SL. No.

: To Be Assigned by ISCEA

Global Supply Chain Case Competition

2020 ISCEA
PTAK PRIZE
To Win ISCEA’s Global Certification-CSCA

TEAM: MXUB-0174-20
Team Member-1 Team Member-2
Name: Yeasir Arafat Name: Amir Hamza

Contact No.: +8801790120676 Contact No.: +8801521515307

Team Member-3 Team Member-4

Name: Md Habibur Rahman Shohagh Name: lmtiaz Ahmed

Contact No.: +1 (709) 219-1431 Contact No.: +1 (709) 219-2052

Table of Contents
Executive Summary...................................................................................................................................1

Introduction...............................................................................................................................................2

Industry Overview.....................................................................................................................................2

Supply Chain Management of Pharmaceuticals in Bangladesh.........................................................3

Proposed Supply Chain Model.................................................................................................................3

Forecasting Demand..............................................................................................................................3

Operations..............................................................................................................................................3

Procurement & Inventory Management..........................................................................................4

Sourcing Supplier..............................................................................................................................4

Manufacturing...................................................................................................................................5

Transportation & Logistics...............................................................................................................5

Distribution........................................................................................................................................5

Infrastructure........................................................................................................................................5

IT Infrastructure...............................................................................................................................6

Corporate Social Responsibility...............................................................................................................6

Comparison between China & Bangladesh Supply Chain.....................................................................7

Impact of the Proposed SCM Model........................................................................................................7

Labor Market........................................................................................................................................7

Attract Foreign Investors in the Long Run.........................................................................................7

Sustainability.........................................................................................................................................8

Improved Quality Control....................................................................................................................8

Enhancement of financial and industrial security...............................................................................8

Other Industry Recommendations...........................................................................................................8

Conclusion..................................................................................................................................................8

References..................................................................................................................................................9
Executive Summary
A global shift of supply chain networks from China is now a very plausible scenario in the post
coronavirus season. China is currently the global hub of supply chains. Due to the pandemic,
manufacturers around the world have faced a significant supply shock. Caused them to lose a
large chunk of revenue streams. To avoid this phenomenon, companies across the globe are
considering diversifying their supply chains, and this is where Bangladesh comes in to replace
China as an importer of goods to these companies.

After analyzing the situation thoroughly, we saw the pharmaceutical industry of Bangladesh as a
potential industry that needs to focus. Since it’s already a very flourishing and promising
industry with exports over 151 countries. But to attract leading foreign manufacturers, the
industry has to be at its peak performance and unlock its full potential.

To utilize its full potential, the government of Bangladesh has to be fully cooperative. They can
assist by providing relevant funds and subsidies. Building an API plant is another crucial step.
Implementation of the Blockchain technology to secure the entire supply chain. It will also
ensure the smoothness of operations.

Finally, with those initiatives and through the proper implementation of the plans, we’ll be able
to generate significant scale employment. We can unleash the full potential of the respective
industries. The industry will be in a secure and swift supply chain. Also, contribution to the
nation’s economy will be enormous. We believe that the industry can flourish on the global
marketplace with the execution of the stated initiatives.

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Introduction
The coronavirus outbreak has demonstrated how fragile the current supply chain is. Recent
statistics indicate the devastating economic impact of week-to-week trade in China, the United
States and Europe halved as a result of the crisis [ CITATION Jes20 \l 1033 ] . But it has opened a
significant opportunity for some developing countries like Bangladesh to make a strong position
in the global supply chain with some particular industries.

Industry Overview
The pharmaceutical industry in Bangladesh is a driving force to the country’s economy with a
contribution of 1.83% in the GDP. The pharmaceutical industry exports to over 151 countries
around the globe. In 2018, the country's domestic pharmaceutical market size stood at
Tk20,511.8 crore with a 15.6% compound annual growth rate (CAGR) for the last five years.
[ CITATION Mah19 \l 1033 ]. There are 257 licensed pharmaceuticals from which 150 are fully

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functioning. According to figures from the Export Promotion Bureau (EPB), medicines worth
US$ 130 million have so far been exported in 2019, with a growth rate of 25.56% [ CITATION
Hel19 \l 1033 ].

Supply Chain Management of Pharmaceuticals in Bangladesh

Bangladesh’s supply chain infrastructure is top among all the other LDC nations. However,
Bangladesh is currently heavily dependent on the overseas market for the required API’s.

