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MATERIAL MANAGEMENT REPORT

SUBMITTED TO: MR.ARSALAN ZAHID


SUBMITTED BY: ASAD JAMAL& ZULFIQAR ALI

Table of Contents

Introduction of Company
History of Pharmacy
Sanofi Aventis Product line
Swot Analysis of the company
Vaccination Department (Sanofi Pasteur)
Planning
Procurement
Manufacturing
Quality Control and Assurance
Distribution Channels
Warehousing and Storage
Major Distributors of Sanofi Pasteur
Major competitors of Sanofi Pasteur
The Overall Supply Chain Process of Sanofi Pasteur Pakistan
Recommendations

Vote Of Thanks
It was a learning experience for us to carry out our term project on The
supply chain process of Vaccination Department of Sanofi Aventis which was
assigned to us by our respected teacher Mr.ArsalanZahid. We would like to
thank you for providing the guidance and the skills that helped us in
preparing the report.
It was an educational experience to carry out such a term project on a topic
so informative and practical.
Yours sincerely,
Syed Zulfiqar Ali Naqvi
Asad Jamal.

Executive Summary
In this report we have discussed brief introduction of Sanofi Aventis. This
multinational pharmaceutical firm was founded in 2004 having its head office in
Paris, France. It has various products top brands includes Flagyl, Claforan, Amaryl,
Vaccines, Lantus, and many more etc. However, we have also mentioned Swot
Analysis of Company. Major strengths which includes like strong and recognize
brand name and socially responsive. Major Weaknesses like, slow decision making
process and less employee benefits and perks. Opportunities which company should
have to avail by utilizing their strength and key environmental threats.
The procurement of the finished vaccines from France Sanofi Lyon company their
storage in a cold temperature environment and the wide distribution network
channel, planning of forecasting technique, manufacturing process cycle of the
vaccines, warehousing inventory controlling system, major distributors, major
competitors and some final recommendations are briefly discussed in this report .

Sanofi Aventis
Introduction
Sanofi Aventis, multinational pharmaceutical is having its head office in Paris,
France. The company was founded in 2004, when Aventis was acquired by SanofiSynthelabo, however both the company basically emerged in 1999.Sanofi-Aventis
Pakistan limited ("Sanofi") has a strong presence in Pakistan. With over 1000
employees working every day with the commitment to improve health and wellness
across the country, Sanofi ranks amongst the top ten pharmaceutical firms in
Pakistan.
By working in collaboration with stakeholders, it is ensured that patient-centric
approach yields tangible benefits to the common man through provision of quality
medicines that cater all age groups. The company is in the business of improving
lives and alleviating suffering, because when the world has its health, it will have
everything.
The manufacturing facilities of Sanofi-Aventis are among the most modern and
environmentally friendly facilities in the country, maintaining the demanding
standards of cGMP. There is great emphasis on quality, professionalism and high
ethical standards. The rich product portfolio of the company includes life-saving
drugs, several of which are leaders in their respective classes.

THE COMPANYS HISTORY


The company was incorporated in 1967 as Hoechst Pakistan Limited. Manufacture of
pharmaceuticals and specialty chemicals began in 1973. In 1977 the company went
public and was listed on the Karachi Stock Exchange.
By virtue of several mergers, acquisitions and divestitures the company underwent
several reincarnations over the years. Today, the company is Sanofi-Aventis
Pakistan limited while the corporate identity is simply Sanofi.

History of Pharmacy
The earliest drugstores date back to the middle ages. The first known drugstore
was opened by Arabian pharmacists in Baghdad in 754, and many more soon began
operating throughout the medieval Islamic world and eventually medieval Europe.
By the 19th century, many of the drugstores in Europe and North America had
eventually developed into larger pharmaceutical companies. Most of today's major
pharmaceutical companies were founded in the late 19th and early 20 th centuries.

Sanofi Aventis Product Line


Sanofi-Aventis focuses its activities on following product line:

Cardiovascular
Thrombosis
Oncology
Central nervous system
Metabolic disorders
Internal medicine
Vaccines
Oral anti diabetic
Pain management
Allergy management
Anti biotic
Diarrhea
Gastric disease
Cough and cold
Anti malaria

Sleep disorder

SWOT Analysis:

INTERNAL

EXTERNAL

STRENGTHS

WEAKNESSES

1) Strong and recognized


brand name.
2) Research & development.
3) Socially responsive.
4) Patent Protection
5) Huge and strong product
portfolio, catering different
segments.
6)
State
of
the
art
manufacturing plants. (Only
blood plasma technology in
Asia)
7) ERP system being used,
to seek improvement in
processes.

