Novartis was created in 1996 from the merger of Ciba-Geigy and Sandoz Laboratories,

both Swiss companies with long histories. At the time it was said to be the largest
corporate merger in history after the merger Novartis reorganized its activities, and spun
out its chemicals activities as Ciba Specialty Chemicals. In 2003, Novartis created
Sandoz, a subsidiary that bundles its generic drug production, reusing the brand of one of
its predecessor companies. On April 20, 2006 Novartis acquired the California-based
Chiron Corporation. Chiron was formerly divided into three units: Chiron Vaccines and
Chiron Blood Testing, which now combine to form Novartis Vaccines and Diagnostics,
and Chiron Biopharmaceuticals, to be integrated into Novartis Pharmaceuticals. The
ongoing Basel Campus Project has the aim to transform the St. Johann site - Novartis
headquarters in Basel - "from an industrial complex to a place of innovation, knowledge
and encounter".

With more than 98 000 associates and operations in 140 countries, Novartis offers a wide
range of healthcare products through its Pharmaceuticals, Vaccines and Diagnostics,
Sandoz and Consumer Health divisions.
The portfolio of NOVARTIS can be described as follows:
• Pharmaceuticals: Innovative medicines with improved efficacy and fewer side-effects
• Vaccines and Diagnostics: Products to fight vaccine-preventable viral and bacterial
diseases, as well as diagnostic tools
• Sandoz: Affordable high-quality generic treatment options following the expiry of
patents

Novartis

CT health Sandoz Pharma

Health Oncology
CIBA health Generic Ophthalmology
Animal health General medicine
OTC in Pakistan
Pharmaceuticals

The Pharmaceuticals division of Novartis is recognized worldwide for the innovative

medicines it provides to patients, physicians and healthcare organizations.
This growing business develops and markets patent protected prescription drugs for
important health needs.

Novartis products are concentrated in major therapeutic areas:

• Cardiovascular & Metabolism

• Oncology & Hematology
• Neuroscience
• Respiratory
• Infectious Diseases, Transplantation & Immunology (IDTI)
• Ophthalmics, Dermatology, Gastrointestinal, Urinary (ODGU)
• Arthritis & Bone
Novartis current product portfolio includes more than 45 key marketed products, many of
which are leaders in their respective therapeutic areas. The product development pipeline
involves nearly 140 projects–including potential new products as well as potential new
indications or formulations for existing products–in various stages of clinical
development. Industry experts have ranked Novartis as a leader for having one of the best
combinations of organic growth, pipeline opportunities, and low patent-risk exposure
among major companies in the pharmaceuticals industry.

Vaccines and Diagnostics

The Vaccines and Diagnostics division is a leader in providing products to fight more
than 20 vaccine-preventable viral and bacterial diseases, as well as in sophisticated
equipment used to test blood donations for infections. This new division was formed as a
new strategic growth platform following the acquisition of Chiron Corporation in 2006.
The portfolio includes more than 20 vaccines used to prevent most life-threatening viral
and bacterial infections that were once major public health issues.
These products include vaccines against meningococcal infections, required
immunizations against childhood diseases, and vaccines to protect travelers against
diseases endemic to certain regions. Our division consists of two business units:
 • Novartis Vaccines, focused on creating innovative products to prevent influenza,
meningitis and other diseases
• Novartis blood testing business, which retains the Chiron name, dedicated to
preventing the spread of infectious diseases through novel blood-screening tools

Sandoz

Sandoz is a leading global supplier of generic pharmaceuticals. It develop, produce and

market high-quality medicines that compete with chemically identical, off-patent branded
drugs, often reducing the costs of treatment. Through Sandoz, Novartis is the only major
pharmaceutical company to have leadership positions in both patented prescription drugs
and generic pharmaceuticals. It offer more than 840 compounds in over 5000 forms in
110 countries. Significant product groups include antibiotics, treatments for central
nervous system disorders, gastrointestinal medicines, cardiovascular treatments and
hormone therapies. Novartis offer a wide range of products covering many steps in the
drug production process: basic molecules, intermediates, active
substances and finished drugs. We are an important biotechnological competence center
within Novartis due to our many years of manufacturing experience in this area.
Our name stands for three related values: speed and simplicity, customer and quality
focus, trust and mutual respect. At the same time, we make every effort to stay close to
our customers in local markets with decentralized commercial operations. Ranked as the
second-largest generics company in the world based on sales, we have completed the
integration of a series of targeted acquisitions to strengthen our product portfolio,
improve technological expertise and expand our geographic presence. The acquisitions of
Hexal and Eon Labs was completed in mid-2005.
 Novartis Mission

We want to discover, develop and successfully market innovative products to

prevent and cure diseases, to ease suffering and to enhance the quality of life.
We also want to provide a shareholder return that reflects
Outstanding performance and to adequately reward those who invest ideas
and work in our company.

