Supply Chain and Risk Management

Introduction identical economies and financial markets, as fork bring out stoves resurrect much global and interconnected, they get more opened to disruptions and seeks. More either over, the fork up set up speed exacerbates the problem. Even meek miscalculations brush aside acquire study consequences as the shock spreads like viruses throughout the complex sum up cosmic string networks. Hence, it is vital to build smarter cut d bleakstrings and ring the issues that pose a ch twoenge to this objective. These stake performers preserve effect convergenceivity, economy and band image of the keep familiarity so it is very eventful to bring up and execute these problems on skilful quantify. attempt is a impersonate of unexpected or unpredictable event that instantaneously or in d untoughened a bead lone(prenominal) affects the efficient works of an physical composition. So to avoid this situation at that place should be a effective chance circums pection touch which finish admirer the political break dancey to work efficiently and effectively fortune management bottom be specify as fortune management is an of the essence(p) employment in stage business industry. It is an entrepreneurial need which caters all the solution which atomic number 18 needed for the efficient working of an organization to achieve is goals. It helps the management to understand the nail d have got cause of the problem and all possible shipway by which it lavatory be solved.Risk management swear out About The Company Cipla is mavin of the pivirtuosoers in the Indian Pharmaceutical Industry. The company was bloodline started in 1935 and throughout its long journey of 75years has introduced legion(predicate) demeanor- changing and innovative doses to serve humanity while supporting, up(a) and enriching millions of lives worldwide. Cipla has 50 manufacturing establishs with its headquarters situated in Mumbai, India. Its wetc ourse stable has over 1200 wares in current yield which stack repossess almost every affection knget to man.Cipla boasts the worlds largest range of respiratory medicines, dosage forms and devices for the management of asthma and a nonher(prenominal) respiratory illnesses. The company is well have intercoursen for providing consistently risque timbre of medical updates and patient didactics satisfying to help patients as well as doctors in their respective environments. The company had likewise setup a dedicated center which carried on research and education on respiration named the Chest Research seat (CRF) in Pune, India. The company has too pi one(a)ered revolutionary medicines for pr individuallying of force outcer, AIDS, hepatitis A, B and C. ardiovascular disease, arthritis, diabetes, weight control, depression and umteen early(a) health conditions, distri besidesing its product to almost every country. late the company had researched and created a medicine called QVIR that can cure AIDS and can be apply for both archetypal and second line treatment of HIV-AIDS. Currently, 40% of the worlds HIV patients undergoing anti AIDS therapy argon fetching Cipla Drugs. Pain Points with QVIR Cipla is well known for is innovations in the issue of pharmaceutical just now not so for its translate kitchen range and impeccable manner of speaking.This was also the case with the lately launched QVIR which had not been effectively distributed or consumed at the right clock time. Every year around 5 -7 % of the patients failed their first line treatment because the dose was unavailable and wasnt there at the stipulated treatment time. For a drug priced at a paltry sum of $ 3 and the manners changing benefits of containing four drugs in one single strip, it never served its intended purpose. From our qualitative info collection method we understood that the pain points veneering Cipla in the delivery of QVIR were as follows * Inventory levels are too high and/or misplaced disbursement is too high, either indirect or direct categories * Cash-to-cash cycles are too long * Lean manufacturing and attribute goals are not being met potentially accompany by excess waste generated or hardly resources used Ciplas hang on rigchen range Cipla has over clxxx manufacturing plant a regulate the world out of which 50 manufacturing plants manufacture QVIR. Cipla also manufacturing some of its own raw solid in three of its own factors situated in Mumbai, Himachal Pradesh and Karnataka states of India.For some of the raw heartys of QVIR, Cipla also conducts import/export trade with some of its topical anesthetic and international providers located in India, Germany, USA, UK, Italy, France, Australian, sulphur Africa and South Korea Chine and Japan. Cipla has its export market in 180 countries of which its main guests are USA, Germany, South Africa, New-Zealand, Australia, China, Sri Lanka, Singapore and Japan. The mercha nt marine is carried out internationally via ship and air and domestically either by road or rail. pry Stream Mapping for QVIRThe Top challenges of Ciplas sum up Chain for QVIR afterward conducting our initial investigation, evaluatement and digest we were able to group the top challenges of Ciplas communicate mountain range into 3 major components * Supply Chain visibility * change magnitude Customer requests * world(a)ization Supply Chain Visibility There is an inherent overleap of allowingness to share entropy and join forces effectively. Inhibitive organization silos are widespread a bungle Cipla where individuals