Report on Square Pharmaceutical Ltd.

Introduction:
SQUARE today symbolizes a name a state of mind. But its journey to the growth and prosperity has been no bed of roses. From the inception in 1958, it has today burgeoned into one of the top line conglomerates in Bangladesh. Square Pharmaceuticals Ltd., the flagship company, is holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985 and is now on its way to becoming a high performance global player. Square Pharmaceuticals Ltd: Square Pharmaceuticals Limited is an organization with equal emphasis on Leadership, Technology, Quality and Passion. Square Pharmaceuticals Ltd. is the leading branded generic pharmaceutical manufacturer in Bangladesh producing quality essential and other ethical drugs and medicines. It was established in 1958 and has been continuously in the 1st position among all national and multinational companies since 1985. And now Square Pharmaceuticals is set on becoming a high performance global player in the field.

Background:
SQUARE Pharmaceuticals Limited is the largest pharmaceutical company in Bangladesh and it has been continuously in the 1st position among all national and multinational companies since 1985. It was established in 1958 and converted into a public limited company in 1991. The sales turnover of SPL was more than Taka 5 Billion (US$ 90 million) with about 15% market share (April 2003 March 2004) having a growth rate of about 16%. SQUARE Pharmaceuticals Limited has extended the range of services towards the highway of global market. She pioneered exports of medicines from Bangladesh in 1987 and has been exporting antibiotics and other pharmaceutical products. This extension in business and services has manifested the credibility of Square Pharmaceuticals Limited. Square Pharmaceuticals Limited (SPL) has been honored for being the most successful entrepreneur at Bankers Forum Award 2005. The award has been given in recognition to the companys ethical and socially-responsible business practices and smooth operations with their bankers. SPL has never been a bank defaulter over their forty-eight years of business. Over 13,000 people are working in Square Group at present; while the number was only 1,500 ten years back. The growth of the company is reflected in making more and more peoples life better and better everyday thus contributing to the development of the nation. She was delighted to

know that Square being the only local pharmaceutical entity from Bangladesh, which is on the verge of entering the regulatory markets of UK and the European Union. During its participation at the 7th SAARC Trade Fair at Karachi, the company has made contacts with some of the most influential and respected local and global pharmaceuticals entities that are operating in Pakistan. They have shown great interest in Squares products, especially its huge range of products in different therapeutic classes to offer to the Pakistan Pharmaceutical Market, and most importantly, its wide range of newer molecules, combination drugs and some of its specialized products like inhalers, suppositories that have a very unique demand in the Pakistan Pharmaceutical Market. The company has already forged ahead to evaluating these potential prospects for the final selection of partners who would best serve its long-term interest in this highly lucrative market. Square plans to launch its operation in Pakistan very soon. This world class facility is housed in a 95,000 sq. feet of covered area and will manufacture Cephalosporin antibiotics in tablets, Capsules, Dry Syrup and Injectable preparations. The annual capacity per shift of the plant is 64 million tablets, 47 million capsules, 3.32 million bottle of dry syrps and 10.58 million of injectables. The facility was built by Telstar S.A. of Spain, a world renowned pharmaceutical manufacturing facility, on a turn key basis. The facility will add new era in Pharmaceutical export from Bangladesh. Patients in the country will also now get developed country standard Cephalosporins from the facility.Presidents and Secretary Generals of Bangladesh Medical Association (BMA) and Bangladesh Pharmaceutical Manufacturers Association (BAPI) along with many dignitaries from Home and Abroad attended the inauguration. We strive for..

We in SQUARE strive, above all, for top quality health care products at the least cost reaching the lowest rungs of the economic class of people in the country. We value our social obligations.

We owe to our shareholders and strive for protection of their capital as well as ensure highest return and growth of their assets.

We strive for best compensation to all the employees who constitute the back-bone of the management and operational strength of the Company through a pay-package composing salary/wages, allowances, bonus, profit participation, leave salary and superannuation & retirement benefits.