Commitment to Patients

We endorse the right to health. This is our primary responsibility. Novartis has pioneered
an array of programs to enhance both affordability and access to treatment in developed
and developing countries. In 2006, our contributions valued at USD 755 million reached
33.6 million patients globally

Commitment to Ethical Business Conduct

Strong ethical standards are essential to our drive for top performance. We have
established a high-integrity corporate culture based on trust, respect and compliance with
legal regulations. We do so because we are convinced it is the right thing to do–and is
key to our business success.

Commitment to Our People and Communities

We endeavor to ensure the safety and promote the health, careers, diversity and
livelihoods of our people. We also strive to be a good neighbor in the communities where
our associates and their families live and work.

Commitment to Environmental Care

We have a clear responsibility to ensure we protect the environment by operating to the

highest standards. We adopt a risk-based approach and focus on minimizing our use of
natural resources, cutting our energy consumption and emissions, and preventing active
ingredients from entering the environment.
 Location of plant/ Warehouses & retailers:

Factory

Factory of Novartis is located at JAMSHORO. This factory is not only catering the
demand of Pakistan but also exporting to other countries like Afghanistan and
Philippines.

Business Unit: Consumer Health

Address: Novartis Pharma (Pakistan) Limited
P.O. Box 100 & 7247
Karachi 74000
PAKISTAN
Phone: +92 21 2313386to90
Fax: +92 21 2311009
Site Address: Novartis Pharma (Pakistan) Limited
15 West Wharf
Karachi 74000

Regional offices:

Novartis has following regional offices nationwide

• Quetta
• Karachi
• Hyderabad
• Sakkar
• Peshawar
• Islamabad
• Lahore
• Multan
• Faisalabad
Warehouses:

Novartis has three warehouses in Pakistan which are located at:

Karachi -West Wharf
Jamshoro
Hyderabad

The Karachi warehouse is use to store raw material which directly come from other
countries or thorough local vendors.

Whereas Hyderabad warehouse is use to store material if they are facing some kind of
storage problem or incase of any problem in the mode of transportation.

They cannot directly send the material which came through shipment but store them until
it meet the demand for the production .that usually save their transportation cost.

1. West wharf ware house in Karachi.

2. Hyderabad warehouse
Number of warehouses:

Novartis owned three warehouses in Karachi which are located at Karachi, Hyderabad
and jamshoro. The Karachi warehouse is located at WEST WHARF area and it manages
all the flow of Raw material from port to the jamshoro. The Hyderabad warehouse is used
to store additional amount of finished good products or raw material. Whereas the
warehouse located at jamshoro is the factory based warehouse which stores all the
finished goods and products.
Parazelsus owned 9 warehouses allover Pakistan. The warehouse locations are not owned
by Parazelsus but are hired on rental basis. Most of these depots also comprise of the
office premises for Novartis personnel.
Generally raw materials, finished products, packaging materials and expired or rejected
goods are stored in separate storage areas or separate compartments within a combined
warehouse. Temperature sensitive raw materials are stored in a separate cold storage room,
maintained at the desirable temperature.

Retailers

They have different retailer in different cities. They didn’t have much information about
retailer because they are under the control of parazelsus which is not in the control of
Novartis they do their work separately .parazelsus is only working for Novartis .their
distribution channels are divided into six cities and their total customer coverage 25431
of which 53 % are their retailer who sell their products.
Marketing strategies:

Strategies used by Novartis in introduction of their new products are as follows.

Typically pharmaceuticals companies don’t use advertisement in their product promotion.
For promotions and marketing of their products, Novartis use three types of marketing
strategies.

