Introduction To Indian Pharmaceutical Industry

Published Date: 02 Nov 2017

Contents

INTRODUCTION TO INDIAN PHARMACEUTICAL INDUSTRY

The pharmaceutical industry of India is currently at the top of the chart amongst all of the India's science-based industries. It has a wide range capability in the complex field of drug manufacture and technology. The pharmaceutical industry of India is a highly organized sector and estimated to be worth $ 45 billion. It is growing at about 8 to 9 percent annually. In terms of quality, technology and the vast range of medicines that are manufactured, it ranks the highest amongst all the third world countries. Almost all type of medicines is now made in the Indian pharmaceutical industry e.g. headache pills to sophisticated antibiotics and complex cardiac compounds.

The Indian pharmaceutical sector is extremely fragmented with more than 20,000 registered units. It has expanded drastically in the last two decades The Pharmaceutical and Chemical industry in India is tremendously divided market with brutal price competition and government price control. The Pharmaceutical industry in India meets around 70% of the country's demand for bulk drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals, and injectibles. Approximately there are about 8000 Small Scale Units and 250 large units, which shape the heart of the pharmaceutical industry in India. (Corporate Catalyst India, 2003)

INTRODUCTION: ATUL MEDICO

Atul medico is a Pharmaceutical distributor that was established on 12th August 1982 as a partnership firm by Kanaiyalal Solapurwala, Manoj Solapurwala, Paresh Solapurwala and Atul Solapurwala. Atul Medico is a registered entity under the Register of Firms and the Food and Health Department of Gujarat. Atul Medico holds a Drug license under the All India Organization of Chemist and Druggist (AIOCD). Atul Medico is a distributor of about 26 Pharmaceutical companies and a total of 150 divisions of these companies. The list of pharmaceutical companies for which Atul Medico is a distributor of, are given below. Atul medico currently employs 18 salesmen, 5 collectors and 10 other personnel, for performing its day to day activities. With an annual turnover of above 20.24 crores, Atul Medico is one of the largest pharmaceutical distributors in South Gujarat.

2.1 Company Profile

Name – Atul Medico (Pharmaceutical Distributor)

Address – 12/2654, Mehervan Park, Vanki Bordi,

SayadPura, Surat - 395003

Owners - Partnership firm

Kanayalal Solapurwala

Manoj Solapurwala

Paresh Solapurwala

Atul Solapurwala

Atul Medico is the distributor of the following Pharmaceutical companies:-

Alembic

Alkem Lab. (All Div.)

Allergan India Ltd.

Andre Lab.

Apple Life-science Ltd.

BAN

Blue Cross

Blue cross

Cadila Pharma. (All Div.)

Cipla Ltd.

Elililly India (Ranbaxy)

Elysium Pharma

Emcure Pharma

F.D.C. Limited

German Remedies

Helios Pharma

Himalaya Drug.

Intas Lab.

Laa Drug.

Life – On

Mankind Pharma

Nicholas Piramal (All division)

Protect

R.P.G. Limited

Rhone-Polunec

Serum Institute

Zuventus India Ltd.

Zydas Pharma (All Div.)

BUSINESS PROCESS OF ATUL-MEDICO

Atul Medico supplies medicines to around 1900 Medical stores in Surat district. The sales at Atul Medico take place by one of the following three methods:

Sale on Credit

Cash sale

Sale through salesmen

There exists an intermediary between Atul Medico and medical stores. In case of credit sale, the medical stores send their respective orders to the intermediary who in turn buys the medicines from Atul Medico on behalf of the medical store and receives a credit chalan from Atul Medico. Five collectors appointed by Atul Medico collect the due payments from the medical stores at regular interval of time. In case of cash sale the intermediary buys medicines from Atul Medico on the behalf of the medical stores. The intermediary receives commission from the medical stores and Atul medico.

The salesmen visit the medical stores, collect their orders, deliver them the medicines and also collect the payments. Each salesman is given a fixed area and a fixed number of medical stores to operate in. All these activities are linked with the MIS of Atul Medico. The information of the stock at the warehouse and purchases from the different pharmaceutical companies is also linked in the MIS. A large number of reports are generated with the help of this information which in turn helps the management in the process of planning and decision making. All the entire Planning and decision making is done by the partners (management) on the basis of the reports with mutual consent.

INTRODUCTION TO MANAGEMENT INFORMATION SYSTEM

A process or system that provides the information required to manage an organization is called a management information system (MIS). The information that is generated by the MIS is usually considered essential constituent of reasonable and prudent business decisions.

The information of the past, present and estimated future and on relevant events inside and outside the organization is provided by the MIS. A premeditated and integrated system for assembling significant data, converting it in to correct appropriate information and providing the same to the concerned executives is called Management Information System. Providing the right information to the right people at the right time is the ultimate purpose of the Management Information System.