We strive for best co-operation of the creditors & debtors the banks & financial institutions who provide financial support when we need them, the suppliers of raw materials & suppliers who offer them at the best prices, the providers of utilities-power, gas & water etc. and the customers who buy our products & services by redeeming their claim in time by making prompt payment and by distributing proper product on due dates.

We strive for fulfillment of our responsibility to the Government through payment of entire range of due taxes, duties, and claim to various public agencies.

We strive, as responsibilities citizen, for a social order devoid of malpractices, antienvironmental behaviors, unethical and corruptive dealings.

We strive for practicing good governance in every sphere of activities covering inter area not being limited to, disclosure & reporting to shareholders holding AGM in time, distribution of dividends and other benefits to shareholders, reporting/dissemination of price sensitive information, acquisition of share by insiders, recruitment & promotion of staff, procurement & supplies, sale of assets etc. all that directly and indirectly affect the interest of concerned groups the shareholders, the creditors, suppliers, employees, government and the public in general. Vision Mission Our mission is to provide quality & innovative healthcare relief for people, maintain stringently ethical standard in business operation also ensuring benefit to the shareholders and other stakeholders.

We see business as a means to the wellbeing of the investors, employees and the society at large, leading to accretion of wealth through financial and moral gains as a part of the process of the human civilization.

Objective Our objectives are to conduct transparent business operations within the legal & social frame work with aims to attain the mission reflected by our vision. Square Quality Policy

Ensure strict compliance with WHO GMP standards and local regulatory norms in every phase of sourcing & procuring quality materials, manufacturing, quality assurance and delivery of medicines. Ensure all activities through documented Quality Management System (QMS) complying International Standard requirements of ISO 9001 through continuously developing Human Resources by regular training and participation. Square is committed to undertake appropriate review, evaluation and performance measurement of processes, business activities and Quality Management System for continual improvement to ensure highest standard, customer satisfaction, developing human resources and company's growth.

Product Category of Square Pharmaceuticals

Coated Capsules Suppositories Injections Liquids Oral Dry Powders Dry Powder Inhalers Metered Dose Inhalers

Export:
Square Pharmaceuticals has invested in state of the art formulation plants aligned to regulated market standards. Four plants based on the Dhaka site can produce pharmaceutical products to the highest GMP specifications. These plants have been designed by internationally recognised firms and equipped with the best machines that can currently be found on the European and US markets. Square Pharmaceuticals has also created quality systems and SOPs according to FDA and EU regulatory agencies specifications. These four plants are: General plant (approved by MHRA) Cephalosporin plant (quality systems aligned to MHRA requirements, plant being prepared for EU regulatory agencies and FDA inspections) BFS plant (quality systems aligned to MHRA requirements, plant being prepared for EU regulatory agencies and FDA inspections) Biotech (insulin) plant under construction Highlights

Exports pharmaceutical finished products since 1987

Offers quality products at competitive price Offers more than 250 off-patent and on-patent molecules Offers facilities for contract manufacturing Provides assistance in product promotion and training in overseas markets

Present Markets:

Asia: Bhutan, Cambodia, Maldives, Myanmar, Papua New Guinea, Nepal, Sri Lanka, Vietnam, Yemen, Uzbekistan, Iraq

Africa: Ghana, Kenya, Libya, Mauritius, Mozambique, Sierra Leone, Somalia, Malawi, Comoro Islands

Europe: Kosovo Markets under Exploration

Asia: Malaysia, Philippines, Laos, Iran, Saudi Arabia, UAE, Qatar, Hong Kong, Singapore, Thailand

Africa: Tanzania, Sudan, Niger, Nigeria, South Africa, Chad, Algeria Europe: Ukraine, Russia, England, Denmark America: Costa Rica, Mexico, Nicaragua Focus: Strengthen its position in the present markets Work is in progress to enter into regulated markets in Europe and United States Work is in progress for the site approval by UK MHRA

Ace Plus +
We have considered a product of Square and that is Ace Plus + Ace Plus is the combination of Paracetamol and Caffeine. Paracetamol is one of the safest and most widely used over the country. Raw Materials: The major raw materials for the production of Ace Plus are : phenol, acetic anhydride, acetic acid, sodium nitrite and sodium sulphide. Indication: Fever, headache, migraine, muscle ache, backache, toothache and menstrual pain.

Distribution Department at a Glance Objective Supply Right products in Right place in Right time History : SPL opened first Depot at Barisal in 1995 Location Central Depot : Hospital Road, Salgaria, Pabna
Depots Depot Dhaka Pabna Bogra Rangpur Khulna Barisal Comilla Mymensingh Address 355-356, Tejgaon Industrial Area, Dhaka-1208. Hospital Road, Salgaria, Pabna. 877/A, MS Road, Bakshi Bazar, Malati Nagar, Bogra South Guptapara,Kaminikutir Sub Post Office Rangpur-5400 Alhamdulillah, 25 Usufe Road, Mirzapur, Khulna9100 502/532 South Alekanda, 1 No. C & B Pool, C & B Road, Barisal. 400/363, Shishu Mangol Road, Kandirper Comilla. 5/A/04 & 5/A/05, Shaheb Quarter, Kachijuli, Mymensingh Phone (880-2) 8828775 (880-731) 66580 (880-051) 64747 (880-0521) 63588 (880-041) 732330, 724654 (880-0531) 53661, 56778 (880-081) 72320 (880-091) 55143

Chittagong Maizdee Sylhet Tangail Rajshahi Faridpur Naryanganj Jessore

House No-1/C, Baijid Bostami Road, East Nasirabad, Chittagong-4000. 234/B, Hospital Road, Maizdee Court, Noakhali. Sabina Mohal, 44, Payra, Darshandewry, Dorga Mohalla, Sylhet. Biswas Betka, Dhaka Road, Tangail 106, Ambagan, Senanibas Sarak, Rajshahi Mission Road, Christian Mission, Police Line, Faridpur Holding No. - 5, Khanpur, Main Road House-1, Plot-1 & 2, Sector-10, Housing Estate Shaikhati, Bablatola, Dhaka Road, Jessore-7400

(880-031) 654423 (880-0321) 61683 (880-0821) 725298 (880-0921) 53488 (880-0721) 760877 (880- 0631) 63561 7632990 042163189 042162419

Supply Chain Management of Square Pharmaceutical

PART A: Physical Supply Channel

Determining Supply Requirements:
In order to determine the supply Requirements Square satisfies some factors and these are given below: What is required? The requirement of the product is determined here. How much is required? The quantity requirements of the product are identified here. When it is required? Within which time period the product is required it is determined here. Where should it be delivered? The expected delivery time is estimated here. How should it be transported? The transport facility is identified here. How should it be quality tested? The quality assurance is satisfied here What other information does my supplier need? The peripheral information about the supplier is given here.

Placing Orders:
Check the latest warehouse inventory, products in the pipeline, arrival schedule of the pipeline products. Check yearly production schedule, quarterly production schedule, monthly production schedule. Determine quantity to be ordered, delivery schedule and mode of transportation to be used. Ask suppliers from the approved suppliers list to provide quotations for the product identifying quantity required, delivery schedule, specification etc. Check the quotations against requirements. If any confusion arises then talk with representative of the indenture, resolve the differences and make it documented on the quotations. Evaluate the quotations against price, delivery schedule and select a supplier for the product. Ask for indent from selected supplier as per approved quotations. Select the indent to Technical Services Department to check the specification. Check specifications of the indent which in-house specification. If the specification is O.K. then approve the specifications and send the indent to the Supply Chain management. If any anomaly found in the specification, then solve it with the supplier, collect a new indent and send it to the Supply Chain Management Department. Open the L/C for the indent and send a copy of the L/C to the supplier along with a request for shipping documents including material certificate. After getting the copy of shipping documents, send a copy of relevant documents to the factory warehouse.

