Supply Chain and Risk Management

Introduction Like economies and financial markets, as offer mountain set ups grow much global and interconnected, they get more exposed to disruptions and dangers. More totally over, the render cosmic string speed exacerbates the problem. Even minor miscalculations backside harbor major consequences as the push spreads like viruses throughout the k nonty put up range of a function cyberspaces. Hence, it is vital to build smarter tack on twines and breed the issues that pose a challenge to this objective. These encounter factors house effect productivity, parsimoniousness and band image of the troupe so it is very significationant to set and manage these problems on in good order clip. endangerment is a set of unhoped-for or unpredict up to(p) event that outright or indirectly affects the efficient working of an memorial tablet. So to avoid this situation in that respect should be a effective put on the line management c ar for which crapper help th e community to work efficiently and effectively Risk management put up be defined as Risk management is an important function in melodic phrase effort. It is an entrepreneurial need which caters all the solution which ar infallible for the efficient working of an organization to achieve is goals. It helps the management to understand the get-go cause of the problem and all possible ways by which it hobo be solved.Risk management operation About The Comp whatever Cipla is one of the inducts in the Indian Pharmaceutical Industry. The partnership was first started in 1935 and throughout its long journey of 75years has introduced mevery brio-changing and innovative drugs to serve military man while supporting, improving and enriching millions of lives worldwide. Cipla has 50 manufacturing plants with its headquarters situated in Mumbai, India. Its on- line(prenominal) stable has over 1200 products in current production which target retrieve or so every illness known to man.Cipla boasts the worlds largest swear of respiratory medicines, dosage forms and de criminalitys for the management of asthma and other respiratory illnesses. The company is well known for providing consistently mettlesome tone of voice of medical updates and diligent education bodily to help patients as well as doctors in their respective environments. The company had too setup a dedicated fondness which carried on research and education on respiration named the Chest question Foundation (CRF) in Pune, India. The company has as well pioneered revolutionary medicines for manipulation of cigaretcer, AIDS, hepatitis A, B and C. ardiovascular disease, arthritis, diabetes, weight control, depression and many other health conditions, distri scarcelying its product to almost every country. Recently the company had researched and created a medicine called QVIR that can be restored AIDS and can be used for both first and help line treatment of HIV-AIDS. Currently, 40% of th e worlds HIV patients undergoing anti AIDS therapy argon taking Cipla doses. Pain Points with QVIR Cipla is well known for is innovations in the field of pharmaceutical simply not so for its write out concatenation and impeccable economy.This was also the case with the recently launched QVIR which had not been effectively distributed or consumed at the right time. Every year around 5 -7 % of the patients failed their first line treatment because the dose was un uncommitted and wasnt there at the stipulated treatment time. For a drug priced at a paltry sum of $ 3 and the life changing benefits of containing four drugs in one single strip, it never served its mean purpose. From our qualitative data collection method we understood that the pain points cladding Cipla in the delivery of QVIR were as follows * Inventory levels be too high and/or misplaced Spending is too high, either indirect or direct categories * Cash-to-cash cycles atomic number 18 too long * Lean manufacturi ng and role goals ar not being met potentially accompanied by redundant shave generated or scarce resources used Ciplas hand over image Cipla has over one hundred eighty manufacturing plant across the world out of which 50 manufacturing plants pay QVIR. Cipla also manufacturing some of its own au naturel(p) hearty in 3 of its own factors situated in Mumbai, Himachal Pradesh and Karnataka states of India.For some of the raw temporals of QVIR, Cipla also conducts import/export trade with some of its local and international suppliers located in India, Germany, USA, UK, Italy, France, Australian, South 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 transportation is carried out internationally via ship and air and domestically either by road or rail. Value Stream Mapping for QVIRThe Top challenges of Ciplas Suppl y image for QVIR After conducting our initial investigation, ratement and analysis we were able to group the merry-go-round challenges of Ciplas write out chain into 3 major components * Supply Chain profile * Increasing Customer Demands * Globalization Supply Chain Visibility at that place is an inherent lack of leaveingness to character randomness and cooperate effectively. Inhibitive organization silos are widespread across Cipla where individuals are too busy to share within the organization and among contribute chain networks.This leads 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 talk about supply chain visibility, it does not simply mean visibility into your own supply chain and your own warheads. It means visibility among partners, which enables collaborative decision making nigh(a)r to the