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

Generic

Oncology

Ophthalmology

General medicine

Health

CIBA health

Animal health

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 reflectsOutstanding 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 WharfJamshoroHyderabad

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 inAccording 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 productionsFacilities 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. Pfizer3. Abbott Laboratories (Pakistan) Ltd 4. Novartis Pharma (Pakistan) Ltd5. Merck Marker (Pvt.) Ltd 6. Roche Pharmaceuticals 7. Bristol-Myers Squibb8. Pharmacia and Upjohn (Pvt.) Ltd9. Parke-Davis10. Wyeth Pakistan Ltd

Source: IMS, Q2, 2006

0%

5%

10%

15%

20%

25%

30%

35%

GSK PFIZER ABBOT NOVARTIS

Series1

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:ContractLetter of Credit

4. Prepare order requisition with calculation sheet i.e. invoice amount, wt/m3Calculation/freight.

5. Internal order communicated to supply chain for production.

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

7. Export department prepares and issues the following:Final proforma invoiceFinal customs invoiceFreight and volume calculationShipment break-up into commercial and bonusPromotional item dispatch detailPromotion item packing listImport declaration form

8. Export department:Completes inspection formalities (if applicable)Books cargo through cargo agentArranges 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

- NOCObtains 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 claimBill of exchange obtained from city courtCopy 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 fornegotiation:- 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

OrderBooki

ng

OrderBooki

ng

CashReceivingFromCustomer

CashReceivingFromCustomer

CashDepo

sitInto

Bank

CashDepo

sitInto

Bank

Invoicing

Invoicing

Goods

Segregation

Goods

Segregation

Loading

IntoDel. Vans

Loading

IntoDel. Vans

SuppliesTo

Market

SuppliesTo

Market

ProcessFlow

Diagram

1

2

3

45

7

6

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. CEO2. 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

.

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 FiguresWarehouses

9(in all major cities of Pakistan)

Pharmacies covered (approx) 25,000Hospitals/Institution 740

Head injection

Head

Supply chain manager

Head technical operations

Head procurement Head MMHead Eng.

Head solid

Head liquid

Head semisolid

Head QC.

Head warehouse

Towns Covered 962Order Bookers 221

Calls / Day 35 – 40Invoices 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

INBOUND LOGISTICS NETWORK:-

OTC Performance ( Rs' 000 )

Months Tar, 07 Ach, 07 % Ach, Growth+ / - %

Jan 81,487 61,242 75 47,872 27.93Feb 102,960 94,500 92 94,377 0.13March 71,289 66,298 93 67,353 (1.57)QI 255,736 222,040 87 209,602 5.93

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.

INBOUND LOGISTICS

VENDOR

F

A

CTORY

WEST WHARF

WAREHOUSE

PORT(Air/Sea)

VENDOR

VENDOR

VENDOR

HYDERABAD

WAREHOUSE

JAMSHORO

150 km

Hauling approx. 3500 tons annually

OUTBOUND LOGISTICS:-

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:-

Parazelsus/Premier Parazelsus/Premier DepotsDepots1. KSD

Karachi2. HSD

Hyderabad3. SSD

Sukkur4. MSD

Multan5. FSD

Faisalabad6. LSD

Lahore7. ISD

Islamabad8. PSD

Peshawar9. QSD

Quetta

Premier DepotsPremier Depots10. NWB

Nawabshah11. MIR

Mirpurkhas12. LAR

Larkana13. GUJ

Gujranwala14. JHE

Jehlum

JAMSHORO

OUTBOUND LOGISTICS

KSD

HSD

SSD

QSDMSD

FSD

LSD

ISDPSD

GUJ

JHE

MIRNWB

LKR

EXPORT TO

PHILIPPINES

EXPORT TOAFGHANISTA

N

EXPORT TOAFGHANISTA

N

Dispatch approx. 66.0 miopacks annually

Head of Supply Chain

Materials Manager

Factory Warehouse

Manager

WW Warehouse

Manager

Procurement Manager

Vacant

Distributional organizational chart:

karachi warehouse

Hyderabad warehouse

Novartis

A Drug’s Multiple Product Delivery Paths

Patient

Wholesaler

Doctor’s Prescription Order

Doctor’s Prescription Order

Retail Pharmacies

Other Hospitals

International and Local vendors

Wholesaler

Wholesaler

Hospital Pharmacy

Emergency Only

Rx

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

Finished Goods Ware House(Imported + Locally Manufactured

Goods)

Locations / Depots (9)

Consumer / Patients

Retail /Chain

Pharmacy

Wholesalers DispensingDoctors

Distributors

HospitalsOthers

(Institutions)

Retail / Chain

Pharmacy

53%

8%

7%

32%

100%%

100% 2

%6%

100%

100%

100%

Raw material import

Karachi port

Production

Local vendors

Karachi warehouse

Hyderabad warehouse

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 products4. 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.

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

Procurement process:

2 years plan segregate on monthly basis

Then it is sub divided into weekly schedule

Schedule forecast for week Current schedule Tentative schedule

MATERIAL MANAGEMENT FUNCTIONAL FLOW CHART

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

Marketing demand

MPS plan according to Forecast

Imports drug demand forward to

procurement

Then local MPS demand forecast

Marketing strategy

Market research

Sales forecast

Production management

Budgetary planning

Product requirement planning

Production schedule

Material requirement planning

inventory planning control

procurement

vendor Quality assurance

Production

RM/PMWarehouse

Distribution

FG warehouse

Sales to customer

Sales analysis

Information flow

Material flow

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

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 MachinesA variety of purpose-built automatic or semiautomatic filling machines forliquids in bottles, liquids in ampoules vials, powders in bottles and creams &ointments in collapsible tubesA variety of purpose-built automatic Printing Machines

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

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.

Reactor

Separation

Crystallization

Purification

Drying

Extraction

Decanting

Centrifugation

Filtration

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.

ParazelsusPremier

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 22,310Retailers 20,299Whole Salers 2,011

Others 3,121Doctors ,363Hospitals 503Institutions 255

Business Contribution in Total Sales

Trade 85.00Retailers 53.00Whole Salers 32.00

Others 15.00Doctors 7.00Hospitals 2.00Institutions 6.00

W. Sale / Retail Ratio in Trade Sales

Retailers 62.35Whole Salers 37.65

37.6562.35

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 problemsMachine break downsMaintenance break downsProblems 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