Inbound Logistics Activities & Parties:

Inbound Logistics represents one of the major business processes in transportation planning. Beyond excellence in operations, the main challenge is to plan inbound logistics jointly with outbound transportation volumes to increase consolidation where ever possible. Inbound logistics does not have an agreed-upon definition in the industry. Several questions arise when one attempts to define the term, for example: Where is the "in" in inbound? Is outbound the opposite of inbound? Clearly the definition of inbound logistics is a matter of perspective. If you are the receiver of a shipment, the shipment is inbound to you; if you initiate or send a shipment as a raw materials supplier, manufacturer or vendor might do then it is outbound from you. For inbound logistics

planning, the focus of transportation management is on planning the receipt of the shipment. The definition of inbound logistics, then, is related not only to the controller of the shipment process, but also to who takes ownership of the goods shipped.

Inbound logistics traffic departments do not simply manage shipments from their own companies (outbound), they plan shipments from other companies "in" to their location. Suddenly the transportation process becomes infinitely more complex. With this complexity comes more opportunity to reduce transportation costs if transportation is well-managed.

Our Product is Ace Plus. The major raw materials for the production of Ace Plus are : phenol, acetic anhydride, acetic acid, sodium nitrite and sodium sulphide.

Supply of Raw Materials:

Raw materials that are used for Ace Plus are not producing in Bangladesh. Square Pharmaceuticals import raw materials for this product from abroad. Phenol one of the major raw materials of Ace Plus is imported from Italy and Germany. Acetic anhydride is imported from USA and France. It imports Sodium Nitrite from India and also it is available in Bangladesh. But collecting from Bangladesh will incur a huge amount of cost. Sodium sulphide is imported from Belgium and Switzerland.

Transportation:
Since most of the raw materials are imported from the abroad so Square Pharmaceuticals brings it to their plant through by air, by sea and by road. Square Pharmaceuticals uses air freight which is the most cost effective means of international transportation as Square tries to minimize lead-time and order-to-cash cycle time.

Square is also using maritime transportation. Depending on the cargo to be shipped, maritime transportation can be carried out on many different classes of vessels e.g. general cargo, container vessel.

Whenever raw materials comes in Bangladesh by air and water then this are shifted to main plant or factory of Square Pharmaceuticals. In order to do so Square is using road transportation. Road transportation offers an advantage to allow point to point service. Road carriers offer faster and reliable services and can operate on a individually scheduled timetable depending on the demand and needs of the company.

Term & Conditions:

Delivery must be completed within the date mentioned in the requisition or agreed upon lead time. Part delivery may be acceptable considering extra ordinary constraint. But short delivery will not be acceptable. Excess supply must be limited to maximum 5% of the requisite quantity. Payment will be made within a time period of not exceeding one months time from the date of

submission of clean, complete and authentic cost of bill. Vat Challan (Musak 11) must accompany the bill. In absence of Musak 11, VAT will be deducted as per Govt. rules and provision. AIT will be deducted at source as per Govt. rules and provision. We reserves the sole right to reject the consignment in part of full if any discrepancy found between the approved specification and the supplied materials as determined by Quality Assurance Department. This purchase order will take effect from the date of acceptance by the seller in writing and will remain valid initially for a period of one year unless any contrary desire is expressed either by the company or the vendor 60 days prior to do so. This purchase order will automatically be renewed for further years at the expiration of initial period. Goods are to be delivered at our Central store at factory site.

Vendor Selection:
Ask the supplier to submit their proposal with detail specification. Supply Chain Management Department may also ask the supplier to submit the following one or all documentary evidences: o Attested copy of the valid Trade License o Reference List o Any other documentary evidence (e.g. financial statement, list of machinery used in production and quality assurance) If the specification and documentary evidences found satisfactory, send the specification of the supplier to Head of Product Management for comments. Send the specification/proposal to Supply Chain Management department with noted comments. Arrange to audit( if desired by management) the suppliers premises along with the representative from PMD/ other concerned department as deemed necessary and conduct the audit as per SOP for Auditing Local Suppliers and records the findings in Local Supplier ( Packaging Materials). If the audit report, ( where applicable) quoted price and quality of the specimen found satisfactory then Supply Chain Management department shall approve the supplier and place the name of the supplier in Approved Supplier List for that/those products. Share the Approved Supplier List with Head of Product Management and Head of Quality and Head of PPIC, Pabna.