In the later part of 1960s, the concept of MIS came into existence and became the epitome of almost all attempts to link the systems and the computer technology, to processing of the data in the business. It became clear that the computer was being applied to the resolution of organizational problem in a gradually manner, focusing almost totally on the computerization of record – keeping and clerical tasks. The MIS concepts are very important to resourceful and effective computer use in organization because of two major reasons:

For organizing the organization’s computer applications, MIS serves as a systems framework. Business applications of computers should be viewed as interrelated and integrated computer – based information systems and not as independent data processing job.

It stresses upon the managements course of electronics information analysis in business. The dispensation of data created by business operations is the main objective of computer based information systems.

In order to make planning and control decision the management relies on the information provided by the MIS. For every organization, to function properly, it must perform certain operations. E.g. Manufacturer of car has to carry out some manufacturing activities; a wholesaler has to supply goods to his area of jurisdiction. These are all the operations that need to be done compulsorily. Besides, carrying out these operations, a business must develop plans for them. In other words the organization must decide on the number and type of cars to manufacture next month or the decision of the commission to offer to the retailers etc.

The standards, and procedures, framework of guidelines, practices or policies for the organization should be clearly defined by the MIS. These should be followed right through the institution in the preservation, growth, and use of all MIS. It should be in collaboration with the organizations longer term strategic objectives and goals. Significant functional component of the total MIS structure are financial accounting systems. However, these financial accounting systems are more closely focused on the internal balancing of an institution's books to the general ledger and other financial accounting subsystems. Accordingly, although accounting reconcilement and MIS totals for connected activities and schedule should be similar, they may not essentially balance.

The Goals of any institutional MIS should be:

• Boost communication among employees.

• Provide a system for aggregating and storing information.

• Deliver complex material throughout the institution.

• Reduction of cost related to labor-intensive manual actions.

• Support the strategic goals of the organization.

MIS enhances and supports the overall decision making process, as it provides decision makers with essential information. It also brings about an enhancement in the job performance throughout an organization. At the highest levels in the hierarchy, it provides the data and information to facilitate the board and management in making strategic decisions. At lower levels, MIS provides the ways by which the organization’s behavior is monitored and information is distributed to employees, management, and customers.

An MIS provides the following advantages.

It Facilitates planning: MIS improves the quality of plants by providing relevant information for sound decision – making. Due to increase in the size and complexity of organizations, managers have lost personal contact with the scene of operations.

In Minimizes information overload: MIS change the larger amount of data in to summarize form and there by avoids the confusion which may arise when managers are flooded with detailed facts.

MIS Encourages Decentralization: Decentralization of authority is possibly when there is a system for monitoring operations at lower levels. MIS is successfully used for measuring performance and making necessary change in the organizational plans and procedures.

It brings Co ordination: MIS facilities integration of specialized activities by keeping each department aware of the problem and requirements of other departments. It connects all decision centers in the organization.

It makes control easier: MIS serves as a link between managerial planning and control. It improves the ability of management to evaluate and improve performance. The used computers has increased the data processing and storage capabilities and reduced the cost.

MIS assembles, process, stores, Retrieves, evaluates and disseminates the information.

MANAGEMENT INFORMATION SYSTEM AT ATUL MEDICO

5.1 ORGANIZATION COMPUTING RESOURCES:

5.1.1 Software Resources

Following software are used for the functioning of the information system and organization.

Application Software

Microsoft Office

Kaspersky internet security 2012

VAT2013 (A software developed by Mr. Khushro according to requirement of Atul Medico )

System Software

Following System software’s are used in the organization:-

Operating System for PC’s - Windows XP

5.1.2 Hardware Resourceshttp://www.wildbunny.co.uk/blog/wp-content/uploads/2012/10/clientServer.gif

Desktop computers (Total no. = 4 units)

Network card

Epson FX-2175 Dot-matrix Printers (Total No. = 5 units)

All the computers are connected to each other through wired LAN. One computer act as the server and the remaining three computers act as client.

5.2 ORGANIZATION REPORTS

The list of reports that the management at Atul Medico generate for decision making are:

Day Book

Day Book (Cash/Bank/Journal)

Bank Reconciliation

Sales/Purchase Book

Date

Party

Area

Discount/Scheme

Detail

Bill Detail

Amount

Purchase Register

R.D / O.G.S

‘C’ Form

Sales Above 25000

Purchase above 25000

Journal Voucher

Party statement

Statement

Outstanding

Vat Reports

Sales Register

Purchase Register

Closing Stock

Closing Stock Summary

CST Report

Sale Register

Purchase Register

General Ledger

Detail

Group / Alpha

Summary

Party Outstanding

Financial Report

Outstanding Collection

Party Wise

Area Wise

Salesman wise

Payment Due

For Bank (Summary)

Reminder

Ageing Debtors Analysis

60 / 75 / 90 / above 90

30 / 45 / 60 / 75 / 90 / 120

90 Days

Statement of Account

Party

Area

Chalan

Pre Printed

Simple

Invoice

Preprinted

Simple

Purchase Invoice

Bank slip / Receipt Voucher

Bank Slip

Receipt/ Expense Voucher

Cheque

Expense Voucher Report

Sales Tax report

Payment Letter

Letter

Party wise Report

Doctor Account Statement

Doctor Wise Sale

Sale Order Reports

Order Print

Order Wise

Salesman Wise

Stock and Sales Reports

Salesman wise Sale

Party wise Sale / Purchases

Sale Margin

Top Party

Chalan wise Sale

Product wise Sale / Purchase

Company-Area-Party Sale

Area wise Sale

Stock and Sales

Stock Adjustment

Expiry Report

Goods Claim

Purchase Order Booking

Quotation

Out of all these above mentioned reports that the management at Atul Medico generates, the most important reports are:-

Purchase Book

Frequency – every 15 days.

The purchase book gives the information about the total amount of purchases that they have made for any given period of time. It contains the information like the date of purchase, invoice number, the total amount of purchase, the name and the address of the supplier i.e. the pharmaceutical company from whom they have purchased.

The information from this report enables the management to be aware of the date before which they have to make payment to the suppliers along with the information of the variation in the purchases from different companies by comparing with the previous purchases.

The sample purchase book has been attached in the annexure.

Weekly Credit sale

Frequency – every week (Saturday)

The weekly credit sale provides the management with the information of the amount of credit sales that have taken place in the entire week. The report gives information of the credit sales to each customer’s and also the total credit sale. This gives weekly information to the management about the sale of the week and if the sales are less than the expected then they could find out the problems and try to solve them.

The sample Weekly Credit sale has been attached in the annexure.

List of sale above 25000 INR

Frequency – every week

The list of sale above 25000 INR gives a list of all the Medical stores with a purchase of more than 25000 INR in the week i.e. Monday to Saturday. This comprehensively informs all the major clients of Atul Medico so that proper facilities can be given to these clients.

The sample List of sale above 25000 INR has been attached in the annexure.

List of Purchase above 25000

Frequency – every alternate day

The list of purchase above 25000 INR gives a list of all the pharmaceutical companies from whom Atul Medico has purchased medicines worth 25000 INR or more.

The sample List of purchase above 25000 INR has been attached in the annexure.

Closing Stock

Frequency – monthly

In the closing stock report the management gets the number of opening stock, number of units i.e. strips or boxes received from the companies, number of units i.e. strips or boxes sold and the closing inventories of all the medicines for given period of time. This report is helpful for the management to keep a close eye on the stock and if any medicine’s closing stock is less, than they can order that medicine. This ensures that Atul Medico never goes out of the stock and proper inventory planning can be done.

The sample Closing Stock has been attached in the annexure.

Party wise Outstanding Report

Frequency – monthly

The party wise outstanding report gives the information of the outstanding payments of the selected client. The report contains the name of the client, the address of the client, and the credit purchases by the client with date, bill no. and amount. The total outstanding payments of the client are also given by this report. With the help of this report, the management follows a strict principle of not selling any medicine on credit to the client if his outstanding amount exceeds to 2 lakhs INR. Hence the decision of whether to sell medicine to the client on credit or not is taken by the management on the basis of this report.

Salesman Outstanding Report

Frequency – monthly

There are 18 salesmen in Atul Medico. These salesmen have been given a fixed number of medical stores in a particular area. The salesmen bring orders from their respective medical stores, deliver the orders and bring payments from their respective medical stores. The salesman outstanding report gives the information of the outstanding payments of all the medical stores of the selected salesman. This helps the management to effectively measure the performance of each salesman and give them the feedback of their work. This report also helps the management in making decisions about giving bonuses to the salesman.

CONCLUSION

In today’s modern era information is considered as an asset. Any organization, big or small in size cannot grow consistently without any kind of information system. Management information system is at the very core of any organizational structure. The information obtained from the MIS helps the management in more number of ways than one can imagine. MIS helps the management in making a number of decisions, to grow and survive the competition in the market. All the planning regarding business activities are done with the help of the information obtained through the MIS. The management at Atul medico receives large amount of information through their information system in the form of different reports. These reports hold a great importance in the planning activities and decision making activities that takes place in the firm. The information system at Atul medico has developed overtime and still has a large scope of development. It would be safe to say that the information system at Atul Medico has played a vital role in making it the biggest pharmaceutical distributor in south Gujarat.

RECOMMENDATION

The management information system is very good at Atul Medico but it has a huge scope of improvement. Some of the recommendations for MIS at Atul Medico are as follows:

Atul Medico should develop a system where the medical stores can directly place an order to the firm and complete eradicate the intermediaries between them and the medical stores.

They should employ an inventory control system wherein the order is automatically placed to the pharmaceutical companies by their system when the stock of some medicine falls below a certain level instead of making a report of stock and then manually placing order.

They should develop a portal wherein all the medical stores can check their outstanding bills, the stock of all medicine currently available, etc. online so that they can plan their activities accordingly.

They should find a way to inculcate teachings about new MIS in order to reduce the trend of businesses being left behind on new inceptions.