• Medical representatives
• Symposium
• Seminars

They usually have their sales force called medical representatives who go to different
clinics and hospitals, tell the doctors about their product and motivate them to prescribe
the Novartis products.

They arrange seminars and symposiums to let the people aware about the diseases and
what their product offer to them in fighting against those diseases. They also sponsors
different health related programs.
AN OVERVIEW OF PAKISTAN PHARMACEUTICAL SECTOR

Pharmaceutical products in Pakistan range from all kinds of vitamins, anti-allergies, and
Alkaloids to ointments and cough syrups. Around 125 categories of medicines produced in
According to the annual government report the growth in the pharmaceutical sector of
Pakistan in percentage was:

• Market growth in volume is14% per year

• Market growth in value is10% per year

A majority of Pakistan’s leading pharmaceutical companies have acquired ISO quality

Certifications, demonstrating their quality standards and vision. Around 15 new productions
Facilities are being established to comply with FDA standards. All this reflects that the
national pharmaceutical companies are aiming at highly regulated markets, such as the
United States and Europe.

Significance of the pharmaceutical industry to Pakistan economy

• Local production – US$1 billion

• Local consumption – US$1 billion
• Number of manufacturing units – 316
• Share of MNCs in the pharmaceutical industry – 47%
• Share of local companies – 53%
• 36 International Trade Centre
• Global sales of pharmaceuticals – US$317 billion
• Pakistan’s share in the global pharmaceutical market – 0.31%
• Increase in exports of pharmaceuticals – 17% per year

Profile of pharmaceutical industries

• Number of units – 316

• Investment – PKR 21 billion (US$350m)
• Import of pharmaceuticals – US$275m (2003-04)
• Export of pharmaceuticals – US$50m (2003-04)
Following is the list of top ten pharmaceutical companies in Pakistan

1. GSK
2. Pfizer
3. Abbott Laboratories (Pakistan) Ltd
4. Novartis Pharma (Pakistan) Ltd
5. Merck Marker (Pvt.) Ltd
6. Roche Pharmaceuticals
7. Bristol-Myers Squibb
8. Pharmacia and Upjohn (Pvt.) Ltd
9. Parke-Davis
10. Wyeth Pakistan Ltd
Source: IMS, Q2, 2006

35%

30%

25%

20%
Series1
15%

10%

5%

0%
GSK PFIZER ABBOT NOVARTIS
Production inputs
Following are the production inputs used in plant/machinery:
Plant/machinery (should be according to cGMP regulations)
- HVAC systems
- Mixer
- Blender
- Granulation suits
- Packing area machinery
- Molding
- Water treatment plant
- Quality control equipment
- HPLCs
- GC etc
Energy
- Generator
- Electricity connection
Documentation
- SOPs
- Registrations
- Regulatory compliance
- Quality/standard certification
Building
- Drainage waste system
- Raw material temperature control
- Dispensary area
- Laboratory
- Stores
- Packaging material stores
- Finished goods stores
- Quarantine area
Personal
- Management
- Executives
- Regulatory
- Distribution and supply chain
- Marketing
- Import and export
- Engineering
- Technical staff
- Labour
Order processing for exports
The procedure of order processing is given below.

1. Order negotiation, acknowledgement and finalization.

2. Issue Performa invoice / sales contract.

3. Order receipt includes the following:

Contract
Letter of Credit

4. Prepare order requisition with calculation sheet i.e. invoice amount, wt/m3
Calculation/freight.

5. Internal order communicated to supply chain for production.

6. Supply chain prepares order compilation and provides the following:

Packing list
Analysis report

7. Export department prepares and issues the following:

Final proforma invoice
Final customs invoice
Freight and volume calculation
Shipment break-up into commercial and bonus
Promotional item dispatch detail
Promotion item packing list
Import declaration form

8. Export department:
Completes inspection formalities (if applicable)
Books cargo through cargo agent
Arranges NOC from ADC office:
- Commercial invoice
- NOC print (5) copies
- Bond paper for NOC affidavit
- Analysis report
- Any other document that may be required from time to time
Obtains Form E endorsement endorsement from bank as per L/C or contract
Completes other documents
- Certificate of origin
- Certification of various documents by the relevant embassy and chamber of commerce
- Commercial invoice (if required)
- Other documents

