SUBMITTED TO :

SIR MUHAMMAD HANIF

COURSE:

SUPPLY CHAIN MANAGEMENT

COUNTRY PROFILE

COUNTRY NAME: PAKISTAN

GROWTH RATE: 6.6%

GDP: 6.9%

POPULATION: 165.8million

LITERACY RATE: 48.7%

PER CAPITA INCOME: $847

 COMPANY PROFILE

Abbot Laboratories (Pakistan) Ltd. The company’s principal activities are to manufacture,
import and market based pharmaceutical, nutritional, diagnostic, hospital and consumer
products and provides toll-manufacturing services. It operates in two segments
Pharmaceutical and other. Pharmaceutical segment manufactures, import and markets
research based pharmaceutical products registered with the ministry of health and
provides toll-manufacturing services. Other segments includes importing, manufacturing
and marketing diagnosing equipment, testing kits, consumer healthcare, nutritional and
hospital products. The company’s pharmaceutical products include Kalaricid, Erthrocin,
Hytrin, Epival, Brufen, Entamizole, protium and Forane. The other products include
Ensure, Pediasure, Pedialyte, Formance etc.

Abbott has approximately 70,000 employees worldwide and a global presence in more
than 130countries. Abbott Pakistan started operation in Pakistan as a marketing affiliate in
1948. The company has steadily expanded to compromise a work force over 1400
employees. Currently two manufacturing facilities located at Landhi (largest tablet
manufacturing plant) and Korangi in Karachi continue to use innovative technology to
produce top quality pharmaceuticals products. The diagnostic division operates from its
office located at Korangi, Karachi
 Locations

Nutritionals and Pharmaceuticals

Abbott (Pakistan) Ltd.
P.O. Box 7229
Landhi Karachi, Pakistan
Telephone: (92 21) 501 50 45
Facsimile: (92 21) 501 32 45

Diagnostics
Abbott (Pakistan) Ltd.
Plot 13, Sector 20
Korangi Industrial Area
Karachi 74900 Pakistan
Telephone: (92 21) 504 65 74
Facsimile: (92 21) 504 42 58
ABBOTT’S FINANCIAL DATA
FIVE YEARS SALES
YEARS SALES (rupees in millions)
2002 4,004
2003 4,277
2004 4,598
2005 5,176
2006 5,888

COMPANY’S FIVE YEARS PROFIT

YEARS PROFIT (rupees in millions)
2002 439
2003 526
2004 747
2005 962
2006 1,000

BENCHMARKING
Ratio Name WYETH SEARLE HI-NOON ABBOTT
Current 4.10 1.714 5.08 4.76
Ratio
Inventory 1.69 times 10.11 times 2.72 times 4.69 times
Turnover
Total Asset 60% 10.2% 67.2% 1.17
Turnover
Profit Margin 0.182 0.032 0.048 1.70
on Sales
Earnings Per 112 3.53 10 10.21
Share
Return on 10.9 3.2 3.2 19.9
Assets
 VISION
“To be a premier health care company in Pakistan”

MISSION
To deliver consistently superior products and services which contribute significantly to
improve the quality of life of the consumers? This will be achieved while ensuring that
the interests of all stakeholders including healthcare providers, employees, share holders
and the communities are secured. Abbott Pakistan will comply with the highest standards
of local cGMP/EHS and adhere to the corporate code of Business Conduct and Ethics.

DICTATED TO
• Employees
• Customers
• Share holders
• Suppliers
• Public

WE VALUE
• Pioneering
• Achieving
• Caring
• Enduring
CORE VALUES OF ABBOTT

Enduring
ing
Pioneer

caring
ABBOTT

Achieving

CAPABILITIES OF ABBOTT
 QUALITY
OF
AGILITY INTEGRITY
EXECUTION
Y

I
SH O
ER TI
D A
A IC
LE UN N
P M
CO

CORE COMPETENCIES OF ABBOT

Products &
Services

Customer
intimacy

operational
excellence

People
 SUPPLY CHAIN MISSION

ABBOTT’s SCM mission is to configure, coordinate and improve all the sequentially
related activities and set of operations with the idea of satisfying the entire chain of
suppliers’ suppliers and customers’ customers by providing right product, at the right
time, in the right quantity and becoming highly recognized by our employees, customers
and shareholders and abiding by Government regulations by adhering to strict ethical and
moral standards”.

