Presentation

Presented to : SIR FAROOQ AZAM

Presented by :

AYESHA HABIB(BBC-09-34)

ASHIFA HAMID(BBC-09-61)

ZAINUB MUSTEHSAN(BBC-09-69)

Company Profile

• Abbot Laboratories (Pakistan) Ltd. The company’s principal activities are to manufacture, import and market based pharmaceutical, nutritional, diagnostic, hospital and consumer products and provides toll-manufacturing services. It operates in two segments Pharmaceutical and other. Pharmaceutical segment manufactures, import and markets research based pharmaceutical products registered with the ministry of health and provides toll-manufacturing services.

Company Profile

• Other segments includes importing, manufacturing and marketing diagnosing equipment, testing kits, consumer healthcare, nutritional and hospital products. The company’s pharmaceutical products include Kalaricid, Erthrocin, Hytrin, Epival, Brufen, Entamizole, protium and Forane. The other products include Ensure, Pediasure, Pedialyte, Formance etc.

Abbott Pakistan

• 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.

Abbott

VISION

“To be a premier health care company in Pakistan”

Abbott

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.

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 and 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”.

Core values of Abbott

PIONEERING

CARING

ACHIEVING

ENDURING

ABBOTT

CAPABILITIES OF ABBOTT

AGILITY

COMUNICATION LEADERSHIP

INTEGRITYY

QUALITY OF EXECUTION

Core Competencies Of Abbott

PRODUCTS & SERVICES

CUSTOMER INTIMACY

OPERATIONAL EXCELLENCE

PEOPLE

Supply chain Integration

MARKETING

TRANSPORTATION

SUPPLIER

WAREHOUSE (M O)

Manufacturing

WAREHOUSE ( F O)

CUSTOMER

RETAILERS/ WHOLESELLERS

DISTRIBUTORS

I N F O R M A T I O N F L O W

P R O D U C T F L O W

Abbott’s Supply Chain Structure

MASTER SCHEDULER

CAPAPCITY PLANNER MASTER

SCHEDULER

SUPPLY CHAIN MANAGER

LOCAL/ IMPORTED PURCHASE MANAGER

EXPORTS MANAGER

WAREHOUSE MANAGER

MATERIALS MANAGER

PRODUCTION PLANNER

PRODUCTION PLANNER

Supply Chain Process

Marketing ( Demand Generated)

Vendors (Quotations asked)

LC

Follow up ---import & dispatches

Manufacturing Planning

(Demand Generated)

Material Planning

Material in Warehouse

Clearance Transit Time

Material Available For Production

QA

Released by QA

Production

Central Depot’s

FO Quarantine (Sampling test by QA)

FO Batches

Packing line

Dispatches

Wholesalers

Satellite Depot’s & Distribution

Retailers

Institutions

SCOR Model

PLANPLAN

DELIVER MAKE

SOURCE

RETURN MO

RETURN FO

Enable

RM Manufact

urer

Make Deliver Source Make Deliver

Make Source

Deliver

Source

Deliver

Source

Plan

Indenters

ABBOTT Lab Pakistan

Distributors

Return Return Return Return Return

Return

Supplier

Supplier’s Supplier Company Customer

Whole salers

Customer’s Customer

PLANNING

• According to the external customer.• Past sales are taken into consideration.• Ads flexibility

PROCESS VIEW OF SUPPLY CHAIN

Push process is applied when forecast of every product is done and every product forecast is different from country to country due to the fact that in different country’s disease are different due to environment and various other factors. This requires different medicines. Pull process is performed when uncertain demand for any medicine increase for example when Dengue occurred there was increased demand for mosquito repellent lotion and injections.

Achieving Strategic Fit

Abbott achieved strategic fit through lean production. They control the upstream and downstream of products, services, finances and information through aligned goals and strategies. That collaboratively work to reduce cost and waste by efficiently and effectively pulling what is needed.

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.

BUSINESS PLANNING

A D S

SNO MEETING

DISCUSS

PROPOSED FORECAST

Business Planing

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.

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.

