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COURSE:
GDP: 6.9%
POPULATION: 165.8million
Abbott has approximately 70,000 employees worldwide and a global presence in more
than 130countries. Abbott Pakistan started operation in Pakistan as a marketing affiliate
in 1948. The company has steadily expanded to compromise a work force over 1400
employees. Currently two manufacturing facilities located at Landhi (largest tablet
manufacturing plant) and Korangi in Karachi continue to use innovative technology to
produce top quality pharmaceuticals products. The diagnostic division operates from its
office located at Korangi, Karachi
Locations
Diagnostics
Abbott (Pakistan) Ltd.
Plot 13, Sector 20
Korangi Industrial Area
Karachi 74900 Pakistan
Telephone: (92 21) 504 65 74
Facsimile: (92 21) 504 42 58
ABBOTT’S FINANCIAL DATA
BENCHMARKING
MISSION
To deliver consistently superior products and services which contribute significantly to
improve the quality of life of the consumers? This will be achieved while ensuring that
the interests of all stakeholders including healthcare providers, employees, share holders
and the communities are secured. Abbott Pakistan will comply with the highest standards
of local cGMP/EHS and adhere to the corporate code of Business Conduct and Ethics.
DICTATED TO
Employees
Customers
Share holders
Suppliers
Public
WE VALUE
Pioneering
Achieving
Caring
Enduring
CORE VALUES OF ABBOTT
ENDURIN
G
PIONE CARIN
ERING ABBOTT G
ACHIEVIN
G
CAPABILITIES OF ABBOTT
QUALITY
AGILITY OF
INTEGRITY EXECUTION
Y
LEADERSHI
P COMUNICATIO
N
PRODUCTS &
SERVICES
CUSTOMER
INTIMACY
OPERATIONAL
EXCELLENCE
PEOPLE
SUPPLY CHAIN MISSION
ABBOTT’s SCM mission is to configure, coordinate and improve all the sequentially
related activities and set of operations with the idea of satisfying the entire chain of
suppliers’ suppliers and customers’ customers by providing right product, at the right
time, in the right quantity and becoming highly recognized by our employees, customers
and shareholders and abiding by Government regulations by adhering to strict ethical and
moral standards”.
SUPPLY CHAIN INTEGRATION
P
R
O
D
CUSTOMER U
C
T
I
N F
F L
O O
R RETAILERS/
WHOLESELLERS W
M
A DISTRIBUTORS
T
I WAREHOUSE ( F O)
O
N
Manufacturing
F
L WAREHOUSE (M O)
O
W TRANSPORTATION
SUPPLIER
MARKETING
ABBOTT’S SUPPLY CHAIN STRUCTURE
SUPPLY CHAIN
MANAGER
CAPAPCITY
PLANNER MASTER MASTER
SCHEDULER SCHEDULER
PRODUCTION PRODUCTION
PLANNER PLANNER
MATERIALS
MANAGER
WAREHOUSE EXPORTS
MANAGE LOCAL/ IMPORTED MANAGER
R PURCHASE
MANAGER
SUPPLY CHAIN PROCESS
Marketing
( Demand Generated)
Manufacturing Planning
(Demand Generated)
Material Planning
Vendors
(Quotations asked)
LC
Material in Warehouse
QA
Released by QA
FO Batches
Packing line
FO Quarantine
(Sampling test by QA)
Central Depot’s
Institutions Wholesalers
Retailers
SCOR MODEL
S C
U U
P S
P T
L O
I M
E E
R R
S S
PLAN
PLAN
RETURN MO RETURN FO
Plan
Enable
Deliver Source Make Deliver Source Make Deliver Source Make Deliver Source
BUSINESS PLANNING
The executive management of ABBOTT Pakistan does the long term strategic planning.
Every 7th day of the month they conduct a SNO (Sales and Operations) meeting. It is
reviewed in the SNO meeting to highlight the gaps in performance if there any, and to
make adjustments if required.
DISCUSS
PROPOSED
FORECAST
SNO MEETING
Marketing department gives the forecast to the supply department and then it’s their job
to make available all the resources required from the purchases till the delivery of end
product to the consumer on the ATP (Availability to promise) .This is how they satisfy
their external customers.
ADS
APPROVED DEMAND FORECAST
In ABBOTT Pakistan the demand is forecasted by the Marketing department. The
Marketing department provides 24 months rolling aggregate demand forecast, which is
known as ADS (Approved Demand Statement). This statement shows individual
demands for all product lines demanded by end users to whom we are providing quality
healthcare products.