9. Export department / supply chain:

Facilitate lifting of stocks by clearing agent
- Form E
- Commercial invoice
- Packing list
- NOC
Obtains following documents from clearing agent:
- Customs invoice (for rebate
- Packing list
- Shipping bill (for rebate)
- Form E

All documents attested by Customs are submitted to Customs House for rebate claim
Bill of exchange obtained from city court
Copy of documents sent to the customer:
- Commercial invoice
- Packing list
- AWB/BL
- Certificate of analysis
- Certificate of origin
- Weight certificate
- Others (if any)
Completes/verifies all documents with L/C requirements and presents to bank for
negotiation:
- Covering letter
- Form E (duplicate and triplicate)
- AWB/BL
- Copy of Letter of Credit
- Bill of exchange
- Packing list (original)
- Invoice (original)
- Certificate of analysis
 Cash
Cash
Depo
Depo
sit
1 Order
Order
Booki
sit Booki
Into
Into ng
ng
Bank
Bank

7 2
Cash
Cash
Recei
Recei
ving
ving Invoic
Invoic
From ing
Process
From ing
Custo
Custo
mer
mer
Flow
6 Diagram 3
Suppl
Suppl Good
Good
ies
ies ss
To
To Segre
Segre
Marke
Marke gation
gation
tt
5 Loadi
Loadi
ng
ng
4
Into
Into
Del.
Del.
Vans
Vans
ORGANIZATION STRUCTURE OF NOVARTIS PAKISTAN:-

Formal Structure:

Novartis Pakistan has a formal organization structure where Head is the person in charge
of Novartis Pakistan who actually acts as a CEO. There are two main departments, one is
the supply chain department and other is the technical operations department. The head of
these departments are called General Managers. Under operations departments there are
sub departments of solid, liquid, injectibles, quality control, warehouses etc. Supply chain
is further divided into sub departments of Procurement and material management. The
structure overall is centralized. Each decision involves a lot of paper work and
documentation and everything has first to be approved by the General managers.

The general hierarchy of Novartis in Karachi is as follows:

1. CEO
2. General Manager (Operations and supply chain)
3. Manager (Solid, Liquid etc)
4. Manager procurement and Material management.

The sales structure for Karachi is as follows:

• Regional sales manager

• Sales manager
 .

Head

Supply
Head technical
chain
operations
manager
Head
Eng. Head procurement Head MM

Head solid

Head liquid

Head semisolid

Head injection

Head QC.

Head warehouse

Logistics network

Distribution arrangements:

For distribution of its products, Novartis has a separate entity called parazelsus.
Parazelsus perform its functions separately than that of NOVARTIS. It looks after all the
matters associated with the distribution of product in the country. The table below is the
statistical view of the distribution network of Parazelsus.

National Statistics
Population 150 Million
# of pharmacies (approx) 35,000

Hospitals/Institution (approx) 1000

Distribution Key Figures
Warehouses
(in all major cities of Pakistan) 9
Pharmacies covered (approx) 25,000
Hospitals/Institution 740
 Towns Covered 962
Order Bookers 221
Calls / Day 35 – 40
Invoices per day 2,700
Sales per day PKR 12.4 mio (USD 0.21 mio)
Vans 84

These are the information about their distribution channels and how they cover
different cities of Pakistan as well as hospitals and other institutions.

Financials Overview of 2006

* 2006 Sales * Per day sales

BUs PKR USD PKR USD

Pharma 2157 36.10 7.19 0.12

OTC 971 16.25 3.24 0.05
Sandoz 598 10.01 1.99 0.03
Novartis 3726 62.36 12.42 0.21
 OTC Performance
( Rs' 000 )
Months Tar, 07 Ach, 07 % Ach, Growth
+/-%
Jan 81,487 61,242 75 47,872 27.93
Feb 102,960 94,500 92 94,377 0.13
March 71,289 66,298 93 67,353 (1.57)
QI 255,736 222,040 87 209,602 5.93

INBOUND LOGISTICS NETWORK:-

 INBOUND
LOGISTICS
150
JAMSHOR
km O

PORT
(Air/Sea)

WEST HYDERABA
WHARF D F
WAREHOUS WAREHOUS
E E A
VENDOR
C
T
O
R
Y
VENDOR

VENDOR

VENDOR

Hauling approx. 3500 tons annually

The inbound Logistics network of Novartis can be described in following steps.