PART B: Physical Distribution Channel

Forecasting of Market Demand:
One of the important tasks is to determine how much of a certain product or production input is required. When planning the quantities to be purchased, a buyer needs to be able to determine the likely demand over a given period of time. Demand generally changes over time, as a result of evolving requirements. If a buyer does not try to determine expected demand as carefully as possible, then the quantities purchased are likely to deviate substantially from what is actually needed. Buyers will also require long-term estimates of demand e.g. for the next 1 year or more when negotiating long term contracts will suppliers. In addition, stock replenishment systems require estimates of demand in order to calculate requirements in the supply lead-time to determine safety stocks and order quantities. Square Pharmaceuticals has their own research and development department which is an integral part of supply chain management. From the estimation of market demand logistician of this company take strategic decision regarding supply chain.

Forecasting:
In some cases, future demand of purchase items will be known as precisely, for instance if it is based on a companys firm contracts to deliver certain goods or services that it sells over a given period of time. In most cases, however, the future demand for an item is not known, and it will be necessary to use a forecast of one kind or another. Square Pharmaceuticals has explored different way to forecast demand. These methods can be used to forecast not only operational requirements for production, but also internal operational demand as well. The methods to forecast demand that Square follows are given below: In order to forecast the market demand Square takes expert opinion this involves consulting people with experience and expertise for their opinions. They analyze the scenario and make

comments over it. Market testing is another method that Square follows to predict the demand. This requires identifying a sample or service is aimed at, and conducting trial sales for a limited period of time to ascertain likely demand Through different types of quantitative analysis like time series analysis, causal methods are used to forecast the market demand. Through using computer based materials planning system like materials requirement planning, distributed resource planning, enterprise resource planning are used to predict the demand. They also determine different market trends of each product and through comparing the trend line to actual demand they calculate base seasonal variations.

Square Pharmaceuticals follows three main phases in the forecasting cycle process. These are given below:

The process of forecasting demand

Phase 1: Collecting & Analysing the data
Identify the best sources of demand data. Collect and review the data Cleanse the forecasting method that works best. Produce a base statistical forecast

The process of forecasting demand

Phase 2: Adding Deterministic Overrides
Identify any factors that may cause forecasted demand to need adjustment, e.g.: Price Changes Competitor Activity Technological Change Market Research into consumer/user Preferences Determine the potential impact of these factors Update the base statistical forecasts taking these factors into account.

The process of forecasting demand

Phase 3: Management Action
Regularly check actual demand against forecasts Understand the reasons for variances Identify and take any required actions e.g.: Remedies to past problems Opportunities for improving performance or accuracy or forecasts Take management decisions to improve operations or reducing costs as a result of the improved

demand forecasts.

Information System & Order Processing:

In tradition logistics operations the focus is on storage and flow of products. The emphasis is changing to include information flow and accuracy. Information within supply chain is crucial for performance as it allows manager to make more informed and better decisions. It includes information customer demand, inventory levels, production and shipments. Without this information, appropriate decisions affecting supply chain performance and corrective measures to optimize the flow of materials throughout the supply chain cannot be made. Square pharmaceutical has a department called PPIC (Product Planning & Inventory Control) who estimates market demand according the data from marketing department. From this data they go for the production and if any shortage of raw materials is there then PPIC inform the Supply Chain Management department to raise the requisition to the suppliers as Square has to import it from abroad. Square pharmaceuticals have a central server through which they transfer information and order processing from one department to another within the organization. They use internal mail to share information among the internal employees within the organization.

Order Processing
Order processing is another important factor for any company. Due to flexibility of the order processing and distribution of information many shipments go to postponement. Order processing is represented by a number of activities like order preparation, order transmittal, order entry, order filling and order status reporting. Square pharmaceuticals maintain manual procedures for the order processing for delivering the product. Through a developed framework of paper activities they do the order processing. They keep the information in database and also in register book. Square has not developed yet a system like ERP (Enterprise Resource Planning). So after receiving the order they check and do all the necessary actions within the organization through

internal mail. Since customers of the company are not updated according to technological development so Square takes manual order from the customer through the paper.