1)
Slow
decision
making process due to
elongated
hierarchy
structure.
2) Decreasing market
share.
3)
Less
employee
benefits and perks.
4) Tough Credit Policy
(Cash/Credit

89%/11%)

OPPORTUNITIES

THREATS

1) Pakistan has a population


growth rate of 1.6% per
annum. Higher population
growth means that there
would be a larger market
available
for
the
pharmaceutical industry.
2)Customers interest and
preference
for
buying
foreign medicines rather
than local medicines
3) Emerging disease
4)
Acquisition
of
local
companies.
5)
Increased
awareness
about allopathic mode of
medicine

1) The sale of FAKE


AND
SMUGGLED
MEDICINES at low
prices
2) Financial crisis is
becoming an obstacle
for
development
opportunities.
3) Use of herbal and
homeopathic
medicines.
4) Government fixing
prices
of
pharmaceutical
products. Difficult to
exit the industry.
5)
Experienced
workforce fleeing out
to other nations for

better
employment
opportunities.

VACCINATION DEPARTMENT (SANOFI PASTEUR):

Sanofi Pasteur, the vaccines division of Sanofi, is the largest company


in the world devoted entirely to human vaccines. Their driving goal is
to protect people from infectious diseases by creating safe and
effective vaccines.
Their company offers a broad range of vaccines in the world, providing
protection against 20 bacterial and viral diseases. They distribute more
than 1 billion doses of vaccine each year, making it possible to
vaccinate more than 500 million people across the globe.

A global company:

Headquarters: Lyon, France

Revenue:3,974 million in 2014


Almost 14,000 employees worldwide
More than 50% of staff devoted to industrial operations
14 production and/or R&D sites located in Marcy l'Etoile, Val de
Reuil and Neuville in France; in Swiftwater (Pennsylvania), Cambridge
and Canton (Massachusetts), Orlando (Florida) and Rockville
(Maryland), USA; in Toronto, Canada; in Pilar, Argentina; in Shenzhen,
China; in Hyderabad, India; in Ocoyoacac, Mexico and in
Chachoengsao, Thailand

Vaccines: A key strategic focus

Sanofi Pasteur, the vaccine division of Sanofi group, is the largest


company in the world devoted entirely to human vaccines. To prevent
diseases in children, adolescents and adults around the world, the
Sanofi Pasteur R&D team is developing new generations of vaccines.
Sanofi Pasteur offers the widest range of vaccines for 20 diseases.
With tomorrows health challenges in view, the R&D team of Sanofi
Pasteur, the Groups Vaccines division, is working on both innovation
and improvement of vaccine delivery and modes of administration.
Either alone or in partnership, the research team is attacking such
major diseases as dengue, pneumococcal infections, cytomegalovirus,
malaria, tuberculosis, Chlamydia and Type B meningitis. In addition,
sanofipasteur remains at the forefront of influenza pandemic
preparedness.
Vaccines provide an effective response to major diseases, generally as
a preventive measure but sometimes as a therapeutic solution.
Seasonal influenza, for example, is a constant concern for health

authorities throughout the world, and Sanofi Pasteur is the undisputed


leader in the field of influenza prevention. Sanofi Pasteur continued to
bring innovative, effective and easier-to-use vaccines to market.

Vaccines:

Today, according to the World Health Organization (WHO), vaccines are


available to protect against more than 26 infectious diseases.
Sanofi Pasteur has the broadest available range of vaccines,
protecting against 20 infectious diseases

Worlds largest producer of influenza vaccines: over 170 million


doses provided in 2008

Worlds leading provider of poliomyelitis vaccine

Broadest range of modern pediatric combination vaccines for


children throughout the world

Worlds largest provider of meningococcal vaccines with


an unfaltering commitment to provide meningococcal vaccine to
fight epidemics in Africa

Largest portfolio of vaccines for travelers and people living in


tropical areas: typhoid, rabies, yellow fever, Japanese encephalitis,
meningococcal meningitis, cholera, hepatitis A, hepatitis B