• The raw material arrived at port via sea and air which normally transferred to the
factory located at jamshoro.
• Sometimes the raw material is of lesser quantity so it’s not feasible for Novartis to
send it to the factory because it would result in higher transportation cost. To
make sure that their raw material would not get damaged they store it in Karachi
warehouse.
• They wait for other shipment of raw material and than collectively send the
previous and the new raw material either to the Hyderabad warehouse or to the
factory.
• The vendors can also ship it from Karachi warehouse to Hyderabad depending
upon the situation. If enough raw materials are available in plant warehouse, they
store excess raw material in Hyderabad warehouse.
• From Hyderabad warehouse the vendor send it to factory depending upon the
requisition of raw material.
OUTBOUND LOGISTICS:-
OUTBOUND
LOGISTICS Parazelsus/Premier
Depots
1. KSD
EXPORT Karachi
TO 2. HSD
PHILIPPIN EXPORT TO Hyderabad
ES AFGHANISTA PSD 3. SSD
N ISD Sukkur
JHE 4. MSD
Multan
GUJ 5. FSD
FS Faisalabad
EXPORT TO D 6. LSD
AFGHANISTA
N
LSD Lahore
7. ISD
Islamabad
8. PSD
Peshawar
QSD 9. QSD
MSD Quetta

Premier Depots
10. NWB
Dispatch approx. 66.0 mio SSD
LKR Nawabshah
packs annually 11. MIR

NWB Mirpurkhas
12. LAR
MIR Larkana
JAMSHORO 13. GUJ
HSD
Gujranwala
KSD 14. JHE
Jehlum

The outbound logistics of Novartis can be described in following steps.

• The parazelsus has 11 warehouses and premier depots all over Pakistan which are
used for the effective and smooth supply of products all over the country.
• The finished goods are transported all across the country form the Jamshoro plant
and warehouse.
• Novartis also export the finished goods to Afghanistan and Phillipines. Phillipines
is their major export market. Shipment of product takes place from the Hyderabad
warehouse via Karachi airport.
• The total dispatch is approximately 66 million annually.
• The export to Afghanistan takes places from the Quetta and Peshawar route.

SUPPLY CHAIN ORGANIZATION CHART:-

 Head of
Supply Chain

Materials Factory WW
Procurement
Manager Warehouse Warehouse Vacant
Manager
Manager Manager

Distributional organizational chart:

karachi warehouse
 Doctor’s
Doctor’s
Prescription Order Hyderabad warehouse
Prescription Order

Wholesaler
Emergency
Only

Novartis
Wholesaler
Other Hospitals
Hospital Pharmacy R
x
Wholesaler

Retail Pharmacies
International
and Local
Patient vendors

A Drug’s Multiple Product Delivery Paths

 Raw material import

Karachi port
Local vendors

Karachi warehouse

Hyderabad
warehouse

Production

Finished Goods Ware House

(Imported + Locally Manufactured
Goods)
100%%

Locations / Depots (9)

53% 32% 7% 8%

Retail /
Wholesalers Dispensing
Chain Distributors
Doctors
Pharmacy

100%
2% 6%
Retail / Others
Chain Hospitals (Institutio
Pharmacy ns)

100% 100% 100%

Consumer / Patients
This is the overall supply chain process of Novartis pharmaceutical company .this shows
how finished good after passing through production process can be deliver to their final
customers. The distributors which are parazelsus can also deliver product to hospital for
their pharmacy and other institutions

The warehouse locations are not owned by Parazelsus but are hired on rental basis. Most
of these depots also comprise of the office premises for Novartis personnel.

We can describe the supply chain process of NOVARTIS in following steps.

1. The Raw material arrived at Karachi port via sea-route and than directly
transferred to the plant at jamshoro for the production
2. If the Raw material is lesser in quantity than it is deposited in Karachi warehouse
and than either shifted to Hyderabad warehouse or at manufacturing plant.
3. Than this raw material is used in the production of medicines and other products
4. The finished good is than moved to the plant warehouse or to Hyderabad
warehouse depend upron the quantity.
5. Now after Finished goods the parazelsus take the charge and moved the products
to the 9 different locations and depots.
6. From these 9 locations and depots 53% of the products are distributed through
retail/Chain pharmacy, 32% to wholesalers, 7% to dispensing doctors and 85
through distributors.
7. From wholesalers it moved 100% to the retail/chain pharmacist and from
distributors it moved to hospitals and other institutions.
8. from all these distribution channels the end product reaches to the end customer.

