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BPRS ROLE IN PHARMACEUTICAL INDUSTRY

Chapter 4: Data Analysis


4.1 INTRODUCTION In this chapter, the realistic findings will be conversed and analyzed. Researcher has carried out four detailed audio-recorded in-depth interviews with the head of the departments and officials and coded as follows: Interview 1 Respondent A Interview 2 Respondent B Interview 3 Respondent C Interview 4 Respondent D

Researcher performs as an intermediary in all the interviews. Researcher has constructed the themes, asked interrelated questions about the themes to dig the details information. 4.2 MEANING CONSTRUCTION

4.2.1

BPR Definition

Respondent A: In a small scope, BPR means to analyzing current process and planning for the modern process in which the organization ideally achieve the goal. Respondent B: BPR is the abbreviation of Business Process Re-engineering and when you use the word reengineering encapsulates all the activities that innovation and process simplification. Respondent C: We are basically encouraging all of our employees from workers to managers to deliver ideas for improvement in every process. The idea could be of cost

BPRS ROLE IN PHARMACEUTICAL INDUSTRY

cutting, new product development, automation and head count reduction on improving the cycle time of the processes Respondent D: Reengineering is a process in which as I told you we are taking different benefits we save steps, time, labor cost, equipment time then we can increase our profit margin.

4.2.2

Redesigning in Pharmaceutical Industry

Respondent A: _ _ _ _ _ _ _ Respondent B: Reengineering has been occurred in our organization in beginning but the form may vary from time to time. Business Process engineering as know the term that fully covers not only process simplification but radical change in the process. As far as pharma industries are concerned you are specifically concerned the pharmaceutical industry, the role of BPR as compared to the other industries like automation industry role of BPR is not that much viable because we have to follow certain kinds of regularities issues and portend ministry of health requirements and their respected SOPs. And we have to follow certain rules and regulations to fulfill our operations we can not change the formulations of product because most of our product pharmaceutical in nature some of the product are not pharmaceutical as well they are known as general health care products but the main business of our firm is revolve around pharmaceutical products and the products are in some categories that is multivitamin, they may be life saving drugs they may be certain pain-killers and anti allergic medicines can be in form of syrup or injections either the injection is inject-able with the intervals. So we can not change the whole foundation of the product of the making of the product like as I said that reengineering specifically means that radical change so we can not radically like you know change the whole

BPRS ROLE IN PHARMACEUTICAL INDUSTRY

procedure of the product talk about but still we can renovate certain part of the process we can simplify certain operations we can even make better even we can make them cost effective so these change could really lie in the circle of reengineering but we can not say that these changes these continuous improvements these process simplification is the hundred percent reengineering. Respondent C: BPR in its full shape can not be implemented in a pharmaceutical industry. As BPR demanded as radical changes and in pharmaceutical companies can not change the whole operational process of manufacturing a drug. Respondent D: When we talk about BPR here you reengineer one process it means all the process from the very beginning, but here in Pharmaceutical you can not change a process entirely, it is impossible. When you want to bring change in any organization then it happens step by step the process of reengineering. And see you can change one process at a time right management changes but management will not change the production process entirely. Management will not change completely your standard SOP she can not change headcounts directly. Because it performs step by step and when we talk about BPR it takes time and it takes a lot of time not only time but it also needs experienced people who have very strong analytical capabilities because if one do not have analytical capabilities what will be outcome the main aim of the BPR that is to increase your profit and reduce your expenses or cost.

4.2.3

Process reengineered

Respondent A: The year before the previous year in 2009, there was an error, half of the carton had to be dispatched, but full of it was send somewhere, because the man who was calculating, wrote one and the whole was dispatched from that error it was triggered we should have some automated system that number of pack calculated

BPRS ROLE IN PHARMACEUTICAL INDUSTRY

automatically the number of cartons then we developed a system standard. Just to give you an idea that we have nearly 80 to 90 cartons and cartons are different on each number of packs. It is very much difficult to recall number of packs per carton as told you that we are dealing 80 millions plus packs it is a huge volume. what I did I made standard for each carton is okay, a standard sheet is prepared in which it is mentioned that this products this number of packs are found in one carton, after which testing etc takes place. Now situation is that as soon as the orders already converts into the number of cartons and the packs. You know that is not much easy, because the batch and number of cartons, there are many SKUS every SKUs line is also different. If one batch is getting finished and 20 loose packs are remaining in the end, that had to be settled in that scenario so it took around two to three months to get it into the actual system and now the essence of this change was, we have reduce the labour hours at warehouse level because as soon as we get the orders that is for picking activities. Basically my responsibility is to highlight all the area of improvement and essence of automation. Now my warehouse people are very happy to this change. Respondent B: As far as the primary containers of the liquid products are concerned they are amber glass bottles. In the past the first finishing operation of amber glass bottles is bottle washing. This process is approved from ministry of health as in pharmaceutical business we have to make our all operations approved as per ministry of health requirements and policies. In this process we have to wash all the bottles coming from the vendors with certain germicidal solution and get them dry in dryers on certain temperature. This process of bottle washing was very long and non productive at the same time as proved to be the bottle neck of our throughput. Then an idea was generated and we shifted from bottle washing operation to air blowing operation. High pressure air nozzles clean all the dust particles from the primary

BPRS ROLE IN PHARMACEUTICAL INDUSTRY

container and make them clean under HVAC system. Air blowing operation then got approved not only from ministry of health but all the affiliates operating in different areas of the world as well. We can not change our process by our own. Collaboration and consensus of different other affiliates operating in different areas of the world should accept that as well. These changes really save a lot of labor and machine hours and we have saved lot of time which is very cost effective for whole process. So this is one activity that we redesign. Respondent C: We have reduced the cycle time of two of our inject-able products ACYCLOVER, VANCOMYCIN. The cycle time of lifolization has been reduced to almost half. We have re-engineered a few of our utility plant operations with a little investment to get control over required temperature. We first bench marked it and matched our process to the best practices in abroad. Our plant in Chicago actually guided and helped us achieve that goal. Respondent D: I am telling you about December 2005 we did import a machine from Germany that was working as a scanner, what it used to scan mean the machines checks that all the things are available in the packs or not, the machine performs very well but for so many reasons we changed the machine and brought another machine. There was a sensor in that machine, did you get it first we used scanner after scanner we come to the sensor, what sensor worked the packs are coming it sense the weight of pack. We used to enter the weight of packs in that machine before the operation starts that saves in the memory of that machine. The benefit of that machine was, if there is variation (weight is less or more) when compared with the stated weight that automatically rejected by the machine and it separated by the machine in rejected category. But again one issue arouse in Pakistan scenario, we used this machine for few months we saw, we were estimate that we will reduce the headcounts and yes for

BPRS ROLE IN PHARMACEUTICAL INDUSTRY

the time being we reduced the headcounts, and because we depends fully on the machine and thought we will get good results but the matter is happed we were frequently receiving complain from the market. Actually the machine was not upto the mark it may be the faulty or there was manufacturing fault in the carton we received was not weight standard sometimes the weight of the carton is light and sometimes it is heavier than the standards. When the number of complains increased what we did we replace the headcounts back with the machine. That was worst experience we were thinking that we will reduce the headcounts and as well as the market complains but all in vain. After that again, what should I say that we bring all headcounts like it was previously working. Then we implant new machine after implanting new machine we faced few problems but we identify the route cause, what was the route cause the local manufacturer because the carton we make in Pakistan they all were local manufacturer there was quality issue the quality is not on the standard level what we desire, and for this we faced all the problem.

4.2.4

Continuous Improvement and Cost Saving

Respondent A: We are dealing with the pharmaceuticals we have a very broad concept of labeling. Every step have to be documented, every step have to be labeled, The material is to be labeled quarantines label is to be placed on it, when quality control samples it, samples label is placed on it, and when it is released, the label of release is placed, so there are a lot of areas to be automated rather in SAP. Now we are thinking to put some alert kind of thing of informative email that when a transaction is completed, if its information is to be circulated to certain stakeholders they should be automatic intimation to that information to all the stakeholder like when warehouse created GRN, it is sent automatically to everyone we took one more

BPRS ROLE IN PHARMACEUTICAL INDUSTRY

risk that when warehouse workers dispatch stock hey use to send delivery challan that we are sending this stock of this quantity, in that they would load the stock on truck then they would print, delivery challan was printed, then sent on mail to TCS. We did earlier that made this transaction to SAP as soon as the goods are packed in the carton and dispatch in that we click like PDF is downloaded. They sent to customer immediately. So no need to making envelop, writing address of distributor so all are time saving and cost effective. So all of it is carried out online and it also comes in our record. Respondent B: Our organization is the biggest user of vitamin C among all the pharmaceutical companies. Vitamin C is one of the most important ingredients of many of our products. In past, sodium ascorbate was used as a source of vitamin C in all products of Vitamin C. It is a salt and the only vendor provided us this particular row material costs a lot. We have got twelve different products that used Vitamin C. After some research we had come to know that we can use ascorbic acid as a source of Vitamin C in our products. Therefore after making trial batches of all products our QA stability finally permits us to use ascorbic acid in replacement of sodium ascorbate which is far cheaper in price. Thus again through this CI we was able to achieve tremendous cost savings. Respondent C: We have to follow certain formulation and methodologies to manufacture a specific product rather that drug would be a tablet liquid semisolid or inject-able. Although to some extent we could reengineer our processes and this activity would be cover by continuous improvement. Respondent D: Actually in pharmaceutical industry there are different departments in production, one is quality assurance and another is quality control and in quality control there is one microbiology testing and another is physical testing, our quality

BPRS ROLE IN PHARMACEUTICAL INDUSTRY

assurance officer visited to that manufacturer and he used to checked the quality that is the same quality materials that they sampled us. As you know that when a supplier comes to you with sample that is hundred percent quality product but there may be variance on he supplies in bulk. Then we ensured that the cartons we are receiving must be up to the mark by this we can reduce the headcounts and machine will work properly and the result was good when we work with local manufacturer. Then we reduced headcounts and machine is also performing well. Now I would like to tell you all the nutshell of this process we did different experiments finally we find the problem that there is no issue with the machine but the problem with the local manufacturer and we improved that now we reduced the headcounts and machine is performing well.