ABNORMAL DEMAND PLANNING / HANDLING UNCERTAINTY

Abnormal demand is a demand, which comes unexpectedly Like at the time of War, NATURAL DISASTERS OR ANY EPIDEMICS According to ABBOTT they have a policy to maintain six weeks safety stock to handle the uncertainties and they have positioned themselves to handle such abnormal demand like ABBOTT did with MOSPEL at the time of Dengue Virus.

APPROVED SUPPLY PLAN

This plan is made on the bases of ADS and is approved once the supply department has made the initial supply plan. Then after the supply plan has been made it is forwarded it to the MM (Material Management Department.)

MASTER PRODUCTION SCHEDULE

The entire production is based on this plan weather it is Tablet, syrup, injectables or syrup manufacturing. This is set up on the bases of forecasted and some times abnormal demand as well. Date for all the batches is set up according to this plan but when there is a sense of urgency then there are some changes made.

CUSTOMER

MARKETING

MAS

MANUGISTICS

MANUFACTURING

MASTER PRODUCTION ARRIVAL

This is the inventory, which is going to arrive in bulk, and it is the job of Master Production Scheduler to arrange the bulk. This bulk can either be for export or for the market demand done through forecast. He also sets up when to make the required batch on which date.

STOCK KEEPING UNITS

ABBOTT Pakistan has 270 SKU”s, out of which 240 Pharma products and 30 are Nutritional products.

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

MATERIAL MANAGEMENT PLANNING

ABBOTT Pakistan is using MRP II to effectively and efficiently handle the Material issues, which is based on the information’s provided by MPS, It has been adopted by ABBOTT Pakistan due to the imposition posted by ABBOTT International, Chicago. This requirement tells us on the system what is the quantity required according to the Master Production Schedule. All transactions are made electronically into BPCS known as Business Planning & Control System. If there is an additional requirement due to abnormal demand then there are some changes made in MRP.

CAPACITY PLANNING

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.

MAKE OR BUY DECISION

As far as the make or buy decision is concerned, some of the products are imported. The primary reason for importing those products is that the quality of the raw materials is not up to the mark or they are very expensive. Also, these products cater to a very small market segment and manufacturing them here would not be profitable. Therefore ‘C’ categorgry materials (grading as per their value) are purchased locally like for instance Pseudo used in cough syrups from Lahore (alpha chemicals).

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

In Pharmaceutical Industry there are two types in ingredients:

• Active Ingredients

• Excipient Ingredients

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

LOCAL/ IMPORTED

PURCHASE EXPORTS WAREHOUSE

MATERIALS MANAGEMENT

BID SHEET

A bid sheet is a low cost effective sheet in which there are quotations form different suppliers and on the bases of that low cost suppliers are selected comparing their LANDED COST 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

VENDORS APPROVAL STEPS

Material Sample and vendor also provides

Certificate of Analysis & Form 7.

Quality Assurance test of the material in ABBOTT”s

own laboratory

Quality Control approves the material and assigns a

number to batch and a Yellow Sticker.

Trial Batch is made of a actual material

Stability Testing (QA)

Material Approval (QA)

Quality Assurance issue a Green Sticker (Release)

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.

PROCUREMENT

ABBOTT Pakistan has two purchasing departments. One is for local purchases and the other one is for imports. The procurement function is bifurcated in two categories:

• Direct Product Related Purchases

• General Purchases

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 stationary, office equipment's, transportations and other minor items which are not directly related with production activities.

DIRECT PRODUCT RELATED PURCHASES

This includes each and every raw material that is required to make end products

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)

• Grade B (moderate cost)

• Grade C (least cost)

Local Purchasing

Local purchasing department of Abbott Laboratories Pakistan deals with local vendors concerning:

• Designing –FP Plastics, Al-Ahad Plastics, Thermoplas (Korangi) > Lead Time 30 Days

• Printing–Ammara Commercial Printing (Memon Goth, Malir) > Lead Time 30 Days

• Packaging – Saima Packaging (Korangi Industrial Area) > Lead Time 30 Days

• Slicing Aluminum foils - Muhammad Corporations, Gulshan -e- Iqbal

• Cartons – Sultan Packages (Dalmiya, Karachi) > Lead time 7 Days

• Cartons – King Packages (Lalukhait, Karachi) > Lead Time 7 Days

• Cartons - Decent packages (S.I.T.E Area) > Lead time 7 Days

• Dextrose – Rafhan Industries (Faisalabad)

