germany, Iran, Malaysia, Taiwan, Nepal, Vietnam, Thailan
d and South Korea. 2.11. WINNING THE EXPORT TROPHY GOLD: Although BPL entered in
ternational arena with export of basic chemicals, today Beximco Pharma has becom
e the country s largest exporter of pharmaceutical finished formulation. BPL has
so far exported its formulation products to Russia, Georgia, Ukraine, Pakistan,
Myanmar, Bhutan, Singapore, Vietnam, Yemen and Kenya. For its outstanding expor
t performance, Beximco Pharma was awarded the NATIONAL EXPORT TROPHY GOLD in the
Financial Year 1994-1995, 1998-1999& 1999-2000. Beximco Pharma is the only comp
any to be a record 3 times winner of this highest national recognition for expor
t award by the Bangladesh Government. 2.12. FUTURE STRATEGIES: In Asia, BPL will
be entering Phillipines, Cambodia, Sri Lanka and Nepal. BPL has already registe
red their Inhalers in Phillipines. BPL has also aplied for product registration
in Cambodia, Sri Lanka and Nepal. In Africa, BPL is basically considering East A
frican countries
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like Tanzania and Uganda. BPL has also applied for registration in Malawi which
is at the sound end of Africa. BPL also intends to enter various countries in La
tin America with its Inhalers brands. In the Eastern Europe, BPL will be enterin
g Czech Republic Market and in the near future, BPL also intends to enter Centra
l Europe Market. Once its 50 Million Dollar new solid facility is completed and c
ertified by USFDA, BPL aim to enter the United States Pharmaceutical Market -the
largest in the world -to dramatically increase the company growth and profit. 2
.13. LISTING IN ALTERNATIVE INVESTMENT MARKET OF LONDON STOCK EXCHANGE: October
21, 2005 Beximco Pharma opened a new chapter in the corporate business history o
f Bangladesh by starting trading of its shares in the Alternative Investment Mar
ket (AIM) of London Stock Exchange. Beximco Pharma became the first and the only
company from Bangladesh to get listed in the LSE. Commenting on the listing on
that ceremonial opening the British Minister for pension Reforms said, `It is a
great day for London and it is a great day for Beximco as well as for Bangladesh.
The British government welcomes this milestone, he added further.
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3.0. INVENTORY MANAGEMENT 3.1. INTRODUCTION Good inventory management is indispe
nsable to the successful operation of most organizations for a number of reasons
. One is the amount of money inventory represents; another is the impact that in
ventories have on the daily operation of an organization. A typical manufacturin
g firm carries different types of inventories including raw materials, workin- p
rocess and finished goods as well as spare parts for machines tools and other su
pplies. Inadequate control of inventories can result in both under and overstock
ing of items. Under stocking results in missed deliveries lost sales, dissatisfi
ed customers, production bottlenecks and overstocking unnecessarily ties up fund
s that might be more productive elsewhere. Inventory management has two main con
cerns. One relates to the level of customer service that is to have the right go
ods, in sufficient quantities, in the right places and at the right time. The ot
her relates to the cost of ordering and carrying inventories. The overall object
ive of inventory management is to achieve satisfactory level of customer service
while keeping inventory costs within reasonable bounds. 3.2. SUCCESSFUL INVENTO
RY MANAGEMENT: Effective Inventory Management enables an organization to meet or
exceed customers expectations of product availability while maximizing net profi
ts or minimizing costs. Inventory management should be successful when it able t
o balance the total costs of inventory and the return after using that inventory
. For a successful inventory management we should consider the following issues:
We should try to Increase inventory turnover but we should not sacrifice the se
rvice level of our organization,
We should keep our stock low without sacrificin
g any services or performances,
We should obtain inventories with lower prices b
y making volume purchases but not ending up with slow-moving inventory, For exam
ple, computing the inventory turnover ratio is a simple measure of managerial pe
rformance. This value gives a rough guideline by which managers can set goals an
d evaluate performance, but it must be realized that the turnover rate varies wi
th the function of inventory, the type of business and how the ratio is calculat
ed (whether on sales or cost of goods sold). Average inventory turnover ratios f
or individual industries can be obtained from trade associations. 3.3. THE PURCH
ASING PLAN: One of the most important aspects of inventory control is to have th
e items in stock at the moment they are needed. This includes going into the mar
ket to buy the goods early enough to ensure delivery at the proper time. Thus, b
uying requires advance planning to determine inventory needs for each time perio
d and then making the commitments without procrastination. For retailers, planni
ng ahead is very crucial. Since they offer new items for sale months before the
actual calendar date for the beginning of the new season, it is imperative that
buying plans be formulated early enough to allow for intelligent buying without
any last minute panic purchases. The main reason for this early offering for sal
e of new items is that the retailer regards the calendar date for the beginning
of the new season as the merchandise date for the end of the old season. 3.4. DE
VELOPMENT OF INVENTORY MANAGEMENT: In recent years, two approaches have had a ma
jor impact on inventory management: Material Requirements Planning (MRP) and Jus
t-In-Time (JIT and Kanban). Material requirements planning is basically an inform
ation system in which sales are converted directly into loads on the facility by
sub-unit and time period. Materials are scheduled more closely, thereby reducin
g inventories, and delivery times become shorter and more
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`Inventory Management System of Beximco Pharmaceuticals limited