4.2.5.

Process Improvement

Respondent A: Where we are getting orders from the customers. And those orders have been coming through SAP. Our customer servicing department makes delivery note. Delivery Note is a document in which the customer servicing department sends information to finished goods warehouse that product A to this quantity to this batch has been sent to x distributor. Just to give the idea about volume we deal with 80 million plus pack per year. Number of orders 500 per month. Five hundred different orders coming from different distributors. If you look from warehouse perspective it is just 1,000 pack quantity is to be dispatched to the customers. But if we look from warehouse perspective then 1000 quantity is equivalent to how many carton because they do not count each pack separately they have to convert 1000 packs into number of carton that 1000 carton equal to how many cartons and keeping in their memory or there will be a standard that this amount of cartons of different products are present

BPRS ROLE IN PHARMACEUTICAL INDUSTRY

that was been done by them since long, they forget that they are converting cartons and that was very difficult job and very laborious job and having some accuracy as well. Respondent B: Look, we definitely can not change the whole manufacturing processes of our products either that product would be a tablet, injection, liquid or cream. Cycle time reduction could be one of the core achievements of continuous improvement. We have reengineered the tablet manufacturing process of our effervescent tablets. These tablets are humidity sensitive and create a lot of problem in compression process. By some modifications and fabrication in machine we are able to enhance our production thrice as before. We basically changed the compression machine parts from SS to Teflon. Unlike wood, Teflon is quite acceptable in pharmaceutical Industry. Respondent C: I personally dont think that only trouble kids are treated with affection. Not only bottle necks but all the operations if they have got the margin should be improved. Respondent D: _ _ _ _ _ _ _

4.2.6.

Redesigning Initiatives

Respondent A: Basically my responsibility is to highlight all the area of improvement and essence of automation. Respondent B: We are not limiting for process of reengineering. Everybody is involved in the process of simplification, process of innovation, every employee from the peon to the CEO everybody can involve in this process of improvement. We have made a particular setup on lean manufacturing and lean six sigma. These techniques are very much implemented in our organization. We may have seen different racks in

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which we put ideas initiative form both in Urdu and English. Urdu for those who can not express his or her idea, language does not matter. Most important thing is the idea and the idea generation is for all. We always welcome each and everybody and of course we have received a lot of even thousand of ideas from different employees from different functional units from marketing, finance, production, material management and defiantly we have the particular setup particular hierarchy of structure of peeling those particular ideas, we have appointed people who are especially dedicated to the job and the matter is that we encouraged our employees to do more and more and give more and more idea and involve in this process of improvement and we after every quarter we announce the winner of those ideas and anyone who is winner is being awarded both financial and reward. So this is the whole process. You can not stop the idea generation for anybody in our organization. Respondent C: _ _ _ _ _ _ _ Respondent D: See in our organization in production everybody is educated our production officer is a pharmacist of course he has studied different subject of it. And from up there are the people of quality assurance who ensure the quality that the specification and SOPs are followed or not and on the above there are the people of quality control who as it is control all the related things ranging from row material to the finished product whether everything is according to the specified specification or not. There is one also department that is new called validation department, and what they do is that all the processes that are running are up to the mark or not. Do these processes need any kind of change, any kind of up-gradation if they do then they bring changes what happened they suggest changes they go to the production department they ask them tell us these are the problems how can we improve that suggestion to the quality assurance department they discussed with them they tell

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them these are the problems tell us how can we improve these suggestions any thing better then the existing suggestion then finally they go to the quality control department and when they sit with the quality control department they also take suggestion from them finally the set those suggestion and when they arrive on a final decision or conclusion they ask representative from few remaining department production, QA, QC and sit with them and decided that we are going to decide that you people agree or not if they say yes OK and if say NO why, they give the reason. One they say yes they agree what happen they first of all by the document they complete the same process that we will do this we will do this, this is temperature level this is moisture level here we will perform this this this what happens same procedure is performing practically in the presence of representative of every department we had decided we are going to just bring the change.

4.2.7

Employees Participation

Respondent A: _ _ _ _ _ _ _ Respondent B: It is really a continuous improvement process from top to down the line and we are not facing any kind of resistance not from the staff not from the management from any people any functional unit. I mean, people over here are not only enjoying it but they are very much keen towards it and they have very healthy competition as far as generating different idea and implementing them are concern. Respondent C: In my company you may have surprised that all employees took any CI initiatives / implementations very positively. They have accepted the change warm heartedly because they all have well aware of the current business scenario, inflation and recession from their management. Respondent D: _ _ _ _ _ _ _

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4.2.8

Improvement Philosophies BPR, and Continuous Improvement

Respondent A: _ _ _ _ _ _ _ Respondent B: lean six sigma is being implemented in our organization. Although we are not on the toppers as far as achieving that the particular six sigma awards are concerned but we are continuously improving our permanent rejections and our processes, and these are the main areas on which we are working. Lean six sigma is a particular specific tool which we are implementing in our organization. Respondent C: In fact, we have deployed two head counts specifically dedicated for this job. Manager CI and CI coordinator both reports to me for this task. We are basically encouraging all of our employees from workers to managers to deliver ideas for improvement in every process. The idea could be of cost cutting, new product development, automation and head count reduction on improving the cycle time of the processes. Well as you may know that BPR depicts the radical change in the process all together and as I told you earlier that in pharmaceutical operations you can not change the fundamental procedures of making the drugs, rather smartly shorter the steps involved and make the operations cost effective. Automation in different areas especially in product finishing operations can act as a continuous improvement. You see, people normally working in pharmaceutical companies don not know the terms like BPR except the ones who have got some educational background of some business school, same case is for Abbott Pakistan as well. But here people working in different areas are well aware of CI and its benefits. As I told you earlier that we have a proper set up of CI and its implementation. CI team along with project development team sit together and implements the CI ideas coming from employees of Abbott working in any department on any post. From a peon to a machine operator and from a finance officer to product manager, everybody is thoroughly involved in CI

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activities and in every year we have celebrated our achievements from CI in terms of cost saving by providing awards to the active participants as well. CI is basically brainstorming and generating as much ideas as you can bring for betterment any process. Cost effectiveness is one of the benefits we can get from it.

Respondent D: The aims of all that is same and that is you improve the quality and with the quality you should reduce the cost and increase profitability. If we talk about TQM so what happens in TQM we talk about quality we are improving quality. Quality does not means what is the ingredients of a product or to purchase that product one consumer or in health care we talk about what will be the impact. Here quality means that after performing this specific process how much outcome you get in your company this is also quality. And when you achieve that quality when you improve the base fundamentals, what will be the fundamentals when features and characteristics of your product meet the customer demand then you can improve quality. Now I want to tell you there are also multinationals organizations they are selling less efficacy products that is not a basically product that is actually brand. They are well established brand and you know that when doctors prescribe that they are quite confident that patient will get the result. In their corner of mind they will get the result this is the quality, the company name is actually quality. There may be less product efficacy and safety margin but the image of the company is good so the company is successful.

4.2.9

Awareness Level

Respondent A: _ _ _ _ _ _ _

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Respondent B: The main thing which is lacking in this company or is awareness. They are not actually hesitating but as a matter of fact they are not properly educated or well aware about the benefits and easy implementation of CI ideas and related reengineering methodologies. I personally know the people from the local firms they are not belong to the multinational firms and even when they come to know about the significance of these ideas of reengineering like continuous improvement they are not only adopting this but they are implementing those ideas like anything. There are different local firms they are implementing these approaches and getting the benefits of those changes in the shape of tremendous cost savings and profitability. Respondent C: I think the companies who dont want to excel in their business, but I dont think I can give you example of any. This is so that the companies do not actually know about these concepts and the related benefits thats y they can not implement it as well Respondent D: _ _ _ _ _ _ _

4.2.10

BPR and Automation

Respondent A: _ _ _ _ _ _ _ Respondent B: You can not really say that BPR means automation. Automation could be one of the parts of the BPR but I personally dont think that automation is the only thing which you named as BPR. Automation can simplify your process and it can be cost effective providing you with better results and speed so by these benefits you can say that yes we simplify and renovate our process. But if you are saying that automation is totally BPR, I dont think so as you are not making some fundamental change in your system.

