Alembic Ltd is planning to start full-scale outsourcing of the supply chain management for all its promotional goods soon. The company has already tied up with a supply chain provider for this. Alembic has a strength of more than 1000 medical representatives throughout the country..
"Delivery of promotional materials such as physicians' samples and other aids at the right time and at the right place is very important for pharmaceutical companies. With the current practice, they are given only a step-motherly treatment," explains A.M. Pendharkar, manager, marketing services, Alembic Ltd.
The promotional materials are currently routed through normal supply channels that distribute the finished formulations. This is a multi-stage process wherein the goods are first transferred from the company warehouse to Clearing and Forwarding (C&F) agencies. C&F agents hand them over to wholesalers and they supply it to retailers. The MRs normally pick up the promo cartons from the nearest retail chemist.
The whole procedure will require nearly a month's time and the drug firms seldom have any control over the delivery. Moreover, the promotional materials normally get only secondary consideration as the routine supplies get the priority as always.
Often the samples reach delayed and MRs need to wait till they arrive according to the convenience of the supplier.
Through outsourcing logistic support, the companies can reduce the inventory. Not only that the delay in delivery can also be considerably minimal. Those townships which are nearby the manufacturing site of the product will receive the goods the very next day itself. In any case, it won't go beyond 10 days to reach even the farthest suburb anywhere in the country, he avers.
Another advantage is, the material will be delivered directly at the doorstep of MRs. They don't have to go out and collect it from the retailer. Nor have they to wait the arrival of the supplier.
Considering the cost factor, outsourcing logistic support may involve a bit more additional expense. But the benefits will outweigh the extra expenditure in the long term, says Pendharkar. "We cannot really look for cost benefits while hiring service from outside. In this case, service benefits will have an edge over the cost factor in the long run," he contends.
Outsourcing of supply chain appears to become a tendency of late amongst select pharma companies for effective delivery of promotional stuff.
Besides Alembic, a few other pharmaceutical firms including the Mumbai-based Glenmark Pharmaceuticals Ltd are also weighing the option of supply channel outsourcing in their effort to streamline the promotional goods delivery.
"Currently, Glenmark supplies the promotional material through our own people. We are not averse to the idea of getting somebody to do the job," says Anand Sawant, from the distribution division of Glenmark.
Whereas bigger players like Ranbaxy do have their own mechanism to ensure timely delivery of the promo stuff to the field staff. "Ranbaxy distributes the promotional material through depots located for the purpose in major cities like Mumbai. So we don't have to look for any logistic support from outside," said an official from Ranbaxy, Mumbai.
In general, many companies increasingly feel it is better to have separate distribution channels to avoid unwarranted delay and to ensure prompt delivery of promotional material which they think integral to the core business activity. And many a midcap firm has started thinking outsourcing, to this end.