predictable. Its primary use is with products composed of many components. MRP s
ystems are practical for smaller firms. The computer system is only one part of
the total project which is usually long-term, taking one to three years to devel
op. Just-in-time inventory management is an approach which works to eliminate in
ventories rather than optimize them. The inventory of raw materials and work-inprocess falls to that needed in a single day. This is accomplished by reducing s
et-up times and lead times so that small lots may be ordered. Suppliers may have
to make several deliveries a day or move close to the user plants to support th
is plan.
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4.0. INVENTORY MANAGEMENT SYSTEM OF BPL 4.1. THE PURCHASING PLAN OF INVENTORIES:
In the midst of the conversation of officials of the purchase department I comp
etent to know about their purchase department purchasing procedure from placing
the order to store all the raw or packing materials needed for production. The p
urchase department is apprehensive with all the purchases (Pharmaceuticals raw m
aterial, packaging materials, machinery etc) of the company. Import Authorizatio
n Formats are prepared by the planning department for the purchase of pharmaceut
icals materials. The format is then sent to the Director (commercial) for approv
al. After an L/C is opened, all information about its latest status is documente
d in a ` Purchase Consignment (PC) folder maintained by the purchase department.
Such documents are indispensable for the monitoring (current status and informat
ion record) of all the L/Cs. The function of the department for purchasing mater
ials from abroad is shown below: Find out the source/supplier Receiving requirem
ent from different department Contract with the vender Opening LC in favor of ve
nder Shipment along with information and documents to the bank Document retireme
nt from bank Contract with the clearing agent Transfer the materials to the go d
own Materials receiving and inspection report from the store
4.2. SUPPLIERS OF INVENTORIES AND TERMS OF CONDITIONS: 4.2.1. Supplier of invent
ories: Main suppliers of inventories are;
Germany
India
Singapore
Republic of Ko
rea UK and
Republic of China 4.2.2. Terms and condition: 1. Materials: Must conf
orm to the specification as described the above-referred indent. 2. Packaging st
atement: To meet the documents as per the LC terms. 3. Shipment: To be made from
any EUROPEAN SEAPORT to Chittagong port by sea. 4. Delivery: To be made by spec
ific date. 5. LC validity: LC remains valid for shipment and negotiation till (m
ade upon agreement). 6. Product label: To be labeled in the container of goods a
s per the instruction stipulated in the LC. 7. Marine insurance: Will be covered
by us soonest on receipt of your shipment advice under the open Marine policy N
O RIC/DB/MC- 262/10/2006 dated (specific date).
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`Inventory Management System of Beximco Pharmaceuticals limited

8. Shipping document PMT: By your sight draft on the opener JANATA bank, local o
fficer, Dilkusha, C/A, Dhaka, BD under their LC no.(xxxxx) dated (specific date)
issued against documentary LC has already been sent by openers to their advisin
g Bank AMEX, FRANKFURT. 9. Certificate of origin: certificate of origin by local
chamber and/or any other similar institutions of the exporting counts must acco
mpany the negotiator documents. 10. Shipping mark: Each pack, containing the mat
erial, should prominently be labeled to appear the following shipping marks. Bex
imco Pharmaceuticals Ltd. Chittagong port by sea LC NO: Material: Origin: 4.3. I
NVENTORIES OF BEXIMCO PHARMACEUTICALS LIMITED: Inventories of Beximco Pharmaceut
icals Limited consist finished goods, work in process, raw materials, packing ma
terials, laboratory chemical, literature and promotional materials, physician sa
mple, spares and accessories etc. With the information of Annual report of Bexim
co Pharmaceuticals Limited (Financial Year 2005), items of closing inventories a
re given below: Closing Inventories of Beximco Pharmaceuticals Limited (In finan
cial year 2005 and 2004) Table-02: ITEMS CLOSING INVENTORY (IN YEAR 2005) CLOSIN
G IVENTORY (IN YEAR 2004)
FINISHED GOODS WORK IN PROCESS RAW MATERIALS PACKING MATERIAL LABORATORY CHEMICA
L LITERATURE&PROMOTIONAL MATERIAL PHYSICIAN SMAPLE RAW&PACKING TRANSIT MATERIAL
IN
378,744,903 156,374,814 695,165,382 229,060,186 2,145,268 18,745,269 12,998,593
107,063,860 1,874,526 81,549,258 TK. 1,683,722,059
294,831,219 113,067,980 631,820,233 212,162,685 465,253 9,456,983 8,236,593 64,8
06,398 1,569,863 58,377,700 TK. 1,394,794,907
STOCK OF STATIONARY SPARES&ACCESSORIES TOTAL
Source: Annual Report of Beximco Pharmaceuticals Limited, In Year2005.
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4.4. LEAD TIME: The pattern of an items lead time determines the amount of time a
llowed to get the item into stock after the order has been issued. The lead time
in weeks for imported raw material comprises: processing of purchase requisitio
ns (i.e., sourcing, placing order, and opening LC shipment including suppliers le
ad time). Getting the information from the Beximco Pharmaceuticals Limited purch
ase department from Marketing department, production department prepares a purch
ase order. The department used to take help from procurement department to calcu
late the time to receive the order on time. After that time analysis purchase de
partment place the order and make a time frame for the supplier to receive the o
rder. Purchase department take account of all other formalities like opening of
LC, insurance and fixed a time of receiving of raw or packing materials. Senior
manager, Accounts and Finance Department, Mr. Jamal Ahmed Choudhury informed me
Beximco Pharmaceuticals Limited calculate lead time depends on necessity of that
particular item. Most of the imported raw or packing materials are from Europe,
China and India and the approximate lead times are; for Europe 45-50 days, Chin
a 30-35 days, India 25-30 days. 4.5. CYCLE COUNTING METHOD: Cycle counting metho
d is a physical inventory taking technique performed continuously rather than pe
riodically. It is a crucial step towards controlling the accuracy of inventory r
ecords and maintaining it at a high level. Major profit improvement can be achie
vement by effective cycle counting through a reduction in production disruption
improved customer service reduce obsolescence elimination of the annual physical
inventory and less inventory shrinkage. Frequently the cycle count is less expe
nsive than the disruptive periodic count method. This method involves a continuo
us counting of stock through out the year. A limited number of items interval. P
ersonnel can be assignment to cycle on a full time or part time basic. The stock
items to be checked may be selected at random or according to a predetermined p
lan. Periodic and cycle counting both are important for any manufacturing compan
y. In case of BPL the company basically uses cycle counting method and through B
PL distribution unit I&I (Import and Indent) services ltd. get everyday sales fr
om every depot through their medical representative so to have the inventories e
nough into the store the continuous inventory counting method is important for s
mooth production.
4.6. ORDERING AND CARRYING COST: After the selection of the supplier the next th
ing is to place the order and it includes some ordering cost plus carrying cost.
The materials Beximco Pharmaceuticals Limited is going to order that may be imp
orted or locally purchased. If the products are imported Beximco Pharmaceuticals
purchase department first gets the insurance policy for that product, Beximco Ph
armaceuticals Limited gets the insurance by the Pragati Insurance Limited. The n
ext thing is opening of the L/C (Letter of Credit) in the bank and the bank take
s a margin with the opening of the L/C (Letter of Credit) and takes some other c
harges like courier services charges, opening document charges. After the docume
nt retirement the rest of the money will return to the bank. The next thing is t
o get the order and transfer to the production plant. All customs related works,
transfer the product into the production plant is done by the C & F (Carrying a
nd Forwarding agent) agent. For any product there is certain percent of VAT, cus
tom Duty Charge, transportation cost, these charges are nor fixed for every item
. C & F (Carrying and Forwarding agent) agent pay all the bills for the company
and it is their responsibility to transfer the materials to the production plant
. At the end C & F (Carrying and Forwarding agent) agents charge their bill with
the entire bill they paid including their commission. Before all this Beximco P
harmaceuticals Limited paid some advance to the C&F (Carrying and
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`Inventory Management System of Beximco Pharmaceuticals limited