SUPPLY CHAIN INTEGRATION

 Customer

I
N
F
O
R Retailers/ wholesellers
M P
A Distributors R
T O
I Warehouse ( F O) D
O U
N C
Manufacturing
T
F Warehouse (M O)
L F
O L
W Transportation O
W
Supplier

Marketing
 ABBOTT’S SUPPLY CHAIN STRUCTURE

SUPPLY CHAIN
MANAGER

CAPAPCITY
PLANNER MASTER MASTER
SCHEDULER SCHEDULER

PRODUCTION PRODUCTION
PLANNER PLANNER

MATERIALS
MANAGER

WAREHOUSE EXPORTS
MANAGE LOCAL/ IMPORTED MANAGER
R PURCHASE
MANAGER
SUPPLY CHAIN PROCESS
Marketing
( Demand Generated)

Manufacturing Planning

(Demand Generated)

Material Planning

Vendors
(Quotations asked)

LC

Follow up ---import &

dispatches

Clearance Transit Time

Material in Warehouse

Material Available For

Production
 Production

QA

Released by QA

FO Batches

Packing line

FO Quarantine
(Sampling test by QA)

Central Depot’s

Dispatches Satellite Depot’s

& Distribution

Institutions Wholesalers

Retailers
SCOR MODEL
S C
PLAN
U U
P S
P T
SOURCE MAKE DELIVER
L O
I M
E E
R RETURN MO RETURN FO R
S S
Enable

Plan

Deliver Source Make Deliver Source Make Deliver Source Make Deliver Source

Return Return Return Return

RM Return Return

Manufactur
er ABBOTT Lab Distributors Whole
Indenters Pakistan salers
Supplier’s
Company Customer
Supplier Supplier Customer뭩
Customer
 PLANNING

Orders, which are planned according to the

demand, made by the external customers,
these orders are initially planned and then
raw material is purchased according to the
planned order.

ABBOTT Pakistan’s marketing department

considers few things at the time of planning such as past statistical figures like what they
have achieved in the last 2-3 years. The ADS has a wide horizon of 24 months for better
flexibility. 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.
BUSINESS PLANNING

The executive management of ABBOTT Pakistan does the long term strategic planning.
Every 7th day of the month they conduct a SNO (Sales and Operations) meeting. It is
reviewed in the SNO meeting to highlight the gaps in performance if there any, and to
make adjustments if required.

DISCUSS

PROPOSED
FORECAST

SNO MEETING

ADS

Marketing department gives the forecast to the supply department and then it’s their job to
make available all the resources required from the purchases till the delivery of end
product to the consumer on the ATP (Availability to promise) .This is how they satisfy
their external customers.
APPROVED DEMAND FORECAST
In ABBOTT Pakistan the demand is forecasted by the Marketing department. The
Marketing department provides 24 months rolling aggregate demand forecast, which is
known as ADS (Approved Demand Statement). This statement shows individual demands
for all product lines demanded by end users to whom we are providing quality healthcare
products.

ABNORMAL DEMAND PLANNING / HANDLING UNCERTAINTY

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

APPROVED SUPPLY PLAN

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

MASTER PRODUCTION SCHEDULE

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

MARKETING

MAS

MANUGISTICS

MANUFACTURING

MASTER PRODUCTION ARRIVAL

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

STOCK KEEPING UNITS

ABBOTT Pakistan has 270 SKU”s, out of which 240 Pharma products and 30 are
Nutritional products.
SAFETY STOCK
The raw material, which is stored in extra units in warehouse, is known as safety
stock. ABBOTT maintain a MO and FO safety Stock of 6 weeks,

MATERIAL MANAGEMENT PLANNING:

