Supply Chain Challenges faced by GlaxoSmithKline at the time of

Pandemic

Minahil Choudhry, Farwa Farrukh, Adina Khalid

Supply Chain Management

Lahore School of Economics

pg. 1
Table of Contents
Table of Contents........................................................................................................................................2
ACKNOWLEDGEMENTS...............................................................................................................................4
Executive Summary....................................................................................................................................5
Introduction to Industry.............................................................................................................................6
Introduction to Company...........................................................................................................................6
GSK Business to Business Structure (B2B)..................................................................................................7
Contract Manufacturing Services:..........................................................................................................7
Consulting Services:................................................................................................................................7
Product:...................................................................................................................................................8
Pharma Supply Chain..................................................................................................................................8
Drivers of Supply Chain:..........................................................................................................................8
Supply Chain Planning Process:..............................................................................................................9
Inventory Management:.......................................................................................................................10
Procurement:........................................................................................................................................10
Supply Chain Analysis...............................................................................................................................12
Manufacturing Process.............................................................................................................................13
Bill of Material..........................................................................................................................................14
Stages of Packing:.....................................................................................................................................15
Distribution and Warehousing.................................................................................................................16
PEST Analysis............................................................................................................................................16
Political Factors:....................................................................................................................................16
Economical Factors...............................................................................................................................16
Technological Factors...........................................................................................................................17
Value Chain Analysis of GSK.....................................................................................................................17
Strategies of GSK.......................................................................................................................................19
Non-stop R&D Strategy:.......................................................................................................................19
Sales & Marketing Strategy:.................................................................................................................19
Outsourcing Strategy:...........................................................................................................................19
Shortage of Panadol in Pakistan...............................................................................................................19
Impacts of Covid-19 on GSK......................................................................................................................20
Short-term impacts of covid-19............................................................................................................20
Long-term Impacts of Covid-19:...........................................................................................................22

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Supply Chain Problems.............................................................................................................................24
Solutions...................................................................................................................................................28
Supplier Management:.........................................................................................................................28
Compliance:..........................................................................................................................................29
Sustainability:.......................................................................................................................................31
Technology:...........................................................................................................................................32
Quality Control:.....................................................................................................................................33
Supply Chain Complexity Management:..............................................................................................34
Supply Chain Resilience:.......................................................................................................................36
Sustainability and Competitive Advantage of GSK...................................................................................37
Recommendations:...................................................................................................................................38
Refrences:.................................................................................................................................................39

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 ACKNOWLEDGEMENTS

This article has been supported by the supply chain problem faced by GlaxoSmithKline and the impacts
of Covid-19 on pharma industry with the help of honored instructor Saba Fazal Firdousi. The material
utilized in this document is incorporated by wide range of reports, papers, articles, discussions and
forums.

pg. 4
 Executive Summary
The pharma sector plays a key role in every country, region and state of the world. Despite the
importance sector faces number of challenges as well. Pharma industry got a sudden hit when pandemic
outbreak came. Pandemic has its own terror on the entire public of the world no matter in which region
they were. The demand of the pharmaceuticals got a hike that even the pharma companies were unable
to meet those demands. The GMS (Global Manufacturing and Supply) (formerly pharma supply chain) is
in charge of manufacturing and distributing GSK's pharmaceutical goods all over the world. The Pharma
Supply Chain (PSC) is a network of production operations that spans demand forecasting,
manufacturing, testing, and market supply of pharmaceutical products. Value chain analysis of GSK is to
achieve the goals of their organization. It is combined with the end consumer, operations of the
company and inbound logistics. Short-term effects of COVID-19 on the health market can be observed in
changes in demand, supply constraints, panic buying and stockpiling, regulation changes, shifts in
communication and promotion to remote connections through technology, and changes to research and
development (R&D) processes. Long term impacts of Covid-19 include delayed in authorization of
medicines that aren’t related to Covid, heading towards pharmaceutical self-sufficiency, production and
growth slow-down in pharma, variations in usage patterns of health-related products. GlaxoSmithKline
(GSK) faces a number of general supply chain problems that are common to many companies
operating in global markets.One such problem is the challenge of managing a complex and
geographically dispersed supply chain, the other is to need to balance the cost and quality. GSK
also faces the challenge of complying with a variety of local, local, and international regulations
governing all of the production, distribution, and sale of its products.

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 Introduction to Industry
Pakistan's pharmaceutical sector is quite young and extremely dynamic. There are 338 national and 24
global companies today thanks to the industry's amazing growth since independence in 1947. (Tribune,
2015). This number could certainly increase, according to Pakistan's National Drug Policy, given the
registration of multiple businesses that currently (PPMA, n.d.) serve about 70% of the country's need for
finished medications.

Pharmaceuticals are a subset of the manufacturing sector, which in FY2015 generated 13% of the GDP,
along with injections, capsules, and tablets. which saw increases of 16.0%, 14.9%, and 4.3% Respectively
(Govt of Pakistan, n.d) (Govt of Pakistan, n.d) Due to the lack of native inputs and lack of competition,
the growth of the pharmaceutical industry is primarily dependent on imports of raw materials.

The cost of production rises over time when producers are subjected to procedures. The growth of
Pakistan's pharmaceutical industry has been severely hampered by the harsh covenants associated with
drug production licences (Dawn, 2015).

Introduction to Company
The largest pharmaceutical company in Pakistan as of the present (Study Sols, n.d.) is GlaxoSmithKline
Pakistan Limited, which was founded on January 1st, 2001 as a result of the merger of SmithKline and
French of Pakistan Limited, Beecham Pakistan (Private) Limited, and Glaxo Welcome (Pakistan) Limited.

Company GLAXO Legacy the Karachi Stock Exchange's first pharmaceutical business to list was Glaxo
Laboratories in 1951. (GSK, 2014) With commercial activities in more than 150 nations, a network of 84
manufacturing facilities in 36 nations, and sizable R&D facilities in the UK, USA, Spain, Belgium, and
China, GLAXO also has a substantial global footprint.

GLAXO Pakistan primarily serves two industry sectors: pharmaceuticals (prescription drugs and vaccines)
and consumer healthcare (over-the-counter medications, dental care, and nutritional supplements)
(Bloomberg, 2016).