Forwarding agent) agents and the remaining amount paid after the C&F (Carrying a
nd Forwarding agent) agents bill submission. 4.7. ABC ANALYSIS: ABC analysis mean
s the classification of items in an inventory according to importance defined in
terms of sales volume, purchase volume etc. in other words, items were assigned
to three groups according to an appropriate criterion. The most important items
were placed in the A group and B and C classifications were used for items of less im
portance. Talking with Mr. Jamal Ahmed Choudhury, Senior Accounts manager of Bex
imco Pharmaceuticals Limited I able to know Beximco Pharmaceuticals Limited does
not consider ABC analysis. They impose equal importance to each and every item.
4.8. TYPES OF INVENTORY SYSTEMS: There are two general types of inventory syste
ms: fixed-order quantity (Also called the Qsystem) and fixed-time period (also r
eferred to as P-system). Fixed-order quantity is a System where the order quanti
ty remains constant but the time between orders varies. Fixed-time period is a S
ystem where the time period between orders remains constant but the order quanti
ty varies. With the conversation of Mr. Jamal Ahmed Choudhury, Senior Accounts a
nd Finance manager of Beximco Pharmaceuticals Limited, I able to know Beximco Ph
armaceuticals Limited follows fixed-order quantity system. Mr. Jamal Ahmed Choud
hury informed me practical business world and academic experience are not simila
r in various aspects. Mr. Jamal Ahmed Choudhury told me it is really difficult t
o success in modern business world with using only one particular system. In fix
ed order quantity system order quantity remains constant but the order quantity
of Beximco Pharmaceuticals Limited are not constant. It depends on the requireme
nt of materials. And also the time between orders varies in Beximco Pharmaceutic
als Limited.
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Fixed-Order Quantity Model:
Number of Units on Hand
Q
Q Q
Q
Q
R L L L L
R = Reorder Point Q = Quantity L = Lead Time
14-9
Time
Based on following assumptions I able to draw the basic Fixed-Order Quantity mod
el that provided me by Mr. Jamal Ahmed Coudhury:
Demand for the product is known
and constant, Lead time (L), which is the time from ordering to receipt, is con
stant. Price per unit product is constant (no quantity discounts) All demands fo
r the product will be satisfied (no back order are allowed).
4.9. INVENTORY MANAGEMENT TECHNIQUES OF BPL: Inventory is defined as the stock o
f any item or resource used in an organization. An inventory system is the set o
f policies an controls that monitors levels of inventory and determines (a) what
levels should be maintained, (b) when stock should be replenished, and (c) how
large orders should be. Manufacturing facility
Supplier
Step 1
Step 2
Customer
In-Transit
Raw Material
WIP
Finished Goods