Proposed Supply Chain Model

Forecasting Demand
Our demand forecasting types should be the likes of Active Demand Forecasting or External
macro-level Demand Forecasting. Because we must seek to scale up and diversify companies
with ambitious growth plans, as the USA is willing to shift its supply chains in medicine to
become less dependent on China following the coronavirus crisis. In this scenario, the
Barometric technique of the Quantitative method can be the most efficient method for
forecasting demand as it is based on the idea of predicting the future by recording events in the
present.

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Operations
The post coronavirus crisis will be a restart for any industries and in this situation, the Lean Six
Sigma method will be the most effective way to enhance productivity, reduce waste and cut
costs. In considering how costly drug manufacturing is, our pharmaceutical industry must start
implementing Lean Six Sigma in its drug development processes.

Procurement & Inventory Management

The pharmaceutical industry in Bangladesh is mostly a generic, branded marketplace [CITATION
AKM18 \l 1033 ]. Because of the imported raw materials, it increases the production cost. We need
to focus on the local production of the raw materials to cut unnecessary production costs. That's
why the implementation of a structured Active Pharmaceutical Ingredient (API) plant is
absolutely necessary. Also, our policymakers can consider the centralized procurement scheme
to control indirect spend categories. Implementation of the Blockchain system in inventory
management will be the perfect solution to track each step of the supply chain.

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Sourcing Supplier
Bangladesh has the facilities to manufacture innovative drugs, such as active pharmaceutical
ingredients, biosimilars, vaccines, and oncology products [ CITATION Sta18 \l 1033 ] . Bangladesh's
pharmaceutical industry is already moving towards autonomy. Bangladesh can manufacture
high-quality goods according to industry insiders, as the sector employs state-of-the-art
production facilities, advanced quality assurance equipment, and professional personnel
[ CITATION Was19 \l 1033 ]. In the global pharma regime, our industry can fully flourish by its
TRIPS stands to export of generic drugs. In 2008, Bangladesh announced the establishment of a
200-acre 'API Park' in Munshiganj, which reportedly reduces raw material import costs by 70
percent [ CITATION MdA19 \l 1033 ].

Manufacturing
Our priority should be a cost-effective method. Developed countries like the USA requires the
pharmaceutical industry to stop drug manufacturing using the conventional batch method and to
move to a more efficient process known as continuous manufacturing [ CITATION Zin19 \l 1033 ].
So, the focus should on the continuous manufacturing process. The aim is to improve the
efficiency of production, improve quality and uniformity while reducing costs.

Transportation & Logistics

About 1,000 local and 20 foreign logistics and freight forwarding companies are already
providing the necessary support to Bangladesh's export and import sector [ CITATION Jag18 \l
1033 ]. But the post coronavirus situation won’t be the same. The actions we take now could
transform the supply chain of the pharmaceutical industry for years to come. Our policymakers
should consider devices such as applications allowing electronic signatures or shipment location
monitoring to be needless expenditures prior to social distancing guidelines appeared. And these
devices can be controlled or monitored by Blockchain technology.

Distribution
Combined with an under-regulated industry, few manufacturers produce pharmaceuticals, and
competing firms to sell branded generics based on brand names. While there will be some
disruptions within the supply chain due to the Covid-19 situation, Bangladesh can capture the
prior export role to the developed countries. Our pharmaceutical industry needs to exploit and
expand production at existing plants in overseas markets.

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Infrastructure
Pharmaceutical firms in Bangladesh currently mainly use facilities for similar tests in Malaysia
and India [ CITATION Ind19 \l 1033 ]. This industry needs a strong organization of clinical research
to strengthen its place in the global supply chain. Again, the API plant will be a massive boost
for the industry. Investing in and developing healthcare-related infrastructure will play an
essential role in the industry's transformation, and drastic improvements in the cost chain will
empower the industry to enter the international market.

IT Infrastructure
In pharmaceutical industries, several industry leaders are using the Enterprise Resource Planning
(ERP) system developed by SAP in supply chain operations [ CITATION Fah19 \l 1033 ]. ERP is a
quite effective system but Blockchain has the potential to use a decentralized structure to
integrate an extensive supply chain network. Pharmaceutical is a flourishing but sensitive sector
and everything needs to be secured & errorless. Within the supply chain, Blockchain solves
visibility. Participants will track the path of the product from the factory floor to the retailer's
shelves, thereby helping to reduce drug duplication and forgery. It is also cheaper because all
manufacturers, distributors, and retailers may use the same solution. Not everyone has to pay for
a complicated install to access the blockchain info [ CITATION Aji18 \l 1033 ] . It’s a perfect time to
implement the Blockchain technology in the pharmaceutical sector to set a benchmark for the
other industries and the foreign investors will have more trust in our industry.