During 2008, a new business unit was set up in Sanofi-Aventis


Pakistan to handle the vaccines business in Pakistan. Sanofi Pasteur
has a product portfolio that offers protection against 20 infectious
diseases that include:

PLANNING:
Quantitative forecasting technique is being used by the Sanofi Pasteur for the
seasoned vaccines like typhoid, influenza that have past data trend available to
Sanofi Pasteur and for some new emerging diseases like dengue the product
forecasting in still in the pipeline in which qualitative technique is used in which
expertise opinions thorough out the world are held under consideration for the
forecasting of the dengue vaccines.
On global level scale there are certain limitation faced by the Pakistan for the
vaccines as it is a third world country and global manufacturing is very sensitive.
The regional manufacturing takes up to 5 to 6 months for producing vaccines
related to any disease. If the first world country has fluctuation in demand the
higher demand of those countries are met by the 3 rd world countries inventory.
The supply chain planning team of USA, Canada usually sits in Singapore with in
touch of Lyon company in France. Pakistan Sanofi doesnt have access into the
planning of the vaccines production.
Some vaccines are being produced on level based strategy depending up on the
nature of demand of those vaccine is constantly stable original forecasts of the
country and some specialized vaccines like yellow fever vaccine is produced on
chase strategy based upon the demand of African countries.
If some kind of epidemic disease occurs in any region of the world the Sanofi lyon
(France) usually enhances its vaccines production schedule with proper
concentration according to the demand requirements of the victimized countries.
Sanofi Pakistan benchmarks the forecasting of the competitors like GSK. If the
competitors forecasting of the vaccines is about 100000 of typhoid vaccines then
the sanofi Pasteur Pakistan would decrease its forecasting to 50000 typhoid
vaccines and in some special case if the GSK fails to launch the vaccines of 100000
than sanofi Pasteur Pakistan grabs that opportunity and enhances its forecast up to
150000 vaccines.
Procurement:

The vaccines are imported in finished form from France Lyon the parent company
with credit term of 60 days with the parent company. The lead time consist of 6
months from the process of beginning till finishing of the final product to the related
companies orders unless they have excessive inventory of the vaccines in their
pipeline.
The supplier of multinational pharmaceutical company is usually a parent company
so therefore they face allegation of transfer pricing as if one thing costs 100 will be
about 1000 to Sanofi Pakistan Company. There are no certain financial risk dealing
with the parent company supplier but Sanofi Pakistan usually faces the commitment
risk of the parent company as they are the only sole manufacturers and suppliers of
the vaccines product.
The parent company gives priority to the 1st world countries orders rather than the
3rd world countries hence therefore some of the specialized vaccines are still not
available in the Asian region in Pakistan.

VACCINE DEVELOPMENT CYCLE (MANUFACTURING PROCESS)


Vaccine research is long, complex and costly. Because a vaccine is a biological
product made from living microorganisms, its development cycle is quite different
from that of a pharmaceutical product:

SEED VIRUS:
The first step in developing a vaccine is obtaining a seed virus. The seed virus is a
specially modified version of the virus designed to produce a vaccine in mass
quantities. After world health officials analyzed and identified the dominant
circulating strain, they selected virus strains and submitted them to contracted
laboratories for preparation of the seed virus.

PASSAGING PROCESS OF SANOFI PASTEUR:


Upon receipt of the seed virus, Sanofi Pasteur began the development process
called passaging, to prepare a working seed. Passaging is the process for
acclimating virus to grow in an egg-based production environment at optimum
yield. Millions of specially prepared chicken eggs are used to produce the vaccine.
The eggs are delivered to Sanofi Pasteur and each one is injected with the working
seed. The eggs are then incubated allowing the virus to multiply. After incubation,
the virus-loaded fluid is harvested followed by multiple purification steps to ensure
the virus in inactivated.

APPROVAL OF FDA REGULATORY


The FDA will determine the clinical trial protocols for testing all pandemic vaccines.
Since people may respond differently to epidemic viruses, it is important to
determine safety and dosage prior to implementing a large-scale immunization
program.

QUALITY CONTROL DEPARTMENT:


Quality control tests are performed on all batches for purity, sterility and potency in
each step of the production process. Doses of the vaccine are formulated and filled
in vials and syringes that must be properly packaged and labeled. Samples of every
lot of formulated vaccine are sent to the FDA for release. Shipments of pandemic
vaccines begin once health authorities authorize it and establish recommendations
for immunization.

