Where does Competitive Edge of Pakistan’s Pharmaceutical Industry lie?

Pakistan Pharmaceutical market is estimated at well over $1.5 Billion in value and bulk imports of raw materials
amount to nearly $450 million. The utility rates and other factors of production have been experiencing a steady
increase over the last couple of years. Prices of drugs have not seen any increase over the last 7 years and most
recently with China revoking its export subsidy by 8%, prices of raw materials are expected to further shoot up.
Machinery and equipment is mostly imported from China, Taiwan, Korea, India, Germany, UK, USA and Japan,
besides other countries with no more than 10% of the demand being met with locally fabricated equipment.

Furthermore, the emergence of WT O has put significant impact on pharmaceutical trade in the shape of:
? National Treatment – Where you have to give equal opportunity to other partner nations to trade their
pharmaceutical products in Pakistan. This may give rise to more and more insurgence of Indian, Korean and
Chinese companies, giving touch competition to the local industry.
? Harmonization of Standards – In the near future the ICH or other globally recognized standard will become the
benchmark of the Pakistani Pharmaceutical Industry, which would invariantly require intensive capital
expenditure.
? The TRIPS agreement will push Pakistani companies out of the competition in the new, high value generating,
state-of-the-art molecules where Pakistani industry, which is a generic manufacturing industry will not be able
to bring generic copies of the new patented molecules for at least first ten years.

In the wake of all these potential threats, the organizations existing in the industry will have to be bringing in
internal efficiencies and make their Supply Chain stronger. There is only one other industry that seems to be able
and willing to offer respite in this catch-22 situation the industry is invariably headed for: Information Technology
– An industry experiencing a 50% annual growth and surpassing the Pharmaceutical industry in exports.

Could advancement through technology offer the solution to this important local industry?

Case Study:
How Online Ordering Systems deliver value in the Pharmaceutical Industry!

Reckitt Benckiser completed the acquisition of Boots Healthcare International for £1,926 million in 2006, gaining a new
platform for growth in the attractive OTC (over the counter) healthcare market. The company sells its products in 180
countries and has its operations in 60 countries across all continents.

Dettol is the world leader in antiseptics bought for use at home. Nurofen is the No.2 Analgesic in Europe. Strepsils is the
No.1 sore throat product outside the US. Clearasil is the No.1 anti-acne treatment.

One of the largest multi-national pharmaceutical and personal-care products manufacturer and marketer in Pakistan,
Reckitt Benckiser has over 80 distributors across the country that are carrying huge inventories to meet the undying
demands of its products.

When the company decided to acquire Strepsils and experienced a marked growth in the sales of Mortein, they knew it
was time to start accepting online, web-based ordering through eOrder, a unique offering of EfroTech. In just six
months, the company gained back its software cost plus other cost savings. Reckitt Benckiser also improved its
warehouse processes, gained employee efficiencies and is now positioning itself with EfroTech’s products like eTravel
and eBuyer for future growth.

What is eOrder? A non-traditional EDI (Electronic Data Interchange)…

• Complete end-2-end Order process • Extremely useful for companies with:
automation that enables: – A big customer base.
– Customers (non EDI): Can place their – Many Ship to customers ordering separately
orders on the web, in a secure manner, and instead through a DC.
track their order status &…. – Small value orders
– Your Company : Can manage – Orders numbering in 100’s or 1 000’s.
centralized product catalogues, customer – Usually experience order crunch at month
orders, and automated Sales Order entry end.
directly into your ERP Application. – Large number of products

• Web Application (Server). • Super User Module (Your Company End)

– SQL Server database – Maintains Multi Country/Currency setup
– ASP.Net – Manages the Country Admin.
– SSL 128 bit Encryption
• Web Application for Your Company & • Country User Module (Your Company End)
Customer requiring: – Maintain Product Catalogs (Price Lists)
– Internet connectivity – Dial-up or better – Customer Master Data
– Internet Explorer 5.5 or above – Order Processing and Maintenance
• PDA Application for Your Company & • Customer Module
Customer requiring: – Secure Web Ordering
– PDA or Handheld device – Customer & Shipping point Authentication
– GPRS or Edge connectivity – Ordering Tracking Status

While most existing businesses resist process change, being intrinsically built around slow paper-based activities,
some organizations have tried to step up and make the necessary changes that are well suited for EDI and would
accommodate automated processing of business documents. For example, a business may receive the bulk of their
goods by 1 or 2 day shipping and all of their invoices by post. The existing process may therefore assume that goods
typically arrive before the invoice. With EDI, the invoice will ideally be sent when the go ods ship and will therefore
require a process that handles large numbers of invoices whose corresponding goods have not yet been received.