`Inventory Management System of Beximco Pharmaceuticals limited

In its complete scope, inventory can include inputs such as human, financial, en
ergy, equipment, and physical items such as raw materials; outputs such as parts
, components, and finished goods; and interim stages of the process, such as par
tially finished goods or work-in-process (WIP). The choice of which items to inc
lude in inventory depends on the organization. Inventory in Beximco Pharmaceutic
als Limited exist basically in three forms:
Raw materials, Work-in-process and
inished goods. But before starting production or at first acquisition of raw mat
erials the company decide how much to order, select a supplier, negotiating cont
racts, place the order, receive the order, transportation system/delivery system
. As well as BPL perform other important activities like how or where the finish
ed goods will store, distribution process of the finished goods, finished goods
transportation mode selection and so on. 4.9.1 Raw materials: After discussion w
ith Mr. Abul Basher, Accounts officer, Beximco Pharmaceuticals Limited, able to
discern how the company buys the raw materials and select their supplier. The fi
rst thing is to buy raw material, which includes deciding which supplier to sele
ct, negotiating contracts, and deciding whether to buy locally or centrally. But
before all these Beximco Pharmaceuticals Limited has to decide how much to buy
and this buying decision of raw materials they know basically from the marketing
department. Marketing department do the market research of their product demand
in future after doing that the marketing department give their decision and the
n the planning department revised the future demand of the product and make plan
how much to order. The next thing is to select a supplier. In terms of Beximco
Pharmaceuticals Limited, after deciding how much to order they get the approval
from the drags and narcotic department for the production of the particular prod
uct. After that purchase department asked from different suppliers to give their
sample, after testing the sample if the standard qualities are approved by thei
r quality assurance and quality control department, Beximco Pharmaceuticals Limi
ted then checked those suppliers profile. After satisfying with all these BPL en
listed those suppliers. Like in this way they enlisted some supplier and when th
ey need raw materials they asked those enlisted suppliers to give their price co
de and from those the lowest will get the order. In this way BPL select their su
pplier. Some examples of raw material: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13
. 14. 15. 16. PYRANTEL PAMOATE, USP XANTHAN GUM, USNF SORBITOL SOLUTION (70%), B
P (NON CRYST) POLYSORBATE 80 (TWEEN 80), BP CITRIC ACID MONOHYDRATE, BD SODIUM C
ITRATE, BP METHYL PARABEN (METH. HYD. BENZOATE), BP PROPYL PARABEN (PROP. HYD. B
ENZOATE), BP SACCHARIN SODIUM, BP LEMON OIL, BP METHYL SALICYLATE BP MENTHAL CRY
STALS, USP TRIETHANOLAMINE, BP PROPYLENE GLYCOL, BP GLYCEROL(GLYCERIN), BP CARBO
MER 940 (CARBOXYUINLY POLYMER) USNF
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4.9.1.1. Receiving and Maintain of Raw and Packing Materials: To maintain inform
ation about the raw and packing material, Beximco Pharmaceuticals Limited use di
fferent system in different stages. Here are some examples which I came to know
with the help of Md. Abul Basher, account officer of Beximco Pharmaceuticals Lim
ited. Beximco Pharmaceuticals Limited check the following situation carefully wh
en they receive and maintains inventories: Receive: 1. 2. 3. 4.
Material information after received, QA (Quality Assurance)Authority Approval &
Stock Updating, Locating Materials after QA(Quality Assurance) Report, Include S
ample/Reject/Un-useable/Short/Excess Quality.
Maintenance: 1. Updating product, material, batch requirement, id-code informati
on, 2. Updating suppliers/manufactures/information, 3. Monthly closing, 4. Emplo
yee register & password maintenance (protected), 5. Date sheet maintenance. Bexi
mco Pharmaceuticals Limited Product Information Table-03 SL. NO 1 2 3 4 5 6 7 8
9 10 11 12 PRATICULARS COMPANY CODE PRODUCT CODE PRODUCT NAME MEASURING UNIT PRO
DUCT TYPE PACK SIZE BATCH SIZE BATCH WEIGHT TRADE PRICE YEARLY SALES FORECAST FI
NISH GOODS STOCK NO. OF BATCHES TO BE PRODUSED AS PER PRODUCT PLAN TYPE C C C C
C N N N N N N N WIDTH 1 3 20 2 1 4 8 15-4 8-2 9 9 3
Source: Inventory Section, ,Accounts and Finance department ,Beximco Pharmaceuti
cals Limited To maintain product information Beximco Pharmaceuticals Limited use
their own technique .Here C means character and N means numeric number. For an exam
ple in case of company code it should be a character and width should be one. In
case of batch size it should be a numeric number and width should be eight digi
ts.
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Beximco Pharmaceuticals Limited Material information & stock maintenance Table-0
4: SL. NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
PRATICULARS MATERIAL ID-CODE MATERIAL NAME PROCUREMENT TIME(IN MONTHS) UNIT COST
ECONOMIC ORDER SIZE MEASURING UNIT(NO/KG/LB/LT) MONTHLY REQUIREMENT MATERIAL TY
PE(RAW/PACK) PURCHASE (LOCAL/IMPORT) USABLE FOR DEPARTMENT OPENING STOCK RECEIVE
D OUANTITY ISSUED QUANTITY BOOKING QUANTITY UN-USABLE EXCESS QUANTITY SHORT QUAN
TITY LOSS QUANTITY OPENING VALUE
TYPE C C N N N C N C C C N N N N N N N N N
WIDTH 6 40 2 12-2 12-2 2 14 1 1 15 17-4 15-4 15-4 15-4 15-4 13-4 14-4 15-4 13-2
20 RECEIVED VALUE N 12-2 Source: Inventory Section ,Accounts and Finance departm
ent ,Beximco Pharmaceuticals Limited As I mention earlier C means character and N me
ans numeric number. For an example in case of Material ID Code: it should be a ch
aracter and width should be six. In case of Monthly Requirement it should be a num
eric number and width should be fourteen digits. . Beximco Pharmaceuticals Limit
ed Material received Information Table-05: SL. NO 1 2 3 4 5 6 7
PRATICULARS MATERIAL CODE INVOICE QUANTITY RECEIVED QUANTITY ISSUED QUANTITY MRR
NO. DATE INVOICE NO.
TYPE C N N N C D C
WIDTH 6 15-4 15-4 15-4 5 8 15
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8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
DATE INVOICE NO. DATE BATCH/LOT NO. CONSIGNMENT NO. SUPPLIER/MANUFACTUER EXPIRE
DATE RE-TEST DATE BOOKING QUANTITY LOSS QTY. UN-USEABLE/REJECT QTY. EXCESS QUANT
ITY SHORT QTY. SAMPLE QTY. CONFIRMATION STATUS PURCHASE TYPE
D C D C C C D D N N N N N N C C
8 10 8 10 10 4 8 8 15-4 15-4 15-4 10-4 15-4 8-4 1 1
Source: Inventory Section ,Accounts and Finance department ,Beximco Pharmaceutic
als Limited Here also C means character and N means numeric number. For an example i
n case of Material Code it should be a character and width should be six. In case
of Booking Quantity it should be a numeric number and width should be fifteen to f
our digits. Beximco Pharmaceuticals Limited Daily Issue Statement, Raw Material
Table-06: NAME OF THE PDT. BATCH SRP TRAN. ID CODE QUAN. MATERIAL CODE NO. NO. N
O.
PYRANTEL PAMOATE, USP METHYL SALICYLATE BP METHYL SALICYLATE BP PARACETAMOL, BP
PARACETAMOL, BP RIBOFLAUIN, USP MAGNESIUM SILICATE, USNF LEVOCARNITINE
MES
LPJ040
1938
109
BA1061
29
IMC IMC NAS NEX ABT ULS
CPJ036 CPJ038 LPJ035 SPK003 SPK009 SPK257
1973 1977 1985 5233 5236 5238
144 143 13893 13900 2842 11263
BA4277 BA4277 BA1082 BA1082 BA1598 BA1490
60 60 120 200 10 10
CNT
SPK025
5263
31
BA3928
8
Source: Daily Issue statement, Raw material, Beximco Pharmaceuticals Limited.