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Respondent C: To some extent yes but not as a whole. You see, through automation you can improve your productivity, reduce man power, and lean your operation so yes you are producing some fruitful change in your operation but still it is not radical. Respondent D: There is a difference you can say or you can say no there is no difference.

4.2.11

Information Technology tools for BPR

Respondent A: SAP, we are using this system for 15 years. First I dont know before this system what they were using but as soon as I joined the company we are using SAP. The biggest benefit obviously it is an integrated system. Access of information is to everybody as stakeholder, Finance, HR, Production, Planning, Purchase, so all has access of information at same time. Customer service sends order, information is sent from them, warehouse takes out stock, post boot and invoice is ready. Finance department is updated after which accounts payable activates that payment is to be received, now all accounts are updated related to it, similarly ledger and cash flow are also updated. Similarly when we prepare purchase order, now that account is again updated that purchase order has been prepared of this amount, then person related to payment is again updated, obviously as they are requesting a huge quantity of material, they need to have cash at bank. With the completion of pay order warehouse is also updated, that this quantity of material is to arrive so we have to ensure the capacity available. When GRN is created, again accounts payable is updated, so this is how it is an integrated system. Respondent B: IT has its role and importance in each and every operation of organization and from procurement to the marketing IT plays a vital role in Supply

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chain and you know marketing is nothing but a flow of information. We are the manufacturer, we are not selling anything and even procuring anything all we have doing that we gathered information and we just pass information timely and effectively and this information is passed through IT software which actually connects us all. ERP is a phenomenon; you can not say ERP is a tool. ERP is Enterprise Resource Planning ERP is a concept and SAP, Oracle's JD Edwards are software for ERP. SAP is the implementing phase of ERP. I mean there are different ERP tools that different organization implements as per their systems and requirements. ERP is the means of process simplification. Respondent C: _ _ _ _ _ _ _ Respondent D: When we talk about information technology so our all processes that is in production or management IT is involved everywhere. Information is provided by the different software and by the help of that software our performance increased by two-forth. Two things I would like to tell you one thing is batch manufacturing record and another is batch packaging record because in one day in company, different products are manufacturing and if we adopt the traditional things register, pen copies I mean manual so it take a lot of time and number of steps. When we talk about computer and IT what benefits we take more output in very less time, save maximum data and we skip number of steps and see I describe two things we have the workforce that is maintain the data you can save from that secondly we get some fast processes by this we can more improve our quality and thirdly number of step for example if there are ten steps in a process so by this we can reduce these steps may be eight or seven to reduce one step is also valuable.

4.2.12

BPR knowledge

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Respondent A: _ _ _ _ _ _ _ Respondent B: There are few Multinational Corporations which are working on this phenomenon in a very effective way but I dont think so that in local companies are really working on this. But I think as long as they are not able to aware about BPR and this concept there is no benefit to apply but let me tell you one thing when they will able to know about the benefits they are defiantly apply those ideas and approaches. As a whole I think only twenty to thirty percent of Pakistani industry are well aware of this concept. Especially people and employee from the business school people like you they really know about the ideas but many people are ignorant about BPR even though they know the concept of process simplification. Respondent C: The term BPR is not very much famous in Abbott Pakistan except those who have some educational background in some business school. But BPR in the form of Continuous Improvement is very much implemented in our organization. Respondent D: Almost six to seven hundred pharmaceutical companies are in Pakistan in which there are fifteen to twenty are multinational, in multinational these things are implementing but local national companies are not adopting these things. There may be forty to fifty organizations they are working on TQM and BPR and not on that level on which a multinational operates.

4.2.13

BPR in Pakistan

Respondent A: Change is good and we are adopting change but in incremental level previously packing used to be labor intensive, laborers would work long hours in lines but today automation has made it speedy. Like we have traditional transporters which we call truck adda, we are waiting that people are coming with the infrastructure that

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is required by the pharmaceutical industry. Our product pharmaceutical goods have to be manufactured below the twenty five degree centigrade general speaking; in cool state condition that product required the temperature. There must be some determination in transportation. So we want true supply chain service from the logistics point of view. Respondent B: I think the future is very very bright I mean this is war of cost cutting and cost effectiveness I mean as far as inflation and recession is concerned and the fact that we are not primary manufacturer of any thing it is genuinely difficult to run an Multinational Corporation over here especially a pharmaceutical company. If you take example of India they are the manufacturer of raw materials and machineries that we have to import. You know they can not resell any machine or part again but make it by their own resources onwards. These strict rules make them more innovative and competitive. Nowadays India is the biggest raw materials exporter and as far as Pakistan is concerned we are not doing this kind of stuff so the only thing which left behind to stay in the market and survive among the best is to have lean and cost effective operation. Operations which are not that much expensive and to achieve that goal we definitely have to use these kind of tools like BPR like CI like TQM. Only by using these particular tools we are able to compete in market. So I think defiantly future is bright. Respondent C: Tremendous scope. Price increase is the core issue of pharma in Pakistan therefore needs some effective cost saving operations to lower our fixed cost and achieve over all cost effectiveness. Respondent D: An interesting thing I am going to tell you from multinationals there are so many employees they have worked in multinational environment they are switching to local national companies. When a employee who is groom up in

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multinational he is equipped with all the technicalities, all SOPs, all manufacturing procedures, all storage procedures, quality standards, QAs all the expertise. He has really command over that. So they are people are coming in local national companies. Here I would like to share interesting information from five to ten years the market share of multinational was fifty five percent and local national was forty five percent now the case in five to ten years is reverse, the main reason I told you same people they were running multinational come in local same thing they are implementing, they are bringing change and the trust of the doctors also build with the local companies they believe with the cheap price they are producing quality products, if you see our economy so poverty level is high so when the quality will be available with affordability so that is the formula that can bring the success. It really can make you or help you towards success.

4.2.14

Benefits of BPR

Respondent A: I am saying five hundred deliveries per month telling you a rough estimate; five hundred deliveries mean five hundred notes. A delivery notes absolute cost for TCS is eighty rupees. This is the time consumed by laborer in printing paper and the time which is consumed in dispatching. Just for this activity the customer is happy the customer services has been improved because they are getting immediate response from the warehouse now they do not need to wait for the whole day for mail coming from warehouse and secondly almost six lacks rupees is the absolute cost estimated we have been paying to TCS monthly. The time being saved about fifteen to twenty minutes then all that time is saved. Respondent B: _ _ _ _ _ _ _ Respondent C: _ _ _ _ _ _ _

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Respondent D: An organization the work in the market, it aims to improve its business. Nowadays in this scenario business where less growth in pharmaceutical and also survival issues. When we come at the stage where we talk about survival and in survival firstly we go for cost cutting, when we go for cost cutting then we can bear our expense. So reengineering is also a process in which as I told you we are taking different benefits we save steps, time, labor cost, equipment time then we can increase our profit margin. Competition is too much, generic are also too much. For one product ten to twenty generic is available in the market. Least price, there is price war; unethical promotion is too much in pharmaceutical. To see all the facts I understand if BPR is implemented with the vision so it really can bring the change and it will really increase your profit margin.

4.3 THEMATIC ANALYSIS

4.3.1

BPR Definition

According to Respondent A BPR is to evaluating process and setting up to date process that helps organization to attain the objective. Respondent B says that reengineering makes all the activities in a very simple way. Respondent C describes that BPR is using for cost saving, automated process, new product development and lessening the headcounts and get better the process cycle time. Respondent D states that by reengineering we cut the surplus steps by which we save apparatus time, labor cost as well as increase profit margin.

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4.3.2

Redesigning in Pharmaceutical Industry

Respondent B describes that in this company BPR takes place time to time, but due to some regulatory issues by the health ministry and SOP reengineering is not workable as in other industries. The product formulation can not be changed cause of its nature so it may call as process improvement but not reengineering. Respondent C says that BPR in its full form can not be applied in this industry because BPR stress as radical change that is not workable for a drug. According to Respondent D talking BPR means do any process from scratch which is not applicable in pharmaceutical. Change comes step by step and time by time so that management will not change the SOP exclusively. For bringing change knowledgeable experienced people with analytical capabilities are required.

4.3.3

Process reengineered

Respondent A states that in 2009, half carton needed to dispatch but a complete carton was send out wrongly, because they have eighty to ninety different type of cartons it is very difficult to manage number of packs per carton manually. This mistake opened a way for new automated system that took sixty to ninety days to launch and by this they reduced labor hours at warehouse. Respondent B describes that we have a bottle neck in the bottle washing of the liquid products primary containers the process is approved by health ministry. The bottle washing process was very long because it needs to have a wash with germicidal solution then waterless in dryers on specified temperature. After analyzing we changed this process to air blowing operation by using HVAC (Heating Ventilation Air Conditioning) system that uses high pressure air nozzles that made primary container dirt free. By changing this process they saved

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lots of labor and machine hours. Respondent C elaborates that by the guidance of their plant in Chicago they achieved the goal. They need to reduce the cycle time of two injectable products ACYCLOVER, VANCOMYCIN. by reengineering few of plant operations they attained over the required temperature, then benched mark it and match this process with the best practices in the globe. It reduced the cycle time of lifolization to fifty percent. According to Respondent D the organization imported a scanner from Germany that checks number of items available in the medicine packs according to SOP. After some while they replaced it with sensor, the sensor was to detect the pack weight that is already stored in the memory of sensor. After installation of sensor the rejection pieces had increased and it was great loss and to get rid of it, they increased the headcounts. Their main purpose of reengineering was to decrease the headcounts and to some extent it worked but they increase the headcounts while number of rejection rose. That was a failure they analyzed the process from the scratch and found that the bottle neck as the local manufacturer, there was quality issue with the pack carton. Weight of pack of cartons are different that creates variation so that the sensor machine that detects packs by weight did not work accordingly. They worked with the local manufacturer to resolve the quality of the carton and get the standard what they needed.