While many view EDI from the technical perspective that EDI is a data format; Reckitt has taken the more accurate
business view that EDI is a system for exchanging business documents with external entities, and integrating the
data from those documents into the company's internal systems.

In order to implement break-through solutions that would eliminate the existing time-consuming, error-ridden way
of receiving order requests from their distributors through mails, faxes and over the phone, Reckitt Benckiser,
along with EfroTech, a fast growing, dynamic local software house, opted for the online ordering system eOrder,
a unique product offering from EfroTech.

EfroTech’s eOrder brings you all the Internet's advantages. A functionality -rich Web “shop”, it not only lets your
customers serve themselves over the Web, but it also processes all their orders for you - feeding purchasing
information into your sales, warehousing and accounting systems, checking client purchasing limits, warning if
they are exceeded and keeping you in the picture about who's buying what, whether it's been paid for, how much
money is still to come in and what's left in stock. Fewer mistakes are made because order and sales data have to be
entered only once - by the customers themselves.

Customers - who need only a simple Web browser to operate the system - value the time-saving and ease of
ordering, while you enjoy the protection of a system which verifies user authorization, automatically ensures that
individual and company credit limits are not exceeded and provides an overview of all orders and payments due.
Closely linked to the JD Edwards ERP application running at the heart of the Reckitt Benckiser Pakistan operations,
eOrder allows automatic processing in the accounting module and works hand in hand with the stock module,
which covers warehouse operations from stock control to invoice generation.
Reckitt Benckiser Pakistan has benefitted at three levels from the implementation of eOrder:

At the Operational level: They have managed to attain lower operating costs by replacing paper
transactions with electronic transmissions, saving time and enabling automatic processing of documents.
Secondly, they have reduced errors and increased information accuracy as there is no need for re-entering of
data, thereby eliminating risks of human error as each re-entry is a rich potential source of error. Thirdly, they
have attained increased productivity as their personnel are focusing on more meaningful tasks and thus
speeding up throughput. Finally, this has added data security through 128-bit SSL encryption, user
authentication and properly defined access protocols.

At the Tactical level: eOrder has helped them better manage their stock balances and production planning.
Secondly, improving delivery of services and goods has been ensured by reducing order and delivery time and
increasing the reliability of meeting targets. Finally, financial transactions are automatically made in the JD
Edwards ERP application, providing faster reconciliation, auditing, checking and improving cash flow.

At the Strategic level: With faster trading cycles, it has led to improved relationships between itself and its
400 or so distributors and dealers. Being offered better marketing competitiveness, Distributors no longer
have to search for product packaging details, specifications, pricing and availability. All this data is generated
automatically by the system, specifically, for each customer! Finally, thanks to the global accessibility of a hosted
application, busines units, departments and regional offices are able to view the data and reports, together. Taking
the company from strength to strength and making the entry of new competitors more difficult.

The same solution has now moved to Reckitt Benckiser South Africa with enhanced functionalities for remote
order capturing through handheld devices.

eOrder is a strategic Web-based solution by EfroTech – a decade-old name in the Pakistan IT industry, boasting of
300 plus customers, spanning three continents – that effectively manages the distributor ordering function for
medium to large organizations. Accounts of hundreds of distributors across various countries can be managed by
this solution that is ideally suited for businesses operating in the Pharmaceuticals, FMCG, Food Products and
Confectionary industries.

“It has been a pleasure working with EfroTech’s professional, efficient and creative team. They are available 24/7
throughout the process of application development. I will certainly recommend their expertise to others. We would
also like to go internationally for ‘eOrder’. The tool has really solved tons of our problems.”

Saqib Mehmood, Manager IS, Reckitt Benckiser

Writer’s Profile:
An MBA (MIS) from IBA, Nadir Khan has his primary exposure as an employee and internee in Healthcare
organizations and IT firms, including Efroze Chemical Industries, Hospital Supply Corporation, CresSoft and Sidat
Hyder. He presently heads EfroTech and can be reached at Nadir.Feroz@EfroTech.com