Page 29 of 42

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Beximco Pharmaceuticals Limited Raw Materials Requisition Slip Product: Bxxtrum
Gold Tab Batch: SPK015 Table-07: SL. NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1
7 18 19 20 ID CODE BA1630 BA1066 BA3277 BA1274 BA2087 BA1183 BA1699 BA1591 BA152
0 BA1927 BA2063 BA3278 BA3276 BA2083 BA2084 BA1578 BA1481 BA1731 BA3727 BA1152 N
AME OF THE MATERIAL VITAMIN A ACETATE, USP ASCORBIC ACID (97% DC) DRY VITAMIN D3
(CHOLECALCIF,850000 IVIG ) DRY VITAMIN E ACETATE USP (DL ALP TO 50%) DRY VITAMI
N K1 5% ITHIAMINE MONONITRATE, USP RIBOFLAVIN, USP PYRIDOXINE HCL, USP FOLIC ACI
D, USP VITAMIN BIZ 0.1% (CYANOCOBALAMIN) BIOTIN USP CALCIUM PANTOTENATE USP DIBA
SIC CALCIUM PHOSPHATE (ANHYDROUS), SUP MAGNESIUM OXIDE CHROMIC CHLORIDE, USP CUP
RIC OXIDE ANHYDROUS DRIED FERROUS SULPHATE, BP MANGANESE SOLPHATE, USP BORON CIT
RATE BLEND 5% NICKEL SULPHATE HEXAHYDRATE REQUIRED QUANTITY ISSUED QUANTITY Source: Raw material requisition slip, Beximco Pharmaceuticals Limited. 4.9.2. W
ork-In -process: At any summit in a continuous production process some units are
not completely processed. The cost of the raw material on which production has
been started but not completed, plus the direct labor cost applied specifically
to this material and a ratable share of manufacturing overhead cost, constitute
the work in process inventory. In case 1. 2. 3. 4. of Beximco Pharmaceuticals fo
ur production departments are as follows: Solid (tablet, capsule) Liquid (cream,
ointment) Antibiotic Inhaler
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These four departments work-in-process are: Solid: Stage 1: Mixing all the ingre
dients of that particular product is mixed carefully. For every pharmaceutical p
roduct there is a batch size and also thee is fixed amount of raw materials to b
e used for production. So the exact amount of raw materials is mixed together. S
tage 2: Granulation -this is also a kind of mixing process but in this stage ing
redients are mixed very sharply. Stage 3: Compression-in this stage the fine mix
ture of all the ingredients are placed into the dice to give them a shape. Stage
4: Coating-sometime the taste of the tablets is not good. So for that, those ta
blets are coated with sugar or other flavors. Stage 5: Packing-the final stage i
s packing. Products are packed in with different materials like-aluminum foil, l
eaflet. Liquid: Stage 1: Manufacturing-like in the solid department all the ingr
edient are mixed carefully Stage 2: Filling-in case of liquid item the mixtures
are going to fill in the bottle. If the product is syrup item or if the product
fixed is for cream or ointment the mixture will go to the tube. Stage 3: Packing
-finally the syrup, cream and ointments are going for packing. Antibiotic: Stage
1: Manufacturing like in the solid department all the ingredients are mixed car
efully. Stage 2: Filling- in antibiotic production case there is filling stage,
the mixture of the production fill in the capsule. Stage 3: The final stage is p
acking the productions are packed in with different materials like-aluminum foil
, blister foil, leaflet. Inhaler: Stage 1: Manufacturing-all the raw materials a
re mixed carefully in this stages. Stage 2: Filling-the second stages is filling
the mixture in the container. Stage 3: Weighted checking-for the production of
inhaler weight checking is very important. After filling the inhaler kept in a p
lace for 28 days and after again the inhaler was weighted to check that the weig
hted of the inhaler was as same as before. Stage 4: Packing-the product finally
labeled and packed
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4.9.3. Finished Goods: The completed or final products of any
h is ready for sale, are called finished goods. The inventory
ists of items that have been produced but are to be sold. Raw
ranulation Compression Filling Packing Finished Goods
r Distribution Distribution in 13 depots