Future Development:
Square has a progressive plan for the future development of their information system. Square is developing software with oracle system through which they will able to input order request. Through the software they will do other necessary actions for order processing. Square has a plan to develop ERP (Enterprise Resource Planning) system which will provide an immense advantage to minimize the time and reduce risk. Apart from that, it will minimize the cost also for the company.

Inventory Management & Warehousing:

Inventory management is the active control program which allows the management of sales, purchase and payments.

Inventory management software helps create invoices, purchase orders, receiving lists, payment receipts and can print bar coded labels. An inventory management software system configured to your warehouse, retail or product line will help to create revenue for your company. The Inventory Management will control operating costs and provide better understanding. We are your source for inventory management information, inventory management software and tools. A complete Inventory Management Control system contains the following components: Inventory Management Definition Inventory Management Terms Inventory Management Purposes Definition and Objectives for Inventory Management

Organizational Hierarchy of Inventory Management Inventory Management Planning Inventory Management Controls for Inventory Determining Inventory Management Stock Levels Square has a proper inventory management plan which has made the company number one in pharmaceuticals industry. Even well run inventory management operations can benefit from regular critical reviews. Large inventories management result from having poor supplier or customer relations. The arrival of internet technology has accelerated the pace of supply chain integration and disintermediation and has brought new demands for accurate and timely information to manage the chain effectively. Before establishing and implementing plan Square pharmaceutical follows some steps for inventory management.

Measuring Inventory and Warehouse Performance: Up-to-date measurement of inventory and helps to find the accurate information.. Verify the quality of records. To find the information that how many times in relevant period the company could not fulfill orders even though the inventory records show that the items should be in stock. Then they calculate inventory ratios.

Inventory to purchase

Inventory to sales Then they analyze the composition of inventory. They try to determine how many weeks or months supply of each item is being carried in inventory. After that, they investigate the space utilization and efficiency of storage layout in warehouse. Then they examine the performance of warehouse processes, equipment and employees. They also consider the scope for reducing the variety of items purchased and stored. Developing an Inventory Management Plan: It is important for every company to periodically review its entire inventory operations in relation to its overall business strategy and the requirements of its customers and suppliers. They

follow some steps to do so where they find out the objective, actions, expected benefits and target date for each and every factors given below: Confirm that inventory measurements are accurate and timely. Evaluate operational performance with the logistics manager. Analyze the composition of inventory. Evaluate space utilization and equipment requirements. Examine inventory response times and processes, and employees training needs. Establish ways of regular interaction with sales, marketing, production and purchasing. Evaluate the ways of appointing fixed warehousing costs.

Warehousing:
The main plan of Square pharmaceuticals is located in Pabna. There have warehouses of their own and also they have regional warehouses. Square pharmaceuticals after manufacturing medicine, will store them in its own finished goods warehouse. From there they are transported to regional warehouses whose function is to serve as a distribution point for retail store. When the retail store requires deliveries of medicine, they will request them from their local warehouse who will arrange for the transportation of these medicines to retail store. In order to choose the location of warehouse Square considers the following: Proximity to the main points of supply and or/demand, to minimize transport lead times and costs. Good road access, avoiding problems of congestion. Drainage and security Availability of essential services, e.g. electricity, water and communications. Size of the site, and its ability to cope with companys future expansion requirements. The most convenient acquisition option for the company, e.g. purchase of an existing warehouse, rental.

In order to establish a warehouse design Square considers the following: Estimates of minimum and maximum inventory requirements, in terms of volume and weights.

Daily throughput in number of deliveries, their volumes and their weights. Packaging sizes and maximum stacking heights. Sizes and unit weights for storage racking and other equipment.