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

CAPACITY PLANNING
Capacity means a measured ability to accomplish work. Capacity planning is a process in
which capacity is planned based upon expected demand and it needs to be balanced with
required capacity utilization and it also outlines the capacity requirements for the
production, availability of machines and what are the standard hours, which they are
required to meet the forecasted demand. ABBOTT Pakistan have a CCR system known
as Capacity Consumption Rate which tells us, the consumption rate of the resources,
which are available for the production, and on the bases of this update a new planning is
developed depending on the consumption rate. A capacity control process is used to
measure and manage the resource requirements and where appropriate, the work through
put and queue levels. Once they got the ADS than they sub divide that plan into monthly
basis and adjust the machines capacity according to it. The planned capacity utilization at
ABBOTT is approx. 95%. And to manage the capacity control process ABBOTT
Pakistan is using a system known as BPCS which stands for Business Process Control
System
ROUGH CUT CAPACITY PLANNING
It indicates requirements for resources by month for a 24-month horizon it is performed
after MPS generation imply on critical work centers on Master Scheduled Items.
Feasibility checks of MPS and early warning of Bottlenecks.

SCM CONFIGURATION
He knows when the raw material is going to arrive, who are the vendors are going to
supply to us. Then accordingly he tells to the bulk planner to plan the inventory which is
being piled up in the warehouse. Keep an eye on the efficiencies of different work centers,
calculates input and output or work centers and decides which Batch to produce first and
what is their in the queue waiting to be produced next.

MAKE OR BUY DECISION

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

Some of the products which ABBOTT buy from Parent company and from there
subsidiaries.

• Pediasure
• Hematology Analyzers
The following products are manufactured in Pakistan.

• Tablets
• Liquids/Syrups/O.R.S
• Injectables, Creams/ Ointments.
SOURCE
 SOURCE

In Pharmaceutical Industry there are two types in ingredients:

• Active Ingredients
• Excipient Ingredients

ACTIVE INGREDIENTS
Is an essential intergradient for any specific drug, without which a drug does not cure a
respective disease?

EXCIPIENT INGREDIENTS
Is an intergradient which itself is not workable, it when mixed with some other
intergradient becomes curable for a respective disease.

It is against the Abbott Pakistan policy to disclose the Excipient Ingredients however
some of the Active ingredients along with the suppliers and the country of origin are as
follows:

• Dy Red – sencient UK
• Potassium chloride – Merck, Germany
• Sodium Citrate – Sanfu, Taiwan
• Sodium chloride – Dominon salt, New Zealand
• Acid Citric – Jungvuzlaur, Austria
• Dextrose – Rafhan Industries Faisalabad
• Artificial bubble gum – IFF Holland
 Once the ADS passes in the organization the MM department comes into function, the
responsibilities and function can be easily understood by the MM department chart

MATERIALS
MANAGEMENT

WAREHOUS LOCAL/ IMPORTED EXPORTS

E PURCHASE

MPS is made by the supply department checked by the supply manager and then
forwarded it to the MM department. Then according to the MRP (Material
Requirement Planning) an enquiry is carried out for the selection of the suppliers.

This is the initiator of Abbot or the most imperative department of the organization.
Each and every individual in this department has to play his role according to the
requirements of Abbott. All the raw material is arranged whether it is selected by the
local vendor or the International vendor. MPS is forwarded to the purchase
department and then it’s the job of purchase department to fulfill their requirements
and to select the right vendor who meets the specs of the organization. This is not a
game of taking risk or gambling but one needs to rethink again and again in order to
select the vendor who provides the raw material to the organization.

Different quotations are sent to different manufacturers or the vendors, an audit is

also carried out and then through different indenters a BID SHEET is prepared.
BID SHEET
A bid sheet is a low cost effective sheet in which there are quotations form
different suppliers and on the bases of that low cost suppliers are selected comparing their
LANDED COST.

It includes:

• Representative/Agent
• Name of manufacturer and country
• Vendor status
• Quotation date
• Foreign currency
• Duty
• Landed cost/kg
• Local currency
• Exchange rates
• Cost and freight

Then after getting the bid sheet orders are finalized and there is a request for an
indenter. After the request of an indenter the bid sheet along with the approved
indenter is send for approval to the finance department.
REQUIREMENTS FOR THE VENDOR APPROVAL

1) Vendor specification
2) Testing method
3) Abbott Specification signed by vendor
4) MFG date expiry date/shelf life
5) Stability data to support shelf life
6) Vendor evaluation check list
7) Material safety data sheet (MSDS)
8) Full range of raw material
9) Vendors’ certificate of analysis
10) Recommended storage condition
11) Technical bulletin
12) List of solvent if used & other residual levels
13) Is your vendor already approved in other Abbott affiliate?
14) TSE/BSE statement. Transmissible Spongiform Encephalopathy’s/Bovine
Spongiform Encephalopathy
15) Vendor capacity
VENDORS APPROVAL STEPS
Material Sample and vendor also provides

Certificate of Analysis & Form 7.

