1

INTRODUCTION
Healthcare Pharmaceuticals limited (HPL) is one of the best kinds of company in the pharmaceutical
industry in Bangladesh manufacturing branded generic products for local and overseas market in
Asia, Africa and CIS region. Healthcare started its operation in 1988 through establishing a company
named Healthcare Distribution Limited in association with Roche (Bangladesh) Limited. Until 2001
Healthcare was responsible for importing and distributing Roche products to the local market.

Later on, in 1996 Healthcare decided to establish its own pharmaceutical plant named Healthcare
Pharmaceuticals Limited (HPL) to produce the products those are imported from Roche, Switzerland
and other local generics for indigenous market. HPL adopting the most recent technology to
formulate and to produce generic formulation ensuring optimum quality compared to the
international brands.

HPL is now producing more than two hundred products for its own with various types of dosage
forms which include Tablets, Capsules, Liquids, Dry syrups, Cream & Ointments, Gels, Small Volume
Parenterals, Eye Drops covering almost all therapeutic classes where a lot of products are in the
launching pipeline. HPL wishes to launch Prefilled Syringes, Lyophilized Vials and Meter Dose
Inhalers (MDI) preparations to its product portfolio by the second quarter of this year.

Healthcare Pharmaceuticals limited is engaged with strategic marketing process which involves
building customer relationships by creating and delivering superior customer value aiming to
produce high customer equity. HPL successfully and efficiently blending skilled people, resources,
organizational structure and decisions for implementing strategies at all levels.

HPL is consistent in maintaining supreme quality in their each and every operations. They also focus
on applying values (such as- safety, quality, accountability, customers focus, responsible decision-
making, employee satisfaction, innovative work, entrepreneurship, team work, environmental
awareness) in their entire business processes.

Vision
To increase awareness and to motivate employees for achieving sustainable competitive business
advantage through adopting “zero accident” philosophy that all work related accidents, incident,
injuries, and illnesses are preventable, excellence in environment performance and waste
minimization initiatives in order to optimize resource use.

Mission
To preserve and improve patient health by consistently delivering high quality , safe and effective
pharmaceutical products and service that meet or exceed customer expectation across the globe
through current good manufacturing practices, state of the art technology, experienced work force
and efficient management.
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SCOPE OF THE STUDY

This study aims to identify the key operational processes of Healthcare Pharmaceuticals Ltd. It
includes the overview of this company and all of its business process. Therefore, this study
represents goals, strategies, competitive analysis, capacity planning and quality management of the
company.

The scopes also include process selection, inventory management and supply chain management of
HPL in detail.

There is recommendation added in this study for the improvement of HPL’s future performance.

METHODOLOGY
For this report we have collected information both from primary and secondary sources.

Primary Source
Plant visit: We went to visit the factory of ‘‘Healthcare Pharmaceuticals Ltd’’ which is situated at
Rajendrapur, Gazipur. We watched the facilities available for producing purpose. We saw the
machines, computers and inventory of the factory. We also found facility layout to understand how
the entire producing procedure is done.

Interview: For process and facilities layout procedure and administrative operations we collected
information by interviewing some of their employees.

Secondary Source
Company Website: Generic information of the company was collected from their own website.

Internet: We also searched for articles and related information on pharmaceutical companies’
operational processes.

LIMITATION
The amount of resourse including experience, time, money and manpower that is required to
conduct a thorough reasearch of a pharmaceutical business is not available to a group of
undergraduates like us.
Also there was not much information or previously published reports available on the internet
regarding the ‘‘Healthcare Pharmaceuticals Ltd’. As a result, we could not come up with the standard
of findings that we imigined we would at the beginning of this research.
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GOALS, STRATEGIES AND COMPETITIVE ANALYSIS

Picture: Packaging area of HPL

Competitiveness of a Company

Competitiveness of an organization depends on how effectively it can meet the wants and needs of
customers relative to other organizations that offer similar goods or services. Aspects of
competitiveness that healthcare pharma follows:

Superior Quality: Healthcare Pharmaceuticals limited (HPL) is one of the best kinds of company in
the pharmaceutical industry in Bangladesh manufacturing branded generic products for local and
overseas market in Asia, Africa and CIS region. HPL adopting the most recent technology to
formulate and to produce generic formulation ensuring optimum quality compared to the
international brands. The quality standards are set by GMP by WHO following their guidelines.
Healthcare also established a company named Healthcare Distribution Limited in association with
Roche (Bangladesh) Limited and has been responsible for importing and distributing Roche products
to the local market.