Outbound Logistics of Produtcs / Transportation:

Square Pharmaceuticals one of the largest company in Bangladesh and it has an established supply chain in all the districts of the country. Square has strong working relationships with specialists in every mode of transportation, allowing us to choose the carriers that will maximize service and drive value for the retailer and customer. Carriers are selected based on their ability to maximize service, deliver value and meet specific needs. Its national carrier infrastructure and highly competitive pricing agreements with premium carriers in all major modes of transportation result in significant cost advantages. Capabilities include: CAPABILITY Logistics Order Management DESCRIPTION Manage customer logistics order lifecycle for shipment planning & execution Global, multi-mode optimization & decision support for rating, routing, consolidation, carrier selection, equipment selection & scheduling Support processes for customer-facing & internal shipment booking / tenders Manage carrier invoice auditing, approval, voucher generation & cost allocation Generate customer bills for transportation services ADVANTAGE Effective order management, including order consolidation Network integration & cost reduction

Shipment Planning / Optimization

Shipment Execution

Eliminate redundant activity Standardized processes to drive increased service Validate information in support of existing freight payment process Reduce customer administrative expense

Freight Payment

Customer Billing

Supply Chain Event Management

Reporting

Automate shipment workflow processes to support management by exception for increased operating efficiency & enhanced customer service Provide internal & external parties with information to support decisions

Proactive shipment oversight, ensuring predictable performance

Presentation of actionable network cost & performance data

Outbound Transportation:
Square Pharmaceuticals generally use Highway for their outbound transportation in all over the country. Square Pharmaceuticals follows Multi-Point delivery plan. In order to move more than one store. This consolidates smaller loads for each store into a larger shipment, which is more suited to transport in a larger and more economical vehicles. It is an appropriate for Square as the destination stores are located in a significant distance away from the dispatching store, and are relatively close to each other. Square pharmaceuticals uses enclosed vehicles for their distribution as it forms the outer layer of protection for goods in transit. These vehicles are weather-proof and also provide greater security. According to the requirement they use small or big covered vehicle for shipment of the product. For an instance, within Dhaka city they use small covered van to delivery the product.

Covered vehicles are more secure than open vehicles. Enclosed vehicles with roller shutter, flexible canvas or heavy duty plastic sides. Sometimes they use refrigerated trucks for some sensitive medicines

Vendor Performance Appraisal:

The process of supplier appraisal and shortlisting involves a number of steps. It begins with determining which criteria will use to assess potential vendors. Based on this, the company needs to identify and screen the vendors that the company wants to apprise, and then collect the information for this purpose. The result of the assessment should be shared with the suppliers themselves, to determine what can be done-if needed- to help develop their potential to supply the company. Square pharmaceuticals maintain a strong and formalized appraisal process for the vendors. They follow these steps with a high importance. The main steps of supplier appraisal are preceded by certain preliminary activities. These groundwork stages- which are essential to the success of vendor appraisal include: Setting supply targets and priorities: This involves knowing that the need to achieve when purchasing the goods and services required by the company, and how important these are. Supply targets are generally set within the areas of quality, availability, supplier support and total cost. Analyzing supply markets: This helps to know the overall level of supply risk in the marketplaces. Then chose the best suited market and identify the potential suppliers.\ Positioning the purchase item: This involves using the supply positioning depending on the companys expenditure and risk. This also helps to identify what priority to give to supplier appraisal efforts for a particular product. Setting item-specific supply strategy and desired supplier relationship: Supply strategy will vary depending on which category of item is involved. Understanding the supplier relationship is essential for the success and important basis for the vendor appraisal.

The Flow Chart of Supplier Appraisal Process for Square Pharmaceutical

Basic Criterias that Square looking for the vendors appraisal are capability and motivation.

The Performance Equation

Conclusion:
Supply chain management is an integral part for any company. A firms needs to establish an effective supply chain in order to gain competitive advantage. If we see the total distribution system of square pharmaceuticals, that is perfect for this company. Warehousing, storage facilities, inventory management, supply chain management, materials handling, value chain management all those things are cost effective which brings large amount of profits for Square pharmaceuticals every year.