1. FINAL PROJECT PRESENTATION
ABBOTT PAKISTAN
SUBMITTED BY:
Mubashir Ahmed

2. MARKET AND PRODUCT PROFILE
TARGET MARKET:
 Diabetic patient
 220 million people
 Advances and Revolutionary technologies
 Treatment coronary artery disease (CAD)
 Heart disease
 Drug-eluting stent (DES)
 Designed to improve deliverability and
access to long lesions in the artery

3. MARKET AND PRODUCT PROFILE
MARKET SHARE:
 IMS report market share of Abbott is 5.2%
 All exchanges of Pakistan
 Achieve Class-A certification
 370 pharmaceutical manufacturing in Pakistan
 Including 30 multinationals operating units
 Market Size PKR 80. 11 billion
SALES TURNOVER:
 Sales increase more than 14% in 2010
 Sales of the pharmaceutical products
increased by 4%.

4. SUPPLY CHAIN STRUCTURE
I CUSTOMER
N
F
O
R
M P
A R
T O
I RETAILER/ WHOLESELLER
O
D
N U
DISTRIBUTOR
C
F T
L WAREHOUSE
O F
W
L
MANUFACTURING
O
W
WAREHOUSE
TRANSPORTATION
SUPPLIER
MARKETING

5. SUPPLY CHAIN PROCESS
Manufacturing
Planning
Production
(Demand Generated)
Material Planning
QA
Vendors
(Quotations asked)
Released by QA
LC
FO Warehouse
Follow up ---import &
dispatches
Clearance Transit
Time
Central Depot’s
Material in Warehouse
Dispatches
Wholesalers
Material Available For
Production
Retailers
Institutions

6. PARTICIPANTS INVOLVED
1. Supplier
2. Agent
3. Distributor
4. Wholesaler
5. Retailer
6. Customer

7. DRIVERS OF SUPPLY CHAIN
1. Sourcing
2. Inventory
3. Facility/location
4. Transportation
5. Information

8. PUSH AND PULL BOUNDARIES
Push/pull Boundary
Demand procurement manufacture Distributor End Consumer
forecasting
ACHIEVING STRATEGIC FIT
 Best Quality
 Product Expiry
 Quality control

9. PRODUCTION
PLANNING AND
CONTROL

10. FORECASTING TECHNIQUE
AND TOOLS
QUANTITATIVE TECHNIQUE
 future demand is forecasted on the bases
of historical patterns of demand.
 Marketing department uses ADS and
provides two years aggregate demand
forecast to the SC department.

11. ROLE OF AGGREGATE PLANNING
 Attempt of matching the supply of and
demand for a product or service by
determining the appropriate quantities and
timing of inputs, transformation, and outputs.
 Considers few things at the time of planning
such as past statistical figures like what they
have achieved in the last 2-3 years..
 It is not possible to make an ADS without
considering the opinions of Abbott Pakistan’s
14 Product Managers who are responsible for
projecting Aggregate demand for the next 24
month.

12. PRODUCTION STRATEGY
LEVEL STRATEGY
 as it maintains stable machine capacity and
workforce levels with a constant output rate
 Moreover it builds up its inventory based on
forecasted demand.

13. ROLE OF MRP
MPS
 Entire production of Abbott is based on MPS
 Master production scheduling is done on the based
of forecast and some times abnormal demand as
well.
BILL OF MATERIAL
 Billof material is the list of quantities and
components needed to make the product.
 It helps the company to manage its raw material
issues effectively and efficiently on the basis of
information provided by MPS.
 This requirement tells the company what is the
quantity required according to the Master
Production Schedule.

14. PROCUREMENT LEAD TIME
 Abbott has its lead time of procurement
of material of approximately 45days by Air
transport and
 approximately 75 days by ship transport
which a company use to import from
different countries.

15. ROLE OF CAPACITY PLANNING
 It is used to measure and manage the resource
requirements and where appropriate, the work
through put and queue levels.
 To manage the capacity control process Abbott
Pakistan uses a system known as BPCS which
stands for Business Process Control System.
 Once they got the ADS than they sub divide that
plan into monthly basis and adjust the machines
capacity according to it. The planned capacity
utilization at Abbott is more than 90%.