Marketing and Promotions: Healthcare Pharmaceuticals limited is engaged with strategic marketing
process which involves building customer relationships by creating and delivering superior customer
value aiming to produce high customer equity. HPL successfully and efficiently blending skilled
people, resources, organizational structure and decisions for implementing strategies at all levels.
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cGMP Approved: Directorate of Drug Administration, Bangladesh, Pharmacy and Poisons Board
(PPB), Kenya, Medicine Control Authority Zimbabwe (MCAZ), Tanzania Food And Drug Authority
(TFDA), Tanzania and Food and Drugs Authority (FDA), Ghana.

Plan for cGMP Certification: Plans for cGMP certifications are- Accreditation for TGA (Australia)
2017, Accreditation for HSA (Singapore) 2017, Accreditation for PFDA (Philippines) 2017 and
Accreditation for NPRA (Malaysia) 2017.

Differentiation Using Innovation and Up-to-Date Products

HPL is now producing more than two hundred products for its own with various types of dosage
forms which include Tablets, Capsules, Liquids, Dry syrups, Cream & Ointments, Gels, Small Volume
Parenterals, Eye Drops covering almost all therapeutic classes where a lot of products are in the
launching pipeline. HPL wishes to launch Prefilled Syringes, Lyophilized Vials and Meter Dose
Inhalers (MDI) preparations to its product portfolio by the second quarter of this year.

They also have carried extensive research in terms of dry powder for Suspensions, Cream and
Ointments, Metered-dose Inhalers (MDIs), Ophthalmic products, and Prefilled Syringe for
Biogenerics etc. HPL is now producing more than 210 branded products of 120 generics.

HPL is continuously creating innovative idea to its every step of operation to add distinctiveness and
competitiveness to the products and services.

Location

The location lies just a few km from their Dhaka corporate office and in very close range to the
factories of their competitors. It is situated in Rajendrapur factory area beside the very famous
landmark, BRAC CDM.

Quick Response

HPL believes in maintaining a higher inventory. They anticipate demand for medicines they produce
to be all time high both inside and outside the country. Since people are nowadays health conscious,
most people look for accredited, internationally recognized pharma companies’ products to
consume. Therefore, the even though the carrying cost of HPL is high they cannot risk a shortage
cost because their main source of revenue are from large foreign buyers.
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Goal
Double revenue by the end of the next 3 years

Strategies

1. Higher Quality at premium pricing

2. High inventory levels for capturing the mass market.

Tactics

1. Accreditations, WHO standards to ensure export quality.

2. Keep a check in balance between carrying cost and shortage cost.

Productivity Analysis

1. Overhead cost: 8% of revenue and utilities take 30% of revenue. Revenue for 2016 was
800,000,0000
2. Labor: No. of labors in the factory 1200.

3. Total wage estimate Tk 50000000

4. Machineries: Total cost estimate Tk 80000000, runs for 24 hours a day.

5. Output per day: Tk 6000000000.

Productivity is therefore, 1.89 units per taka of input.

DEMAND FORECAST: SALES (CRORES)

Year Actual Forecaste Error Weights Assigned Forecaste Error Forecast Error
Deman d d ed
d
Demand Demand Demand

Alpha=

10%
201 800 603 197 10%+20%+30%+40% 607 193 443
6
201 760 477 283 60+25%+15% 512 248 407.8
5
201 550 440 `110 60%+40% 452 98 392
4
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201 500 380 120 100% 380 `120 380

3
201 380 _ _
2

STRATEGIC CAPACITY PLANNING

Strategic Capacity planning of HealthCare Pharmaceutical is wholly dependent on the demand of the
market and it varies in quantity of different types of product. In 2016, their annual sales were BDT
800 Crore. The goal of strategic capacity planning is to achieve a match between the long-term
supply capabilities of the organization and the predicted level of long term demand. And how HPL
plans to do it is as follows:

Machine and Equipment

As a pharmaceutical manufacturer, HPL has their own distribution channel and therefore makes
sure all the supplies are reached on time to reduce shortage costs. HealthCare has different
plants for inventory, transportation, packing, water distillation, oral dose manufacturing,
injection, power generation and research & development. All together, they have an estimation
of 65 million USD worth of machine and equipments are currently in their operations. As HPL is
expanding to more bio-generic products, the company is expanding to accommodate more
biotechnological equipments.