This process flow diagram shows their exchange process as well as the documentation
process of their goods

• First they receive orders

• Then they prepare invoicing
• In third step goods segregation takes place
• Then the segregated good will be loaded into vans to deliver into market place
• Finally they receive cash in return of goods.

SCOR MODEL
PLAN:-

Planning is the most important part in production as well as success of product in

Novartis the supply chain department organizes meetings on weekly and monthly basis
where different teams are assigned their tasks and they review that whether the tasks or
previous goals were achieved or not. In Novartis, they usually make a plan for 1 month
and for the proper accomplishment of goals and meeting targets they arrange weekly
production meetings. Usually athe accomplishment percentage of targets and goals is less
than 100% but they strive their best to get the maximum achievable targets.

We can describe the planning process in following steps.

2 years plan segregate

on monthly basis

Then it is sub
divided into weekly
schedule

Schedule forecast for

week Current schedule Tentative schedule

This process is base on marketing plan which they develop through past years sales
as well as current demand.

Procurement process:
 Marketing demand

MPS plan according to

Forecast

Imports drug demand

forward to
procurement

Then local MPS demand

forecast

MATERIAL MANAGEMENT FUNCTIONAL FLOW CHART

Information flow
Marketing Market
strategy research Material flow

Budgetary Production
planning management
Sales forecast

Product requirement
planning
Material requirement Production
planning
schedule

procurement inventory planning

control

Quality
vendor Production
assurance

RM/PM FG
Warehouse warehouse
Distribution

Sales to Sales
customer analysis
Material management functional flow is not stand alone activity, it is tightly integrated
with Market Demand and sales forecast.

• Production schedule is fully dependent on market demand and budgetary planning

• Product requirement planning is depend on sales forecast and then based on that
planning MRP department may able to create production schedule.
• Material requirement planning for that production schedule is another parallel
activity which is performs by MRP department.
• MRP department forward their material requirement to procurement so that
procurement can make sure the availability of required material on right time from
appropriate vendors. The integration of this information reduces the unnecessary
delays and lead time.
• When raw material comes, it’s received in warehouse for inspection and approved
material forward to production as per requirement.
• Finally, Finished Goods subsequent to quality assurance, stored in FG warehouse
and ready for distribution where Parazelsus start distribution through out in country
and at the end, product is available for end user.
• Sales analysis helps production management to forecast the sales for next year.
• Whole Cycle is repeated in the similar approach.
MAKE

Process order

Manufacture dispensing
(Issue of all raw materials & packaging
Material)

Manufacturing

Compensation/capsule
filling

Coating
(Tablets coating)

Final packaging

Final release by QA

Transferring to different
depots and F.G
WWAREwarehouses

Major equipment used for production of different pharmaceutical products include:

• Mixing & Blending Vessels
• Granulating machines
• Drying Chambers
• Autoclaves and Ovens
• Tablets Compression Machines
• Tablets Coating Machines
• Capsule Manufacturing Machines
• Encapsulation Machines
A variety of purpose-built automatic or semiautomatic filling machines forliquids in bottles,
liquids in ampoules vials, powders in bottles and creams &ointments in collapsible tubes
A variety of purpose-built automatic Printing Machines
 Reactor
Extraction

Decanting
Separation

Centrifugation
Crystallization

Filtration

Purification

Drying

The Make process of Novartis can be described as follows

Raw materials or ingredients, including solvents, used to produce the intermediate or bulk
substances are charged into the reactor vessel. Once the reactor vessels are charged with
the raw materials, the reaction takes place.

Several separation mechanisms are employed by the Novartis including extraction,

decanting, centrifugation, and filtration. These mechanisms may be employed jointly or
individually, in multiple stages, to separate the intermediate or bulk substance from the
reaction solution and to remove impurities

After the reaction takes place, the intermediate or final bulk substance (which is usually
in solid form) can be separated from the reaction solution by crystallization.
Crystallization is one of the most common separation techniques and is often used alone
or in combination with one or more of the separation techniques described above. In
crystallization, a supersaturated solution is created in which crystals of the desired
compound are formed. Super saturation depends on the solubility of the desired
compound. If the compound’s solubility increases with temperature, super saturation can
be achieved by cooling the solution.