• Pseudo - Alpha Chemicals – (Lahore)

• Essential Chemicals – (Lahore)

IMPORT PURCHASING

ABBOTT Pakistan has indenters through which they place their orders to the respective manufacturers of raw materials. Some of the Indenters of ABBOTT Pakistan are:

• Rasheedsons - KHI

• Munico Associates - KHI

• S. Aijazuddinn - KHI

• Arfeen - KHI

IMPORTED MATERIALS’ AVERAGE LEAD TIME

• By sea is approximately 75 days

• By air approximately 45 days

Documents Required For Import

• Invoice

• Picking List

• Form 3 and 7 (Imposed by Ministry of Health which contains Batch Certificate, name of the manufacturer, raw material to get a Drug Import License from MOH)

• Bill of Lading / Air Label

• Certificate of Analysis

• Certificate of Origin

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.

FEW SHIPPING COMPANIES THROUGH WHICH ABBOT PAKISTAN IMPORTS RAW

MATERIALS

• P&O NEDLLOYD

• MAERSK SEALAND

• HOPAG LLOYD

WAREHOUSE

Checking of raw material on the bases of check list

Received through MRR & kept in quarantine for QA

approval

Storage of raw/packaging material after acceptance

Handling of non acceptance material

Storage of control/locater system

Wastage Warehouse

FIFO

Storage of control/locater system

Storage of temperature sensitive material

Issue of raw material M O

Hazardous drug labeling

Material requisition return

Cold Storage (Refrigerators 2C- 8C)

Manufacturing

End Product

Quality Assurance of Finished Good

Warehouse FO

RECEIVING THROUGH MRR

Raw material is received in warehouse through MRR (Material Receiving Report).This report ensures that the right raw material for the required product is received.

FOR TESTING QA

The raw material is send to QA (Quality Assurance) for testing if it approved then it is ready for issuance to the manufacturing department also called as MFG. If it’s rejected then it is send back to the suppliers.

PRACTICES THAT SET ABBOTT APART

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.

EXPORTS

Performa raised against the demand of products by the

exports in charge

Performa forwarded to Materials planning

Arrangement of raw material regarding the product

Invoice and bill of lading prepared

Documents sent to MOH Ministry of Health

Shipment made before the due time after all the process has been completed before.

Demand of products received by external customer

ABBOTT Pakistan fulfils the demand of countries like:

• South Africa

• Sri Lanka

• Thailand

• Bangladesh

• Malaysia

• Indonesia

• Syria

ABBOTT PAKISTAN TYPES OF PRODUCTS

TYPES OF PRODUCT:

• Tablets

• Liquids/Syrups/O.R.S

• Injectables

• Creams/Ointments

MAIN PRODUCTS

• Multivitamins

• Antibiotics

• Anti Inflammatory

• Cough and Cold

• Anaesthetics

• Analgesics

• Anti Arthritic

• Antacid

• Anti B.P.H

• Anti Epileptic

DISTRIBUTION

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.

DISTRIBUTORS

• Premier Agency—Muslimabad, Karachi.

• Babar Medicine, Lahore.

• Nadeem Traders, Peshawar.

• Baloch Enterprise, Multan.

• D.S Pharma, Rawalpindi.

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 Lahore naulakkah transport, Bashir Siddique transport, Fast track cargo services, Leopard courier services.

ABBOTT’S DISTRIBUTION CHANNEL

Hospital

Cent. Depot

Abbott truck

Abbott truck

Distributor

Abbott Pak

Wholesaler

DOCUMENTATION AND INVOICING

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

RETURNS

MANUFACTURER

Product Returns

CONDITIONS FOR RETURNING RAW

MATERIALS

Raw Materials are returned either at the time when they are being unloaded or after they have been tested by the QA and found to be defective.

RETURN OF MATERIAL ORDERS (MO’S)

This can occur if the batch size is found to be wrong i.e. ABBOTT suppliers mistakenly supplied the wrong quantity of materials or the materials were of incorrect specifications or the product is found contaminated. In either case, the material is not allowed to be kept in the warehouse and is returned immediately.

Thank you