CUSTOMER
MARKETING
MAS
MANUGISTICS
MANUFACTURING
SAFETY STOCK
The raw material, which is stored in extra units in warehouse, is known as safety
stock. ABBOTT maintain a MO and FO safety Stock of 6 weeks,
CAPACITY PLANNING
Capacity means a measured ability to accomplish 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 standard hours, which they are
required to meet the forecasted demand. ABBOTT Pakistan have a CCR system known
as Capacity Consumption Rate which tells us, the consumption rate of the resources,
which are available for the production, and on the bases of this update a new planning is
developed depending on the consumption rate. A capacity control process is used to
measure and manage the resource requirements and where appropriate, the work through
put and queue levels. Once they got the ADS than they sub divide that plan into monthly
basis and adjust the machines capacity according to it. The planned capacity utilization at
ABBOTT is approx. 95%. And to manage the capacity control process ABBOTT
Pakistan is using a system known as BPCS which stands for Business Process Control
System
SCM CONFIGURATION
He knows when the raw material is going to arrive, who are the vendors are going to
supply to us. Then accordingly he tells to the bulk planner to plan the inventory which is
being piled up in the warehouse. Keep an eye on the efficiencies of different work
centers, calculates input and output or work centers and decides which Batch to produce
first and what is their in the queue waiting to be produced next.
Some of the products which ABBOTT buy from Parent company and from there
subsidiaries.
Pediasure
Hematology Analyzers
The following products are manufactured in Pakistan.
Tablets
Liquids/Syrups/O.R.S
Injectables, Creams/ Ointments.
SOURCE
SOURCE
ACTIVE INGREDIENTS
Is an essential intergradient for any specific drug, without which a drug does not cure a
respective disease?
EXCIPIENT INGREDIENTS
Is an intergradient which itself is not workable, it when mixed with some other
intergradient becomes curable for a respective disease.
It is against the Abbott Pakistan policy to disclose the Excipient Ingredients however
some of the Active ingredients along with the suppliers and the country of origin are as
follows:
Dy Red – sencient UK
Potassium chloride – Merck, Germany
Sodium Citrate – Sanfu, Taiwan
Sodium chloride – Dominon salt, New Zealand
Acid Citric – Jungvuzlaur, Austria
Dextrose – Rafhan Industries Faisalabad
Artificial bubble gum – IFF Holland
Once the ADS passes in the organization the MM department comes into function, the
responsibilities and function can be easily understood by the MM department chart
MATERIALS
MANAGEMENT
MPS is made by the supply department checked by the supply manager and then
forwarded it to the MM department. Then according to the MRP (Material
Requirement Planning) an enquiry is carried out for the selection of the suppliers.
This is the initiator of Abbot or the most imperative department of the organization.
Each and every individual in this department has to play his role according to the
requirements of Abbott. All the raw material is arranged whether it is selected by the
local vendor or the International vendor. MPS is forwarded to the purchase
department and then it’s the job of purchase department to fulfill their requirements
and to select the right vendor who meets the specs of the organization. This is not a
game of taking risk or gambling but one needs to rethink again and again in order to
select the vendor who provides the raw material to the organization.
It includes:
Representative/Agent
Name of manufacturer and country
Vendor status
Quotation date
Foreign currency
Duty
Landed cost/kg
Local currency
Exchange rates
Cost and freight
Then after getting the bid sheet orders are finalized and there is a request for an
indenter. After the request of an indenter the bid sheet along with the approved
indenter is send for approval to the finance department.
REQUIREMENTS FOR THE VENDOR APPROVAL
1) Vendor specification
2) Testing method
3) Abbott Specification signed by vendor
4) MFG date expiry date/shelf life
5) Stability data to support shelf life
6) Vendor evaluation check list
7) Material safety data sheet (MSDS)
8) Full range of raw material
9) Vendors’ certificate of analysis
10) Recommended storage condition
11) Technical bulletin
12) List of solvent if used & other residual levels
13) Is your vendor already approved in other Abbott affiliate?
14) TSE/BSE statement. Transmissible Spongiform Encephalopathy’s/Bovine
Spongiform Encephalopathy
15) Vendor capacity
VENDORS APPROVAL STEPS
own laboratory
Batch Manufactured
End Product
ANALYSIS OF THE REQUIREMENT
Two general categories for vendors are:
A) Approved and Active
B) Approved and Inactive
This is the bases on which the vendors are selected and it is conducted by the
ABBOTT itself in order to select the vendor who can provide the material of good
quality and at low cost .The basic purpose of selecting a vendor is to have quality service
provided by them and to check their EFFECIENCY & RESPONSIVENESS.