16. INVENTORY MANAGEMENT TECHNIQUES
DETERMINATION OF SAFETY STOCK:
 Safety stock is a buffer to meet some
unanticipated increase in usage. Abbott
maintains a safety stock of six week dependent
and independent demand items in order to
minimize the risk of shortage due to any uncertain
demand.
RE-ORDER POINT:
 When the inventory is depleted to lead time
consumption, the order should be placed.
 In case of Abbott, Lead time of imported material
is 45 to 75 days while local material is 7 to 30 days
depending on the nature of the material.

17. A.B.C ANALYSIS:
 Abbott Pakistan classifies its materials according to
the values or the cost of materials; basically they
have allotted three grades or types to their
materials:
 * Grade A (very costly materials, e.g. erythromycin)
 * Grade B (moderate cost, e.g. clathromycin)
 * Grade C (least cost, e.g. bubble gum and artificial
flavors like mint)
AGING SCHEDULE OF INVENTORY:
 This technique helps to classify the inventory
according to the life of material.
 Abbott categorizes the inventory of a particular
material/Finished product according to its expiry
date.

18. LOT SIZING TECHNIQUES
 Abbott Pakistan uses POS (periods of
supply) technique for its dependent and
independent demand items.
 In POS technique, Lot size will be equal to
the net requirements for a given number
of periods (e.g. weeks) into the future.
 Abbott maintains six weeks stock in
warehouses of dependent demand items
and independent items which named as
FO and MO respectively.

19. DISTRIBUTION OF PRODUCTS
 Outsource
 Depots in various cities
 6% commission scenario for distributors
 Linking distributors to Abbott through
satellite systems.

20. DISTRIBUTORS OF ABBOTT
 Premier Agency Muslimabad, Karachi.
 Babar Medicine, Lahore.
 Nadeem Traders, Peshawar.
 Baloch Enterprise, Multan.
 D.S Pharma, Rawalpindi.

21. SOURCING
GENERAL PURCHASE
 Includes the purchase of stationary, office
equipment for the Office use, packaging
material, transportation trucks for the
delivery purpose and different other
chemicals.

22. VENDORS
 Designing –FP Plastics, Al-Ahad Plastics, Thermoplas (Korangi)
 Printing–Ammara Commercial Printing (Memon Goth, Malir)
 Packaging – Saima Packaging (Korangi Industrial Area)
 Slicing Aluminum foils - Muhammad Corporations, Gulshan -e-
Iqbal
 Cartons – Sultan Packages (Dalmiya, Karachi)
 Cartons – King Packages (Lalukhait, Karachi)
 Cartons - Decent packages (S.I.T.E Area)
 Dextrose – Rafhan Industries (Faisalabad)
 Pseudo - Alpha Chemicals – (Lahore)
 Essential Chemicals – (Lahore)

23. VENDOR SELECTION CRITERIA
 Bid sheet (low cost effective sheet )
IT INCLUDES
 Vendor specification
 Testing method
 Signature of vendor
 MFG date expiry date/shelf life
 Stability data to support shelf life
 Vendor evaluation check list

24.  Material safety data sheet (MSDS)
 Full range of raw material
 Vendors’ certificate of analysis
 Recommended storage condition
 Technical bulletin
 List of solvent if used & other residual levels
 Is your vendor already approved in other Abbott
affiliate?
 TSE/BSE statement. Transmissible Spongiform
Encephalopathy’s/Bovine Spongiform
Encephalopathy
 Vendor capacity.