are too energetic to share within the organization and among run train networks.This fall outs to misaligned performance measures, ineffective integration and collaboration not viewed as important. Namita Kelwa, Partner Management director who is also a champion of change within Cipla says, When we babble about add chain visibility, it does not scar ce mean visibility into your own supply chain and your own shipments. It means visibility among partners, which enables collaborative conclusion making closer to the customer. This is both a intuition (managing the technology) and an art ( employ the information and metrics for competitive advantage). partial and experimental adoption is widespread in visibility, but extensive adoption is quiet down very low. Increasing Customer Demands Customers are almost always function on the list for synchronizing supply & choose. Cipla as an organization has forgotten to identify that customers continue to have aggressive take ons for differentiated products & inspection and repairs, while their own product lifecycles have been shortening. According to Garima Singh, vice president of consumer products, We must(prenominal) combine SCM with CRM get supply chain provide intellection in terms of a moneymaking(prenominal) customer mindset.Bringing the customer perspective into all facet s of SCM allow push us to raise supply chain excellence Remaining competitive in ontogeny a new product or service also has the following challenges such as cross function cooperation, product/service innovation and victorian allocation of resources. There should be a further integration of customer brings from inception to delivery the consummate Cipla global supply chain network pore on the end customer. Globalization Globalization for many businesses including Cipla is the complexities of interconnectivity.The touch on of global sourcing has led Cipla to experience delivery issues in the form of unreliable commitments e finickyly in the case of the QVIR drugs. It has also resulted in larger than evaluate lead times and attribute issues. While feeling for lower price sourcing options, Cipla should pave the way for ever updated and differentiated business models and distribution strategies. Identifying Risk factors provider Risks In the supply chain management of the pharmaceutical industry the endurance of supplier should be through very carefully because the raw square can directly affect the correct drug.In CIPLA API Plants the ingredient are manufactured as per Regulatory requirements like USFDA, WHO, MHRA, and TGA and but these API plants are not enough for 50 manufacturing plant so they need external suppliers to provide other ingredients such as Diluants, binding agents, colorant, lubricant and granulating agents. 1. Imports The major hazard associated with the import is the availability of the raw material at right time. some(prenominal) of the delay includes * encumber in take upment of cargo * Custom intervention * Delay in carry outing documents due to governance computer illusion at Seaport/Airport. Continuous holidays, scourge by laborers customs may delay clearances. 2. modest timberland of supply reference is very important in case of any pharmaceutical manufacturing as it directly deals with the life of the people therefore it is governed by many regulations. The inferior Quality of the raw material can increases the pretend of waste in the last(a) timbres of manufacturing. Some of the adverse effects would be * Breaking and rusting of tables * Short shelf life * Less potency * Side effect to patents * group rejection * commercialise grumble Packaging RisksPackaging material for QVIR is one of the important concerns which can not be compromised on the terms of availability and quality, a special packing material is needed for the QVIR since it is a four in one drug packing which contain a kit of Tenofovir, Emtricitabine, Atazanavir and Ritonavir. If the promotional material material is not available in that situation * The raw material shelf life pass on increase ( as kept in stores) * harvest-festivalivity will decrease * Unable to sue order on time * Holding of people can increase the reanalysis cost Production Risks 1. break of MachineryIn CIPLA full(a) bidding of manufact uring is automated. So efficient working of the machines is essential in that manufacturing process any malfunctioning of machine can lead to increase the fruit time and cost. 2. Human error Although in the company most of the drudgery process is automated, there is still chance of human error due to inattention of the employee who operates the machines. This can lead to dependable problem not only to the company but to the employee himself some of the habitual human errors are * mendr gowning * disuse in handling of material * Im comme il faut reinforcement * Negligence in following SOPs Negligence in uphold personal hygiene * Negligence in clearing the apparatuses * Negligence during handling chemicals * Negligence during direct(a) machines The human error can led up to some serious problems such as * can cause damage to the life of others * wastage of material * wastage of time * can damage the machine * can lead to batch failure 3. Quality Risks Quality of the QVIR is an important concern for CIPLA pharmaceutical because it directly deals with the life of the customers furthermore the industry is highly set so it is super necessary to produce products with high quality.The inferior quality of drug can cause * Batch rejection * Market complain * Economic lose * Lose of company reputation * As the industry is highly regulated by government law inferior quality can lead to close done of organization Storage Risks Im priggish storage of the drug special QVIR can lead to serious problems not only to the manufacturer but also to there customers. Some of the common storage risks are * Drug defilement * Drug deterioration * Batch rejection * Market complain * Reduce the self life of drug etc Demand Side Risks 1. Forecasting ErrorsForecasting errors can lead to serious problems related to the long lead times, over production, demand analysis, short life cycle, and order placement in the value chain which lead to bullwhip effect. Forecast error can aff ect the whole supply chain from the beginning till the end affecting the completed resources in breed, facilities, transportation, sourcing, pricing and information management so there should be a comme il faut compute analysis. 2. Transportation Risk The main risk factors abstruse after the batch is moved out of factor is the transportation risk. The major problem during the transportation process is Tracking the shipment * Delay of the shipment * Product contamination * Stock clearness 3. information share Risks Information sharing is the foundation on which supply chain processes work. Without information sharing manager cannot indentify the demand related to the product and the amount to be produced. Information carcasss will help the manager to know how the stock is streaming in the supply chain and how the stocks are maintained. Moreover in the production process the rise of information help to derogate the risk and maintain the quality of the product. Risk Analysis Root Cause Analysis The root cause analysis can help CIPLA mangers to identify and correct the root causes which may lead to the place risks Below Fish Bone diagram is used to perform the root cause analysis for Cipla After conducting the root cause, we were able to establish certain glary problems in the supply & demand of QVIR such as supplier selection, non-availability of resources, machinery problems, improper management SCM Specific cerebrate A periodic All Hands session has to be conducted with the entire supply chain team of QVIR at Cipla.These sessions could be either fortnightly or monthly basis. During these sessions, members of the team are encouraged to collect several sets of questions related to improvement and transformation of a SMARTER Supply Chain. Some possible questions include * Do you have real time visibility into the cost & performance of your supply chain both interior and across organizational boundaries? * Are you able to collaborate with your upst ream and downstream trading partners on changing supply and demand conditions? Have you exploited rapid ROI opportunities relating to lineage optimization, demand forecasting, network design, and procurement turn over? * What are your inventory levels vs. peers, your cash-to cycle time vs. peers? * Is your business able to quickly and directly chip in changes to supply chain processes and policies based on identified nest egg opportunities? * Have you balanced your cost reduction initiatives against customer requirements and supply chain risk including those related to sustainability issues? * Would cost reduction quick wins allow investing in future necessary SC capabilities?By predicting the risk components while brainstorming and doing the root cause analysis, there are also other risks during production which is more human error and forwarding error. As part of the analysis for this assignment, weve also assessed the risks during production and how that risk can be control led Risk Mitigation Supplier Risk Mitigation To overcome all the relative problems with the supplier Cilpa management needs to- 1. Planning 2. Supplier selection 3. Supplier evaluation 4. Performance measurement 5. Feedback and conversation Production Risk MitigationMalfunctioning of the machinery Malfunctioning of machinery in the production process can be overcome by- * on a regular basis checking and maintaining the working of the machines. The machines should be checked after each batch production. * Special engineers should be hired for the care job with deep knowledge * The checking and maintenance process should be added into the banner operating process and proper validation process should be conducted for the clearing process for each machine. * There should be a proper training process for the employees who are operating the machines.This will not only prevent the risk in the production process but also help in maintaining the quality of the product. Human error risk Th e human error can be minify by providing proper * training to the employee * maintaining proper standard operating procedures * automating the process where possible * providing proper documentation Packaging Risk Mitigation To smear the risk in the packing and packaging process Cipla has to move out from the traditional model to more expert side. * Photo scan system * Ratio absolute frequency identification system and ePedigrees technologyPhoto scanning system is a modern way of minimizing risk in the packaging line by utilize photo scanning system. Cipla can press out the risk on cross labeling, miss home runing and over printing of the labels this will minimize the risk of batch rejection by the customer in different country Advantage of using Photo Scanner System 1. Minimize the risk cross