Once the intermediate or the bulk substance has been separated, it may need to be
purified. In vitamin production, for example, there are at least three to four purification
steps. Purification typically is achieved through additional separation steps such as those
described above. Purification is often achieved through recrystallization.

The final step in the chemical synthesis process is drying of the intermediate or final bulk
substance. Drying is done by evaporating the solvents from the solids.
Formulation, Mixing, and Compounding

The primary objective of mixing, compounding, or formulating operations are to convert

the manufactured bulk substances into a final, usable form
Tablets:-

To prepare a tablet, the active pharmaceutical ingredient is combined with filler, such as
sugar or starch, and a binder, such as corn syrup or starch. The filler is added to ensure
that the active ingredient is diluted to the proper concentration. A binder is needed to bind
tablet particles together. Coating may be used to offer protection from moisture, oxygen,
or light, to mask unpleasant taste or appearance, and to impart distinctive colors to
facilitate patient recognition. Once the tablets pass quality control requirements, they may
be held or sent directly to packaging.

Liquid Dosage

In formulating a liquid product, the ingredients are first weighed and then dissolved in an
appropriate liquid. The solutions are mixed in glass-lined or stainless steel vessels, after
which they are stored in tanks before final packaging. Preservatives maybe added to
prevent mold and bacterial growth. If the liquid will be used for injection or ophthalmic
use, sterilization is required. In this case, the container, which has also been previously
sterilized/dehydrogenated, is filled with liquid which has either been rendered sterile by
aseptic filtration in a sterile environment and/or the entire container and its contents are
terminally heat sterilized in an autoclave.
Injectibles Manufacturing

Ampoules and vials are first washed with de -ionized water.

a. Sterilization of Primary containers (Ampoules/vials): The primary containers are

Washed with de-ionized and/or distilled water and then sterilized in an electrically heated
oven at about 250 0C. In some cases siliconaiztion to avoid sticking of materials is also
done.

b. Autoclaving: all the dresses, equipment parts, gloves, glass containers etc are sterilized
by autoclaving.

c. Mixing and Filtration: Sterile liquid mixture is prepared by mixing active ingredients
and excipients in the specified ratio. The liquid mixture is then filtered under sterile
conditions. The distilled water is used for the washing of equipment, before starting the
mixing and filtration processes. The filtration assembly is also sterilized prior to the
process of filtration.

c. Filling and Sealing: The ampoules/vials are filled with the liquid mixture and then
sealed, on the automatic filling and sealing machine.

d. Optical Checking: The filled ampoules/vials are subjected to visual inspection, under
special light arrangement, to detect the presence of any particulate matter. The white
particles are optically checked against black background and black against white
background.

e. Printing and Packaging: After checking ampoules/vials are sent for printing, on a
Printing machine. The final packing is done in packaging area. At the end the packed
products are kept in big cartons and sent to warehouse for dispatch.

Sterilization 250 c

Autoclaving

Mixing

Filling &ceiling

Optical checking

Printing
Sourcing:

Raw materials for medicines include active pharmaceutical ingredients, excipients (like
sugar and lactose) and solvents (such as ethylene chloride, dichloride ethane, ethyl
acetate and methanol). Most of the requirements of raw materials are met through import.
Basic raw material used in the manufacturing of empty capsules is pharmaceutical grade
gelatin. Gelatin is a mixture of water-soluble proteins derived primarily from collagen,
which is a naturally occurring protein. Other major materials used in the capsule
manufacturing are dyes, dye -aids, preservatives and glycerin. Variety of packaging
materials like glass bottles, blisters, plastic caps, aluminum seals, polythene/paper bags,
cartons, carton partitions, labels and shrink wrappers are also used by pharmaceutical
industries.

• They use FEFO method (first expiry first out)

• Sourcing is taken place though shipment as well as through airways

• Shipment process takes 5 month and carry large amount of raw material

• Through air ways it take 60 days but carry less as compare to shipment

• According to them ship is more cost effective for them

• frequently the raw material is directly transferred to jamshoro and excess material
is stored in Karachi warehouse

• Main imports are from Europe, Switzerland, Germany, Italy, and India.