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Corporate Social Responsibility
From a research paper, it’s found that the CSR Disclosures average index of Pharmaceutical is
41%. By this, it can be inferred that while the industry is trying to put greater focus on the
disclosure of more knowledge related to corporate social responsibility, the norm is still below
50% [ CITATION Sab15 \l 1033 ] . Though the percentage rate may have increased in recent years,
but still the sector should be more concerned with establishing policies on this. The more the
ratio will be, the more foreign investors will show their interest.

Comparison between China & Bangladesh Supply Chain

Reconfiguration of US-China trade relations have opened a new opportunity for the
pharmaceutical industry of Bangladesh to attract the global market. Bangladesh's competitive
advantage lies in its cheap labor that is three to four times cheaper than that of India or China, the
availability of qualified labor and the Intellectual Property Trade-Related Aspects (TRIPs)
agreement. USA imported $127 billion of pharmaceutical goods, of which China accounted for
$1.5 billion, according to the US International Trade Commission. Bangladesh's export of
pharmaceutical goods to the US, by comparison, is just $13 million for FY19 [ CITATION Fai20 \l
1033 ]. Although the gap is vast between the two countries, the post coronavirus situation will be
different. The global supply chain leader’s position will be open to be taken as China won’t be
the dominant market player anymore. Sufficient investment can strengthen the industry to take
the top spot. If our regulators focus on the implementation of the API plant along with other
proposed aspects then we can compete with China with ease.

Impact of the Proposed SCM Model

Labor Market
After the coronavirus pandemic, there will be a big hole in the labor market. However, the
uprising pharmaceutical industry can resolve the unemployment issues by creating
approximately 2 million of new positions according to Bangladesh Association of
Pharmaceutical Industries (BAPI). In addition, the generic drug market is expected to grow
10.8% by 2021[ CITATION Zio16 \l 1033 ] which will flourish the domestic market as well. It is
predictable that the job market will be in a good shape when pharmaceutical industries will start
to regulate the whole market.

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Attract Foreign Investors in the Long Run
Since the production of both patented and non-patented drugs move to low-cost manufacturing
areas, the pharmaceutical firms can be affiliated with foreign companies which improve the
domestic financial infrastructure. The industry can gain trust of some the overseas marketplace
providing that the other foreign investors may aspire to invest in the pharmaceutical industries in
the long run.

Sustainability
The growth rate of the pharmaceutical industry has remained constantly increasing over the last 6
years [ CITATION BAP \l 1033 ]. According to TRIPS, Bangladesh will be leading in low-cost
pharmaceutical manufacturing after 2020. Consequently, it should strive to create a sustainable
and growing industry in the upcoming years.

Improved Quality Control

This model can prevent all illegal firms from establishing a regulatory environment. Knowledge
transfer led improvement will be an essential step for improving quality control. The
Bangladeshi companies can tie up foreign venture to improve research facilities which result in
the highest drugs quality possible.

Enhancement of financial and industrial security

Implementation of Blockchain will play a crucial part in the enhancement of financial and
industrial security. The system and the cash flow will be more secured than ever.

Other Industry Recommendations

Apart from the pharmaceutical industries, Information Technology and IT Enabled Services
(ITeS) sector is another industry with full of potential. The outcome of the government's Digital
Bangladesh drive has recently surfaced. Gartner has ranked Bangladesh among the top 30
destinations for outsourcing. Many freelancers ready to thrive in the global market. To achieve
the best possible height, this growth requires structured development [ CITATION Wal16 \l 1033 ].

Conclusion
The development of the Bangladesh Pharmaceutical Industry is considered a particular case
among the developing countries. For a long time, the RMG sector has been the main industry of

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Bangladesh in terms of exporting and in the global pharmaceutical industry, China has been a
dominating force. But US-China trade relations have opened a new opportunity for Bangladeshi
pharmaceuticals to establish itself as one of the main industries of the country and also compete
in the global market as well. With the assistance of GoB, this industry can meet the worldwide
demand and reach strategic objectives, particularly in high-value foreign markets.

9
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