Land required:
The current location of their manufacturing plant sits on almost 300 acres of land in Gazipur,
Rajendrapur. They have multiple buildings for different types of inventory, separate buildings for
different layouts. HealthCare pharmaceutical follows vertical production line as the heavier
machineries sits on the lower floors of the building and upper floors are used for lighter works
such as quality inspection of that particular product and packaging.

1. What kind of Capacity is needed?

In terms of machines and equipments due to future sales and biotech expansion, the
expansion also requires them to acquire another 50 acres of land, since biotech and bio
generic products need a separate building for production to be carried out. HealthCare has ,
as mentioned above, different plants for inventory, transportation, packing, water
distillation, oral dose manufacturing, injection, power generation and research &
development for each genre of medicine, e.g bio-gen, antibiotics, invectives etc. All together,
they have an estimation of 65 million USD worth of machine and equipments are currently in
their operations.

2. How much is needed?

According to the demand forecasted using the moving average method the demand for the
next 5 years is stable. HPL plans to expand to increase the demand for the products by
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introducing new products like the bio-gen. Therefore, they plan on acquiring 50 acres of land
for mass production of bio-gen products using the latest bio-technology bought using the
expansion proceeds.

3. When is it needed?

The expansion plan is said to be completed by 2021.

CAPACITY PLANNING
Changes in technology: HPL has their R&D department ensuring the latest technology is being used
in carrying out day to day activities. HPL has also the best accredited tech providers giving them an
upper hand.

Design Capacity: output of BDT 9 billion per annum

Effective Capacity: output of BDT 8.5 billion per annum

Actual output: BDT 6 billion per annum

Utilization: 66.67%

Efficiency: 70.5%

HPL has very good efficiency level but slightly low on utilization level and this can be improved by
increasing the effective capacity by reducing bottlenecks, waiting line and mismanagement during
the production process. Therefore, their goal should be to reduce these to increase the effective
capacity in order to achieve greater output with the existing capacity.

The Capacity Development strategy

HPL uses the expansion plan and forecasting of future demands as a way to plan for future capacity
requirements. The problem with this is that an optimistic forecast and expansion plan can lead to a
surplus capacity that is left unused. Therefore, in this case it is important to not only undertake the
forecast but also to undertake the flexibility of the capacity design. Provision for future in the
original design of the structure can be obtained at a small price rather than remodeling the existing
structure. Therefore, they should focus on reducing bottlenecks to increase the effective capacity to
closely match the design capacity before considering further expansion.

Since HPL is in their maturity phase, they would be able to increase profitability by reducing cost and
making full use of existing capacity.

Relating Capacity with Supply Chain

Take a big picture approach to capacity changes. When developing capacity alternatives, HPL should
consider how parts of the system interrelate. Will suppliers be able to handle the increased volume?
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It is necessary to consult with them prior to capacity expansion decisions. Suppliers needs time to
adjust to capacity.

Bottleneck Analysis
HealthCare pharmaceutical claims no presence of bottlenecks but while giving a tour inside the
factory, the workers have mentioned some cases where there are bottlenecks. Below, the
production process diagram shows numerous examples of cases of bottlenecks being produced. For
ex, granulation is 4000 units/ hr but purification and compounding can only take up to 100 to 83.3
unit per. Therefore, purification and compounding plants are needed to be added to increase up to
3000 units per hour. Afterwards, coating unit needs to be expanded to 3000 units per hour as well.
These three are the bottlenecks needed to be expanded as soon as possible for the reduction of
effective capacity.

Cost Volume Analysis

Cost volume analysis focuses on the relationship between cost, revenue and volume of output. HPL
estimates their income under different operating conditions.

Basic information: (For year 2016)

Fixed cost of HPL is estimated by their percentage on total revenue. 8% of the TR which is
64,00,00,000 taka is their overhead cast and 30% of TR which is 240,00,00,000 is their utility cast.

Variable Cost: 264,00,00,000

Total Cost=568,00,00,000
Total Revenue= 800,00,00,000
Quantity produced= 600,00,00,000 unites
Profit = 232,00,00,000

Break-even Analysis
Break-even point is the point where the total volume/ quantity of output at which total cost and
total revenue are equal. QBEP is 340,29,85,075units. The calculations are shown in the appendix
below.