• Major portion of raw material are imported from the countries above.

• And their vendors are also located in Karachi, Hyderabad.

• Basic raw mat. And packaging mat. Is also imported through other countries
almost 95 % because basic manufacturing of these materials are not in Pakistan
Deliver:

Deliver process is take place through parazelsus which is separate company and the
distribution system is also discuss in parazelsus slides.

Parazelsus
Premier

These are the two distribution networks work for Novartis

In starting the distribution system was controlled by Novartis it self form jan. This year
they handed the distribution department to parazelsus

Distribution Operation Overview

Customers Coverage (25,431)

Trade Customers 22,310

Retailers 20,299
Whole Salers 2,011

Others 3,121
Doctors ,363
Hospitals 503
Institutions 255

Business Contribution in Total Sales

Trade 85.00
Retailers 53.00
Whole Salers 32.00

Others 15.00
Doctors 7.00
Hospitals 2.00
Institutions 6.00
W. Sale / Retail Ratio in Trade Sales

Retailers 62.35
Whole Salers 37.65

37.65
62.35
Return:

There are three types of return in Novartis supply chain.

• Return of product if expired
• Return of Product in fault of production process
• Return of product due to defective raw material

The products are to be returned to NOVARTIS if they reach to their expiry period. To
safeguard the health and to avoid any severe condition the expiry products can be sent
back to Novartis.

Novartis mainly import raw material form different countries. Sometimes this raw
material has been found defective in quality assurance testing and this raw material is
sent back.

Due to the mishandling of raw material the addition or lesser quantity of certain raw
material in production process would force the company to callback its batch.
BULLWICK EFFECT

Fluctuation in the demand of medicine takes place only in the month season of winter and
summer where as in spring there is no fluctuation like summer and winter .In spring the
demand become constant as per their forecast.

They generally start their grounding of raw material four months earlier in order to met
the demand of these seasons

In summer the demand of calcium increase by 4 times so to overcome this demand they
collect the stock earlier to get prepare for that month.

The demand for kafkol rises 4 times in winter so they follow the same procedure as
mention above.

BOTTLE NECKS

Mechanical problems
Machine break downs
Maintenance break downs
Problems with raw material.
RECOMMENDATIONS:-

After detailed view of the Novartis Supply chain management and other departments
associated with it, we have following recommendations that can help Novartis to improve
their system.

• Dearth of talent/skill set.

Novartis has to set the level of skills required by its personnel. One thing that is hurting
pharmaceutical sector is the lack of skills and the expertise require in the relevant fields.
Novartis has to search for the talent and benchmark the skills to be set by them.

• Capacity constraints in Production.

Another problem we observe in Novartis supply chain is the capacity constraints. They
have to remove the bottlenecks in their production process to maximize the capacity in
their production.

• Old machinery resulting in high maintenance costs.

Novartis has an older plant which in results not only affecting the production of the
pharmaceutical products but in financial terms it increasing the maintenance cost.

• Severe limitation of storage space.

The one and the most important factor is the lesser number of warehouses. Novartis is
facing the problem of limited storage space. They have 3 warehouses located in Karachi,
Hyderabad and Jamshoro which are not enough to store the products. So they have to
either rent more warehouses or built warehouses in order to solve this problem.

• Rising input costs versus fixed output price.

Pricing is another issue which becomes serious for NOVARTIS day by day. The prices of
raw material and other inputs are rising. As they import most of the raw material from
different countries, it in turns increasing their manufacturing cost but when we analyze
their output price it doesn’t increase with more pace. It may be because of some
governmental barriers but Novartis has to cut down their input cost.

• High cost of supply due to low forecast accuracy.

• High inventory levels due MOQ and Shelf life restrictions.
• High logistics costs due to remoteness of factory and space constraints.
• Lack of integration of supply chain functions.
• Wind fall opportunities dying down in Urban markets- look out at rural markets
• Parazelsus smooth transition
• Continuous flow of the goods as per market need
• Counter strategies to offset shortage.
• MoQ to be revised to cater to small or new customers
• Matching of OTC FF layout with distribution field force.
• Improvement of SS quality.
• Recruitment of SS at LSD and FSD