The Company operates in Pakistan's anti-infective, respiratory, vaccine, dermatological,

gastroenterological, analgesic, urological, central nervous system, allergy, cardiovascular, and vitamin
therapy sectors and produces 200 million tablets annually, making it the nation's largest tablet
manufacturing facility (World Trade Review, 2015).

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Augmentin, Seretide, Amoxil, Velosef, Zantac, and Calpol are a few of GSK's top pharmaceutical
products. Other well-known consumer healthcare brands include Panadol, Horlicks, Sensodyne, and
ENO. Pharmaceutical businesses that are multinational are the primary rivals (KSE Equities, n.d.) include:

- Getz and Sami, Abbott, Norvartis, Pfizer, Sanofi, and Aventis. (Med Pk., n.d.) A local business.
Prominent goods produced by this plant include Augmentin, Amoxil, Calpol, Zantac, and Actifed (A1
Pakistan, 2015).

SmithKline and French of Pakistan Limited, Beecham Pakistan (Private) Limited, and GlaxoSmithKline
Pakistan Limited merged on January 1st, 2001 to form GlaxoSmithKline Pakistan Limited (Pakistan) Ltd,
which is currently Pakistan's biggest pharmaceutical firm.

GSK primarily serves the pharmaceutical (prescription drugs and vaccines) and customer healthcare
(over-the-counter medicines, dental care, and nutritional care) industries in Pakistan.

One of the top research-based pharmaceutical and healthcare organisations in the world, GSK is
dedicated to its purpose of offering patients high-quality medicines that will help them live better lives.

Presently, GSK Pakistan still holds an over 85% value and over 13% volume share in the pharmaceutical
market in Pakistan. MNCs like Abbott, Novartis, Pfizer, and Sanofi as well as regional businesses like Getz
and Sami are the main rivals. GSK Pakistan has developed a capable commercial competency and a
history of effectively fusing together many industries to create a diversified and lucrative company with
over 150 brands.

GSK Business to Business Structure (B2B)

The contract manufacturing services, consulting services, and suppliers for the acquisition of materials
make up the GSK Business to Business Structure.

Contract Manufacturing Services:

GSK offers manufacturing services for biopharmaceutical products under contract, from early-stage R&D
clinical supplies to the introduction and expansion of small, medium, and large-volume medications.

Consulting Services:
With the purpose of facilitating quick and easy access to scientific expertise, GSK has a team of research
and development consultants, known as SCINOVO.

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SCINOVO offers strategic intelligence, technical advice, answers to queries, and direction on how to
decide whether a project or opportunity is generally viable.

Product:
Panadol is a consumer healthcare medication made by GlaxoSmithKline. It is one of the most reputable
painkillers in the world.

It provides pain relief that is both quick and efficient and lowers fever, allowing you to resume enjoying
life to the fullest. It has been available on the market for more than 30 years.

Pharma Supply Chain

The GMS (Global Manufacturing and Supply) (formerly pharma supply chain) is in charge of
manufacturing and distributing GSK's pharmaceutical goods all over the world.

The Pharma Supply Chain (PSC) is a network of production operations that spans demand forecasting,
manufacturing, testing, and market supply of pharmaceutical products.

Drivers of Supply Chain:

 Inventory
 Logistics
 Sourcing
 Location/Facilitation
 Information

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Supply Chain Planning Process:

The supply chain planning process for GSK is shown in the above diagram.

It highlights the actions and steps required to meet client needs. In the first three processes, demand for
the planning horizon is projected using a combination of advanced forecasting methods, computer
models, and executive judgement. In step four, production planning and inventory management, which
turns information about beginning production into timing and quantity.

1. Demand Forecasting:
Sales and marketing determine demand, provided there are no restrictions on product supply.
The unrestrained demand is the name given to this need. Demand projections are often made
on an annual basis, then divided into biennial and quarterly intervals.
2. Demand Finalization:
In order to determine what can actually be accomplished given production and supply
restrictions, the supply chain team works closely with the procurement and production

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 functions. Demand develops once all the parameters, including production schedules, import
quotas, and lead times, are taken into account. The company's financial estimate for the
planning periods is built around the constrained demand.

Inventory Management:
1. Finished goods components
The components known as active pharmaceutical ingredients (API) are what give drugs their
positive health effects.
Excipients: Stabilizers and preservatives
Packaging: both primary and secondary components

2. Material required for manufacturing PANADOL

Paracetamol is the direct material API. Indirect content Sugar and the other four substances are
excipients
3. Determination of safety stock
Safety stock serves as a cushion in case of an unexpected rise in usage. In order to reduce the
risk of shortage brought on by uncertain demand, GSK keeps a safety reserve of three months'
worth of dependent and independent demand items
4. Reorder point/ minimum level of inventory
Orders should be placed when the inventory is exhausted to lead time.
GSK's inventory lead time for imported materials is three months, compared to one for local
materials.

Procurement:
1. Sourcing
API and the most important excipients are direct product purchases that are imported from
China and India. The purchase of stationary, office supplies for use in the office, packing
materials, delivery trucks, and other chemicals is considered a general purchase.
2. Type of Sourcing

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 The primary factors at GSK are broken down into six categories: cost, quality, services, delivery,
supplier profile, and overall staff competencies.
3. Evaluation of Suppliers
4. These basic requirements are broken down into many sub criteria as shown in Table Below

Main Criteria Sub Criteria

Product Price
Cost Payment Term
Delivery Cost
Product quality
Packaging and labelling
Quality ISO 9001 (quality management system
certification)
Research, development and innovation
Customer relationship management (CRM)
Services Aftersales services
Delivery Customer relationship management (CRM)
Aftersales services
Financial status
Technical ability
Supplier Profile Facilities Capacity
Risk assessment system ISO 14001
(environmental management system
certificate)
Past record documentation
Overall Personal Capabilities Labor experience
Labor overall skills

5. Supplier list of imported materials

Excipients and API are imported from China, Russia, and other countries.
6. Supplier Lead Time

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 When a corporation imports material from several nations, GSK has a lead time of procurement
of material of around 50 days by air and approximately 75 days by ship.