Quality Assurance test of the material in ABBOTT”s

own laboratory

Quality Control approves the material and assigns a

number to batch and a Yellow Sticker.

Trial Batch is made of a actual material

Stability Testing (QA)

Material Approval (QA)

Quality Assurance issue a Green Sticker (Release)

Batch Manufactured

End Product
ANALYSIS OF THE REQUIREMENT
Two general categories for vendors are:
A) Approved and Active
B) Approved and Inactive

This is the bases on which the vendors are selected and it is conducted by the
ABBOTT itself in order to select the vendor who can provide the material of good quality
and at low cost .The basic purpose of selecting a vendor is to have quality service
provided by them and to check their EFFECIENCY & RESPONSIVENESS.
Quotations from different vendors are sent through mail and on the bases of the BID
SHEET, final selection of the vendor is made. There is no indenter involved in local
purchases.

These are the requirements of ABBOTT’S Pakistan in the selection of their vendors; the
vendors must meet these requirements and specifications in order to be approved as a
vendor to provide the raw material to this leading pharmaceutical industry.

Let suppose if MM department, is buying vitamin C form a vendor worth $4 and a vendor
contacts them and says that he is going to provide them of $3, then the MM department
will check his past certificate of Analysis or his services to any Abbott affiliate. They will
also check his record against other Pharmaceutical industries and his testing analysis, if
they qualified then they will buy the material and give it to the QA depart and they will
conduct the stability and shelf life test which can take 3-9 months depending on the
stability of the raw material. The material should not have pig fats which are used in the
raw material by the European vendors.
PROCUREMENT
ABBOTT Pakistan has two purchasing departments. One is for local purchases and the
other one is for imports.

The procurement function is bifurcated in two categories:

• Direct Product Related Purchases
• General Purchases

There is a clause imposed by ABBOTT Int. Chicago on ABBOTT Pakistan that if the
amount of requisition value is above $ 1000, then at least 3 quotations must be taken.

GENERAL PURCHASES
General Purchases include routine items such as stationery, office equipments,
transportations and other minor items which are not directly related with production
activities.

DIRECT PRODUCT RELATED PURCHASES

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

MATERIAL CLASSIFICATIONS
ABBOTT Pakistan classifies its materials according to the values or the cost of materials,
basically they have allotted three grades or types to their materials:
• Grade A (very costly materials, e.g. erythromycin)
• Grade B (moderate cost, e.g. clathromycin)
• Grade C (least cost, e.g. bubble gum and artificial flavors like mint)
 LOCAL PURCHASING

Local purchasing department of Abbott Laboratories

Pakistan deals with local vendors concerning:

• Designing –FP Plastics, Al-Ahad Plastics, Thermoplas

(Korangi) > Lead Time 30 Days

• Printing–Ammara Commercial Printing (Memon Goth,

Malir) > Lead Time 30 Days

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

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

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

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

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

• Dextrose – Rafhan Industries (Faisalabad)

• Pseudo - Alpha Chemicals – (Lahore)

• Essential Chemicals – (Lahore)

IMPORT PURCHASING
ABBOTT Pakistan has indenters through which they place their orders to the respective
manufacturers of raw materials

Some of the Indenters of ABBOTT Pakistan are:

• .Rasheedsons - KHI
• Munico Associates - KHI
• S. Aijazuddinn - KHI
• Arfeen - KHI

INDENTER
An indenter is a local supplier or the middle party, we also call them as an agent who
gives information to the manufacturer and tells then to arrange the material. They
have link with the manufacturer and paid commission by them.