4.3.4

Continuous Improvement and Cost Saving

According to Respondent A labeling is essential in all steps. So there are rooms for improvement they set some alert email when transaction takes place so that every stake holder gets update. By using SAP as the goods packed in the carton it automatically updated and sent it to customer at the same time. The operation and transaction process is online they saved time of making envelopes, writing distributor

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address by this improvement the process is now cost effective. Respondent B says that his organization is the biggest user of vitamin C as it is used as a major ingredient of twelve different products. Sodium ascorbate was used in past as a source of vitamin C. after few experiment the company used to know that she can use ascorbic acid as the replacement of sodium ascorbate. By making trial batches of related products QA authorized to use ascorbic acid that is far cheaper in price. It is remarkable cost saving by continues improvement. .Respondent C describes that there is certain methodologies to manufacture a product whether this is tablet, semisolid or injectable. The company can reengineer the processes but change the activities by continuous improvement. Respondent D states that the sample provided them by the local supplier are somewhat different as compared the quality of bulk supply. Their quality assurance officer coordinates with local manufacture to make sure the quality as it is sampled. So by the making sure quality material, machine is also performing well and the problem of rejection ended. It reduced the headcounts and consequently a cost saving.

4.3.5.

Process Improvement

Respondent A states that their process was long like making traditionally delivery note. As they have such a huge quantity to deliver almost eighty million packs annually. More than five hundred orders per month. Now they have improved their ordering system by implementing SAP. Respondent B describes that they can not change whole processes at once but cycle time reduction is one of the central part attainment by continuous improvement. They have already reengineered tablet manufacturing process of their bubbling tablets as they were humidity sensitive. They have now increased the production three times by some modifications in machine.

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Respondent C says that every process that have margin should be improved there is no any science that one is to improve and another is not.

4.3.6.

Redesigning Initiatives

According to Respondent A that the management is initiative taker as he is on managerial post his responsibility is to highlight the area of improvement. Respondent B says that there is no limitation. Everybody can play its role in the process of improvement. They have designed a structure. Ideas improvement form is placed in different racks in different functional area. They have dedicated people to see the process of improvement. They also encourage new ideas of improvement by rewarding them on quarterly basis. Respondent D states that everybody can play its role regarding improvement because they do not only have management knowledge but also they are also pharmacist. In the company there is a department called validation department for checking the processes up to the mark or not. If they find any problem they collect the data from all the stakeholders and suggest the solution or new method to for more simplification.

4.3.7

Employees Participation

Respondent B states that there is no resistance from the staff and not from the management. People from different departments enjoy the change and likes healthy competition. Respondent C says that employees take improvement initiative very positively means they accept change by the heart they own the change. As they are fully aware that this change will make their work easier then it was before.

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4.3.8

Improvement Philosophies BPR, and Continuous Improvement

According to Respondent B lean 6-sigma is implemented is the organization. By implementing such improvement philosophies they are progressing not only they decreased permanent rejections but continuously improving their processes. Respondent C says that they have two dedicated people for the improvement one of them is manager. They look after all the phases from idea generation to implementation. They are encouraging the employees at each stage to participate and put their share for improving. The term BPR is not well known in the company but people are well aware of continuous improvement. CI team sits with project development team to implement CI ideas coming from the people. As described CI is brainstorming and generating ideas for betterment of the organization. Respondent D states that the aim of all philosophies is same. For example total quality management talks about improving quality and quality means what would be the final outcome for the organization it talks about all around. To improve quality firms need to improve base, fundamentals, features, characteristics of the product that can fulfill the customer demand. The multinationals selling the product now has become the brand and when the doctor prescribes that the only thing in his mind is the quality associate with this brand. Now the company name has become the symbol of quality and that is the success.

4.3.9

Awareness Level

Respondent B describes that there is lack of awareness. Nobody can say that they do not want to improve but they are not properly educated or well aware about the

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benefits of reengineering in fact. Even in some local national firms there are few people who have idea about reengineering and they have simplified many processes and getting significant result by cost savings and profitability. Respondent C says that company do not know about the concept of reengineering and benefits of it and that is only reason they still not implement it.

4.3.10

BPR and Automation

According to Respondent B BPR and automation is not same but automation is a part of BPR. Automation simply makes easier the process with best result and speed. BPR talks about fundamental change whenever automation only helps to do so. Respondent C describes that the relation of automation and BPR is in yes and no. By automation one can improve the productivity, reducing man power taking a lot of benefits but still you can not call it radical change. Respondent D states that to some extent there is difference and you can say there is no difference.

4.3.11

Information Technology tools for BPR

Respondent A states that the SAP as an information technology tool is using for fifteen years. The main benefit of the SAP, that it is an integrated system. Not only every functional units have the access to its related information but also the supplier and distributor has access to it. From placing an order, manufacturing, warehousing, to the customer everything is managing through this tool. Respondent B describes

that information technology plays vital role in every operation of the organization from procurement to marketing. ERP is a phenomenon under which Oracles JD Edwards and SAP like tools working. Organization is using the software according to its needs and requirements. Respondent D says that information technology is

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everywhere. The flow of information coming from different sources and by using these system performance increased by two-forth. By the help of information tools firms are giving more output in very less time, skipping many manual processes and automated through information technology. By using IT tools one can save the workforce that was need to maintain the data, secondly improve the quality and finally number of steps. 4.3.12 BPR knowledge

Respondent B says that there are few multinational corporations are working on BPR as a very effective tool to boost in his opinion local nation firms did find it effective. It is all about knowledge when people have awareness about it they will be starting to adopt it such ideas an approach. Not more than twenty to thirty percent of Pakistani industry knowledge about reengineering. Respondent C describes that in Abbott Pakistan the term BPR is not famous except few who have some educational record in business school. Continuous improvement is very much famous in lieu of BPR. Respondent D states that in multinationals there are few who have knowledge about the term BPR, when talk about local firms still they do not have such terminology like BPR they are not as competitive as multinationals.

4.3.13

BPR in Pakistan

Respondent A states that incremental change is good and we are adopting it. Here in Pakistan there is traditional transport system called truck adda. Normally pharmaceutical goods manufactured under twenty five degree centigrade. Medicines are temperature sensitive. In Pakistan they do not have such infrastructure to maintain the temperature level during the transportation. Just because of temperature issue the efficacy level of medicine decreases. Respondent B describes that future is good in

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BPR perspective. Let it be example of India as compare to Pakistan she manufacture own row material and other related machineries. There are strict rule by buying machine at once then they need to copy even its spare parts. It makes India world biggest pharmaceutical raw material exporter. To make good position in the international market Pakistan needs to reengineer it processes and policies. Respondent C says that increasing price is big issue for this country in such case there is only way of cost cutting policies by reengineering. According to Respondent D the situation is very dramatic in Pakistan. Many employees who have worked in multinational firms ultimately they are moving in local national pharmaceutical firms. The training and development they got from multinational now they are utilizing in local firms so benefits directly come to Pakistan firms. This is the reason we hope the future is bright in the case of BPR.

4.3.14

Benefits of BPR

According to Respondent A successful restructuring can give direct benefit to the organization. Just because of one process reengineered so many benefits can be seen. Respondent D states that the organization that is working in the market always aims to improve. When an organization thinks about survival there is ultimately they go for cost cutting. Before such scenario arises reengineering with vision can not only simplify the process but it can also cost saving in long run and also increase the profit margin.

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Chapter 5: Conclusion
BPR focus on paying no attention to all the traditions and assumption of the way business is doing and as an alternative build a new process-centered business firm that attains incredible objective. A fresh viewpoint is required to achieve the success in reengineering. Reengineering is the process in which current organizational traditions and assumptions obliterate and full flash modern organization is build. Key elements of reengineering is to focus on basics deal with the issue of specifically how business is doing in present and what are the rules. Reengineering pays no attention to whatis and give attention to what should be. It is about reformulate the business for dramatic results not incremental changes.

RECOMMENDATION: In pharmaceutical industry of Pakistan, most of the firms are operating according to traditions and assumptions that developed in past. Most of the organizations are aware about incremental changes and also implementing in day to day business but the misconception is that they can not differentiate BPR with other improvement philosophies. Business Process Reengineering is a great opportunity for these pharmaceutical companies to build up new regulations by which business will be carried out in future rather than being obligatory to operate by the convention forced by someone else. By reengineering, firm can set new benchmark level that every company must meet to compete and can used as competitive advantage.

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Appendix A: Transcript of Unstructured Interview


Interview 1

Researcher: Assalam-u-alaikum Respondent A: Walaikum Salam

Researcher: How are you sir? Respondent A: I am all right how are you?

Researcher: I am also all right sir Respondent A: Ok what do you want to know from me?

Researcher: I am a student of MBA from IQRA UNIVERSITY and I am doing my research work on BPRS ROLE IN PHARMACEUTICAL INDUSTRY. The research is qualitative and I need your consultation/interview. I want to be familiar with your experience about Business Process Reengineering. Respondent A: Basically, I am dealing with Supply Chain Process and Plant Logistics. We have warehousing, finished product delivery stock. Where we are getting orders from the customers. And those orders have been coming through SAP. Our customer servicing department makes delivery note. Delivery Note is a document in which the customer servicing department sends information to finished goods warehouse that product A to this quantity to this batch has been sent to x distributor. Just to give the idea about volume we deal with 80 million plus pack per year.

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Number of orders 500 per month. Five hundred different orders coming from different distributors. If you look from warehouse perspective it is just 1,000 pack quantity is to be dispatched to the customers. But if we look from warehouse perspective then 1000 quantity is equivalent to how many carton because they do not count each pack separately they have to convert 1000 packs into number of carton that 1000 carton equal to how many cartons and keeping in their memory or there will be a standard that this amount of cartons of different products are present that was been done by them since long, they forget that they are converting cartons and that was very difficult job and very laborious job and having some accuracy as well. The year before the previous year in 2009, there was an error, half of the carton had to be dispatched, but full of it was send somewhere, because the man who was calculating, wrote one and the whole was dispatched from that error it was triggered we should have some automated system that number of pack calculated automatically the number of cartons then we developed a system standard. Just to give you an idea that we have nearly 80 to 90 cartons and cartons are different on each number of packs. It is very much difficult to recall number of packs per carton as told you that we are dealing 80 millions plus packs it is a huge volume. what I did I made standard for each carton is okay, a standard sheet is prepared in which it is mentioned that this products this number of packs are found in one carton, after which testing etc takes place. Now situation is that as soon as the orders already converts into the number of cartons and the packs. You know that is not much easy, because the batch and number of cartons, there are many SKUS every SKUs line is also different. If one batch is getting finished and 20 loose packs are remaining in the end, that had to be settled in that scenario so it took around two to three months to get it into the actual system and now the essence of this change was, we have reduce the labour hours at warehouse

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level because as soon as we get the orders that is for picking activities. Basically my responsibility is to highlight all the area of improvement and essence of automation. Now my warehouse people are very happy to this change.

Researcher: What do you mean by BPR? Respondent A: In a small scope, BPR means to analyzing current process and planning for the modern process in which the organization ideally achieve the goal.

Researcher: What about ERP? As you have indicated that you have implemented SAP. Can you please tell me the details of what was the cause to implement ERP/SAP system? What are the benefits that you are taking from this system? Respondent A: SAP, we are using this system for 15 years. First I dont know before this system what they were using but as soon as I joined the company we are using SAP. The biggest benefit obviously it is an integrated system. Access of information is to everybody as stakeholder, Finance, HR, Production, Planning, Purchase, so all has access of information at same time. Customer service sends order, information is sent from them, warehouse takes out stock, post boot and invoice is ready. Finance department is updated after which accounts payable activates that payment is to be received, now all accounts are updated related to it, similarly ledger and cash flow are also updated. Similarly when we prepare purchase order, now that account is again updated that purchase order has been prepared of this amount, then person related to payment is again updated, obviously as they are requesting a huge quantity of material, they need to have cash at bank. With the completion of pay order warehouse is also updated, that this quantity of material is to arrive so we have to ensure the

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capacity available. When GRN is created, again accounts payable is updated, so this is how it is an integrated system.

Researcher: What is your role in this value chain, what role do you play? Respondent A: As I told you early my role is basically planning. We initiate any purchase process that which material in what quantity is required. I mean our purchase department negotiates with the supplier that what quantity is required now, so what the offered rate is, so we trigger that process. We raise requisition that his quantity of this much material what the production plan is for next month, so this quantity is requested, so purchase staff buy it for us. Those who are power users is my department, basically we all maintain the master data in the SAP as well.

Researcher: As the process of purchasing you described is under your department, what improvements / changes are you looking forward to getting optimal result? Respondent A: Still there are lot rooms for improvement. We are dealing with the pharmaceuticals we have a very broad concept of labeling. Every step have to be documented, every step have to be labeled, The material is to be labeled quarantines label is to be placed on it, when quality control samples it, samples label is placed on it, and when it is released, the label of release is placed, so there are a lot of areas to be automated rather in SAP. Now we are thinking to put some alert kind of thing of informative email that when a transaction is completed, if its information is to be circulated to certain stakeholders they should be automatic intimation to that information to all the stakeholder like when warehouse created GRN, it is sent automatically to everyone we took one more risk that when warehouse workers dispatch stock hey use to send delivery challan that we are sending this stock of this

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quantity, in that they would load the stock on truck then they would print, delivery challan was printed, then sent on mail to TCS. We did earlier that made this transaction to SAP as soon as the good are packed in the carton and dispatch in that we click like PDF is downloaded. They sent to customer immediately. So no need to making envelop, writing address of distributor so all are time saving and cost effective. So all of it is carried out online and it also comes in our record.

Researcher: Sir, what is GRN? Respondent A: GRN means goods received note.

Researcher: As the automation you discussed what are benefits your organization gets in term of other benefits? Respondent A: In term of see, I am saying five hundred deliveries per month telling you a rough estimate, five hundred deliveries mean five hundred notes. A delivery notes absolute cost for TCS is eighty rupees. This is the time consumed by laborer in printing paper and the time which is consumed in dispatching. Just for this activity the customer is happy the customer services has been improved because they are getting immediate response from the warehouse now they do not need to wait for the whole day for mail coming from warehouse and secondly almost six lacks rupees is the absolute cost estimated we have been paying to TCS monthly. The time being saved about fifteen to twenty minutes then all that time is saved.

Researcher: Sir, can you please tell me the future of BPR in Pakistan? In todays organization is BPR in practice? Is there awareness of redesigning?

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Respondent A: Yes, very much. Change is good and we are adopting change but in incremental level previously packing used to be labor intensive, laborers would work long hours in lines but today automation has made it speedy. Like we have traditional transporters which we call truck adda, we are waiting that people are coming with the infrastructure that is required by the pharmaceutical industry. Our product pharmaceutical goods have to be manufactured below the twenty five degree centigrade general speaking; in cool state condition that product required the temperature. There must be some determination in transportation. So we want true supply chain service from the logistics point of view. Researcher: Thank you so much sir, for your time.

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Interview 2

Researcher: Assalam o alaikum sir Respondent B: Walaikum Salam

Researcher: How are you sir? Respondent B: Fine

Respondent B: Ok Mr. Akram what exactly do you want to ask?

Researcher: Sir I am doing MBA from IQRA UNIVERSITY GULSHAN CAMPUS and sir I am doing my research on the role of Business Process reengineering in pharmaceutical industry of Pakistan. My research is qualitative base and I need your interview I want to know about your experience about Business Process Reengineering.

Researcher: I would like to know about BPR and your role regarding BPR, and what do you mean by BPR? Respondent B: As you know Akram BPR is the abbreviation of Business Process Reengineering and when you use the word reengineering encapsulates all the activities that innovation and process simplification. Reengineering has been occurred in our organization in beginning but the form may vary from time to time. Business Process engineering as know the term that fully covers not only process simplification but radical change in the process. As far as pharma industries are concerned you are

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specifically concerned the pharmaceutical industry, the role of BPR as compared to the other industries like automation industry role of BPR is not that much viable because we have to follow certain kinds of regularities issues and portend ministry of health requirements and their respected SOPs. And we have to follow certain rules and regulations to fulfill our operations we can not change the formulations of product because most of our product pharmaceutical in nature some of the product are not pharmaceutical as well they are known as general health care products but the main business of our firm is revolve around pharmaceutical products and the products are in some categories that is multivitamin, they may be life saving drugs they may be certain pain-killers and anti allergic medicines can be in form of syrup or injections either the injection is inject-able with the intervals. So we can not change the whole foundation of the product of the making of the product like as I said that reengineering specifically means that radical change so we can not radically like you know change the whole procedure of the product talk about but still we can renovate certain part of the process we can simplify certain operations we can even make better even we can make them cost effective so these change could really lie in the circle of reengineering but we can not say that these changes these continuous improvements these process simplification is the hundred percent reengineering. So these are the things like we have done a lot of improvement a lot of the process simplification in our different processes.

Researcher: Sir, can you please portray any process that you reengineer/redesign, what was that? Respondent B: Yes, as far as the primary containers of the liquid products are concerned they are amber glass bottles. In the past the first finishing operation of

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amber glass bottles is bottle washing. This process is approved from Ministry of Health as in pharmaceutical business we have to make our all operations approved as per MINISTRY OF HEALTH requirement and policies. In this process we have to wash all the bottles coming from the vendors with certain germicidal solution and get them dry in dryers on certain temperature. This process of bottle washing was very long and non productive at the same time as proved to be the bottle neck of our throughput. Then an idea was generated and we shifted from bottle washing operation to air blowing operation. High pressure air nozzles clean all the dust particles from the primary container and make them clean under HVAC system. Air blowing operation then got approved not only from MINISTRY OF HEALTH but all the affiliates operating in different areas of the world as well. We can not change our process by our own. Collaboration and consensus of different other affiliates operating in different areas of the world should accept that as well. These changes really save a lot of labor and machine hours and we have saved lot of time which is very cost effective for whole process. So this is one activity that we redesign. And besides that as far as vendor development and vendor evaluation is concerned we normally done a lot of work in this particular area. We are basically working on effective and cost effective procurement. As you must know as you are the student of supply chain that almost seventy percent of the cost is been incurred on the raw materials in any product manufacturing in any industry. So this seventy percent is of very much importance. If we will successfully made cost effectiveness on that particular seventy percent of the product cost so we will definitely achieve economies of scale and economies of scope and make the overall cost effective strategic operational excellence. So what we are basically doing is the continuously digging out different alternative vendors. Our organization is the biggest user of vitamin C among all the pharmaceutical companies.

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Vitamin C is one of the most important ingredients of many of our products. In past, sodium ascorbate was used as a source of vitamin C in all products of Vitamin C. It is a salt and the only vendor provided us this particular row material costs a lot. We have got twelve different products that used Vitamin C. After some research we had come to know that we can use ascorbic acid as a source of Vitamin C in our products. Therefore after making trial batches of all products our QA stability finally permits us to use ascorbic acid in replacement of sodium ascorbate which is far cheaper in price. Thus again through this CI we was able to achieve tremendous cost savings. Look, we definitely can not change the whole manufacturing processes of our products either that product would be a tablet, injection, liquid or cream. Cycle time reduction could be one of the core achievements of continuous improvement. We have reengineered the tablet manufacturing process of our effervescent tablets. These tablets are humidity sensitive and create a lot of problem in compression process. By some modifications and fabrication in machine we are able to enhance our production thrice as before. We basically changed the compression machine parts from SS to Teflon. Unlike wood, Teflon is quite acceptable in pharmaceutical Industry.

Researcher: Sir, where does the reengineering process start? Who take the initiative the redesign process? Respondent B: We are not limiting for process of reengineering. Everybody is involved in the process of simplification, process of innovation, every employee from the peon to the CEO everybody can involve in this process of improvement. We have made a particular setup on lean manufacturing and lean six sigma. These techniques are very much implemented in our organization. We may have seen different racks in which we put ideas initiative form both in Urdu and English. Urdu for those who can

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not express his or her idea, language does not matter. Most important thing is the idea and the idea generation is for all. We always welcome each and everybody and of course we have received a lot of even thousand of ideas from different employees from different functional units from marketing, finance, production, material management and defiantly we have the particular setup particular hierarchy of structure of peeling those particular ideas, we have appointed people who are especially dedicated to the job and the matter is that we encouraged our employees to do more and more and give more and more idea and involve in this process of improvement and we after every quarter we announce the winner of those ideas and anyone who is winner is being awarded both financial and reward. So this is the whole process. You can not stop the idea generation for anybody in our organization.

Researcher: What is lean manufacturing and lean six sigma? Respondent B: Lean manufacturing means nothing but removing fat portion room your operations that means eliminating the none value added steps and activities from our all operations. Six sigma is the standardized method to measure the quality aspects of the products. It actually tells the per million rejections of the product.

Researcher: As you told that the firm appreciates, did you face any resist from employees or management after or during implementation of new idea? Respondent B: No. no no not at all. It is really a continuous improvement process from top to down the line and we are not facing any kind of resistance not from the staff not from the management from any people any functional unit. I mean, people over here are not only enjoying it but they are very much keen towards it and they have very healthy competition as far as generating different idea and implementing

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them are concern. As long as resistance from the people are concerned, we could not find it any way.

Researcher: Sir, there is so many improvement philosophy, like BPR, CI, TQM, what specific philosophy do you prefer for improvement? Respondent B: As I told you already that lean six sigma is being implemented in our organization. Although we are not on the toppers as far as achieving that the particular six sigma awards are concerned but we are continuously improving our permanent rejections and our processes, and these are the main areas on which we are working. Lean six sigma is a particular specific tool which we are implementing in our organization.

Researcher: as I read in literature usually companies hesitate to implement the BPR, what are the reasons? Respondent B: I dont think company really resist. I mean the main thing which is lacking in is company or is awareness. They are not actually hesitating but as a matter of fact they are not properly educated or well aware about the benefits and easy implementation of CI ideas and related reengineering methodologies. I personally know the people from the local firms they are not belong to the multinational firms and even when they come to know about the significance of these ideas of reengineering like continuous improvement they are not only adopting this but they are implementing those ideas like anything. There are different local firms they are implementing these approaches and getting the benefits of those changes in the shape of tremendous cost savings and profitability.

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Researcher: Is BPR means automation? Respondent B: Well, in my opinion you can not really say that BPR means automation. Automation could be one of the parts of the BPR but I personally dont think that automation is the only thing which you named as BPR. Automation can simplify your process and it can be cost effective providing you with better results and speed so by these benefits you can say that yes we simplify and renovate our process. But if you are saying that automation is totally BPR, I dont think so as you are not making some fundamental change in your system.

Researcher: IT plays vital role of transformation of BPR? Respondent B: Definitely, it is without saying, yes. IT has its role and importance in each and every operation of organization and from procurement to the marketing IT plays a vital role in Supply chain and you know marketing is nothing but a flow of information. We are the manufacturer, we are not selling anything and even procuring anything all we have doing that we gathered information and we just pass information timely and effectively and this information is passed through IT software which actually connects us all. ERP is a phenomenon; you can not say ERP is a tool. ERP is Enterprise Resource Planning ERP is a concept and SAP, Oracles's JD Edwards are software for ERP. SAP is the implementing phase of ERP. I mean there are different ERP tools that different organization implements as per their systems and requirements. ERP is the means of process simplification.

Researcher: what is the status of knowing BPR by the people i.e. managers in the pharmaceutical industry?

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Respondent B: As far as Multinational Corporations are concern there are few Multinational Corporations which are working on this phenomenon in a very effective way but I dont think so that in local companies are really working on this. But I think as long as they are not able to aware about BPR and this concept there is no benefit to apply but let me tell you one thing when they will able to know about the benefits they are defiantly apply those ideas and approaches. As a whole I think only twenty to thirty percent of Pakistani industry are well aware of this concept. Especially people and employee from the business school people like you they really know about the ideas but many people are ignorant about BPR even though they know the concept of process simplification.

Researcher: Where do you see the future of BPR in Pakistan? Respondent B: I think the future is very very bright I mean this is war of cost cutting and cost effectiveness I mean as far as inflation and recession is concerned and the fact that we are not primary manufacturer of any thing it is genuinely difficult to run an Multinational Corporation over here especially a pharmaceutical company. If you take example of India they are the manufacturer of raw materials and machineries that we have to import. You know they can not resell any machine or part again but make it by their own resources onwards. These strict rules make them more innovative and competitive. Nowadays India is the biggest raw materials exporter and as far as Pakistan is concerned we are not doing this kind of stuff so the only thing which left behind to stay in the market and survive among the best is to have lean and cost effective operation. Operations which are not that much expensive and to achieve that goal we definitely have to use these kind of tools like BPR like CI like TQM. Only by

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using these particular tools we are able to compete in market. So I think defiantly future is bright.

Researcher: Thank you Sir, thank you for you time? Respondent B: It is Ok.

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Interview 3

Researcher: Assalam-o-alaikum RESPONDENT C: Walaikum Salam

Researcher: How are you sir? RESPONDENT C: I am fine how are you?

Researcher: I am also fine sir RESPONDENT C: Yes, what would exactly you want to know?

Researcher: Sir, Please state about your role in this organization. RESPONDENT C: I am working as Assistant Director Supply Chain in Abbott Pakistan. My role along with my team is to monitor and manage all the activities related to Supply Chain from vendor to commercial. Working in supply chain is nothing but Liaoning to the vendors and customers by providing and maintaining the effective follows of information.

Researcher: Sir, I am student of MBA Supply Chain Management, and for fulfillment of the degree I am writing my thesis on the Roles of BPR in the pharmaceutical industry of Pakistan. My research is qualitative in which we collect data by in-depth and unstructured interview. What do you say about BPR? RESPONDENT C: The term BPR is not very much famous in Abbott Pakistan except those who have some educational background in some business school. But

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BPR in the form of Continuous Improvement is very much implemented in our organization. In fact, we have deployed two head counts specifically dedicated for this job. Manager CI and CI coordinator both reports to me for this task. We are basically encouraging all of our employees from workers to managers to deliver ideas for improvement in every process. The idea could be of cost cutting, new product development, automation and head count reduction on improving the cycle time of the processes. BPR in its full shape can not be implemented in a pharmaceutical industry. As BPR demanded as radical changes and in pharmaceutical companies can not change the whole operational process of manufacturing a drug. We have to follow certain formulation and methodologies to manufacture a specific product rather that drug would be a tablet liquid semisolid or inject-able. Although to some extent we could reengineer our processes and this activity would be cover by continuous improvement.

Researcher: Would you like to share any experience of re-engineering of process? RESPONDENT C: We have reduced the cycle time of two of our inject-able products ACYCLOVER, VANCOMYCIN. The cycle time of lifolization has been reduced to almost half. We have re-engineered a few of our utility plant operations with a little investment to get control over required temperature. We first bench marked it and matched our process to the best practices in abroad. Our plant in Chicago actually guided and helped us achieve that goal. Researcher: What is lifolization? RESPONDENT C: The process of making liquid inject-able to powder form.

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Researcher: Is there any difference on the basis we can distinguish BPR and other related terminologies? RESPONDENT C: Well as you may know that BPR depicts the radical change in the process all together and as I told you earlier that in pharmaceutical operations you can not change the fundamental procedures of making the drugs, rather smartly shorter the steps involved and make the operations cost effective. Automation in different areas especially in product finishing operations can act as a continuous improvement. You see, people normally working in pharmaceutical companies don not know the terms like BPR except the ones who have got some educational background of some business school, same case is for Abbott Pakistan as well. But here people working in different areas are well aware of CI and its benefits. As I told you earlier that we have a proper set up of CI and its implementation. CI team along with project development team sit together and implements the CI ideas coming from employees of Abbott working in any department on any post. From a peon to a machine operator and from a finance officer to product manager, everybody is thoroughly involved in CI activities and in every year we have celebrated our achievements from CI in terms of cost saving by providing awards to the active participants as well. CI is basically brainstorming and generating as much ideas as you can bring for betterment any process. Cost effectiveness is one of the benefits we can get from it. Researcher: BPR, Continuous Improvement, TQM. What improvement philosophy should be preferred by this company? RESPONDENT C: As I told you earlier that CI is very much implemented in its full form in our company and we really are enjoying its benefits in terms of tremendous cost saving year after year.

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Researcher: Did you face any resistance or why people resist the change? RESPONDENT C: Well honestly I dont agree with this statement In my company you may have surprised that all employees took any CI initiatives / implementations very positively. They have accepted the change warm heartedly because they all have well aware of the current business scenario, inflation and recession from their management.

Researcher: Why companies/organizations hesitate to implement BPR? RESPONDENT C: What can I say I think the companies who dont want to excel in their business, but I dont think I can give you example of any. This is so that the companies do not actually know about these concepts and the related benefits thats y they can not implement it as well

Researcher: What kind of processes should be re-engineered? RESPONDENT C: Almost every I personally dont think that only trouble kids are treated with affection. Not only bottle necks but all the operations if they have got the margin should be improved.

Researcher: Is BPR means automation? RESPONDENT C: To some extent yes but not as a whole. You see, through automation you can improve your productivity, reduce man power, and lean your operation so yes you are producing some fruitful change in your operation but still it is not radical.

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Researcher: Reasons of doing redesigning / reengineering? RESPONDENT C: Cost effectiveness. Economies of scale and scope, enhancement of production ete etc.

Researcher: Scope of BPR in Pakistans pharma Industry? RESPONDENT C: Tremendous scope. Price increase is the core issue of pharma in Pakistan therefore needs some effective cost saving operations to lower our fixed cost and achieve over all cost effectiveness.

Researcher: Thank you very much, Sir. RESPONDENT C: It is ok, Akram.

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Interview 4

Researcher: Assalamo-alaikum Respondent D: Walaikum-u-Salam

Researcher: Sir, I am doing MBA from IQRA UNIVERSITY. I am working on my final thesis the topic of research is BPRS ROLE IN PHARMACEUTICAL INDUSTRY. I want your interview to know your experiences regarding Business Process Reengineering. Respondent D: First of all I would like to tell you the packaging experience. What we do in packaging, in packaging there is a machine and one operator with one helper after all when the tablet comes on the line after the pack that is called packaging line and in line there are eight to twelve people working. As you have seen that generally tablets are packed in strip form then they put it into the carton and one leaflet is also inserting into the carton then it process to the final the man handled that is called packer. Packer is the finalist, what the packer does he converts the carton into a final outer corrugated box. And with the final he follows whatever specifications and sends it to our warehouse. Now what problem arises? See, in pharmaceuticals there are some regulatory laws that we have to follow strictly I mean the tablet we have packed it has same specification that is written on it, the outer box means packs in which all the strips must be represented same product. Leaflet must be present whether for doctor information and if requirement by the patient information as well. And what happened next the quantity which is mentioned should be the same I am talking about numbers of tablets. Now it is generally said that human error is involved everywhere.

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Sometimes it happens that labors are tired or they loose interest or by the cause of careless or involvement of human error, all the stated reason I told you there may be one any time to counter this we did in 2005. I am telling you about December 2005 we did import a machine from Germany that was working as a scanner, what it used to scan mean the machines checks that all the things are available in the packs or not, the machine performs very well but for so many reasons we changed the machine and brought another machine. There was a sensor in that machine, did you get it first we used scanner after scanner we come to the sensor, what sensor worked the packs are coming it sense the weight of pack. We used to enter the weight of packs in that machine before the operation starts that saves in the memory of that machine. The benefit of that machine was, if there is variation (weight is less or more) when compared with the stated weight that automatically rejected by the machine and it separated by the machine in rejected category. But again one issue arouse in Pakistan scenario, we used this machine for few months we saw, we were estimate that we will reduce the headcounts and yes for the time being we reduced the headcounts, and because we depends fully on the machine and thought we will get good results but the matter is happed we were frequently receiving complain from the market. Actually the machine was not upto the mark it may be the faulty or there was manufacturing fault in the carton we received was not weight standard sometimes the weight of the carton is light and sometimes it is heavier than the standards. When the number of complains increased what we did we replace the headcounts back with the machine. That was worst experience we were thinking that we will reduce the headcounts and as well as the market complains but all in vain. After that again, what should I say that we bring all headcounts like it was previously working. Then we implant new machine after implanting new machine we faced few problems but we identify the

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route cause, what was the route cause the local manufacturer because the carton we make in Pakistan they all were local manufacturer there was quality issue the quality is not on the standard level what we desire, and for this we faced all the problem. Actually in pharmaceutical industry there are different departments in production, one is quality assurance and another is quality control and in quality control there is one microbiology testing and another is physical testing, our quality assurance officer visited to that manufacturer and he used to checked the quality that is the same quality materials that they sampled us. As you know that when a supplier comes to you with sample that is hundred percent quality product but there may be variance on he supplies in bulk. Then we ensured that the cartons we are receiving must be up to the mark by this we can reduce the headcounts and machine will work properly and the result was good when we work with local manufacturer. Then we reduced headcounts and machine is also performing well. Now I would like to tell you all the nutshell of this process we did different experiments finally we find the problem that there is no issue with the machine but the problem with the local manufacturer and we improved that now we reduced the headcounts and machine is performing well. There is also one advantage for this when we talk about machine, machine means something which really can produce a lot in very small time ok, when we have that machine our packaging had become very fast and when packaging is fast means final packaging improves then we speed up the machine of the tablet striping it increased the number of units and reduced the per unit cost. There are two or three more benefits per unit cost reduced, less the headcounts and as well the accuracy level got up. You can write three things.

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Researcher: Sir, can you please tell me the name of the scanner that you used first and after that what was the name of the machine that you replaced with that scanner? Respondent D: The name is exactly I do not remember but I know it was German made, actually our company is also German based. I would like to tell you an interesting fact as much multinational Pharmaceutical mostly they used German row material.

Researcher: What do you think is BPR and Automation the same thing? Respondent D: There is a difference you can say or you can say no there is no difference. When we talk about BPR here you reengineer one process it means all the process from the very beginning, but here in Pharmaceutical you can not change a process entirely, it is impossible. When you want to bring change in any organization then it happens step by step the process of reengineering. And see you can change one process at a time right management changes but management will not change the production process entirely. Management will not change completely your standard SOP she can not change headcounts directly. Because it performs step by step and when we talk about BPR it takes time and it takes a lot of time not only time but it also needs experienced people who have very strong analytical capabilities because if one do not have analytical capabilities what will be outcome the main aim of the BPR that is to increase your profit and reduce your expenses or cost. You can not achieve at once or in one day it takes time for this you need foresighted people and what we say the higher management they should be foresighted and should have very broad vision and if they are with broad vision and they say that they are taking decision that they can forecast what to say they can give prophesy about that decision that whatsoever they have taken the decision today these will have impact tomorrow.

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Whether this impact will be bearable tomorrow or not. This is what we can say BPR helps in this way.

Researcher: As you told that you automated the process but it fails in two to three attempts, then you brought the back the headcounts. What was the reason why BPR fails? Respondent D: The reason is that see you were not identified the route cause of the problem that what is the route cause that our there is a problem with our operators that they were not able to operate properly the machine or is there any issue with our material or our headcount was better. Now see there is indecisive stage what we thought what we want we do not want complains and want rapid packaging so that we can make sure maximum availability of our finished product in the market that meet the demands. But it did not happens we increasingly receiving complains and complains means it creates spot on your companys image and companys image matters a lot specially you are producing pharmaceutical product. Because the person who prescribe pharmaceutical product is very much qualified person and if he has any doubt in his mind that this is complain last time and this can happen. I would like to share one more experience regarding this I would not tell the name of the company, one parenteral of this company, we say parenteral to the inject able, so the injection also called MBUs that goes directly in veins it is irreversible, if it goes one and is there any contamination so it can cause a patient death that is the reason the doctor who prescribe parenteral is hundred percent sure that the companys product I prescribe is a quality company. Once any complain and if doctor inject any injection and he faces any adverse reaction so he will not prescribe not only parenteral but also oral tables of that company and this is the problem with the image. As I told you when

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we bring automation complain increases and what we wanted we want to reduce complain then we change all after we identified the rout cause in a nut shell I would like to tell you that actually problem with local manufacturer and when we rectify the rout cause so our reengineering process was successful that we reduce headcounts after automation speed increases then we achieve our main goal.

Researcher: Are BPR, Continuous Improvement and TQM same? How do you define these improvement philosophies? Respondent D: The aims of all that is same and that is you improve the quality and with the quality you should reduce the cost and increase profitability. If we talk about TQM so what happens in TQM we talk about quality we are improving quality. Quality does not means what is the ingredients of a product or to purchase that product one consumer or in health care we talk about what will be the impact. Here quality means that after performing this specific process how much outcome you get in your company this is also quality. And when you achieve that quality when you improve the base fundamentals, what will be the fundamentals when features and characteristics of your product meet the customer demand then you can improve quality. Now I want to tell you there are also multinationals organizations they are selling less efficacy products that is not a basically product that is actually brand. They are well established brand and you know that when doctors prescribe that they are quite confident that patient will get the result. In their corner of mind they will get the result this is the quality, the company name is actually quality. There may be less product efficacy and safety margin but the image of the company is good so the company is successful.

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Researcher: To bring improvement in any process what role Information technology plays? Respondent D: When we talk about information technology so our all processes that is in production or management IT is involved everywhere. Information is provided by the different software and by the help of that software our performance increased by two-forth. Two things I would like to tell you one thing is batch manufacturing record and another is batch packaging record because in one day in company, different products are manufacturing and if we adopt the traditional things register, pen copies I mean manual so it take a lot of time and number of steps. When we talk about computer and IT what benefits we take more output in very less time, save maximum data and we skip number of steps and see I describe two things we have the workforce that is maintain the data you can save from that secondly we get some fast processes by this we can more improve our quality and thirdly number of step for example if there are ten steps in a process so by this we can reduce these steps may be eight or seven to reduce one step is also valuable. I would like to tell you that we have one table-ting machine that produces almost eleven thousand tablets in a minute, means you can divide it into seconds; still there is room for improvement. But what is the matter we can speed up the machine but the different characteristics, physical characteristics effects so we can not increase it. In which physics is purely involve means when you have strong command over physics so you can set physical characteristics that if you increase machine speed hundred times so the final shape of the tablet can not change. May I tell you if you increase the speed so the hardness of tablet will be less and the problem is that if it take ten minutes to dissolve it dissolve in five minutes so the absorption rate will be reduce and patient will not get relief and one thing more if speed is less from required level so the hardness will be up that

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tablet should dissolve in ten minutes it dissolves in fifteen to twenty minutes in your stomach so again absorption rate will be change and as it is it will be out from your body and you will not get result.

Researcher: What is a physical characteristic? Respondent D: Physical characteristic mean there is a coating outer side of the tablet, sugar coating, color coating, film coating. If you want to know the means of coating firstly color coating if the shape of tablet is not good there is spot or black powder so we do the color coating for the betterment of shape. The main reason of sugar coating all the medicine which really have bitter test that patient take and feels very bitter test it might what should I say spitted it out so that is the reason it is coated with sugar so that patient can take it easily. There are also different reasons for film coated there are few tablet or few chemicals we have normally which smells badly so may be possible patient dislike it because they take it by mouth it could smell for nose or feels vomiting complain then we layered it by film coated, these are the physical characteristic. With it I told you hardness and dissolution problem, stability problem means it manufactures in Karachi and transport it to all Pakistan so if it has hardness it cause possible breakage, there may be temperature issues.

Researcher: Who initiates change? Respondent D: See in our organization in production everybody is educated our production officer is a pharmacist of course he has studied different subject of it. And from up there are the people of quality assurance who ensure the quality that the specification and SOPs are followed or not and on the above there are the people of quality control who as it is control all the related things ranging from row material to

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the finished product whether everything is according to the specified specification or not. There is one also department that is new called validation department, and what they do is that all the processes that are running are up to the mark or not. Do these processes need any kind of change, any kind of up-gradation if they do then they bring changes what happened they suggest changes they go to the production department they ask them tell us these are the problems how can we improve that suggestion to the quality assurance department they discussed with them they tell them these are the problems tell us how can we improve these suggestions any thing better then the existing suggestion then finally they go to the quality control department and when they sit with the quality control department they also take suggestion from them finally the set those suggestion and when they arrive on a final decision or conclusion they ask representative from few remaining department production, QA, QC and sit with them and decided that we are going to decide that you people agree or not if they say yes OK and if say NO why, they give the reason. One they say yes they agree what happen they first of all by the document they complete the same process that we will do this we will do this, this is temperature level this is moisture level here we will perform this this this what happens same procedure is performing practically in the presence of representative of every department we had decided we are going to just bring the change. If I want to give example one tablet (name is not mentioned) in that tablet there is an issue that tablet comes with capping, capping is that when tablet is complete, after completion it breaks from the sides the terminology is called capping. It was the issue of company image in the market there was issues and problem with this then we identify the reasons and the are two reasons identified firstly is the moisture level that is decided through the SOP, the SOP is coming from the international parent company we can

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not change it, if we want to bring any change so firstly we work around the change then we send this to the parent company then they give the approval. What to do with moisture level for reducing capping, down the moisture level first then we check the result and up the moisture level then check the result then we identified that to increase moisture level capping was reduced but still there was little bit then what happened we have usually small batches like we can say one batch equal to ten kilogram. And for ten kg per batch when next batch coming in the machine it is complete clean, it was also time consuming and secondly machine itself when it starts and close and for this temperature goes up and down that was also the reason of the tablet capping. Then what we did we follow the economy of scale we went to ten kg batch to twenty kg first thirty kg then and finally forty kg a batch, what is the benefit we take the benefit is now we talk about profit, with quality and TQM and also BPR all the things will be cover here. Firstly we will talk about first issue was capping that resolved, secondly same product but different batch. The minimum shifting time from one batch to another batch is twenty minutes and I told you that we manufactured eleven thousand tablets in a minute so twenty minutes divided by eleven thousand this is another loss what happened when we increased the size of batch where we produce three batches in one hour even I say in three hours only three or four batches we produced and doubled it almost. For skipping the time of cleaning, taking approval from quality control it decreased per unit cost, we save labor cost, we save equipment cost and plus we saved our time we also save the electricity cost and this we saved when machine starts and turns off it consumes electricity more when it run with flow it consume less energy. And engineering cost we saved our operator come and change the oil we change it for the safe side although it does not need a lot but actually it was the part of SOP so we had to do it. When we bring the change we follow the economy

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of scale we went for the larger batches so management really felt that we have improved. Finance department is also helping us because they assists us that if we do on that method we can save the cost so it involves these things.

Researcher: What is the knowledge level of BPR in pharmaceutical industry? Respondent D: Almost six to seven hundred pharmaceutical companies are in Pakistan in which there are fifteen to twenty are multinational, in multinational these things are implementing but local national companies are not adopting these things. There may be forty to fifty organizations they are working on TQM and BPR and not on that level on which a multinational operates.

Researcher: What is the role of reengineering for the success of a company? Respondent D: An organization the work in the market, it aims to improve its business. Nowadays in this scenario business where less growth in pharmaceutical and also survival issues. When we come at the stage where we talk about survival and in survival firstly we go for cost cutting, when we go for cost cutting then we can bear our expense. So reengineering is also a process in which as I told you we are taking different benefits we save steps, time, labor cost, equipment time then we can increase our profit margin. Competition is too much, generic are also too much. For one product ten to twenty generic is available in the market. Least price, there is price war; unethical promotion is too much in pharmaceutical. To see all the facts I understand if BPR is implemented with the vision so it really can bring the change and it will really increase your profit margin.

Researcher: Scope of BPR in future in Pakistan?

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Respondent D: An interesting thing I am going to tell you from multinationals there are so many employees they have worked in multinational environment they are switching to local national companies. When a employee who is groom up in multinational he is equipped with all the technicalities, all SOPs, all manufacturing procedures, all storage procedures, quality standards, QAs all the expertise. He has really command over that. So they are people are coming in local national companies. Here I would like to share interesting information from five to ten years the market share of multinational was fifty five percent and local national was forty five percent now the case in five to ten years is reverse, the main reason I told you same people they were running multinational come in local same thing they are implementing, they are bringing change and the trust of the doctors also build with the local companies they believe with the cheap price they are producing quality products, if you see our economy so poverty level is high so when the quality will be available with affordability so that is the formula that can bring the success. It really can make you or help you towards success.

Researcher: Thank you for your precious time.