Material Requirement Planning (MRP)

Materials needed the management of industrial processes is done through the use of planning, an
inventory control system. The MRP programme in the ERP System is run to generate a purchase
requisition once the demand has been finalised.

Manufacturing Planning

On MPS, the entire production is built. The master production schedule is created using forecasts
and occasionally, atypical requests as well.

Manufacturing plant location

Situated in the commercial district of Korangi Karachi. This production facility comprises a small unit
for tablets as well as a dedicated block for injectable and oral cephalosporin.

Manufacturing capacity

Production capacity GMS Korangi has a manufacturing capacity of about 103 SKUs and produces
about 37 million packets annually.

Production order confirmation:

The final week of the month sees the confirmation of the production order.

Supply Chain Analysis

Inbound Logistics:

Typically, production sites are where raw materials and inventory are obtained. To guarantee that
the raw materials meet the high standards of quality being used, the raw materials are transported
to a qualitative analysis lab (QA Lab).

Operation Logistics:

The finished product is sent back to the qualitative analysis lab (QA LAB) after the manufacturing
process for medications is complete, and the items that were rejected are returned back to the

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 manufacturing process. Products are sent to the outbound process after passing the QA Lab test and
receiving the appropriate Labels for each Stack.

Outbound Logistics:

PTN received form the sites and the lorry order sent to the main office. The labeled products sent to
the wholesaler and then to all other retailers.

Manufacturing Process

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 Bill of Material
A Bill of Material (BOM) is a comprehensive, properly organised list of the quantities and parts
required to make a product. The BOM list includes the material number, quantity, and measurement
unit for each component.

All BOMs in SAP have a single level. BOMs are kept up to date for all finished goods and, naturally,
for finished goods.

Hence, a full product structure is made up of several SINGLE level BOM.

BOM defines the linkages between assemblies (semi-finished and finished goods) and their
components by producing the quantitative recipe that serves as the MRP's foundation (packaging
and raw material). BOM now serves as the foundation upon which all other planning is based.

BOM is a critical component of MRP and its output must be precise and current for it to be valid.
Based on the information provided by MPS, it assists the organisation in managing its raw material
difficulties effectively and efficiently.

Bills of Material Consists of:

API PARACETAMOL

EXCIPIENTS Starch, potassium sorbate calcium

carbonate, agar, magnesium stearate
PACKING MATERIALS

PACKING MATERIALS BLISTER, cartons, paperboard etc.

Lot Size:

GSK uses POS lot size procedures (Period of Supply). Lot size equal to the net requirements for a

specified number of future periods.

Packaging:

Tablets are typically wrapped using the proper packaging materials before being distributed. 

 The degree of protection required

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  The compatibility of the packaging material with the formation, and other considerations
will all influence the type of packaging material utilised.

 The presentation of things in particular that can be the target of impulsive purchases

 Consumer convenience in terms of size, weight, opening/closing mechanism, print legibility,

etc.

 Filling technique

 Price

Stages of Packing:
Primary packaging is the initial material that encloses and supports the product. Secondary
packaging, which is used to bundle primary packages together, is in the second stage. Bulk handling,
warehouse storage, and transportation all happen in the third step. The most typical type fits closely
into containers as a palletized unit load. Tablets are frequently packaged in blister and strip packs,
where they are protected from high temperatures and low humidity. In addition to offering each

pg. 15
 tablet unit superior environmental protection, the packaging is both attractive and functional.
Furthermore, blister and strip packaging provide the dose form a degree of temperature resistance.

Glass and plastic bottles, metal containers, cartons, or paperboard drums may be utilised for greater
quantities sent to the pharmacy, along with polyethylene liners where appropriate to provide
additional protection from moisture.

Distribution and Warehousing

The four warehouses are outsourced to KENCO LOGISTICS SERVICES, a third-party logistics company.

PEST Analysis
Political Factors:
The dishonest behaviour of the government, which hoards and still seems hesitant to understand
the unresolved problems, such as the suspension of production lines if tyrant covenants are broken
(Pakistan Today, 2014). Unresolved grudges predict a gloomy future for the pharmaceutical
industry. Government establishes the low medicine costs that must be approved at its discretion;
any violation would result in severe fines (Dawn, 2016). (Dawn, 2016) Government decisions like
these that have not been resolved provide pharmaceuticals fewer opportunities to operate without
restrictions. The harsh rule that only raw materials subject to customs duties not exceeding 10% ad
valorem tax are exempt (Kabanico, 2016) has the same impact on GLAXO as an increase in price. The
worst threat to Pakistan is terrorism, which has disrupted the country's commercial environment
(Ali, 2016)

Economical Factors
Due to Pakistan's interest rate's historical low of 6% (Trading Economies, n.d.), borrowing is feasible
at a little cost. - The economy's persistently high inflation rate (Trading Economies, n.d.). B is a
quagmire for industrialists, and firms like GLAXO have continually been shaken by this persistent
build. - The unstable Pakistani currency poses a huge risk to GLAXO (Aazim, 2015), since it controls
their profit and exerts significant macro pressure. - In order to close the budget gap before loan
repayment, a staggering tax rate of 40 billion rupees will be demanded (Dawn, 2016). This may
cause investors to lose faith in the economy.

pg. 16
 The government's reluctance to address the issue and the ongoing electricity and gas shortage,
which is likely to persist (Dost, 2016), indicate that GLAXO problems related to working in a
developing country will persist. Pakistan's growing population and population pyramid's wider base
(LiaqatandAbdullah, 2014) imply that children and adults would need more supplemental products
like Horlicks and need more immunisations. - 24 percent of the general population in Pakistan is
undernourished, which is a distressing abnormal state of unhealthiest. (United Nation. (2014) This
suggests that GLAXO will expand in the future since rising demand for its products appears to be a
given. - Sewage can transmit germs that cause diseases.

Unfortunately, Pakistan's sewage system is unmonitored (Daily Times). (2016) GLAXO specialises on
selling drugs to treat these conditions, which suggests a loyal customer base. The vast majority of
the populace lacks access to safe drinking water. One of the main factors in the spread of illnesses is
contaminated water. According to the Hassan Foundation, water-borne infections account for 45
percent of all illnesses. (n.d.) GLAXO is actively working on the creation of products to treat
diarrhoea, cholera, typhoid, and hepatitis A and E.

Technological Factors
According to the 2016 Budget, the Pakistani government intends to invest considerably in
Technology, which will strengthen the taxation and procurement systems and benefit GLAXO.
According to Dawn (2016), Pakistan has a low GPD for research and development, which indicates a
low degree of science education and, as a result, less support for GLAXO. According to the Global
Innovation Index, which ranks 141 nations, Pakistan is rated 131. This ranking reflects Pakistan's
general pattern, which will likely lead to less technological growth in the years to come.

Value Chain Analysis of GSK

Value chain analysis of GSK has been discussed in the following diagram to achieve the goals of their
organization. It is combined with the end consumer, operations of the company and inbound
logistics.

pg. 17
 Primary Activities:

Three pillars fall under the primary activities:

 operations

 sales

 marketing and services.

Around 1.4 billion pharmaceuticals are manufactured, formulated, filled, packed, controlled,
released, and delivered as part of operation. Team Operation Sustainability provides assistance in
this regard. Commercial teams in sales and marketing are in charge of comprehending patients,
consumers, and customers. The healthcare promotions of GSK are hidden by services.

Secondary Activities:

The three most crucial operations under secondary operations are:

 firm infrastructure

 human resource management

 Research &Development

Company infrastructure consists of a corporate office, manufacturing facilities, and an R&D division.
Remuneration, organizational development, and raising employee skill levels are all included in
human resource management. Bioelectronics, addressing the risks posed by antibiotic resistance,
and epigenetic turn-on and turn-off are among the areas of research and development.

pg. 18
 Strategies of GSK
Non-stop R&D Strategy:
In recent years, GSK has led its rival Pfizer on an R&D collaboration to the public sales of HIV
medicines and Covid Vaccines at the time of outbreak. GSK has focused most of its investments on
R&D to develop its own medicine and franchise it as a member of proprietary on R&D.

Sales & Marketing Strategy:

With the help of telecommunications firms, GSK was able to promote its Flixonase (a medication
that treats hay fever) to its customers by texting them or by the sales team (mobile marketing),
which sets its marketing techniques apart from others. Moreover, GSK actively promoted its over-
the-counter medications.

Outsourcing Strategy:
working with other pharmaceutical businesses to source new ideas for treating diseases like
osteoarthritis due to the expiration of patent.

Shortage of Panadol in Pakistan

The production of Panadol tablets, Panadol Extra tablets, and the Children's Panadol liquid range has
been put on hold, according to GlaxoSmithKline (GSK), because of negative margins following a
sharp increase in the price of paracetamol's raw materials and unsuccessful negotiations with the
government. In a letter to the prime minister's office, Farhan Muhammad Haroon, the CEO of GSK
Pakistan, stated that "manufacturing of the Panadol range on negative margins is unsustainable"
and that "the situation is now beyond our control," despite the company's extensive efforts to
resolve this issue through dialogue.

Despite suffering significant financial losses, GSK stated it manufactured around 5.4 million Panadol
tablets in the previous 12 months and maintained steady supplies throughout Pakistan amid the
COVID-19 pandemic, dengue fever crisis, and floods. The company claimed in the statement, "We
are one of the few global corporations still operating in the country. The business asserted that it is
willing to resume production once the federal government has authorised price hikes to account for
the cost of raw materials.

Health professionals urge the government to take immediate action

pg. 19
 According to medical professionals, a lack of commonly prescribed painkillers could compromise the
health of millions of Americans. Panadol is one of the most widely used over-the-counter painkillers
in Pakistan, despite the fact that there are alternatives. Patients can afford it, and doctors believe it
to be helpful. The suspension of such medications could have a significant negative impact on
healthcare in a populous nation like Pakistan where there is a staffing shortage. Also, many people
who cannot afford to see a clinic turn to Panadol for quick relief, according to Dr. Humayun
Warraich, head of the Pakistan Young Doctors Association, in a Gulf News interview.

The government has been urged to "pay careful attention" and "take prompt measures" to resolve
the conflict with the international corporation so that "people do not suffer," according to Dr.
Warraich, a resident orthopaedic surgeon at Rawalpindi's Benazir Bhutto Hospital.

Impacts of Covid-19 on GSK

Short-term impacts of covid-19
Short-term effects of COVID-19 on the health market can be observed in changes in demand, supply
constraints, panic buying and stockpiling, regulation changes, shifts in communication and
promotion to remote connections through technology, and changes to research and development
(R&D) processes.

Changes in Demand:

Induced demand and panic buying of oral home remedies, particularly for chronic disease, may be
caused by the pandemic (linked to COVID-19), and there may also be shortages due to supply-chain
irregularities. GSK faced a rapid change in demand when the first layer of Covid-19 hit and people
got scared and panicked due to the lock down situation and terror of the pandemic.

Induced demand and panic purchasing:

Induced demand for stocking medicines by the general public, sometimes known as "panic buying,"
may result in a recurring shortage in the market, particularly for prescriptions for chronic diseases.
According to studies, "panic buying" of medications for chronic illnesses will account for the majority
of the global pharmaceutical market's induced demand, which is predicted to increase by 8.9% by
March 2020. GSK who is a pharmaceutical produce and wholesalers were instructed by the
allocation order not to supply medications in excess of the regular demand. However, in Iran, due to

pg. 20
 a lack of such regulation, only induced demand was recorded informally by retail pharmacists. In
certain nations, the "stay at home" order may have led to a decline in demand.

Low supply of API and Finished Goods:

Active pharmaceutical ingredients (APIs) as well as finished goods are in low supply. The primary
suppliers of APIs, key starting materials (KSMs), and finished medicines are China and India. There
may have been a shortage of and a spike in the cost of important prescription medicines,
particularly antibiotics, as a result of the disease and a slowdown in production. When non-
substitutable essential APIs are involved such as amoxicillin, potassium clavulanate, ceftriaxone
potassium sterile, meropenam, vancomycin, gentamycin and ciprofloxacin are being concerned.