IMPORTED RAW MATERIALS

• Dy Red – Sencient UK
• Potassium chloride – Merck, Germany
• Sodium Citrate – Sanfu, Taiwan
• Sodium chloride – Dominon salt, New Zealand
• Acid Citric – Jungvuzlaur, Austria
• Aluminum Seals and PV– Vaasen, Flexible Packaging Holland
• Artificial bubble gum – IFF Holland
• Supplier for Sugar - Malayam Malaysics, Malayasia
• Sodium Sulphate – Merck, Germany
IMPORTED MATERIALS’ AVERAGE LEAD TIME
• By sea is approximately 75 days
• By air approximately 45 days

DOCUMENTS REQUIRED FOR IMPORT

• Invoice

• Picking List

• Form 3 and 7 (Imposed by Ministry of Health which contains Batch Certificate,

name of the manufacturer, raw material to get a Drug Import License from MOH)

• Bill of Lading / Air Label

• Certificate of Analysis

• Certificate of Origin

OPENING OF LC
For importing material, ABBOTT needs to open an LC. An LC is a Letter Of Credit
which is opened through a bank and it ensures to the manufacturer that if they are going to
provide the material to Abbott then they are going to pay you on the scheduled date. This
goes for Abbott also and It’s their job if they receive the material on time then they have
to pay to the manufacturer
 ADVISING BANKS OF ABBOT PAKISTAN
• Detuche Bank
• Standard Chartered Bank
• ABN AMBRO
• HSBC
Then after this process the LC is send to the concern suppliers and indenters and then
they set the raw material to be shipped, shipment is done through different shipping
company and this part is dealt by the imports department.

FEW SHIPPING COMPANIES THROUGH WHICH ABBOT

PAKISTAN IMPORTS RAW MATERIALS
• P&O NEDLLOYD
• MAERSK SEALAND
• HOPAG LLOYD
 WAREHOUSE
FIFO Checking of raw material on
the bases of check list

Received through MRR &

kept in quarantine for QA
approval

Storage of raw/packaging
material after acceptance

Handling of non acceptance Wastage Warehouse

material

Storage of control/locater
system

Storage of temperature Cold Storage

sensitive material (Refrigerators 2C- 8C)

Issue of raw material

MO

Hazardous drug labeling

Washing of utensils,
containers
 Material requisition return

Manufacturing

End Product

Quality Assurance of Finished

Good

Warehouse FO

The process of warehousing starts when a consignment enters the premises of

ABBOTT and starts unloading. An actual physical cont is taken first and only then is the
consignment allowed to be fully offloaded. Two separate warehouse facilities exist: one
for finished orders and one for material orders. Furthermore, material orders consist of
two types of materials:

• Active Ingredients

• Exciepent Ingredients

While offloading material orders, if any individual packet is found to be damaged

or exposed, it is straight away placed in the Rejection Room which is located separately
so that there is no possibility that it might get mixed and be used up in the production
process. Also, there are certain raw materials which require a temperature range of 2-8°C.
In order to ensure that this temperature range is maintained throughout its long journey,
each packet has a temperature seal attached to it and if, at any point in time during
transportation, the temperature exceeds the said limit, it changes color. This acts as a
surety because although at the time of inspection the temperature might appear normal,
but this temperature seal really tells us whether the temperature range was breached or not
during transportation.

In keeping with its policy of using only the best materials, all consignments have
to pass a Quality Assurance test before they can be used in the production process.
Because of the large number of consignments that arrive, the Quality Assurance
Department draws out samples from the entire consignment of exciepent ingredients
while all active ingredients are tested fully. While under quality testing, the consignment
is placed in a quarantine area and a Yellow sticker is placed on items, specifying that such
batches cannot be used up under any circumstances. At this point, the consignment’s
status is designated as Quarantined, or simply “Q”. Depending on the number of batches
of exciepent ingredients, Quality Assurance draws out the following number of samples:

No. of Packages
Size of Sample Drawn
Arriving

5 All
5 - 11 5
11 - 50 7
50 - 100 10
100 - 250 15
over 250 20

Once Quality Assurance has tested the sample, they place a Green Sticker on the
consignment which is known as the Release Sticker. Only then is the status of the batch
changed from Q to A, which stands for Assured and the consignment is ready to be used
up in the production process. It must be mentioned that the Warehouse operates on a first
in first out and this ensures the maximum amount of time of the final product before it
expires.
 After manufacturing, Finished Products are again sent to the Quality Assurance
Department for testing. Once end products have passed quality testing, they are placed in
the FO Warehouse with a green sticker, which means that they are ready to be delivered.
Once the material is arrived at the store, the MO warehouse personnel store the
material according to:

• Product Name.