organization, whic
of such goods cons
Materials Mixing/G
in Store I & I services fo

In Beximco Pharmaceuticals Limited, every stage of productions are carefully ins

pected by their Quality control and Quality Assurance departments experts. So aft
er the end of the production there is less chance of defected item or rejected i
tem. There are fields on each line for plan date, actual date, batch, quality, c
omment, signature and quality control. The quality control field contains signat
ure by the quality control section in the production department. After all these
checking the finished goods are going into the store of Beximco Pharmaceuticals
Limited and authorized staff from the store signed the document with the clear
mention of the production quality and sent this document to the Accounts departm
ent and I & I (Import and Indent) services. Then I & I (Import and Indent) servi
ce department distribute the product into 13 depots of Beximco Pharmaceuticals L
imited. 4.10. ECONOMIC ORDER OF QUANTITY (EOQ): Economic order of Quantity is an
inventory model that determines optimal quantity to order taking into considera
tion both the cost to carry inventory and the cost to order the item. Mr. Jamal
Ahmed Choudhury, Senior Accounts Manager of Beximco Pharmaceuticals Limited aske
d me not to calculate Economic Order of Quantity for the limitation of internal
data availabity But in this report, I try to calculate some Beximco Pharmaceutic
als limited product Economic Order of Quantity (EOQ) with the help of Accounts o
fficer Mr. Abul Basher who provide me the information of some raw materials whic
h Beximco Pharmaceuticals Limited used to import from abroad and other informati
on like the product ordering cost, holding cost, demand and from which I calcula
te Economic Order of Quantity (EOQ) of those products. Formula: 2 DS EOQ = H
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Here, D = Demand, S = Order Cost, H = Holding cost. Beximco Pharmaceuticals Limi
ted Raw material received statement Sodium Chloride Table-08: MONTH PC NO. MRR N
O. DATE CODE NAME OF THE MATERIALS QTY (kg) A-VALUE
Feb 05
PC-8957
10404
9/2/05
BE1784
SODIUM CHLORIDE SODIUM CHLORIDE
973600
126376.27
May 05
PC-9198
10650
31/05/05
BE1784
1919000
238251.13
Sep 05
PC-9445
11119 21/09/05 BE1784 SODIUM CHLORIDE 999500 139810.76
Yearly Demand: 432456 kg (Approximately) Source: Raw material received statement
, Beximco Pharmaceuticals Limited. Beximco Pharmaceuticals Limited Raw material
received statement Sodium Starch Glycolate Table-09: MONTH
PC NO.
MRR NO.
DATE
CODE
NAME OF THE MATERIALS
QTY (kg)
A-VALUE

Mar 05
PC-8930
10456
01/03/05
BE1858
SODIUM STARCH GLYCOLATE SODIUM STARCH GLYCOLATE SODIUM STARCH GLYCOLATE SODIUM S
TARCH GLYCOLATE SODIUM STARCH GLYCOLATE
1999.9
426823.37
Mar 05
PC-8930
10457
03/03/05
BE1858
1199.9
256072.95
May 05
PC-2002
2002
17/05/05
BE1858
162.68
33494.19
May 05
PC-9029
10659
29/05/05
BE1858
2999.95
614902.55
Jun 05

PC-9029
10660
02/06/05
BE1858
2999.95
614953.43
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`Inventory Management System of Beximco Pharmaceuticals limited

Jun 05
PC-9310
10703
10/07/05
BE1858
SODIUM STARCH GLYCOLATE SODIUM STARCH GLYCOLATE
20
4223.6
Sep 05
PC-9493
11176
29/09/05
BE1858
2999.9
614534.09
Dec 05
PC-9512
11457
15/12/05
BE1858
SODIUM STARCH GLYCOLATE
2999.9
622275.84
Yearly Demand: 1282 Kg (Approximately) Source: Raw material received statement,
Beximco Pharmaceuticals Limited.
Beximco Pharmaceuticals Limited Raw material received statement Liquid Paraffin
Heavy BP Table-10: MONTH
PC NO.
MRR NO.
DATE

CODE
NAME OF THE MATERIALS
QTY (kg)
A-VALUE
Feb 05
PC-9068
10407
06/02/05
BE1915
LIQUID PARAFIN HEAVY BP LIQUID PARAFIN HEAVY BP LIQUID PARAFIN HEAVY BP
199.92
337770.9
Jul 05
PC-9235
10830
19/07/05
BE1915
99.97
166964.78
Oct 05
PC-9426
11193
06/10/05
BE1915
199.92
326665
Yearly Demand: 50 Kg (Approximately) Source: Raw material received statement, Be
ximco Pharmaceuticals Limited. Beximco Pharmaceuticals Limited Raw material rece
ived statement Self-adhesive (Lactameal) Table-11: MONTH PC NO. MRR NO. DATE COD
E NAME OF THE MATERIALS QTY (kg) A-VALUE
May 05
PC-2002

2002
17/05/05
BA10075
Self Adhesive (Lactameal) Self Adhesive (Lactameal)
7
828
Jun 05
PC-9093
10742
24/06/05
BA10075
2339 9
26058211
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`Inventory Management System of Beximco Pharmaceuticals limited

Nov 05
PC-9437
11383
22/11/05
BA10075
Self Adhesive (Lactameal)
7799
863627
Yearly Demand: 2837 Pcs (Approximately). Source: Raw material received statement
, Beximco Pharmaceuticals Limited.
Beximco Pharmaceuticals Limited Holding cost Table-12: RATE($) QTY. PKG DAY. POR
T VAT (15%) TOTAL YEARLY COST
1.5 6
1 1
15 1
1326.37 353.7
198.95 53.05
1525.32 406.75
36607.68 146430
Source: Cost sheet, Beximco Pharmaceuticals Limited. Beximco Pharmaceuticals Lim
ited products holding cost calculation depends on how the company imports the ra
w or other materials from abroad or what will be the mode of transportation the
company use. The modes of transportation Beximco Pharmaceuticals Limited may use
are Sea, Air and Track. Based on the transportation mode it can vary. Here the
holding cost what I used for EOQ calculation is Sea. If Beximco Pharmaceuticals
Limited use the mode of Sea for import of materials than they have some charges
like-port dues, shipping agent charge. Depending on how long the materials will
stay to the port and whether the product container is full with Beximco Pharmace
uticals Limited materials its called FCL (full container lot) or coming with oth
er companys materials LCL (low container cost) port dues and shipping agent charg
es will be different. And Beximco Pharmaceuticals Limited always calculates VAT
15%. Beximco Pharmaceuticals Limited Ordering Cost Sodium Chloride Table-13: PAR
TICULARS Opening charge C&F commission Insurance Premium AMOUNT 2684 2561.4 2495
TOTAL Source: Cost sheet, Beximco Pharmaceuticals Limited.
7740.4
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`Inventory Management System of Beximco Pharmaceuticals limited

Beximco Pharmaceuticals Limited Ordering Cost Liquid Parafin Heavy BP Table-14:
PARTICULARS Opening charge C&F commission Insurance Premium TOTAL Source: Cost s
heet, Beximco Pharmaceuticals Limited. Beximco Pharmaceuticals Limited Ordering
Cost Sodium Starch Glycolate Table-15: PARTICULARS Opening charge C&F commission
Insurance Premium TOTAL Source: Cost sheet, Beximco Pharmaceuticals Limited. Be
ximco Pharmaceuticals Limited Ordering Cost Self Adesive (Lactameal) Table-16: P
ARTICULARS Opening charge C&F commission Insurance Premium TOTAL Source: Cost sh
eet, Beximco Pharmaceuticals Limited. AMOUNT 740 47.13 1438.2 2225.3 AMOUNT 4062
698.33 8545 13305 AMOUNT 2691 122.62 4603 7416.6
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`Inventory Management System of Beximco Pharmaceuticals limited

4.11. CALCULATION OF ECONOMIC ORDER OF QUANTITY (EOQ): SODIUM CHLORIDE: Yearly d
emand (D) = 432455.56 kg Yearly ordering cost (S) = 7740.42 Tk. Yearly holding c
ost (H) = 36607.68
2 DS EOQ = H
2 X 432455.56 X 7740.42 EOQ = 36607.68
EOQ = 427 kg SODIUM STARCH GLYCOLATE: Yearly demand (D) = 1281.85 kg Yearly orde
ring cost (S) = 13305.33 Yearly holding cost (H) = 146430
2 X 1281.85 X 13305.33 EOQ = 146430
EOQ = 15 kg
LIQUID PARAFIN HEAVY BP: Yearly demand (D) = 49.981 kg Yearly ordering cost (S)
= 7416.62 Yearly holding cost (H) = 146430
2 X 49.981 X 7416.62 EOQ = 146430
EOQ = 2 kg SELF ADESIVE (LACTAMEAL): Yearly demand (D) = 2837.035 Pcs Yearly ord
ering cost (S) = 2225.33
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`Inventory Management System of Beximco Pharmaceuticals limited

Yearly holding cost (H) = 36607.68
2 X 2837.035 X 2225.33 EOQ = 36607.68
EOQ = 19 Pcs. Economic Order of Quantity (EOQ) is essentially an accounting form
ula that determines the point at which the combination of order costs and invent
ory carrying costs are the least. The result is the most cost effective quantity
to order. So after calculation of Economic Order of quantity of Beximco Pharmac
euticals Limited, it can be conclude that if Beximco Pharmaceuticals limited ord
er 427 kg of Sodium Chloride, 15 kg of Sodium Starch Glycolate, 2 kg of Liquid P
arafin Heavy BP, 19 pieces of Self Adesive Lactameal in per order time, it will
carry least cost and as a result Beximco Pharmaceuticals Limited will able to us
e maximum benefit of cost effectiveness. 4.12. DISTRIBUTION PROCESS: Beximco che
mical divisions all finished goods distribution program is done by one of their u
nit I&I services ltd. I&I (IMPORT AND INDENT) SERVICES LTD
I&I (Import and Indent) services ltd. is the distribution network of Beximco che
mical division. It was established during the inception of Beximco pharmaceutica
ls ltd. in 1980. This network is a forward integration of Beximco chemicals divi
sion to expedite the distribution of all the products throughout the country. Be
ximco pharmaceuticals ltd. is the only company in the pharmaceuticals industry t
hat has a country wide distribution network of its own. The organ gram of the I&
I services ltd. is shown below.
Manager (1) Assistant Manager (2) Sr. Distribution Officer (9) Distribution Offi
cer (9) Asst. Distribution Officer Supervisor
The head office of I&I (Import and Indent) services is located at paribag, Dhaka
. It has 13 depots: Dhaka, Bogra, Comilla, Kushtia, Barisal, Khulna, Chittagong,
Sylhet, Mymensingh, Faridpur, Rajshahi, Noakhali and Rangpur. As per requiremen
t of the regional depots, the supplier of the products are sent to them from the
head office. This is done on regular basis depending on the information availab
le from them.
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`Inventory Management System of Beximco Pharmaceuticals limited

The medical representatives generate the demand and get the orders of individual
product. Then they submit the order to their respective distribution depots. Di
stribution depots generate invoice through which they collect the required produ
cts and supply them to individual drug store. They generate a daily sales report
which contains quantity as well as monetary value of each products sold every d
ay. It also prepares sales journals which are a summary of the amount and type o
f products sold in a month.
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`Inventory Management System of Beximco Pharmaceuticals limited

5.0. CONCLUSION: Despite the diligent efforts that have given in preparation of
this report, I have only succeeded to skin the surface of the ocean of the subje
ct. Therefore the views expressed in this report are likely to be limited by the
lack of extensive knowledge and understanding. As I have worked only three mont
hs in the Be ximco P harmaceuticals Ltd, I have got just the overall idea about
the Inventory Management System of Beximco Pharmaceuticals Ltd. As I was not the
employee of that organization I couldnt get access to all the departments. But d
efinitely I able to gathered experiences in the practical job environment. My ps
ychiatry about Beximco Pharmaceuticals Limited is that, it is a leading pharmace
uticals company in Bangladesh they serve much more to the society. BPL produces
a good number of pharmaceuticals products and which are affordable to every leve
l of the people. While doing the report on inventory management system of Beximc
o Pharmaceuticals Limited I came to know that how well and how much attention th
e company pays to maintain their production level under definite order and try t
o do better in future.
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`Inventory Management System of Beximco Pharmaceuticals limited

6.0. FINDINGS AND RECOMMENATIONS: Total inventory management of Beximco Pharmace
uticals is splendid .For the reason Beximco Pharmaceuticals able to reach in thi
s extraordinary position. As a result on October 21, 2005 Beximco Pharma opened
a new chapter new chapter in the corporate business history of Bangladesh by sta
rting trading of its shares in the Alternative Investment Market (AIM) of London
Stock Exchange. Beximco Pharma became the first and the only company from Bangl
adesh to get listed in the LSE. But there are certain things which the organizat
ion should change or adopt for more improvement in future. In case of raw materi
als Beximco Pharmaceuticals Limited using approximately 1500 raw materials (loca
l and imported) and give to equal importance to every item is taking a lots of m
anagements time. In that case the company might classify the raw materials in dif
ferent categories. Holding cost is not appropriate in case of Beximco Pharmaceut
icals Limited products. Beximco Pharmaceuticals Limited does not calculate the a
ctual holding cost of the product. So if the company wants to calculate the prod
ucts Economic order of Quantity (EOQ) the result might not give the actual EOQ o
f the product. Beximco Pharmaceuticals limited also not considering ABC classifi
cation. The main purpose of this method is to concentrate upon those items of ma
terials that demand particularly attention rather than all the items indiscrimin
ately. Thus the items under the `A category are of high value, `B category needs o
nly routine control measures and control may be diluted in the case of `C categor
y items. In case of classification considering lead time; lead time varies for i
mporting from each of the places or company. So according to the amount and freq
uently use the inventory item can be classified. Whatever it is, in case of mana
gement of raw materials, work-in-process and finished goods the company doing we
ll with its computer based software and efficient work forces.
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`Inventory Management System of Beximco Pharmaceuticals limited

BIBLIOGRAPHY: Books and Articles:
Mark M. Davids, Nicholas J. Aquilano, & Aichar
d B. Chase, Fundamentals of Operation Management, 3rd edition. John J. Coyle, Th
e Management of Business Logistics, 3rd edition. Lee J. Krajewski & Larry P. Rit
zman, Operations Management, 2nd edition. Floyd D. Hedrick, Inventory Management
, Internet Article. Tony Wild, Best Practice in Inventory Management, 2nd Editio
n. Annual Report, Beximco Pharmaceuticals Limited (2005)
Web sites:

www.beximcopharma.com

Page 42 of 42

www.beximco.net