25. APPROVAL OF VENDORS
 Material Sample and vendor provides
Certificate of Analysis & Form 7
 Quality Assurance test in ABBOTT”s own
laboratory
 Number is assigned with a Yellow Sticker
 Quality Assurance department do the Stability
Testing
 Issues a Green Sticker
 Materials are sent for Batch Manufactured
and then End Product is made

26. DIRECT PRODUCT RELATED PURCHASES:
Direct product Related purchase includes raw material
import from different countries.
Abbott Pakistan import its raw material.
Abbott classifies its products according to its costs.
 Grade A Very Costly Products
 Grade B Moderate Costs Products
 Grade C Least Cost Products

27. LOCAL SUPPLIERS & LEAD TIMES
 Designing: FP Plastics (Karachi, Korangi)
 Printing:(Karachi, Malir)
 Packaging: (Karachi, Korangi)
 Aluminum foils: (Karachi, Gulshan -e- Iqbal)
 Cartons:(Karachi,Dalmiya, Lalukhait, S.I.T.E Area)
 Dextrose: (Dextrose is a sterile solution injected
intravenously) (Faisalabad)
 Chemicals: (Lahore)

28. SUPPLIERS OF IMPORTED MATERIALS
 Dye Red, UK
 Potassium chloride, Germany
 Sodium Citrate, Taiwan
 Sodium chloride, New Zealand
 Acid Citric, Austria
 Aluminum Seals and PV, Holland
 Artificial bubble gum, Holland
 Supplier for Sugar, Malaysia
 Sodium Sulphate, Germany

29. LEAD TIME FOR IMPORTED MATERIALS
 By sea it approximately takes 75 days
 By air it is approximately takes 45 days.
CENTRALIZED PURCHASING
 Completely centralized
 Distribution is decentralized
 Quality of the raw materials and Cost

30. ROLE OF E-PROCUREMENT
 MRP II to effectively and efficiently handle
the Material issues
 Based on the information’s provided by
MPS
 Transactions are made electronically into
Business Planning & Control System
 Changes are made in MRP if there is an
abnormal demand

31. JIT / LEAN MANUFACTURING
JIT CONCEPT
 There is no concept of JIT
LEAN MANUFACTURING
 Production plan (based on MPS)
 MPS is made by the supply department which is
forwarded to the MMD
 Arrange the raw material for the production
department
 MMD is using MRP II

32.  MRP II to effectively and efficiently handle the
Material issues
 Based on the information’s provided by MPS
 Transactions are made electronically into Business
Planning & Control System
 Changes are made in MRP if there is an abnormal
demand.
 Plan is initially made during the plan stage
 Planning production
 Made on weekly bases as well as monthly bases
depending upon the availability of the resources,
which are required to make the required product.

33. PRODUCTION PLANNING
 Made on weekly bases as well as monthly
bases depending upon the availability of the
resources, which are required to make the
required product.
 Then Sales & Operations meeting is held,
which do two parties one from supply side
and the other represent from demand side
and production related decisions are made
as per the plan.
BUSINESS PLANNING AND CONTROL SYSTEM
 It monitors the status of manufacturing
department
 Batch size produced
 No random manufacturing

34. DISTRIBUTION TYPE

35. BUYING PROCESS OF ABBOTT

36. DISTRIBUTION STRATEGY
 Since in majority of the cases drugs are not
purchased by choice of the consumers- the
distribution is to some extent selective.
 Most pharmaceuticals products require special
storage conditions to be maintained at
manufacturer’s warehouses, channels of
distribution, and the point of sale.
 Many products need not supply at the
pharmacies but to the hospitals only like cancer
medications.

37. TRANSPORTATION NETWORK
 Lahore Naulakkah Transport
 Bashir Siddique Trasport
 Fast Track Cargo Service
 Leopard Courier Services
 Courier Per emergency
They also have their own vans with Abbott monogram
and they are generally used for distributing to local
customers (distributors and institutions) within Karachi and
nearby areas.

38. TYPES OF TRANSPORTS
 Cold refrigerated vans

39. DISTRIBUTION CHANNEL
Abbott Pak
Abbott truck Hospital
Distributor
Cent. Depot
Abbott truck
Wholesaler

40. RESTRICTIONS
 Distributors can’t go out of their area for
sale.
 Discountpolicy should be followed
according to company’s instructions.
 Distributors should carry 6 weeks inventory
at their side.

41. RETURNS
Product Returns