• Quantity.

• Supplier Name.

• Import invoice.

• Certificate of Analysis

• Quality Control Report. From supplier

Type of information through which Finished Product docking is done in the FO ware
house

• Product Name.

• Batch No.

• Quantity.

• Release Status.

RECEIVING THROUGH MRR

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

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

PRACTICES THAT SET ABBOTT APART

The Rejection Room where damaged or exposed materials are placed can only be
accessed via two keys which must be placed simultaneously in the lock. The warehouse
Manager has one key, while the Quality Assurance Department has the other.

ABBOTT Pakistan also has a method of ensuring that such faulty material is not sold on
the black market. For this reason, an employee of Quality Assurance accompanies the
inferior quality materials to a disposal site where the materials are put into an incinerator
where the temperature is as high as 800°C. The name of the facility where ABBOTT
disposes off such materials is ABBASEEN.

EXPORTS
 Demand of products received
by external customer

Performa raised against the

demand of products by the
exports in charge

Performa forwarded to
Materials planning

Arrangement of raw material

regarding the product

Invoice and bill of lading

prepared

Documents sent to MOH

Ministry of Health

Shipment made before the due time after all

the process has been completed before.

ABBOTT Pakistan fulfills the demand of countries like:

• South Africa
 • Sri Lanka
• Thailand
• Bangladesh
• Malaysia
• Indonesia
• Syria

For example if there is a demand of 8,000 units from Sri Lanka, imports
comprising 2,000 units of Vitamins, 2000 units of Injectables, 3500 units of General
health care products like Mospel, Selson Blue and 1500 units of Nutritious products. The
designated man will make a Performa according to the demand raised by certain country
and forward it to the Material Planning Department requesting them to arrange the raw
material as well as the Packaging material for the desired product.

Export department will send the Performa to the advising bank through which an
LC or bank contract is opened’ in return he will get an answer from the bank that they
have received the Performa send by the person in charge in exports. During this period all
the completed documents along with the Invoice, bill of lading will be send to MOH to
check weather the product which is being send is the right quantity and the raw material
through which it has been manufactured is the right specifications.
MAKE
 MAKE

All the production held at Abbott is make- to -stock that is to say 99% of their
making. Whereas 1% is make -to -order for certain customized institutional orders like for
instance army orders which have special labeling/carton labeling requirements. The whole
production/manufacturing process at Abbott may it be tablets, syrups or injections is
based on production plan which is eventually based on MPS. Master production schedule
is made by the supply department which is forwarded to the MATERIALS
MANAGEMENT department .The job of Material Management department is to arrange
the raw material for the production department well before the required time so that there
are no delays in the manufacturing of the product.

This plan is initially made during the plan stage. While planning production it is
kept in view what resources they have with them in order to produce and what type of raw
material is stored in warehouse so that according to that they make their production plan.
Production plan is 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 S &O P meeting is held, which is represented by two parties’ one from supply side
and the other from demand side and production related decisions are made as per the plan.

Abbott Pakistan is using BPCS system. This activity monitors the status of
manufacturing department including:
• Tablet manufacturing
• Syrups
• Injectables

The MO’s, which has been send to the manufacturing department for the finished
product, are at what stage and what batches are being manufactured on which machines.
.
 As per this system, the system is programmed in such a way that only the multiples
of batch size can be produced and no random manufacturing can be done that is to say if
the batch size is 100 then 200 or 300 can be produced even if the requirement/demand is
125units. In order to cater the demand of 125units, 200units products need to be
manufactured which will later be adjusted through the system in the coming months.

ABBOTT PAKISTAN TYPES OF PRODUCTS

TYPES OF PRODUCT:
• Tablets
• Liquids/Syrups/O.R.S
• Injectables
• Creams/Ointments

MAIN PRODUCTS
• Multivitamins
• Antibiotics
• Anti Inflammatory
• Cough and Cold
• Haematincs
• Anesthetics
• Analgesics
• Anti Arthritic
• Antacid
• Anti B.P.H
• Anti Epileptic
STANDARD OPERATING PROCEDURES
• Cleaning
• Uniform
• Carefully usage of instruments

TOLERANCE LEVEL
Currently +/-5% tolerance level is set but it can vary from product to product.