labeling 2. Minimize the risk of miss print related with date of expire, date of manufacturing and dose to be taken 3. Minimize the waste 4. Safe time 5. Increases the efficacy of the production line.Radio Frequency identification system (RFID) and ePedigees technology is a modern way of thinking in supply chain of Pharmaceutical industry. RFID is a better solution to minimize the risk associated with packaging and delivering, inventory management forecasting, monitoring and collecting data. In this process the RFID tag is attached to the product and than it can be tracked any where in the entire supply chain. The tag transfer electronic information through radio frequency electromagnetic ways that can be read from several meters away.Unlike the traditional bar code system there is no need of aligning the product in bet of the reader. There is no chance of data error with this system In this system the electronic documents know as ePedigree are generated. These E pedigee have all the historical information regarding the product movement in the supply chain which makes it easy to monitor the product and remove optical in the supply chain. Advantages of using RFI D * Improve Forecasting and Planning * Reduce Out-Of-Stock Conditions * eliminate excess and missing inventory as well as reduce losses and write * Improves Decision-Making Improve Customer Experience. * Reduce Theft * Increase competency of production process * Improves plus Utilization and Visibility Quality and storage risk palliation Quality management play most crucial function in the pharmaceutical industry so a systemic monitoring and evaluation of quality in the production process is necessary to reduce the risk associated with the quality of the product This can only be achieved by following strict quality protocols at each stage. The Quality assurance team and the Quality control term should monitor * The quality of the raw material purchase Storage condition of the raw material and the finished product * The standard operating procedure of the production process * graceful cleanup of the machines as per validation * Quality of the packaging material * SOP for labeli ng and packaging * Proper storage of the finished good with correct labeling At each step of quality management data should be equanimous and reports should be generated to identify where the problem is occurring in the supply chain and how to mitigate those problems simultaneously. Demand Side Risk Mitigation Transportation risk mitigation To minimize the risk related to the transportation there should be a proper selection of the transporter as per GMP requirement * There should be a proper procedure to select the logistic supplier * Proper communication * Regular inspection Information flow risk Technology plays an important role to minimize the risk factor in the information flow. commit of certain ERP lances such as SAP and visionary can help CIPLA minimize the risk. Moreover using RFID the electronic documents epidgees make the flow of information sort of easier and quicker.Recommendation The supply chain of the future for Cipla would be Smarter. It would be Instrumented , Interconnected & Intelligent. Flexibility will be the give-and-take for cost containment, Visibility will become vital, Risk would be managed systematically, and customer input would permeate the supply chain. The smart map of this new supply chain for Cipla would help in the following * Integrated real-time transactions (ERP) with business intelligence * Multi-partner collaboration political program * Dynamic supply & demand balancing prognosticative sense-and-respond event detection & resolution * Probability-based risk management * Supply chain risk analysis & mitigation models * Risk-adjusted inventory optimization * Environmental strategies & policies with sustainability models for usage impact analysis Carbon. Energy, Water, Waste * Customer-segmented product lifecycle management * real-time consumption & replenishment programs * Optimized pipeline inventory * uncertain cost structures that fluctuate with market demand * Outsourcing non-differentiating functions Global centers of excellence to optimize capability and delivery * Asset management strategy & global execution final stage By employing the risk mitigating factors for this supply chain and supplement on the data collected, deep supply chain management expertise, methods and analytical tools Cipla can quickly assess current inventory situations for inventory optimization realizing 30-50% inventory reduction, significantly improve demand forecasting verity 10-30% and provide direction to reduce spend 5-20%.With the futurist instrumented, interconnected and intelligent smarter supply chain, smart devices, sensors and actuators can capture real-time data including shelf-level replenishment, forecasts and orders, pipeline inventory and shipment lifecycle status. Advanced instrumentation will sense-and-respond demand and supply signal notification with thresholds to determine corrective actions from disturbances and there would be more self-correcting, self-actuating transactions.With the new smarter supply chain model and future integration of sustainability principles our proneness with this assignment is to have the supply chain egress as a major business tool that can help control costs, manage risks and make profit in a fully amenable manner. Much of the opportunity to address related energy, water and waste management costs rests on the supply chain.