Research and Development Changes:

All the health-sector departments changed their Research and Development strategies when the
pandemic hit. Pandmic created an emergency situation by which every department has to speed-up
their R&D because the spread of that disease was very fast. GSK management also changed their
R&D strategies and the researchers have to stayed late night and worked on how to get out of this
situation, supplying appropriate information of medicines to the management and then preparing
the drugs for the patients they just not have to speed-up their R&D but also their supply chain
process because there was a sudden hike in demand and they had to prepare the medicines for their
consumers to save the lives of public. major international pharmaceutical corporations delay new
releases and clinical investigations, the producers of medicines that are derived from importing
resources face the heat. Low sales are thus a significant issue for GSK that provide global
pharmaceutical corporations.

53 vaccinations and at least 113 medications are now being tested in clinical studies or utilised as
treatments for COVID-19 patients worldwide. On April 23, 2020, there were almost 924 ongoing
trials for COVID-19 therapy worldwide. Only about 15% of these trials use standard, double-blind,
multicenter, comparator-arm randomised RCT methodologies, while the remaining 40% aren't even
standardized.

pg. 21
Long-term Impacts of Covid-19:
Long term impacts of Covid-19 include delayed in authorization of medicines that aren’t related to
Covid, heading towards pharmaceutical self-sufficiency, production and growth slow-down in
pharma, variations in usage patterns of health-related products.

Delayed Authorization for Medicines not related to COVID:

Delays were expected as a result of several months of delays and cancellations in the application
assessment because all countries, including Pakistan, were under crisis pressure and COVID-19
management was their main concern. Due to the economic crisis, registration and reimbursement
decisions have been made with a great deal of delay; yet, this circumstance might be favorable.
Additionally, it is impacted by the almost complete shutdown of regulatory bodies.

Heading towards Pharmaceutical self-sufficiency:

Potential supply chain disruptions caused by export bans in India and China, two key suppliers of
APIs and generics, have pushed governments in many countries to acknowledge supply chain
awareness and implement laws to avert shortages in such a crisis. Foreign investments in the
European Union (EU), particularly those influencing the health sector, must be subject to risk
assessments in order to avoid any negative consequences on the EU's ability to address its citizens'
health requirements.

pg. 22
 Production and Growth slow-down in the pharmaceutical industry:

The coronavirus pandemic has caused economic slowdowns in many regions, which could cause the
pharmaceutical sector's growth to halt. The pharmaceutical industry is sensitive to the economic
growth of nations, particularly those with pharmaceutical markets. The introduction of new
pharmaceuticals is more to blame for this slowdown in demand increase. Yet, because GSK's
portfolio aims had changed, the health sector was less sensitive to declining economic performance
during a financial crisis.

Variations in usage patterns Health-Related Product:

Modifications in consumption-related behaviors, drug replenishment in the treatment of chronic

illnesses, and developing telemedicine all have the potential to affect outcomes. GSK is now more
concerned about their customers personal hygiene, using hand sanitizers and nose/mouth
protection, clothing and ambient anti-infection materials. Due to the pandemic's protracted
duration, this intake may continue to influence local and global behavior.

pg. 23
 Supply Chain Problems

GlaxoSmithKline (GSK) is a leading global healthcare company that operates in over 100
countries worldwide. As a company that relies heavily on its supply chain to deliver products to
customers, GSK faces several strategic supply chain problems that it must address to ensure its
continued success.

GlaxoSmithKline (GSK) faces a number of general supply chain problems that are common to
many companies operating in global markets.

One such problem is the challenge of managing a complex and geographically dispersed supply
chain. GSK sources raw materials and components from thousands of suppliers around the
world, and distributes its products to customers in over 100 countries. This complexity can
make it difficult to maintain visibility and control over the entire supply chain, which can lead to
delays, quality issues, and other disruptions.

Another general supply chain problem for GSK is the need to balance cost and quality. As a
healthcare company, GSK must ensure that its products meet high quality standards, while also
managing costs to remain competitive. This requires the company to carefully manage its
suppliers, monitor production processes, and invest in quality control measures.

GSK also faces the challenge of complying with a variety of local, local, and international
regulations governing all of the production, distribution, and sale of its products. Failure to
comply with these regulations can lead to significant financial and reputational damage, making
it essential for GSK to have robust compliance programs in place.

Finally, GSK must contend with the rapid pace of technological change in supply chain
management. The company must keep pace with new technologies such as artificial
intelligence, blockchain, and the Internet of Things, which are transforming the way companies

pg. 24
manage their supply chains. This requires GSK to invest in new technologies and develop new
skills and capabilities among its workforce.

In summary, the general supply chain problems faced by GSK include managing a complex and
geographically dispersed supply chain, balancing cost and quality, complying with regulations,
and keeping pace with technological change. By addressing these challenges, GSK can improve
its supply chain operations and maintain a competitive edge in the global healthcare market.

One of the primary strategic supply chain problems facing GSK is the challenge of managing its
extensive network of suppliers. The company sources raw materials and components from
thousands of suppliers around the world, making it difficult to maintain visibility and control
over the entire supply chain. This lack of visibility can lead to supply chain disruptions, delays,
and quality issues that can transform the power of the company to keep the delivery time of
the products to the customers on appropriate time.

Another strategic supply chain problem for GSK is the need to manage inventory levels
effectively. GSK operates in a highly regulated industry, which means that it must maintain
strict control over the storage and transportation of its products. At the same time, the
company must balance the need to maintain adequate inventory levels to meet customer
demand while minimizing the risk of excess inventory and obsolescence.
Finally, GSK must contend with the growing trend towards digitalization and the use of
advanced technologies in supply chain management. The company must keep pace with these
developments to remain competitive and meet customer expectations. This requires
investment in new technologies and the development of new skills and capabilities among its
workforce.

To address these strategic supply chain problems, GSK must take a comprehensive approach
that involves collaboration with suppliers, effective inventory management, rigorous
compliance programs, and investment in new technologies and capabilities. By addressing

pg. 25
these challenges, GSK can strengthen its supply chain and ensure its continued success in the
global healthcare market.

The strategic supply chain problems faced by GSK have evolved over time, and the COVID-19
pandemic has introduced new challenges that the company must address.