PROCESS FLOW (TABLETS)

GRANULATION

DRYING

MILLING

BLENDING
Bottleneck

COMPRESSION

COATING
 In granulation stage the raw material is put under a process where solids are
broken down into small granules. Next is drying stage where these granules are kept on
large trays and passed through e certain temperature for specific period of time (varying
as per the tablet). Milling process where further REFINING of this dried material is done
separately and is converted into fine powder form follows this stage. Then comes
blending stage where different materials are mixed together and are then passed into the
compression process where a certain amount of pressure is given and the mixed material
is given a tablet form (shape). Coating is the last stage where the tablets are coated with
sugar and dyes/ colors (HPMC and Methocyl) in order to differentiate the tablets from
other tablets available and to avoid bitter taste. The bottlenecks in the production of
tablets are compression and coating.

PROCESS FLOW (SYRUPS)

The processing of syrups is done in huge tanks, which are already filled with water (as per
the requirement/specifications). Raw materials and glucose are added in the tanks, certain
material are also dissolved separately in
other small tanks or large beakers etc and
dissolved solution is then added to the tanks
along with glucose etc. the solution is heated
at a very high temperature usually (varies as
per different syrups). The sample is then
passed to QA for testing and once the tests
are approved the packaging of these syrups
starts.
PACKAGING PROCESS (SYRUPS)

FILLING

SEALED

STERILIZED

LEAK TEST

RELEASED
PROCESS FLOW INJECTIBLES
The processing of injectables is done in beakers with a capacity of 50 liters. The
materials are mixed in that beaker in the form of a solution. If large amount of injectable
is required then large pressure vessel containers are used for mixing and making the
solution. Keeping a PH check and PH adjustments is the most important factor during this
process. The filtration of the solution should be 0.2 microns.
 PROCESS FLOW (PEDIALYTE)
BOTTLE FEEDING & WASHING

SOLUTION
MANUFACTURING FILLING

SEALING

Bottleneck
Sterilization

LEAK TEST

CAPPING

SKILLETING & TROLLY TRANSFER

PACKAGING LINE
AUTO CALVE

UNCAPPED

LEAK TESTER

CAPPING

OPTICAL

LABELLING

SKILLETING & LSPC SEALING

DISTRIBUTION
 DISTRIBUTION

The distribution at ABBOTT is all about delivering products to customers at the right
time, right place and in right quantity so that there are no shortages. Distribution can be
done through different methods.

TYPES OF DISTRIBUTION
• Direct Distribution
• Indirect Distribution

Direct Distribution is done through the manufacturing plant i.e. after manufacturing,
products are distributed via ABBOTT delivery trucks to the institutions according to
contracts and demand by institutions.

Indirect Distribution is all about distributing through appointed distributors i.e. those
distributors who have proper contracts and than they distribute the respective product to
the wholesalers and different chemists. Here, the concept of Third-party logistics (3PL)
comes into play.

ABBOTT DISTRIBUTION

ABBOTT has their own depot i.e. their own distributorship in Karachi, Multan, Lahore
and Islamabad dealing directly to customers
(Distributors and institutions) ABBOTT has market distributors in big cities and specific
areas are assigned to each distributor (who works on 6% commission basis) so that they
can specifically take care of their areas and make sure those proper services and products
are delivered to each and every customer.

These distributors are linked with ABBOTT through satellites which report back on
weekly basis about sales and inventory level. ABBOTT Pakistan monitors these
distributors with the help of inventory system as this is the standard system they use for
distributors i.e. they are supposed to hold six weeks inventory.

DISTRIBUTORS
• Premier Agency—Muslimabad, Karachi.
• Babar Medicine, Lahore.

• Nadeem Traders, Peshawar.

• Baloch Enterprise, Multan.

• D.S Pharma, Rawalpindi.

