REPORT

ON
SUPPLY CHAIN MANAGEMENT OF

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 Report on
Supply chain management of
“GSK”

SUBMITTED BY

Roll Name
No
1 ASMA SHAKOOR
MADIHA SUBOOR
49 MARIA YOUNUS

SUBMITTED TO
SIR HUZAIFA
Lecturer at Karachi University Business School

Date of submission: 01 November 2019

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Acknowledgement
We would like to express our deepest appreciation and thanks to SIR
HUZAIFA for offering his immense support and facilitate us all the
time of working on this project.
We also express our greatest gratitude to GLAXOSMITHKLINE
members for providing us their precious time and required
information to make report in proper manner.
We all also thankful to Almighty ALLAH who has bestowed us with all
his best resources and give us an ability to study and apply learning.

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GSK AT GALANCE
GlaxoSmithKline Pakistan Limited was created on January 1st, 2001
through the merger of SmithKline and French of Pakistan Limited,
Beecham Pakistan (Private) Limited and Glaxo Welcome (Pakistan)
Limited, and stands today as the largest pharmaceutical company
in Pakistan.
In Pakistan, GSK operates in mainly two industry segments:
Pharmaceutical (Prescription Drugs and Vaccines) and Customer
Healthcare (Over –The –Counter Medicines, oral care and Nutritional
Care).
GSK _ one of the world’s leading research based pharmaceutical and
healthcare companies committed to the mission of providing
patients quality products to help improve the quality of their lives.
Today, GSK Pakistan maintains almost 85 of the value and over 13%
of the volume share of Pakistan’s pharmaceutical market. Major
competitors are MNCs such as Abbott, Novartis, Pfizer, Sanofi and
local companies such as Getz and Sami. GSK Pakistan has built a
competent commercial capability with a track record of successfully
integrating several businesses to build a diverse and profitable
organization with over 150 brands.

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Corporate information
Company status –
MIED (manufacturer, importer, exporter, distributor)
Co Registration NO. 0000061
COPMANY CODE:
Manufacturing license provided by DRAP (Drug Regulatory
Authority of Pakistan). It is mention on each pack of the product.
GSK ML No. is 000304

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GSK BUSINESS TO BUSINESS STRUCTURE (B2B)
GSK Business to Business Structure comprises of CONTRACT
MANUFACTURING SERVICES, CONSULTING SERVICES and
SUPPLIERS for procurement of materials.

CONTRACT MANUFACTURING SERVICES:

GSK provide manufacturing services under contract for
biopharmaceutical products – from early stage R&D clinical
supply to launch and growth of small, medium and large
volume medicines.

CONSULTING SERVICES:
GSK has a group of research and development consultants,
called SCINOVO, to help provide simple and effective access
to scientific capabilities.
SCINOVO provide strategic intelligence, technical guidance,
post questions and guide decisions on the overall viability of
a project or opportunity.

SUPPLIER:
GSK engages with a diverse group of suppliers to ensure have
an inclusive supply chain that advances and foster
competitive advantage. This is achieved through strategic
partnerships with various advocacy organizations.

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GSK BUSINESS TO CUSTOMER STRUCTURE (B2C)
Consumer _ Patients (End user of the product)
Provider _ Physicians (Gateway to the product)

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One of GSK’s consumer healthcare product is Panadol. It is
the world’s most trusted pain relievers.
It offers fast and effective relief from pain and also reduces
fever leaving you free to enjoy life full again. It has been
present in the market for over three decades.

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PHARMA SUPPLY CHAIN
The PHARMA SUPPLY CHAIN previously known as GMS
(Global Manufacturing and Supply) is responsible for
producing and supplying GSKs’ pharmaceutical products
around the globe.
The Pharma Supply Chain (PSC) is an integrated network
involving production operations from demand planning to
manufacturing, testing and supply of pharmaceutical
products to the market.

DRIVERS OF SUPPLY CHAIN

1. SOURCING
2. INVENTORY
3. FACILITY/LOCATION
4. LOGISTICS
5. INFORMATION

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SUPPLY CHAIN PLANNING PROCESS

The above figure shows GSK’s supply chain planning process.

It point to the steps and the course of actions necessary to
satisfy customer need. The first three steps are to forecast
the demand for the planning horizon by combining
sophisticated forecasting techniques, computer models and
executive opinion. production planning and inventory
management in step four determines the timing and quantity
production, and converts the information about beginning

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inventory, forecasts and customer order into projected
inventory, procurement requirements and available to
promise. Step 5 centered around distribution management
and step 6 is the performance evaluation of the entire supply
chain.
1a. Demand Forecasting
Demand is finalized by sales and marketing function
assuming no constraints with respect to product availability.
This demand is referred to as the unrestricted demand.
Demand forecasting is usually done on annual basis then split
into biannual and quarters.

1b. Demand finalization

Supply chain team coordinate with production and
procurement function to see what can be achieved in reality
considering production and supply constraints. Once all the
factors such as production plans, import quota, lead time are
considered restricted demand emerges.
The restricted demand forms the basis of the company's
financial forecast for the planning periods.
SOURCE PLAN
Another important component of planning
2. Inventory management

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2a. Finished goods components

 Active pharmaceutical ingredients (API) – substances

that are responsible for the beneficial health effects
 Excipients – preservatives/stability materials
 Primary and secondary components – packaging
2b. Material required for manufacturing PANADOL

1. Direct material API is Paracetamol

2. Indirect material Excipients are sugar and other four
chemicals
2c .Determination of safety stock
Safety stock is a buffer to meet some unanticipated increase
in usage. GSK maintains a safety stock 3months dependent
and independent demand items in order to minimize the risk
of shortage due to uncertainty in demand.
2c. Reorder point/ minimum level of inventory
When the inventory is depleted to lead time consumption,
the order should be placed.
GSK lead time of inventory of imported material is 3months
while local material is 1 month.

3. PROCUREMENT
3a. SOURCING

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 Direct product related purchase include API and major
excipients which are imported from China and India.
General purchase includes the purchase of stationary,
office equipment for the office use, packaging material ,
transportation trucks for the delivery purposes and other
chemicals,
3b. type of sourcing
GSK undertake multi sourcing to avoid any disturbance in
procurement and production process
3c. Evaluation of suppliers
In GSK the main criteria are grouped under six categories,
which are cost, quality, services, delivery, supplier profile
and overall personnel capabilities. These primary criteria
are decomposed into various sub criteria as represented in
table 1
Main criteria Sub criteria
Product price
Cost C1
C2 Payment term
C3 Delivery cost

Product quality
C4
C5 Packaging and labeling
quality C6 ISO 9001 (quality management
C7 system certification)
Research ,development and
innovation
C8 Customer relationship management
Services
(CRM)
C9 Aftersales services

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 C10 Geographical location
Delivery C11 On time delivery
C12 Financial status
Supplier profile C13
Technical ability
C14 Facilities
C15 Capacity
C16 Risk assessment system
ISO 14001 (environmental
C17 management system certificate)
past record documentation

C18 Labor experience

Overall personnel
C19 Labor overall skills
capabilities

3d. selection of supplier

3e. supplier list of imported materials
 API and excipients are imported from China, Russia and
rest of the world.
3e. supplier lead time
GSK has its lead time of procurement of material of
approximately 50 days by Air transport and
Approximately 75 days by ship transport which a company
use to import material from different countries.

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Material Requirement Planning (MRP)
Material Requirement Planning is a planning and inventory
control system used to manage manufacturing processes.
Once the demand is finalized, MRP program in the ERP I is
run to generate purchase requisition.
Manufacturing Planning
Entire production is based on MPS
Master production scheduling is done on the base of forecast
and sometimes abnormal demands as well.
Manufacturing plant location

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Located in the korangi industrial area. this manufacturing site
has a dedication block for Cephalosporin both oral and
injectable as well as a small unit for tablets.
Manufacturing capacity
GMS Korangi manufactures around 103 SKUs and produces
an annual volume of around 37 million packs.
Production order confirmation:
Production order is confirmed in the last week of the month.

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PAGE 17
Manufacturing process
dispensing
each ingredient in the tablet formula is weighed and accurately dispensed

sizing

formulation ingerdients must be in finely divided form

powder blending

powder are mixed using a suitable blender to obtain a uniform and homogenous mixture

granulation
here small powders particles are gathered togetherd into layers and permenant aggregate to render them
into free flowing states

drying and screening

screened wet granules need to be dried for a particular period at control temperature dried
granules are screened through the appropriate mesh screen

tablet compression

this step involves into the comp[ression of granules into a required shape

coating
tablets and granules are coated if there is a need to mask the unpleasant taste order of some drug
substance or to increase the aesthetic appeal of uncoated tablets as well as modify the release or control the release of
drug substance from tablets

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Bill of material:
A Bill of material (BOM) is a complete, formally structured
list of quantities and components needed to manufactured a
product. The BOM list contain the material number together
with quantity and unit of measure of each components.
In SAP all BOM are single level. BOM are maintained for all
the finished product and of course for the finished products.
Therefore, multiple SINGLE level BOM constitute a complete
product structure.
BOM yield the quantitative receipe which is used by the MRP
as its basis, these define the relationships of assemblies
(semi-finished and finished products) and their components
(packaging and raw material). thus, BOM becomes a
framework on which the entire planning process depends.as
a vital part of MRP, BOM must be accurate and up to date for
its output to be valid.
It helps the company to manage its raw material issues
effectively and efficiently on the basis of information
provided by MPS.

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Bill of materials consists of

API PARACETAMOL
EXCIPIENTS  Starch, potassium sorbate
calcium carbonate, agar, magnesium
stearate
PACKING BLISTER, cartons, paperboard etc.
MATERIALS

Lot size
Lot size techniques adopted by GSK is POS (Period of Supply).
Lot size equal to the net requirements of given number of
periods into the future.
PACKAGING
Before tablets are sent out for distribution they are usually
packaged using appropriate packaging materials. The type of
packaging material used is a matter of choice and dependent
on several factors including
1. The degree of protection required
2. Compatibility of the packaging material with the
formation
3. Presentation particularly of those products which may
be subject of impulsive buying

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4. Customer convenience in term of size, weight, method
of opening or closing legibility of printing etc
5. Filling method and
6. Cost

requirement of packaging

easy
dispensing

requirement
hermetically child
of tablets
sealed resistance
packaging

senoir
friendliness

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Stages of packaging
1st stage – primary packaging is the material that first
envelops the product and holds it

2nd stage – secondary packaging is outside the primary

packaging used to group primary packages together
3rd stage is used for bulk handling, warehouse storage
and transport shipping. The most common form is a
palletized unit load that packs tightly into containers

Tablets are commonly packaged using blister and strip

packs and are kept in place of low humidity and
protected from extreme temperature. The packaging
provide excellent environment protection for each unit
of tablet, coupled with an aesthetically pleasing and
efficacious appearance. Blister and strip packaging also
provide some degree of temper resistance to the dosage
form.
For larger quantities delivered to the pharmacist, glass
and plastic bottles, metal containers cartons or
paperboard drums may be used along with polyethylene
liners where necessary to give added protection from
moisture.

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Warehousing and distribution
All the four warehouses are outsource to 3rd party logistics providers
named KENCO LOGISTICS SERVICES.

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