Pre-COVID, GSK faced challenges related to supplier management, inventory management,

compliance, and technology. However, the pandemic exacerbated these challenges, particularly
in the areas of supplier management and inventory management. With the sudden surge in
demand for healthcare products such as vaccines and medicines, GSK had to rapidly adjust its
supply chain to ensure that it could meet customer needs. This required the company to quickly
identify alternative suppliers and distribution channels to ensure a steady supply of critical raw
materials and components.

In addition, the pandemic highlighted the need for greater collaboration and transparency
between GSK and its suppliers. The company had to work closely with its suppliers to ensure
that they could maintain production and delivery schedules, even as travel restrictions and
border closures disrupted global supply chains.

Post-COVID, GSK faces new challenges related to the ongoing impacts of the pandemic, as well
as broader trends such as the increasing importance of sustainability and the growing use of
digital technologies in supply chain management. The pandemic has increased the need for
agility and flexibility in the supply chain, as companies must be prepared to quickly respond to
new disruptions and changes in demand.

Furthermore, as customers and stakeholders become increasingly focused on sustainability,

GSK must take steps to ensure that its supply chain is environmentally and socially responsible.
This may require investment in new technologies and processes to reduce carbon emissions,
minimize waste, and ensure ethical sourcing practices.

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Finally, the growing use of digital technologies in supply chain management presents both
opportunities and challenges for GSK. On one hand, the company can leverage advanced
analytics and automation tools to improve visibility, increase efficiency, and reduce costs. On
the other hand, GSK must also ensure that it has the necessary skills and capabilities to
effectively implement and manage these technologies.

In addition to the challenges mentioned above, GSK also faces other strategic supply chain
problems that it must address to remain competitive and successful.

One such challenge is the need to balance cost and quality in the supply chain. As a healthcare
company, GSK must ensure that its products meet high quality standards, while also managing
costs to remain competitive. This requires the company to carefully manage its suppliers,
monitor production processes, and invest in quality control measures.

Another challenge for GSK is the need to manage the complexity of its supply chain. The
company operates in multiple countries and sources raw materials and components from
thousands of suppliers. This complexity can lead to delays, errors, and increased costs, making
it essential for GSK to have strong supply chain management processes in place.

Finally, GSK must address the challenge of ensuring supply chain resilience. The COVID-19
pandemic highlighted the importance of having a resilient supply chain that can withstand
disruptions and unexpected events. GSK must have contingency plans in place to quickly
respond to any disruptions, such as natural disasters or geopolitical events, to ensure the
continuity of its operations.

In summary, GSK faces a range of strategic supply chain problems that it must address to
remain successful in the global healthcare market. By investing in supplier management,
inventory management, compliance, sustainability, technology, quality control, supply chain

pg. 27
complexity management, and supply chain resilience, GSK can improve its supply chain
operations and maintain a competitive edge. In conclusion, the strategic supply chain problems
faced by GSK have evolved over time, and the COVID-19 pandemic has introduced new
challenges that the company must address. By taking a comprehensive approach that involves
collaboration, effective inventory management, compliance, sustainability, and investment in
new technologies, GSK can strengthen its supply chain and ensure its continued success in the
global healthcare market.

Solutions

The solutions to the strategic and general supply chain problems faced by GSK are multifaceted
and require a comprehensive approach that involves collaboration, effective inventory
management, compliance, sustainability, and investment in new technologies. Below are some
specific solutions for each of the challenges mentioned above:

Supplier Management:

GSK can improve its supplier management by developing strong relationships with its suppliers,
increasing collaboration and transparency, and using advanced analytics to monitor supplier
performance and identify potential issues before they arise.
GSK can improve its inventory management by implementing more robust demand planning
processes, using advanced forecasting tools, and implementing lean production processes to
reduce inventory waste and improve responsiveness to changing demand.

It can take several steps to improve its supplier management issue, including:
1. Conducting a comprehensive review of its current supplier management practices, this
should include an analysis of the key areas where improvement is needed which can
help in the identification of the root causes of the problems.

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 2. Once the review is complete, GSK can develop a clear supplier management strategy
that addresses the identified issues. The strategy should include clear objectives, goals,
and metrics for measuring success.
3. They can enhance communication with its suppliers to establish a more collaborative
relationship. This can include regular meetings, sharing of information and feedback
mechanisms.
4. The company can implement supplier performance management systems to monitor
and measure supplier performance against agreed-upon metrics. This will allow GSK to
identify any issues early and take corrective action.
5. GSK can improve its supplier selection processes by developing more robust selection
criteria and conducting more rigorous due diligence on potential suppliers.
6. The company should ensure that all of its suppliers are compliant with relevant
regulations and standards.
7. They can provide training and support to its suppliers to help them improve their own
operations and meet GSK's requirements.
8. GSK should review and revise its supplier contracts to ensure that they include clear
expectations for supplier performance and consequences for non-compliance.
By implementing these steps, GSK can improve its supplier management practices and build
stronger relationships with its suppliers. This will help to ensure the quality and reliability of its
products and services, while also reducing risks and costs associated with poor supplier
performance.

Compliance:
GSK can improve its compliance by investing in training and education for employees and
suppliers, monitoring regulatory changes and ensuring that its operations are aligned with
regulatory requirements, and conducting regular audits to identify and address compliance
issues.
To address compliance problems within their supply chain, they can consider the following
suggestions:

pg. 29
 1. Conduct a comprehensive risk assessment: GSK should conduct a comprehensive risk
assessment of its supply chain to identify potential compliance risks, including those
related to ethical and environmental practices.
2. Develop supplier codes of conduct: GSK can work with its suppliers to develop codes of
conduct that outline their expectations for compliance with applicable laws and
regulations, ethical and environmental practices, and social responsibility.
3. Monitor supplier compliance: GSK should implement a system for monitoring supplier
compliance with their codes of conduct and applicable regulations, which could include
regular audits and assessments of supplier performance.
4. Provide training and support: GSK can provide training and support to its suppliers to
help them understand their compliance obligations and improve their practices.
5. Strengthen due diligence procedures: GSK should strengthen its due diligence
procedures to ensure that all potential suppliers are thoroughly vetted for compliance
risks before entering into a contract with them.
6. Enhance communication and collaboration: GSK can enhance communication and
collaboration with its suppliers to build strong relationships and foster transparency
around compliance issues.
7. Review and revise contracts: GSK should review and revise supplier contracts to include
clear expectations for compliance with applicable laws and regulations, codes of
conduct, and consequences for non-compliance.
8. Engage with industry groups and regulatory bodies: GSK can engage with industry
groups and regulatory bodies to stay up-to-date on best practices and emerging
compliance risks in the supply chain.
By implementing these suggestions, GSK can improve compliance within its supply chain,
reduce risk, and enhance its reputation as a responsible and ethical company.

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Sustainability:
GSK can improve its sustainability by setting ambitious sustainability targets, investing in
renewable energy and waste reduction initiatives, and working closely with suppliers to
promote sustainable practices throughout the supply chain.
It can consider to address sustainability problems within its supply chain by taking following
measures:
1. Collaborate with suppliers: GSK can assist with its suppliers to find out opportunities for
sustainability improvements within the supply chain. This could include providing
guidance and support for sustainable practices and incentivizing suppliers to adopt more
sustainable practices.
2. Set sustainability targets: GSK can set ambitious sustainability targets that align with
global targets such as the United Nations Sustainable Development Goals. These targets
should be measurable and specific, such as reducing greenhouse gas emissions or water
use by a certain percentage within a given timeframe.
3. Implement sustainable sourcing practices: GSK can implement sustainable sourcing
practices to reduce the environmental impact of its supply chain. This could include
sourcing from suppliers that use renewable energy, minimize waste, and have strong
environmental and social performance.
4. Monitor supplier sustainability performance: GSK can implement a system for
monitoring supplier sustainability performance, which could include regular audits and
assessments of supplier sustainability practices. This will help identify areas for
improvement and ensure that suppliers are meeting sustainability targets.
5. Engage with stakeholders: GSK can engage with stakeholders, such as customers,
investors, and NGOs, to understand their expectations around sustainability and ensure
that its sustainability practices align with stakeholder expectations.
6. Foster innovation: GSK can foster innovation within its supply chain by encouraging
suppliers to develop and implement new, more sustainable practices. This could include
providing funding or other resources to support supplier innovation.

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 7. Report on sustainability performance: To improve accountability and transparency, GSK
can report on its sustainability performance and advancement towards its sustainability
goals. This will show its dedication to sustainability and aid in establishing confidence
with stakeholders.
8. By implementing these solutions, GSK can address sustainability problems within its
supply chain, reduce its environmental impact, and build a more sustainable and
resilient supply chain.

Technology:
GSK can improve its technology by investing in advanced analytics, automation tools, and
digital technologies such as blockchain to improve supply chain visibility, increase efficiency,
and reduce costs.
There are several ways the company can improve its technology to enhance its operations and
stay competitive. Here are a few suggestions:
1. Invest in digital transformation: GSK should consider investing in digital transformation
to modernize its operations and leverage technology to gain a competitive advantage.
This could involve implementing new technologies such as automation, artificial
intelligence, and machine learning to streamline operations, reduce costs, and improve
efficiency.
2. Upgrade existing systems: GSK should assess its existing technology systems and
determine if they need to be upgraded or replaced. This may involve upgrading
hardware or software, improving cybersecurity measures, or migrating to cloud-based
systems to increase flexibility and scalability.
3. Foster innovation: GSK should create an environment that fosters innovation and
encourages workers to experiment with novel concepts and technologies. This might
entail establishing an innovation lab. or investing in research and development to
explore new technologies and solutions.
4. Collaborate with technology partners: GSK should collaborate with technology partners
to stay informed about the most recent developments and ideal procedures in

pg. 32
 technology. This may involve partnering with startups, universities, or other
organizations to exchange knowledge and expertise.
5. Emphasize data analytics: GSK should prioritize data analytics to gain insights into its
operations and make data-driven decisions. This may involve investing in data analytics
tools and hiring data scientists to analyze data and identify opportunities for
improvement.
6. Develop a technology roadmap: GSK should develop a technology roadmap that outlines
its technology strategy and goals over a set period of time. This will help to ensure that
technology investments are aligned with the company's overall objectives and provide a
clear direction for technology initiatives.
Overall, by investing in digital transformation, upgrading existing systems, fostering innovation,
collaborating with technology partners, emphasizing data analytics, and developing a
technology roadmap, GSK can improve its technology and enhance its operations, ultimately
driving growth and improving its competitiveness.

Quality Control:
GSK can improve its quality control by investing in robust quality control processes, using
advanced analytics and data analysis tools to monitor product quality, and conducting regular
quality audits to identify and address any issues.
To address a quality control problem within the supply chain, here are some steps that can be
taken:
1. Determine the underlying cause: The first step in solving a quality control issue is to
determine its underlying cause. This may involve reviewing production processes,
supplier performance, logistics, and other factors that can impact quality. GSK should
use statistical process control (SPC) techniques to identify any trends or patterns in the
data that may indicate a problem.
2. Define the problem and establish quality control standards: GSK should clearly define
the problem and establish quality control standards to prevent it from happening again.

pg. 33
 This should involve setting measurable objectives for quality, defining quality metrics,
and implementing quality control procedures.
3. Improve supplier performance: GSK should work closely with its suppliers to improve
their performance. This may involve providing them with training, sharing best
practices, and setting up a system for monitoring their performance. GSK should also
consider using quality assurance agreements to ensure that suppliers are meeting the
company's quality requirements.
4. Implement quality control processes: GSK should implement quality control processes
throughout the supply chain. This may involve conducting inspections, performing tests,
and verifying the quality of raw materials and finished products. GSK should also use
technology to track quality metrics and identify any issues.
5. Monitor and review performance: GSK should continuously monitor and review the
performance of its supply chain to ensure that quality control standards are being met.
This may involve conducting regular audits, analyzing data, and making improvements
as necessary.
6. Communicate with stakeholders: GSK should communicate with all stakeholders,
including customers, suppliers, and employees, about its quality control processes and
standards. This will help to build trust and confidence in the company's products and
services.
Overall, addressing quality control problems in the supply chain of GSK requires a
comprehensive approach that involves identifying the root cause of the problem, implementing
quality control processes, and continuously monitoring and reviewing performance. By taking
these steps, GSK can make sure that its goods are of the highest caliber and live up to customer
expectations.

Supply Chain Complexity Management:

Supply chain complexity management is a critical process for GSK to optimize its supply chain
operations, increase efficiency, and reduce costs. The company can manage supply chain

pg. 34
complexity by centralizing and consolidating its supplier base, simplifying product lines, and
improving communication and collaboration among suppliers and other stakeholders.
Here are some steps that it can take to manage supply chain complexity effectively:
1. Map the supply chain: GSK should map out its entire supply chain to identify all the
different entities involved, including suppliers, manufacturers, distributors, and
customers. This will help to understand the overall structure of the supply chain and
identify potential areas of complexity.
2. Identify sources of complexity: Once the supply chain is mapped out, GSK should
identify the sources of complexity, such as multiple suppliers, varying lead times, and
differing regulations across markets. This will help to focus efforts on the areas where
complexity can be reduced.
3. Rationalize the supply chain: GSK should rationalize its supply chain by consolidating
suppliers and reducing the number of SKUs (stock-keeping units) where possible. This
will help to reduce complexity and improve efficiency, as well as potentially reduce
costs.
4. Standardize processes: GSK should standardize processes across its supply chain to
reduce complexity and improve consistency. This may involve implementing
standardized operating procedures, using common terminology and metrics, and
implementing technology solutions to automate processes.
5. Improve communication: Effective communication is essential to managing complexity
in the supply chain. GSK should establish clear communication channels with all entities
in the supply chain and ensure that information is shared in a timely and accurate
manner.
6. Implement technology solutions: GSK should consider implementing technology
solutions to help manage supply chain complexity. This may include supply chain
management software, data analytics tools, and automation solutions that can
streamline processes and reduce manual tasks.
7. Continuously monitor and optimize: Supply chain complexity is not a one-time fix; it
requires ongoing monitoring and optimization. GSK should continuously review its

pg. 35
 supply chain operations, gather data, and analyze performance metrics to identify
opportunities for improvement and adjust strategies accordingly.
Overall, effective supply chain complexity management requires a systematic approach that
involves mapping the supply chain, identifying sources of complexity, rationalizing the supply
chain, standardizing processes, improving communication, implementing technology solutions,
and continuously monitoring and optimizing. By following these steps, GSK can improve its
supply chain operations and enhance its competitiveness in the market.

Supply Chain Resilience:

GSK can ensure supply chain resilience by developing robust contingency plans, diversifying its
supplier base, and investing in redundant capacity to ensure continuity of operations during
disruptions.

Adopting supply chain resilience is critical for GSK to ensure that its supply chain can withstand
disruptions and continue to operate effectively. Here are some steps that GSK can take to adopt
supply chain resilience:
1. Identify potential risks: GSK should identify potential risks to its supply chain, including
natural disasters, geopolitical tensions, regulatory changes, and supplier disruptions.
This will help to identify the potential outcomes of these risks on its supply chain
operations.
2. Assess supply chain vulnerabilities: Once the risks are identified, GSK should assess its
supply chain vulnerabilities to these risks. This may involve analyzing the criticality of
suppliers, assessing the resilience of transportation networks, and evaluating the
robustness of inventory management systems.
3. Develop contingency plans: GSK should develop contingency plans to address potential
disruptions to its supply chain. This may involve identifying alternative suppliers,
establishing safety stock levels, and implementing backup transportation routes.
4. Strengthen supplier relationships: Strong relationships with suppliers are critical for
building supply chain resilience. GSK should work closely with its suppliers to

pg. 36
 understand their operations, assess their risk exposure, and develop joint contingency
plans.
5. Leverage technology: Technology can play a critical role in building supply chain
resilience. GSK should consider implementing supply chain management software, data
analytics tools, and automation solutions that can improve visibility and agility in its
supply chain operations.
6. Train employees: Supply chain resilience is not just about technology and processes; it
also involves people. GSK should provide training to its employees on how to respond to
supply chain disruptions and communicate effectively during crisis situations.
7. Continuously monitor and improve: Supply chain resilience is an ongoing process that
requires continuous monitoring and improvement. GSK should regularly review its
supply chain operations, gather data, and analyze performance metrics to identify
opportunities for improvement and adjust strategies accordingly.
Overall, adopting supply chain resilience requires a systematic approach that involves
identifying risks, assessing vulnerabilities, developing contingency plans, strengthening supplier
relationships, leveraging technology, training employees, and continuously monitoring and
improving. By following these steps, GSK can enhance the resilience of its supply chain and
mitigate the impact of potential disruptions.

In summary, the solutions to the supply chain problems faced by GSK involve a combination of
people, process, and technology initiatives that require a long-term, strategic approach. By
addressing these challenges, GSK can improve its supply chain operations and maintain a
competitive edge in the global healthcare market.

Sustainability and Competitive Advantage of GSK

The challenges in approving an original form of medication will be of great competition, and that's even
after the drug's patent expired in 2000. This is particularly true when dealing with the United States,
where approving inhaled medications is a highly challenging prospect.

GSK has altered its emphasis to focusing on actual product innovation and maximizing value. GSK is
currently extending its assets from its developed markets into the new emerging regions, when viewed

pg. 37
from a geographic perspective. Galxo is well-positioned in these competitive industries thanks to its
client and vaccination segments.

Recommendations:
GSK needs to work on their data base and make it strong as good data will lead to good
analysis and forecast. Strong data will enable accurate analysis and forecasting; hence GSK

needs to improve their data base.

 They need to implement and take use of artificial intelligence. They must use and deploy

artificial intelligence. A more effective channel management strategy

 Improvements in their channel management.

pg. 38
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https://www.resilinc.com/blog/gsks-ashish-gupta-shares-the-companys-supply-chain-risk-management-
journey/

https://www.ingentaconnect.com/content/ben/covid/2022/00000003/00000002/art00006#

https://www.mdpi.com/2673-3986/3/4/32

https://www.emerald.com/insight/content/doi/10.1108/IJLM-04-2021-0232/full/html

https://link.springer.com/article/10.1007/s40199-020-00358-5

https://www.sciencedirect.com/science/article/pii/S2666412720300015

https://www.sciencedirect.com/science/article/pii/S2667276621000378

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