MODES OF TRANSPORTATION
ABBOTT has different modes of transport as per requirement of the product and the
distance to be covered. Some products such as Atrelax require temperature controlled
environments (2-8 °C) and for this reason they are delivered to Peshawar through courier
services so that they can be maintained properly throughout.

They have their own vans with ABBOTT monogram and they are generally used for
distributing to local customers (distributors and institutions) within Karachi and nearby
areas. Names of some of the transportation services hired by ABBOTT are as follows:

• Lahore Naulakkah Transport

• Bashir Siddique Trasport
 • Fast Track Cargo Service
• Leopard Courier Services
• Courier Per emergency

ABBOTT’S DISTRIBUTION CHANNEL

Abbott Pak
Hospital
Abbott truck

Cent. Depot Distributor

Abbott truck

Wholesaler
DOCUMENTATION AND INVOICING

There are some legal formalities that need to be fulfilled before making a contract with
distributors.
• Delivery Chalaan
• Customer Invoice
• Merchandise Receiving Report (MRR)
⇒ Product Name
⇒ Quantity
⇒ Delivered by
⇒ Received by
⇒ Condition (sound or spoiled)
⇒ Date of receiving

RESTRICTIONS

There are few rules and regulations that are very important for the company and
distributors to abide by them in order to avoid any mishap or confusion.

• Distributors can’t go out of their area for sale.

• Discount policy should be followed according to company’s instructions.
• Distributors should carry 6 weeks inventory at there side.
 RETURNS

Product Returns

MANUFACTURER
 RETURN

There are two types of returns, one associated with Finished Orders and the other
associated with Material Orders.

CONDITIONS FOR RETURNING RAW MATERIALS

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

RETURN OF MATERIAL ORDERS (MO’S)

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

Another type of Source Return takes place after disapproval from the Quality Assurance
Department. The inferior material along with the entire batch with which it was delivered
at ABBOTT is sent to the Rejection Room which is located in a separate building located
far away from the manufacturing plant. ABBOTT also has an approved policy of
disposing these materials which is in accordance with the EPA ACT 2003.

WASTAGE HANDLING

There is only one dumping side in Karachi, Surjani town which is owned by the
Government of Pakistan but it is not upto the standards set by the Parent Company
(Abbott In’t) that is why ABBOTT Pakistan does the dumping through a Private
organization name ABASEEN (Pvt) Ltd which is a more costly as compare to the
traditional process (Rs 30/= per Kilogram)

RETURN OF FINISHED ORDERS (FO’S)

• Finished Orders are returned due to excess supply or supply of incorrectly

specified products.

• Another condition for returning finished orders occurs when the product is just 90
days away from its expiration date. In this case, ABBOTT grants a full refund to
customers and donates all those drugs to hospitals that the drugs are used as soon
as possible before its expiry date.

FO’s Returns

Factory
OBSERVATIONS AND RECOMMENDATIONS

• There is no Cold Storage warehouse for the

sensitive Materials and Sensitive end Product
to store, they have few refrigerators (2C-8C)
to keep those
sensitive MO and
FO. They should
make a proper cold storage
warehouse to store the
Temperature sensitive products.

• There is no proper handling of MO’s and FO’s. They are loaded and unloaded
from the container/ truck is in an open environment
(in the sunlight, in
moisture) without
any precautions to
maintain a specific
temperature and to
handle the medicines carefully. They
should avoid doing this and it will eventually
result in their low wastage cost which causes by the mishandling of the product.
• All the unloading and loading is done mechanically and sometimes they just
through the products. They should make a proper terminal where the trucks can
easily and efficiently unloaded and loaded through a conveyer Belt or with a Fork
lifter, so the product should not be damaged.

• For temperature sensitive drugs or Materials,

they do not use any Temperature control
containers; they simply use the ice box at the
time of packaging that particular product in the
carton.

• There are no bar code sensors or any computerized system to count the Material
arrival from consignment, all the counting is done manually by the supervisors.
They should adopt any computerized customized software to do the counting
procedure so it will save the time and there will far less chances of error.

• Chemicals drums and Acid bottles can easily be found in

the visitors waiting area which proves that they do not
have a proper material handling in ABBOTT Pakistan.

• The empty bottles and caps for syrups can be found at

the stairs of the Material Management department.

REFERENCES: