Submitted to: Qutubuddin Hayder Sumbitted by: Khurram Qasim MBA Weekend Spring -09 Roll#: No15 Date of Submission: 05th January, 2011
MULLER & PHIPPS PAKISTAN PRIVATE LIMITED
Letter Of Transmittal January 5, 2011 Mr, Qutubuddin Hayder Dadabhoy Institute of Higher Education
Dear Sir, I have pleasure to submit the Strategic Management report assigned by you. All topics that were relevant have been covered in this report in great detail. If you have any queries or doubts about the compilation of this report you may feel free to contact us. Sincerely,
Khurram Qasim
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MULLER & PHIPPS PAKISTAN PRIVATE LIMITED
Acknowledgement
In the preparation of my Strategic Management report, I acknowledge the encouragement and assistance given by a number of people at Muller& Phipps.
I would like to express my gratitude to my supervisor Sir Qutubuddin Hayder, for sharing his ideas and interests with me about my study. I would also like to thank my parents who were always there by my side and last but not least all of my friends at Dadabhoy Institute of Higher Education.
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Contents Letter Of Transmittal..........................................................................................................a Acknowledgement..............................................................................................................b Contents..............................................................................................................................i Company profile.................................................................................................................1 Vision & Mission.................................................................................................................2 Company History................................................................................................................3 Business Areas..................................................................................................................4 Professional Affiliations......................................................................................................4 Corporate Organogram......................................................................................................5 Business performance.......................................................................................................7 Distribution Network...........................................................................................................8 Principals : Pharma Distribution.........................................................................................9 Principals : Hospital Care Unit & Nutrimed......................................................................11 Distribution Flow...............................................................................................................11 Pharma Division...............................................................................................................12 Depots Setup....................................................................................................................13 Pharma Distribution Grouping..........................................................................................13 Pharmaceutical Division...................................................................................................14 TRENDS IN DISTRIBUTION...........................................................................................15 Depot (warehouse) operations.....................................................................................15 Delivery operations.......................................................................................................15 History – IT.......................................................................................................................16 Present IT Setup..............................................................................................................16 Expectations:....................................................................................................................16 Data, Budgeting & Monitoring..........................................................................................18 SWOT ANALYSIS-M&P ..................................................................................................18 Strengths......................................................................................................................18
MULLER & PHIPPS PAKISTAN PRIVATE LIMITED Weaknesses.................................................................................................................19 Opportunities ...............................................................................................................19 Threats..........................................................................................................................20
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MULLER & PHIPPS PAKISTAN PRIVATE LIMITED
Company profile Established: 1912 Nature of Business and Sector: Distribution of pharmaceuticals, FMCG and Hospital Care Products. Introduction: M&P commenced business operations in the year 1912,and today has the distinction of being one of the largest and oldest multinational sales and Distribution Company in Pakistan, representing leading multinational and local companies in Pharmaceutical, FMCG and Hospital Care sector. We derive our strong corporate image from our innovative approach to business, extensive distribution experience, competent staff, well equipped establishments and vast operational network. We are spread across 42 establishments in the country with an employee base of more than 2,700 through which we provide direct sales and distribution access to 690 towns and cities. Through our strong network, we serve more than 26,000 Pharmaceutical retail outlets and cover over 50,000 retail outlets for FMCG products. With our state of the act IT infrastructure, we provides prompt and detailed information to our clients. Ever since its inception services in the following areas: .Warehousing .Primary and secondary logistics . Distribution .Sales Management .Route-to-Market .MIS
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MULLER & PHIPPS PAKISTAN PRIVATE LIMITED
Vision & Mission Vision: To be a first choice Distribution House in Pakistan with diversified businesses and commitment to expand into regional markets. Mission: .We are a leading sales and distribution company offering business solution to renowned Pharmaceutical, FMCG and Hospital Care companies. .Through our experience, our innovation approach to business, our people, and infrastructure, we endeavor to provide our customers & principals the highest level of services. .We take pride in adhering to ethical business practices and in creating value for all our stakeholders. We recognize our responsibility to society and in being a good corporate citizen. Values:
.Teamwork: We are a caring that recognizes and rewards people by creating an enabling environment and facilitating fulfillment of both their personal and professional goals. .Result and Driven: We make a difference to our stakeholders by holding ourselves accountable and delivering on what we promise. .Ethics: The Company strongly believes in ethical practices, such as honesty, integrity and transparency with respect for all its stakeholders. .Excellence: We strive to meet the highest standard of quality by our commitment to customer satisfaction and improvements through innovation.
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MULLER & PHIPPS PAKISTAN PRIVATE LIMITED
Company History In 2012, we will be celebrating our centenary of operations – a century of trusted service, to our principals and stakeholders. Key milestones in our history are illustrated in the exhibit below:
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MULLER & PHIPPS PAKISTAN PRIVATE LIMITED
Business Areas •
Pharmaceuticals
•
Consumer Product Division
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Hospital & Healthcare Unit
Professional Affiliations •
American Business Council
•
Karachi Chamber of Commerce & Trade
•
OICCI
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MULLER & PHIPPS PAKISTAN PRIVATE LIMITED
Corporate Organogram
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MULLER & PHIPPS PAKISTAN PRIVATE LIMITED
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MULLER & PHIPPS PAKISTAN PRIVATE LIMITED
Business performance
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MULLER & PHIPPS PAKISTAN PRIVATE LIMITED
Distribution Network
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MULLER & PHIPPS PAKISTAN PRIVATE LIMITED
Principals : Pharma Distribution
Principals : Consumer Distribution
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Principals : Hospital Care Unit & Nutrimed
Distribution Flow
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MULLER & PHIPPS PAKISTAN PRIVATE LIMITED
•
Cool Chain Supply
•
We have the latest and technologically advanced digital temp. data logging cold chain supply distribution in Pakistan.
•
With optimal temperature control and system reliability, our clients can be assured of efficient safe and consistent freezing.
•
A temperature-controlled supply chain ensures uninterrupted series of storage and distribution activities at a given temperature.
We offer this service for the food and pharmaceutical industries providing one common temperature of 2 - 8 degree. In pharmaceuticals the specific temperature tolerances depends on the actual product being mobilized.
Pharma Division
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Depots Setup
Pharma Distribution Grouping
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Pharmaceutical Division •
1. TOTAL NUMBER OF OUTLETS COVERED
•
2. TOTAL NUMBER OF TOWNS SERVICED
•
3. COVERAGE CYCLE
•
4 DELIVERY
28,000 + 632
6 Days
LOCAL
Next day
UP-COUNTRY •
5. TOTAL NUMBER OF DELIVERY VANS
2nd day 176 (74 with A.C)
Sales Coverage / Delivery Cycle – Pharma
•
123 TOWNS (TRIPLE COVERAGE)
6 DAYS CYCLE
(80% OF SALES) •
509+ UP-COUNTRY TOWNS (FULL RANGE)
6 DAYS CYCLE
•
DELIVERY IN LOCAL TOWNS
NEXT DAY
•
DELIVERY IN UP-COUNTRY TOWNS
•
DIRECT INSTITUTION, DOCTOR, PATIENT AND COUNTER SALES
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2nd DAY CYCLE
MULLER & PHIPPS PAKISTAN PRIVATE LIMITED
TRENDS IN DISTRIBUTION •
Companies focusing on strategic partnerships vs old principal-distributor relationship.
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Focus shifting from primary to secondary sales.
•
Realization by companies that RDs cannot give due focus because of the large range they carry.
•
IT demands increasing.
•
Value being placed on integrity of channel partner.
•
Large companies finding that small distribution houses cannot fulfill growth objectives due to limited financial resource.
•
Good companies looking for distributors that are dynamic and have the capacity to build infrastructure and resource-base.
•
Manufacturers more keen to focus on primary activity (marketing) and outsource logistics and sales function to competent parties.
Depot (warehouse) operations •
Modern warehouse facilities with 3 distinct temperature zones
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High volume & fast processing – 24 depots with over 8,500 invoice/ day
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Well managed inventory – shrinkage rate
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High in-stock rates à Happy customers & sales
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Strict compliance of: -
GWP / GDP
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HSE
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Regulatory needs
Delivery operations •
Temperature controlled vans
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Continuous expansion of direct coverage
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Evening delivery - in testing
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Home delivery – evaluation phase for chronic disease/high value products
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MULLER & PHIPPS PAKISTAN PRIVATE LIMITED •
Business support by building –
Habit
–
Relationship
–
Efficiency & control
History – IT •
First Distribution company to be fully automated
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Head Office system live since 1985
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Depot system live since 1991(Nationwide view of inventory & sales status).
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Our controls are updated with the major audit requirements
•
Our time delay between actual sale to reported sale is half a working day
•
We proudly respond to all user requests (internal or external) within hours
•
KPI’s (achievement v/s objective)
Present IT Setup •
Order capturing on Hand Held Devices
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Data to be consolidated at Depot every day end for processing and emailing to Head Office
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Centralised system. -
Nationwide view of inventory.
-
Sales status TODAY.
•
Softcopy data provided to internal and external users daily, weekly and monthly
•
Backbone Financials on Oracle Applications
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Automated integration between S&D system and Oracle Applications
Expectations: •
Business Intelligence (BI). -
KPI’s.
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Sales v/s Target.
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MULLER & PHIPPS PAKISTAN PRIVATE LIMITED •
Competitive analysis and positioning for partners
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Data, Budgeting & Monitoring
SWOT ANALYSIS-M&P Strengths –
Nationwide multinational distributor.
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Offers a country wide reach to meet distribution needs.
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Provides convenience of one window operation creating contractual efficiency.
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Has centralized feedback on sales, stocks, sales related statistics and batch recall.
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Ensures equitable distribution.
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An ethical company with high values & superior financial strength..
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In-depth market knowledge and high customer intimacy.
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Direct access to customer, which leads to increase of goods movement & reducing exposure to fake goods & cross channeling.
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Delivering a high quality & transparent services.
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The strive towards automation, date integration, higher efficiency and accuracy as well as greater speed is one of the characteristic of M&P.
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Has distribution experience and expertise.
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High service level with rapid response time.
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Cold chain tested.
Weaknesses -
The product is too narrow
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Less training facilities
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Tough environment for women to work
Opportunities •
Focus – support growth
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Transparency – sharpen visibility
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Professionalism / Experience
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Confidentiality / Trustworthiness
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Ownership / Commitment
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Keep up with change
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Maintain and enhance excellent customer service
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Compliance with laws and ‘code of conduct’
Our endeavor is to be good corporate citizens – economically, socially and ecologically. 19 | P a g e
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Threats •
Managing fast growth / evolutionary market change
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Track and manage product life cycles / expiration dates
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Keep low rates of shrinkage / write offs
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Managing tight delivery windows
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Fulfill variety of order profiles and requirement
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Managing notorious “last mile” of supply chain (wholesalers – sub-wholesalers)
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Collection and manage transaction details
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Competitive margin rates
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Modern technology backbone
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Quality (temperature, speed, accuracy)
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Customer service
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