To reach the break-even point, HPL

need to produce 340,29,85,075
unites but their production rate in
last year was 600,00,00,000 unites
which is almost double then the
break-even point; so we can say
that they are able to make a
handsome amount of profit from
their output rate.
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Graph: Fixed, Variable, Total Cost & Break-Even Point units

Multiple break even may occur, however the total revenue line might not intersect the fixed cost line
in a particular range. Therefore, to decide how many machines to purchase, a manager should
consider projected demand related to multiple break even points and chose the best alternative.

PROCESS SELECTION AND FACILITIES LAYOUT

Securit
y

Cafe
Field
Ware
Construction house 1
Ongoing

Construction Ongoing Head Office

Warehou
Effluent From Control
se 2
Oral Solid Lab

Blower
Septic Tank Chamber 1
&2
Aeration

Clarifier Tank
Clean
Water
Pit

Oncology
Biologic
al
Tower Sterile Unit

Water Purification

Lagoon pond
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Line balancing: Precedence diagram (for tablets)

Raw material Inspection Dispensing

unloading .0375min/u .01min/u
.03min/u

Water distillation Granulation

.005min/u .015min/u

Add lubricent
.015min/u

Coating Lifolizer
.04min/u .015min/u

Blister
.01min/u

Primary packaging Secondary packaging

.007min/u .008min/u
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Process Selection and Process Type

Process selection is demand driven and it depends on two factors such as Variety and Volume. There
are five kinds of process types. Amongst them HPL partially follows Continuous Processing. In
continuous processing, a very high volume of highly standardized goods are produced. High skilled
expertise workers and highly specialized equipment are used for the production. HPL produces high
volumes of highly standardized medicines and their variety is quite low. Though they say that they
bring innovative products are brought in every 2 to 3 years, yet the variety is low. But the
manufacturing is very efficient.

QUALITY MANAGEMENT
Quality is the ability of a product or service to consistently meet or exceed customer expectations.
HealthCare Pharmaceuticals has certain procedures and guidelines that it follows in order to comply
with its quality management objectives. The company has been awarded with GMP (Good
Manufacturing Practice) as part of fulfilling the required guidelines of WHO Therefore, it can be said
that Health Care Pharmaceuticals has pursued a Proactive Approach regarding its Quality Assurance
Objectives. As a result of the nearly fully-automated process for checking defects, the existence of
internal failure costs is kept at a minimum in the company.

There are Dimensions of Quality that are taken into account when HealthCare Pharmaceuticals Ltd.
focuses on reaching its quality management objectives. They are as follows.

1. Performance
2. Aesthetics
3. Special Features
4. Reliability
5. Conformance

Quality Assurance Team ensuring quality at each stage

HealthCare Pharmaceuticals maintain thorough and dedicated policy regarding documenting each
and every step of the processes is also something commendable. Quality and Customers orientation
are a company commitment and the shared responsibility of all associates. This commitment will be
maintained through having the competent people doing the right things, the first time, every time.
HPL are assuring continued high quality through state of the art technology, which develops and
commercializes safe pharmaceutical products that enhance the quality of life.

Use of SOP and Quality control lab

HPL includes SOP a standard operating procedure. Documentation is prioritized and every process is
checked and corrected in the quality control lab at critical points during production.
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a few input for improving TQM:

Top Management
Top management should change this policy and determine critical points where inspection would
take place instead of running around and halting production.

Production and operations

HPL should take the responsibility to ensure that products conform to design specifications. Any
problem in the production leading to repetitive faults should be reported to the designer to alter the
specifications for it to be flawless while being produced.

Gathering and Analyzing data

The Quality assurance team must be gathering data and analyzing to solve problems with
operations. Since it is medicines, the products should have clear and precise labels and instructions
on them.

Marketing and Customer Relationship Management

Healthcare Pharmaceuticals limited (HPL) is one of the best kinds of company in the pharmaceutical
industry in Bangladesh manufacturing branded generic products for local and overseas market in
Asia, Africa and CIS region. HPL adopting the most recent technology to formulate and to produce
generic formulation ensuring optimum quality compared to the international brands.

Healthcare Pharmaceuticals limited is engaged with strategic marketing process which involves
building customer relationships by creating and delivering superior customer value aiming to
produce high customer equity. HPL successfully and efficiently blending skilled people, resources,
organizational structure and decisions for implementing strategies at all levels.

However, HPL should consider using a top down and bottom up approach ensuring that they
communicate the information to appropriate departments to deal in a reasonable manner with
customers, work to resolve problems and follow up to confirm that the situation has been effectively
remedied.

Quality Assurance costs

HPL’s quality assurance involves appraisal cost as they evaluate and audit materials taken
from suppliers before they reach the warehouse. They also involve internal failure cost and
prevention costs as during production the quality assurance team checks faults in each step
and before handing over to the customer, they review and check the finished goods to
ensure they are properly manufactured with an estimate of having 5% error in their
production.

DMAIC approach
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HPL should incorporate DEMAIC approach as they already have set objectives for
continuous improvement and measure of performance. They can, in addition, incorporate
data analysis to further improve modifications that lead to improvement in the process.
Thus, establish plans and procedures to ensure that the continuous improvement is
sustainable.

Inspection
Inspection is a critical component of ensuring a TQM approach within an organization. TQM, because
they believe in continuous improvement and The inspection process at HealthCare Pharmaceuticals
is done keeping in mind the based on URS (User Requirement Specification). One of the things that
are inspected keeping in compliance with the TQM approach of the company is the packaging.
Inspection is also done on the mixture of particles, mesh size, humidity levels and moisture
condition.

Moreover the granulation and coating suit is also inspected before use. Vendor validation is done
based on whether raw materials meet WHO standards. There are numerous types of inventories in
the company. Some of them are for packaging, raw materials, finished product inventory, re-agent
inventory, toolset inventory and machine set inventory. Inventory is inspected when it has just been
delivered and when it is sent to somewhere else. Based on company policies documentation is
mandatory in all cases after inspection has been completed. To ensure that inspection is satisfactory
the company follows SOP (Satisfactory Operating Procedure)

Problem Identification: While HPL maintains an impressive quality assurance process but the
problem here is that they use too much quality assuring in each stage leading to delay of production
to 36 days to complete a batch size of 200 units.

The critical points to inspect

As they already inspect raw materials before they enter warehouse and finished products before
they reach the customer. They should, instead of inspecting in each stage, rather inspect before a
costly operation, an irreversible process and before a covering process. This would be cost effective
and further reduce the overall batch processing time.
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INVENTORY MANAGEMENT
Inventory Management is the process of managing and overseeing the storage of the materials,
finished and on process products. Inventory management for raw materials and WIP goods and
finished goods HPL will have store house where they store the all inventory. Finished goods will be
loaded from store house for the distribution. A large portion of the floor is used for warehouse
purpose.

Types of Inventory
1. Raw Material Inventory: Raw materials sourced from the suppliers are stored in the
inbound logistic warehouse after inspection.

2. Finished Product Inventory: Bio-Generic Products, Consumer Products and Oncology

Products.

3. Machinery and Equipment Inventory: in each of the 4 units: Solid, Sterile, Hormone,
Oncology.

Goods in Transit to warehouses are not there as the warehouses reside at the same site as that of
the production factories.

Classification system
HPL should incorporate the ABC classification system which would classify the inventories
according to their importance. As currently they have huge stocks of Tablets, Capsules,
Liquids, Dry syrups, Cream & Ointments, Gels, Small Volume Parenterals, Eye Drops covering almost
all therapeutic classes where a lot of products are in the launching pipeline. Also they plan to launch
Prefilled Syringes, Lyophilized Vials and Meter Dose Inhalers (MDI).

Counting System: Periodical and Perpetual

The managers use periodic system to keep track of the inventory as their process is centralized. They
physically count the cartons of material weekly to keep in check and order when deemed necessary.
But for the finished goods they use bar code scanner to keep record using the perpetual system
along with.

Lead Time Analysis: It depends on batch size how big the batch is. If batch size is big then lead time
is high. Usually the lead time is 90 days, as per their consideration. But, lead time varies and they
should take the variable lead times into account, the time it varies and the reasons for fluctuations
should also be considered.

Safety Stock: They produce more than order for safety stock. If demand increasing they use safety
stock. They should record the raw materials using bar code scanner or RFID for not having any error.
They should use economic order quantity model (EOQ) to determine the optimum number of
quantity to minimize their order cost and holding cost because this will reduce storage space and the
company can utilize that space for other tasks.

Ordering Cost, Shortage Cost & Carrying Cost: The policy of HPL is that they want to ensure the
production requirements are smooth and the demand is met. They prioritize on reducing shortage
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costs and therefore, they keep huge bulk of finished goods inventory to capture the anticipated
demand and to eliminate the risk of stock outs. But the holding cost of HPL is extremely high due to
this and it is creating an opportunity cost. Now HPL could solve this problem by Economic order
quantity (EOQ) Model. It would identify a fixed order size that would minimize the sum of annual
costs of holding and ordering inventory reflecting a balance between carrying and ordering cost.

SCHEDULING AND WAITING LINE MANAGEMENT

HealthCare pharmaceutical claims no presence of bottlenecks but while giving a tour inside the
factory, the workers have mentioned some cases where there are bottlenecks. Below, the
production process diagram shows numerous examples of cases of bottlenecks being produced. For
ex, granulation is 4000 units/ hr but purification and compounding can only take up to 100 to 83.3
unit per. In this place Healthcare pharmaceutical face waiting line and other place is supplier to
warehouse where Healthcare also facing waiting line .Waiting lines add to the cost of operation and
they reflect negatively on customer service. For example customer demand for 200000 units of
medicine but Healthcare pharmaceutical does not provide 200000 units. So this is the negative
impact in customer mind and also there operation cost increase. If they want to remove waiting line
from working process I think they should take some steps. In working process they should use
multiple channel and multiple phase

Multiple channel

Multiple phase

By using this process they can remove waiting line and increase production and fulfill customer
demand

Managerial Implication: Healthcare Pharmaceuticals believes the cost to provide waiting space
before the delivery of the consignment is much greater because they are already accumulating huge
space further providing waiting space will result in more cost. HPL has built a good relationship with
its customers and if not managed properly the waiting line management of serving its customers
they will face severe loss of goodwill and consecutively customer dissatisfaction.
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Goal of waiting line management:  In a queuing system customers enter a waiting line of a
service facility , receive service when their turn comes and leave the system. The number of
customers in the system (awaiting service or being served) will vary randomly over time. The goal  of
waiting-line management is essentially to minimize total costs. There are two basic categories of cost
in a queuing situ-ation : those associated with customers waiting for service and those associated
with capacity.

TC=customer waiting cost + capacity cost

Capacity costs are the costs of maintaining the ability to provide service. example include
Numbers of people need for looking after raw materials.

The costs of customer wait- ing include the salaries paid to employees while they wait for service
(mechanics waiting for tools, the drivers of trucks waiting to unload).

Characteristics of waiting lines: There are numerous queuing models from which an analyst
can choose. Naturally, much of the success of the analysis will depend on choosing an appropriate
model. Model choice Is affected by the characteristics of the system under investigation. In the
pharmaceuticals sector they recommended to have finite source situation in population source
where as in the number of servers they have multiple channel and multiple phase cause of their
different product. In arrival and service pattern HPL finds waiting lines are most likely to occur when
arrivals are bunched or they are lengthy. But in queue discipline they do not serve on a first come
basis rather they serve on the customers waiting cost and those with the highest cost

Measures of waiting line performance: Healthcare Pharmaceuticals measures the waiting

line performance by the average number of customers waiting in line or in the system, the average
time customers have to wait with the utilization of the system and capacity utilized. Foremost is the
implied cost of a gain to the level of capacity and related waiting line.

Production scheduling:
When HealthCare pharmaceutical face waiting line in production they should need scheduling. In the
decision –making hierarchy scheduling decision are the final step in the transformation process
before actual output occurs. Production scheduling is the phase of production management that
produces a detailed description of operations to be executed in a given period of time, typically
short. This description contains, for each operation, the specification both of resources (machines,
manpower, tools) to be used, and of time when they have to be executed. Many decisions about
system design and operation have been made long before scheduling decisions. They include the
capacity of the system, product or service design, equipment selection, selection and  training of
workers, and aggregate planning and master scheduling. By scheduling Healthcare pharmaceutical
increase productivity and decreasing cost. When waiting line occurs in working process they should
Establishing the timing of the use of equipment, facilities, and human activities in an organization.
Effective scheduling can yield cost savings, increases in productivity, and other benefits. For
example, in hospitals, effective scheduling can save lives and improve patient care. In educational
institutions, it can reduce the need for expansion of facilities

SUPPLY CHAIN MANAGEMENT

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Figure: Supply Chain Management

The strategic coordination of the sequential process of the supply chain of an organization is called
supply chain management. Its purpose is integrating the supply and demand of the organization.

Logistics of Healthcare Pharmaceuticals Ltd.

Logistic is a very important part of supply chain management. It controls the flow of goods and
services, as well as cash and information.

Transportation: Healthcare Pharmaceuticals Ltd. uses their own transportation system to bring
their raw materials and to distribute their produced products. They import their raw materials and
take them to their warehouse directly by their own vehicles. To distribute their produced medicines,
they use the transportation system of their sister concern company.

Material handling: By consistently delivering high quality, safe and effective specialty
pharmaceutical products and services, Healthcare Pharmaceuticals Ltd. is exceeding everyone’s
expectations. All associates of Healthcare Pharmaceuticals are committed to the company's quality
Policy to all aspects. They are assuring continued high quality, usefulness and effectiveness of
products for customers. They have experienced workforce, equipped with continuing education and
training in emerging quality techniques. They have a management team that is accountable for
effective review and support of quality, through the prioritization, resourcing, and timely execution
of quality-conscious decision-making.

Warehousing: They have separate warehouses for the raw materials and produced medicines. The
warehouses are located in their own factory premises. The warehouse (for general products)
consists of the following areas:
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1.  Large loading/unloading Bay. 

2.  Receiving area 
3.  Separate Raw, Packaging material and finished goods Store based on storage condition

4.  Sampling area equipped with LAF. 

5.  Office for logistic activity & Lockers for warehouse personnel 
6.  Areas for fork lift battery charging
7.  Narcotic material store
8.  Rejected material store
9. Return goods store

Distribution: The administration team is taking help from another distribution channel which is
apparently their sister concern. They have both inbound and outbound distribution systems. They
export their produced medicines to certain Asian countries such as Myanmar, Vietnam, Sri Lanka,
Hong Kong, Bhutan. We have also established association with different African, ASEAN and CIS
countries.
They are in progress for the GMP approval from UKMHRA, TGA, GCC etc.

Quality Control: Quality Control Department has the responsibility for the preparation, revision
and distribution of the following documents:

1. Raw materials, packaging material, finished products specifications

2. Analytical methods
3. Batch analysis records
4. SOPs and associated documents
5. Certificate of analysis
6. Validation data

HVAC System
Dedicated and separated HVAC system is established for production unit & QC area to meet the
GMP requirement.

1. General Solid Unit

2. Cephalosporin Unit
3. Semi-solid Unit
4. Sterile Unit
 20

Suppliers
Healthcare Pharmaceuticals Limited is indebted to F. Hoffmann-La Roche Limited, Basel, Switzerland
for providing us the technical support in the initial stage, products those are imported from Roche,
Switzerland and other local generics for indigenous market. They import the Raw materials, as in the
molecules from different countries.

Exporting Countries

Myanmar Vietnam Sri Lanka

Singapore Malaysia Hong Kong

Bhutan Afghanistan Uzbekistan

Kenya Ghana Tanzania

Zimbabwe Philippines Uganda

Choosing Suppliers
For a medicine manufacturer like HealthCare Pharmaceutical, it is very important to choose the best
supplier depending on: quality of the raw material, flexibility, past experience with them, after sales
service, location, price, lead-time of the delivery and reputation. They focus more on choosing
suppliers because they believe in long term relationship with the supplier and they start to act as
partners reaching towards the same goal, generating profit by delivering best quality medicines for
the people

Supplier Relationship Management

HPL has two types of suppliers, one who delivers the raw materials, and the one who delivers the
packaging materials. They emphasize more on the suppliers from whom they get the raw material as
the raw materials become their final good. Most of the chemical raw materials come from China and
some are manufactured in Bangladesh. They get packaging supplies from local suppliers.

HealthCare Pharmaceutical is very sophisticated about dealing with new suppliers, mostly for the
quality issues, but after getting assured about the consistency of the quality after few deals, they
tend to go to long term contract with the suppliers.

The long-term contract may starts as a partnership deal by cooperation on various issues and
strategic consideration and HPL can build a relationship with the suppliers that work as partnership.
By this, they may get benefits in suppler flexibility like change in delivery schedules, quality and
quantity.

Keeping good relationship with the suppliers is viewed as an important factor in maintaining
competitiveness. Companies are now a days viewing supplier as a partner. This viewpoint creates a
stable relationship with a few reliable suppliers who can provide high quality supplies, maintain
delivery schedule and remain flexible to any king of change.
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Procurement

Most of the raw materials of HPL comes from foreign chemical manufacturing companies
and they always choose the best quality raw material for production. They should issue the
General Terms & Conditions with each purchase order ("Order") issued, and incorporate
them in each Order via a statement on each Order referring to this page.

Additionally, they should produce a 3rd Party Supplier Code of Conduct (1.7MB PDF) that
aligns with their ethical, social and environmental responsibilities to maximize the long term
sustainability of their business.

Integrating IT

Moreover, HPL should incorporate Enterprise Resource Planning (ERP) to effectively

manage inventory and procurement with more transparency and accountability. The checks,
cash payouts and account payables can easily be recorded in the ERP for effective financial
statements and keep count of inventory purchases and sales. They should maintain
database for each vendor and supplier and obtain the goods in a timely and efficient
manner.

Adopting Lean Principles

Applying this to supply chains can overcome the weakness by eliminating value added
processes, improving product flow by using pull systems, rather than using push system.
They already use the certification system by GOP and can focus on reducing the length of
the supply chain to maintain effective communication and faster distribution. They should
also incorporate measuring the supply chain ROI.

Risk Management

They should recognize the importance of resiliency in order to recover from negative impact
creating events in the supply chain. The contingency plan to ensure recovery of any
disruptions that has a good probability of taking place. The prevention method can follow
the three simple steps:

I. Know the suppliers

II. Provide supply chain visibility

III. Develop event response capability

CONCLUSION
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To conclude we would like to mention that Healthcare Pharmaceuticals Ltd is doing a phenomenal
job. Every company has its flaws, so do they. But the amount of lacking in their manufacturing is low.
As we've already noted the recommendations at the end of each part, if they follow those they will
meet their goals faster.

REFERENCES
1. Operations Management, 12th Edition b William J. Stevenson
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2. http://www.hplbd.com/quality-policy.php

3. Human Resource Manager, Healthcare Pharmaceuticals Limited

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Appendix
Cost Benefit Analysis

Basic information: (For year 2016)

Fixed Cost Per year-

Fixed cost of HPL is estimated by their percentage on total revenue. 8% of the TR which is
64,00,00,000 taka is their overhead cast and 30% of TR which is 240,00,00,000is their utility cast.

Variable Cost= 264,00,00,000

Depending on the type of medicine they are producing variable cast varies. To estimate the variable
cast in general including raw material, direct and indirect labor, supporting materials and
transportation, the use the rule of third; which is one third or the total revenue.
In 2016, 33% of the total revenue is 264,00,00,000 taka.

Total Cost=568,00,00,000
Total cost is the summation of FC and TC which is 568,00,00,000 taka for year 2016.

Total Revenue= 800,00,00,000

In the year of 2016 HealthCare Pharmaceuticals total revenue was 800,00,00,000 taka.

Revenue per unite= 1.33 taka

Revenue per unit is 1.33 taka on average.

Quantity produced= 600,00,00,000 unites

In year 2016, they have produced 600,00,00,000 unites of products.

Profit = 232,00,00,000
HealthCare Pharmaceuticals profit in last year was 232,00,00,000 taka.

Variable cost per unite= .44tk

Variable cost per unite produced is .44 taka.

Break-even Analysis
Break-even point is the point where the total volume/ quantity of output at which total cost and
total revenue are equal.

QBEP=

QBEP=
QBEP=340,29,85,075 units
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Demand Forecast

Year Actual Forecaste Error Weights Assigned Forecaste Error Forecast Error
Deman d d ed
d
Demand Demand Demand

Alpha=

10%
201 800 603 197 10%+20%+30%+40% 607 193 443
6
201 760 477 283 60+25%+15% 512 248 407.8
5
201 550 440 `110 60%+40% 452 98 392
4
201 500 380 120 100% 380 `120 380
3
201 380 _ _
2

Pictures from the site:

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