DISTRIBUTED

GOODS FLOWS CHART

CHANNELS

In Pakistan there is a cold chain warehouse of the Sanofi Pasteur located in Karachi
through which the inventory is being stored in properly controlled temperature of 2
to 8 degree centigrade and are further distributed to all over the Pakistan from the
warehouse.
There are 15 distributors in Pakistan who generally purchase the vaccines from the
company and further distribute it to the wholesaler and retailers and the
institutional distribution is being handled by the Sanofi Pakistan itself they usually
transmit the vaccines by the air mode of transportation because the orders of the
institution are generally shorter than the large distributors of the company.
When they usually sell the vaccines to the distributor they maintained the
temperature of 2 to 8 degree through cold chain containers that are design for
these cold chain supply items. Distributors are maintaining the temperature with
their specialized cold chain vans .
There is a risk of non payment by the customers of Sanofi which includes the
distributors as well. So to tackle this problem, the company sells their products on
cash basis to the distributors which comprise approximately 89% of the companys
sales.
The reversal flow of the product is properly being managed by the Sanofi Pasteur in
two ways. Firstly, the excessive inventory is returned by the distributor back to the
company which is in turn supplied to another distributor who has demand for
supplies. Secondly, the expired and nearly expired inventories returned by the
distributors to the company are disposed of by the company before being used.

Warehousing and Storage:


There is only one cold chain warehouse consist of 400000 inventory capacity of
vaccines located in Karachi sometime when there is large consignment received by

the company they usually rent the cold chain container to cater the higher
inventory demand.
The whole setup of maintaining and storing inventory is usually computerized based
on ERP system in which the company monitors the inventory level up to 1 to 2
months of the distributors directly and distributors do not have access to seek the
companys inventory level. The sales out are being monitored by the company in
which the inventory that has been sold by the distributor to the retailers and
wholesalers comes in the record of the company.
Whereas they cant monitor the inventory level of the institutions due to the
inaccessibility given by the institutions.
The packaging of the insulin is usually solely produced by the company itself in
accordance with instructions of government of Pakistan Sanofi Pasteur has been
labelling the packaging in Urdu version for administration of dose use safety.

Major distributors of Sanofi Pasteur:

Major Competitors of Sanofi Pasteur:


1.
2.
3.
4.

PFIZER INC.
MERCK & CO INC.
GLAXOSMITHLINE PLC
NORVATIS

The Overall Supply Chain Process of Sanofi


Pasteur Pakistan

The supply chain process is distributed in to three phases i.e. manufacturing of


finished product in France shipment of that finished product to Pakistan by air and
second storage at optimal temperature level and relabeling of the product in Urdu
and third final stage consist of distributing the vaccines to the medical institutions
and distributors in cold chain containers and cold chain vans distribution network till
it reaches the final consumer.
Shipment of the product to Pakistan depends upon push and pulls strategy. In push
strategy view France anticipates the demand of vaccines from Pakistan and in pull
view orders from Pakistan are made to the manufacturing unit based in France to
the Lyon Company.

RECOMMENDATIONS:

The company should relax its tough credit policy for the time-tested and
reputable customers in the market. 89% of sales are made on cash basis.
There are reputable doctors in the medical industry who if given the vaccines
on credit terms, can enhance the share of the company ensuing greater
market share. By relaxing tough credit policy only for reputable distributors
and renowned doctors, the company can give tough competition to its
competitors as a result of increased sales. The time-tested distributors in the
market dont create problems like delayed payments or default.
The company needs to enhance its storage capacity of 400000 inventories of
vaccines relying on the single cold warehouse unit based in Karachi by
acquiring some new geographical location or a unit to cater the higher
demand of disease like dengue and other diabetic insulins. By doing that the
major problem of renting a cold chain container will get dissolved once for
all.
The parent company of France Lyon needs to provide equal priorities to the
3rd world countries orders like they are providing for the 1 st world countries
orders as they are the only solely producer in the vaccines field and the
diseases which are life threatening are dependable upon them so for
minimization of the causalities in the 3rd world country concentration and
priority level should be to same extent like 1st world countries orders.
Focusing on untapped markets like Cancer, HIV, and new disease to increase
market share.
Conducting seminars and ATL (Above the line) advertising activities to create
awareness about emerging diseases.
They should monitor the inventory level of the institutions like they are
monitoring for distributors.