Quotations from different vendors are sent through mail and on the bases of the BID
SHEET, final selection of the vendor is made. There is no indenter involved in local
purchases.
These are the requirements of ABBOTT’S Pakistan in the selection of their vendors; the
vendors must meet these requirements and specifications in order to be approved as a
vendor to provide the raw material to this leading pharmaceutical industry.
There is a clause imposed by ABBOTT Int. Chicago on ABBOTT Pakistan that if the
amount of requisition value is above $ 1000, then at least 3 quotations must be taken.
GENERAL PURCHASES
General Purchases include routine items such as stationery, office equipments,
transportations and other minor items which are not directly related with production
activities.
MATERIAL CLASSIFICATIONS
ABBOTT Pakistan classifies its materials according to the values or the cost of materials,
basically they have allotted three grades or types to their materials:
Grade A (very costly materials, e.g. erythromycin)
Grade B (moderate cost, e.g. clathromycin)
Grade C (least cost, e.g. bubble gum and artificial flavors like mint)
LOCAL PURCHASING
Packaging – Saima Packaging (Korangi Industrial Area) > Lead Time 30 Days
INDENTER
An indenter is a local supplier or the middle party, we also call them as an agent who
gives information to the manufacturer and tells then to arrange the material. They
have link with the manufacturer and paid commission by them.
Picking List
Certificate of Analysis
Certificate of Origin
OPENING OF LC
For importing material, ABBOTT needs to open an LC. An LC is a Letter Of Credit
which is opened through a bank and it ensures to the manufacturer that if they are going
to provide the material to Abbott then they are going to pay you on the scheduled date.
This goes for Abbott also and It’s their job if they receive the material on time then they
have to pay to the manufacturer
ADVISING BANKS OF ABBOT PAKISTAN
Detuche Bank
Standard Chartered Bank
ABN AMBRO
HSBC
Then after this process the LC is send to the concern suppliers and indenters and then
they set the raw material to be shipped, shipment is done through different shipping
company and this part is dealt by the imports department.
Storage of raw/packaging
material after acceptance
Storage of control/locater
system
Washing of utensils,
containers
Hazardous drug labeling
Manufacturing
End Product
Warehouse FO
Active Ingredients
Exciepent Ingredients
In keeping with its policy of using only the best materials, all consignments have
to pass a Quality Assurance test before they can be used in the production process.
Because of the large number of consignments that arrive, the Quality Assurance
Department draws out samples from the entire consignment of exciepent ingredients
while all active ingredients are tested fully. While under quality testing, the consignment
is placed in a quarantine area and a Yellow sticker is placed on items, specifying that such
batches cannot be used up under any circumstances. At this point, the consignment’s
status is designated as Quarantined, or simply “Q”. Depending on the number of batches
of exciepent ingredients, Quality Assurance draws out the following number of samples:
No. of Packages
Size of Sample Drawn
Arriving
5 All
5 - 11 5
11 - 50 7
50 - 100 10
100 - 250 15
over 250 20
Once Quality Assurance has tested the sample, they place a Green Sticker on the
consignment which is known as the Release Sticker. Only then is the status of the batch
changed from Q to A, which stands for Assured and the consignment is ready to be used
up in the production process. It must be mentioned that the Warehouse operates on a first
in first out and this ensures the maximum amount of time of the final product before it
expires.
After manufacturing, Finished Products are again sent to the Quality Assurance
Department for testing. Once end products have passed quality testing, they are placed in
the FO Warehouse with a green sticker, which means that they are ready to be delivered.
Once the material is arrived at the store, the MO warehouse personnel store the
material according to:
Product Name.
Quantity.
Supplier Name.
Import invoice.
Certificate of Analysis
Type of information through which Finished Product docking is done in the FO ware
house
Product Name.
Batch No.
Quantity.
Release Status.
The Rejection Room where damaged or exposed materials are placed can only be
accessed via two keys which must be placed simultaneously in the lock. The warehouse
Manager has one key, while the Quality Assurance Department has the other.
ABBOTT Pakistan also has a method of ensuring that such faulty material is not sold on
the black market. For this reason, an employee of Quality Assurance accompanies the
inferior quality materials to a disposal site where the materials are put into an incinerator
where the temperature is as high as 800°C. The name of the facility where ABBOTT
disposes off such materials is ABBASEEN.
EXPORTS
Performa forwarded to
Materials planning
For example if there is a demand of 8,000 units from Sri Lanka, imports
comprising 2,000 units of Vitamins, 2000 units of Injectables, 3500 units of General
health care products like Mospel, Selson Blue and 1500 units of Nutritious products. The
designated man will make a Performa according to the demand raised by certain country
and forward it to the Material Planning Department requesting them to arrange the raw
material as well as the Packaging material for the desired product.
Export department will send the Performa to the advising bank through which an
LC or bank contract is opened’ in return he will get an answer from the bank that they
have received the Performa send by the person in charge in exports. During this period all
the completed documents along with the Invoice, bill of lading will be send to MOH to
check weather the product which is being send is the right quantity and the raw material
through which it has been manufactured is the right specifications.
MAKE
MAKE
All the production held at Abbott is make- to -stock that is to say 99% of their
making. Whereas 1% is make -to -order for certain customized institutional orders like
for instance army orders which have special labeling/carton labeling requirements. The
whole production/manufacturing process at Abbott may it be tablets, syrups or injections
is based on production plan which is eventually based on MPS. Master production
schedule is made by the supply department which is forwarded to the MATERIALS
MANAGEMENT department .The job of Material Management department is to arrange
the raw material for the production department well before the required time so that there
are no delays in the manufacturing of the product.
This plan is initially made during the plan stage. While planning production it is
kept in view what resources they have with them in order to produce and what type of
raw material is stored in warehouse so that according to that they make their production
plan. Production plan is made on weekly bases as well as monthly bases depending upon
the availability of the resources, which are required to make the required product.
Then S &O P meeting is held, which is represented by two parties’ one from supply side
and the other from demand side and production related decisions are made as per the
plan.
Abbott Pakistan is using BPCS system. This activity monitors the status of
manufacturing department including:
Tablet manufacturing
Syrups
Injectables
The MO’s, which has been send to the manufacturing department for the finished
product, are at what stage and what batches are being manufactured on which machines.
.
As per this system, the system is programmed in such a way that only the multiples
of batch size can be produced and no random manufacturing can be done that is to say if
the batch size is 100 then 200 or 300 can be produced even if the requirement/demand is
125units. In order to cater the demand of 125units, 200units products need to be
manufactured which will later be adjusted through the system in the coming months.
TYPES OF PRODUCT:
Tablets
Liquids/Syrups/O.R.S
Injectables
Creams/Ointments
MAIN PRODUCTS
Multivitamins
Antibiotics
Anti Inflammatory
Cough and Cold
Haematincs
Anesthetics
Analgesics
Anti Arthritic
Antacid
Anti B.P.H
Anti Epileptic
STANDARD OPERATING PROCEDURES
Cleaning
Uniform
Carefully usage of instruments
TOLERANCE LEVEL
Currently +/-5% tolerance level is set but it can vary from product to product.
GRANULATION
DRYING
MILLING
BLENDING
BOTTLENEC
K
COMPRESSION
COATING
In granulation stage the raw material is put under a process where solids are
broken down into small granules. Next is drying stage where these granules are kept on
large trays and passed through e certain temperature for specific period of time (varying
as per the tablet). Milling process where further REFINING of this dried material is done
separately and is converted into fine powder form follows this stage. Then comes
blending stage where different materials are mixed together and are then passed into the
compression process where a certain amount of pressure is given and the mixed material
is given a tablet form (shape). Coating is the last stage where the tablets are coated with
sugar and dyes/ colors (HPMC and Methocyl) in order to differentiate the tablets from
other tablets available and to avoid bitter taste. The bottlenecks in the production of
tablets are compression and coating.
The processing of syrups is done in huge tanks, which are already filled with water (as
per the requirement/specifications). Raw materials and glucose are added in the tanks,
certain material are also dissolved separately
in other small tanks or large beakers etc and
dissolved solution is then added to the tanks
along with glucose etc. the solution is heated
at a very high temperature usually (varies as
per different syrups). The sample is then
passed to QA for testing and once the tests
are approved the packaging of these syrups
starts.
SEALED
STERILIZED
LEAK TEST
RELEASED
SOLUTION
MANUFACTURING FILLING
SEALING
BOTTLENECK
STERILIZATION
LEAK TEST
CAPPING
PACKAGING LINE
AUTO CALVE
UNCAPPED
LEAK TESTER
CAPPING
OPTICAL
LABELLING
The distribution at ABBOTT is all about delivering products to customers at the right
time, right place and in right quantity so that there are no shortages. Distribution can be
done through different methods.
TYPES OF DISTRIBUTION
Direct Distribution
Indirect Distribution
Direct Distribution is done through the manufacturing plant i.e. after manufacturing,
products are distributed via ABBOTT delivery trucks to the institutions according to
contracts and demand by institutions.
Indirect Distribution is all about distributing through appointed distributors i.e. those
distributors who have proper contracts and than they distribute the respective product to
the wholesalers and different chemists. Here, the concept of Third-party logistics (3PL)
comes into play.
ABBOTT DISTRIBUTION
ABBOTT has their own depot i.e. their own distributorship in Karachi, Multan,
Lahore and Islamabad dealing directly to customers
(Distributors and institutions) ABBOTT has market distributors in big cities and specific
areas are assigned to each distributor (who works on 6% commission basis) so that they
can specifically take care of their areas and make sure those proper services and products
are delivered to each and every customer.
These distributors are linked with ABBOTT through satellites which report back on
weekly basis about sales and inventory level. ABBOTT Pakistan monitors these
distributors with the help of inventory system as this is the standard system they use for
distributors i.e. they are supposed to hold six weeks inventory.
DISTRIBUTORS
Premier Agency—Muslimabad, Karachi.
MODES OF TRANSPORTATION
ABBOTT has different modes of transport as per requirement of the product and the
distance to be covered. Some products such as Atrelax require temperature controlled
environments (2-8 °C) and for this reason they are delivered to Peshawar through courier
services so that they can be maintained properly throughout.
They have their own vans with ABBOTT monogram and they are generally used for
distributing to local customers (distributors and institutions) within Karachi and nearby
areas. Names of some of the transportation services hired by ABBOTT are as follows:
Abbott Pak
Hospital
Abbott truck
Abbott truck
Wholesaler
There are some legal formalities that need to be fulfilled before making a contract with
distributors.
Delivery Chalaan
Customer Invoice
Merchandise Receiving Report (MRR)
Product Name
Quantity
Delivered by
Received by
Condition (sound or spoiled)
Date of receiving
RESTRICTIONS
There are few rules and regulations that are very important for the company and
distributors to abide by them in order to avoid any mishap or confusion.
Distributors can’t go out of their area for sale.
Discount policy should be followed according to company’s instructions.
Distributors should carry 6 weeks inventory at there side.
RETURNS
Product Returns
MANUFACTURER
RETURN
There are two types of returns, one associated with Finished Orders and the other
associated with Material Orders.
Another type of Source Return takes place after disapproval from the Quality Assurance
Department. The inferior material along with the entire batch with which it was delivered
at ABBOTT is sent to the Rejection Room which is located in a separate building located
far away from the manufacturing plant. ABBOTT also has an approved policy of
disposing these materials which is in accordance with the EPA ACT 2003.
WASTAGE HANDLING
There is only one dumping side in Karachi, Surjani town which is owned by the
Government of Pakistan but it is not upto the standards set by the Parent Company
(Abbott In’t) that is why ABBOTT Pakistan does the dumping through a Private
organization name ABASEEN (Pvt) Ltd which is a more costly as compare to the
traditional process (Rs 30/= per Kilogram)
RETURN OF FINISHED ORDERS (FO’S)
Another condition for returning finished orders occurs when the product is just 90
days away from its expiration date. In this case, ABBOTT grants a full refund to
customers and donates all those drugs to hospitals that the drugs are used as soon
as possible before its expiry date.
FO’s Returns
Factory
OBSERVATIONS AND RECOMMENDATIONS
There is no proper handling of MO’s and FO’s. They are loaded and unloaded
from the container/ truck is in an open environment
(in the sunlight, in
moisture) without
any precautions to
maintain a specific
temperature and to
handle the medicines carefully. They
should avoid doing this and it will eventually
result in their low wastage cost which causes by the mishandling of the product.
All the unloading and loading is done mechanically and sometimes they just
through the products. They should make a proper terminal where the trucks can
easily and efficiently unloaded and loaded through a conveyer Belt or with a Fork
lifter, so the product should not be damaged.
There are no bar code sensors or any computerized system to count the Material
arrival from consignment, all the counting is done manually by the supervisors.
They should adopt any computerized customized software to do the counting
procedure so it will save the time and there will far less chances of error.
REFERENCES: