Power of packaging in pharma industry

Technology in packaging is losing out to the cost factor in India, says S Sampath

Companies spend a large amount of time and money on improving manufacturing practices (GMP), quality controls and ISO standards. We, however, rarely see companies working on development of tamperproof packaging — a sure way out of this problem.

In a majority of companies, at all levels of management, the attitude is to cut costs irrespective of whether one is procuring raw material, machinery or packaging material - bottles, vials, ampoules and cartons. One is always looking for a lower price. Technology/innovation are not considered on account of cost. There are hundreds of techniques that help management control costs. However, wearing blinkers when considering alternative packaging/technology would only result in a hasty demise of the product/ company.

Thousands of Indian executives visit international trade fairs every year. They see cutting edge technology at these forums. How often do we adopt these technologies, especially for packaging. In a number of cases the will is there but it is difficult to convince the management especially if the cost of the end product goes up.

Suppliers: The pharmaceutical industry has historically made payments to the suppliers in 75 days (some companies take upto six months). This is definitely keeping at bay professional/quality suppliers. The purchase executive who is constrained to buy at the lowest cost coupled with not being able to pay on time, he ends up getting the job done through any and every suppliers who has no understanding of quality.

Packaging development: Very few in the pharma industry spent time and money on R&D in packaging. Therefore, the importance of packaging is ignored knowingly, mostly on account of this illusive factor called cost. The function of any medicine is common for all human beings. It is therefore the responsibility of the owner (drug company) to reduce the size of the fake drug market. There are hardly any fake drugs available in USA or Germany.

Most of the medicines abroad are sold in tamperproof packs, childproof packs /caps, special packs for aged people, counter caps, security containers with tear off portion, pull up spouts, flexi spout packs, dose packs etc. None of them are seen in this country. Technology is losing out to the cost factor in India. We are still using age-old concept of packing liquids in glass bottles with simple aluminum caps. It costs 25 paise to duplicate a new cap and label. Aluminum caps are one of the biggest threats as the investment requires to duplicate caps is probably a few thousand rupees. A single colour label printed on standard paper is another easy prey for duplication. You could continue to use glass bottles but do change over to labels and caps, which are, tamperproof.

Some practical solutions to reduce the size of the spurious drug industry, if not to completely eradicate them:

1) Set your own goals in packing your products in tamper proof packs (technology is available and when produced in India, it will definitely be cheaper)

2) Make attitudinal changes towards adopting new packs even if it cost little more. It will pay off in long term

3) Develop R&D for package development

4) Develop good and quality vendors after visiting and evaluating their capacity, trust worthiness. Maintain good relations with suppliers; arrange payments in time through better financial management

5) Introduce innovative ideas in your artwork and choose difficult colour shades

6) Choose the right board or paper and if necessary special board, foil board, mirror coated board etc.

7) Introduce new colours in shippers or get them printed completely

8) Let every manager take the responsibility in adopting new packs which are customer-friendly and are difficult to copy

9) Distribute the R&D expense on higher valued medicines

10) Adopt new technology, new concepts, ew media for packaging.

The control is in our hands. Let all drug manufactures ask questions to themselves. Am I contributing to fake drug industry? Unless you are dead sure, no one can stop counterfeit and many a death is inevitable.

The writer is Managing Director, Samkipack Systems Private Limited

Interview

‘SMEs will benefit greatly by adopting

IT-enabled business practices’

ICICI Infotech, an IT division of ICICI Bank Ltd, offers service like ERP solutions, software consultancy and development, enterprise application integration, systems enhancement and maintenance support, networking and facilities management services and security solutions. The company had recently launched Orion@Pharma, an ERP II product, for handling the complex requirements of the pharmaceutical industry encompassing both bulk drugs and formulation business.

Solution providers must understand the nuances of the business as well as the unique information requirements of a sensitive business segments such as pharma, says Hari Padmanabhan, president and head, Enterprise Solutions Group, ICICI Infotech Ltd. Far from having to modify the infrastructure, the SMEs will benefit greatly by adopting such IT-enabled business practices, he says in an interview with Balakrishnan Nair. Excerpts:

What are the salient features of ERP2 compared to ERP?

Enterprise Resource Planning (ERP) centred on resource planning as well as visibility beyond the plant and throughout the manufacturing enterprise, to cover man, machine and money resources.

ERP II breaks down the barriers of traditional ERP, forcing solutions to offer functionality that extends beyond the four walls of an organisation. The essence of ERP II is an expansion beyond enterprise-centric optimisation and transaction processing to improve enterprise competitiveness, by setting strategies and deploying applications that enable the enterprise to share information and thereby collaborate in communities of interest to participate in collaborative commerce (c-commerce).

As opposed to the web-aware, closed and monolithic architecture of ERP, ERP II is a web-based, open, and most importantly, componentised architecture. ERP II enables an organisation to extend itself to communicate directly to its vendors and customers to create an external enterprise. Transactions generated from outside the traditional enterprise can be received and processed by the enterprise and similarly transactions received can be directly sent out to impact the customer’s systems after due authentication. ERP II thus extends transaction processing beyond the traditional boundaries of the conventional ERP.

In short, ERP II uses a broad-based approach that integrates business processes across suppliers, partners, employees and customers to create a more effective organisation.

What sets Orion apart from other software solutions?

Orion is ICICI Infotech’s flagship ERP II product which is an integrated enterprise solution system that meets the enterprise solution requirements of diverse market segments such as manufacturing, distribution, contracting and retail. The salient features of Orion are:

• It supports multi-company, multi division/ profit centres, multi-department/ cost centre kind of organisation structures.
• Its flexible design and extensive parameterisation permits it to evolve to cater to changing business dynamics.
• It is designed to accommodate diverse and dynamic business needs.
• Developed on Oracle database, Orion can be implemented on a diverse range of hardware and operating systems ensuring that investments on the application software are secure in the long run.
• Orion offers verticalised solutions which require very little customisation thereby ensuring a shorter implementation time.

In pharma industry, Orion offers specific solutions like batch tracking including expiry date tracking, quality control tracking, recipe management, credit control, logistics control, sales promotions and discounts, purchase-sales-inventory analysis and consignment sales tracking.

While in retail, it offers making informed merchandising, stocking and logistics, decisions that are based on analysis of data across the retail store locations. Integrates and centralises customer, sales and merchandising information across multiple channels and locations.

Are such solutions viable to small manufacturing enterprises (SMEs)?

Among SMEs involved in similar businesses, there are a lot of commonalities in business practices. However, in practice, each SME reinvents the wheel since little attention is initially given to business processes and made sure they are followed. ERP provides a repeatable, scalable framework where best business practices are made available to the business to work with. Far from having to modify the infrastructure, the SMEs will benefit greatly by adopting such business practices.

There would also be some learning and unlearning in terms of how to do what they do but the basic essence of what they do does not change. Orion delivers as a pre-mapped solution for specific verticals, such as pharma, chemical, auto ancillary and retail provides the SMEs, benefits of rich industry expertise without the related costs and time of high end consulting. It also provides information, infrastructure and process definition required to adapt to changing business requirements, and scales rapidly or desegregates the part of the business say by outsourcing some part of the business and yet retains overall control effectively on the business. The affordability is brought in with pre-mapped solution and rapid implementation that makes the solution faster to go live and lighter on the purse.

ICICI Infotech’s hosted model for deployment for SMEs enables the organisation leave IT to the experts and focus on fine tuning its business processes and take maximum advantage of ERP implementation in the shortest possible time. This utility model of computing where user organisation can install the PC/client, connect it to the data centre that is remotely located and get benefits of the full ERP is truly a plug and play solution that provides best business practice to SMEs without the pain of hardware selection, infrastructure creation and other related issues of setting up IT infrastructure.

Further financial modules not only permits the transaction based or a fixed fee single cheque payment on a monthly basis which goes to the expense line and does not burden the organisation with the kind of one time investment that traditional ERP modules require in hardware and infrastructure as well as the repetitive in house cost of qualified professionals who are difficult to retain.

Information in companies is often fragmented, how does Orion help in integration of this?

Orion transaction processing is designed based on the source document being generated by the system and the data flowing from the original document that captures the data to all related transaction. Data from the quotation to the customer could go all the way to the customer order, the packing list, delivery note, invoice that flows through transaction processing. Fragmented data is a thing of the past once an end to end solution is implemented in the organisation.

Pharma companies are often considered to be reluctant to adopt automation. What has been your experience?

Pharma companies are always open to new technologies and have adapted to systems that are tuned to meet their specific requirements. It is important that the solution provider understands the nuances of the business as well as the unique information requirements of a sensitive business segments such as pharma. Aspects such as batch traceability, expiry date control, environment requirements for storage and other such considerations need to be fully supported. Quality assurance processes, extensive documentation capabilities would all be considered as basic requirements for acceptance. They are rightfully fussy about choices they make.

Can a single contract cover applications in all the activities of the organisation, namely, production, QA/QC, supply chain, stores, retailing, distribution etc?

Orion ERP II is designed to meet the requirements of pharma organisation across the value-chain both within and outside of the enterprise encompassing its suppliers and clients. The Orion collaboration corporates will also support data flow between distribution chain and the organisation and provide infrastructure required for end to end transaction processing across the ‘buy’, ‘sell’, ‘insides’ of the business.

Are there plans to introduce any new products?

As markets achieve more depth and segments grow in size, they get fragmented and we will continually evaluate our products but our focus is on deepening our presence and achieving larger share of market in areas of our expertise.

How do you market the products?

We have a countrywide network of sales, implementation management and support offices. Technical support is available from our Chennai development centre. Either directly or through selected partners focused on business areas and fully trained and certified on our product, we understand customer businesses in depth, show them their mapped solution and obtain their concurrence to our solution before closing with a deal. This direct, in depth and focused sales activity enables us provide a better quality solution and achieve higher quality implementation with our customers.

What about the security to information provided by the companies?

If the implementation is in house, operating system, database and user level security ensures that authorised users have access to specified information, so there is no question of information being given to anyone outside of the company.

In the hosted model, since security of the data stored at the data centre is a basic factor for success, we have invested in highly sophisticated security tools (which would normally be done by large organisations) and provide this benefit to the SMEs. With constant monitoring of the environment by our administrators and the usage of other tools such as those for intrusion detection, the data centre provides the SMEs the benefit of a high security data environment, normally available to large organisations at very high investments.