node. This is both a science (managing the technology) and an art (using the information and inflection for competitive advantage). Partial and experimental adoption is widespread in visibility, but extensive adoption is still very low. Increasing Customer Demands Customers are almost always last on the list for synchronizing supply & invite. Cipla as an organization has forgotten to identify that customers continue to have battleful occupys for divergentiated products & services, while their own product lifecycles have been shortening. According to Garima Singh, vice president of consumer products, We must combine SCM with CRM get supply chain staff thinking in terms of a commercial customer mindset.Bringing the customer perspective into all facets of SCM go away push us to further supply chain excellence Remaining competitive in developing a new product or service also has the following challenges such(prenominal) as cross function cooperation, product/service innovation and fit alloca tion of resources. at that place should be a further integration of customer demands from inception to delivery the entire Cipla global supply chain network focused on the end customer. Globalization Globalization for many businesses including Cipla is the complexities of interconnectivity.The impact of global sourcing has led Cipla to experience delivery issues in the form of tr all(prenominal)erous commitments e pickyly in the case of the QVIR drugs. It has also resulted in larger than judge lead times and eccentric issues. While looking for lower approach sourcing options, Cipla should pave the way for constantly updated and differentiated business works and distribution strategies. Identifying Risk factors provider Risks In the supply chain management of the pharmaceutical industry the selection of supplier should be done very carefully because the raw genuine can directly affect the finished drug.In CIPLA API Plants the ingredient are manufactured as per Regulatory requi rements like USFDA, WHO, MHRA, and TGA and but these API plants are not enough for 50 manufacturing plant so they need external suppliers to deliver other ingredients such as Diluants, binding agents, colorant, lubricant and granulating agents. 1. Imports The major essay associated with the import is the availability of the raw material at right time. well-nigh of the abide includes * Delay in workment of cargo * Custom manipulation * Delay in motioning documents due to form error at Seaport/Airport. Continuous holidays, strike by laborers customs may delay clearances. 2. Inferior tint of supply Quality is very important in case of any pharmaceutical manufacturing as it directly deals with the life of the population therefore it is governed by many regulations. The inferior Quality of the raw material can increases the risk of exposure of shave in the final steps of manufacturing. both(prenominal) of the adverse effects would be * Breaking and rusting of tables * Short ledge life * Less potency * Side effect to patents * Batch rejection * market complain 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 fisticuffs 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 case material is not available in that situation * The raw material shelf life will increase ( as kept in stores) * Productivity will lessening * Unable to fulfill order on time * Holding of muddle can increase the reanalysis price mathematical product Risks 1. Malfunctioning of MachineryIn CIPLA entire address of manufacturing is automated. So efficient working of the machines is essential in that manufacturing do by any malfunctioning of machine can lead to increase the production time and cost. 2. Human error Although in the company most of the production motion is automated, t here is still chance of human error due to sloppiness of the employee who operates the machines. This can lead to skillful problem not only to the company but to the employee himself some of the common human errors are * Improver gowning * sloppiness in handling of material * Improper documentation * Negligence in following SOPs Negligence in maintain personal hygiene * Negligence in clearing the apparatuses * Negligence during handling chemicals * Negligence during operate 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 hoi polloi 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 moreover the industry is highly regulated so it is extremely infallible to produce products with high quality.The inferior quality of drug can cause * Batch re jection * Market complain * Economic lose * escape of company reputation * As the industry is highly regulated by government law inferior quality can lead to close done of organization Storage Risks Improper warehousing 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 contamination * Drug deterioration * Batch rejection * Market complain * thin out the self life of drug etc Demand Side Risks 1. Forecasting ErrorsForecasting errors can lead to serious problems colligate 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 affect the whole supply chain from the beginning till the end affecting the entire resources in inventory, facilities, transportation, sourcing, pricing and information management so there should be a proper forecast analysis. 2. Transportation Ri sk The main risk factors intricate 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. education Sharing Risks entropy 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 formations will help the manager to know how the inventory is flowing in the supply chain and how the stocks are maintained. Moreover in the production process the flow of information help to minimize the risk and maintain the quality of the product. Risk AnalysisRoot Cause Analysis The tooth root cause analysis can help CIPLA mangers to identify and cleanse the root causes which may lead to the determine risks Below Fish Bone diagram is used to perform the root cause analysis for Cipla After conducting the r oot cause, we were able to establish plastered glaring problems in the supply & demand of QVIR such as supplier selection, non-availability of resources, machinery problems, improper management SCM Specific Brainstorming A periodic both Hands session has to be conducted with the entire supply chain aggroup up of QVIR at Cipla.These sessions could be either fortnightly or monthly basis. During these sessions, members of the team are encouraged to ask several sets of questions related to purifyment and renewal of a SMARTER Supply Chain. Some possible questions include * Do you have real time visibility into the cost & performance of your supply chain both inside and across organizational boundaries? * Are you able to collaborate with your upstream and downstream trading partners on changing supply and demand conditions? Have you exploited rapid ROI opportunities relating to inventory optimization, demand forecasting, network design, and procurance drop dead? * What are your in ventory levels vs. peers, your cash-to cycle time vs. peers? * Is your business able to flyingly and directly be changes to supply chain processes and policies based on identified savings 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 packaging error. As part of the analysis for this assignment, weve also assessed the risks during production and how that risk can be controlled Risk easing Supplier Risk Mitigation To shoot down 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 communication Produ ction Risk MitigationMalfunctioning of the machinery Malfunctioning of machinery in the production process can be overcome by- * Regularly checking and maintaining the working of the machines. The machines should be checked after to each one batch production. * Special engineers should be hired for the maintenance job with thick knowledge * The checking and maintenance process should be added into the standard in operation(p) 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 The human error can be minimized by providing proper * training to the employee * maintaining proper standard operating procedures * automating the process where possible * providing proper documentation Packaging Risk Mitigation To minimize the risk in the packing and packaging process Cipla has to move out from the traditional model to more technological side. * Photo see transcription * Ratio frequency identification system and ePedigrees technologyPhoto scanning system is a modern way of minimizing risk in the packaging line by using photo scanning system. Cipla can eliminate the risk on cross labeling, miss printing 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. derogate 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 front 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 RFID * 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 e fficiency of production process * Improves Asset Utilization and Visibility Quality and storage risk mitigation Quality management play most of the essence(p) role in the pharmaceutical industry so a general 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 * Proper cleaning of the machines as per validation * Quality of the packaging material * SOP for labeling and packaging * Proper storage of the finished good with correct labeling At each step of quality management data should be collected and reports should be generated to identify where the problem is occurring in the supply c hain 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. Use of certain ERP tools such as SAP and vaticinator can help CIPLA minimize the risk. Moreover using RFID the electronic documents epidgees make the flow of information quite 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 watchword for cost containment, Visibility will become vital, Risk would be managed systematically, and customer scuttlebutt 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 platform * Dynamic supply & demand match Predictive 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 * Variable cost structures that undulate with market demand * Outsourcing non-differentiating functions Global centers of excellence to optimize capability and delivery * Asset management strategy & global execution Conclusion By employing the risk mitigating factors for this supply chain and leveraging on the data collected, copious supply chain management exper tise, methods and analytical tools Cipla can quickly assess current inventory situations for inventory optimization realizing 30-50% inventory reduction, significantly improve demand forecasting accuracy 10-30% and provide direction to reduce spend 5-20%.With the futuristic instrumented, interconnected and intelligent smarter supply chain, smart devices, sensors and actuators can arrogate 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 disciplinal 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 desire with this assignment is to have the supply chain emerge as a major business tool that can help control costs, manage risks and make profit in a fully resp onsible manner. Much of the opportunity to address related energy, irrigate and waste management costs rests on the supply chain.