OPERATIONS MANAGEMENT AT

GLAXOSMITHKLINE

Presented By:

Maira Hassan
Neelam Malik Tajani
Salima Ghabrani
 GlaxoSmithKline
MISSION STATEMENT

GlaxoSmithKline Our Quest is to improve the quality of

human life by enabling people to do more, feel better and
live longer.

VISION STATEMENT

GlaxoSmithKlines vision is exciting- the opportunity to make

a difference to the lives of billions of people.

Our value system and operating principles provide the

necessary guidance on how we work at GSK.

2
INTRODUCTION
1947 Glaxo operations organized in Pakistan at
independence.
SK&F came to Pakistan under the name of
1949
Pharmaco Limited.

1952 Glaxo became public Limited.

1954 Beecham incorporated in Pakistan.

1955 Glaxo developed manufacturing facilities In

Pakistan.

1955
Wellcome Incorporated in Pakistan.
1956 Wellcome developed manufacturing facilities In
Pakistan.

1979 Wellcome Pakistan became public listed.

Glaxo and Wellcome merged to become Glaxo
1996
Wellcome.
Glaxo Wellcome, Beecham and SK&F integrated as
2002 result of a global merger to form GlaxoSmithKline
Pakistan.
Portfolio & Products
GSKs product portfolio includes medicines & vaccines that
help cure the major six disease areas
Asthma
Virus control, infections
Mental health
Diabetes
Digestive conditions
Cancer

Market Leading Products

Include
Panadol
Horlicks
Amoxil
Augmentin
Sensodyne
Manufacturing Sites In Pakistan
SITE 1 GMS West Wharf

SITE 2 GMS F 268, SITE Karachi

SITE 3 Korangi, Karachi

SITE 4 Lahore
Operations Processes
LOCATION
Labor availability
Availability of raw material
Energy availability
Transportation
Proximity to customers

DEMAND FORECASTING
Previous year same time sales
Last three month sales
Current trends
Competitors' drives
Consumer promotion schemes
Operations Processes (Contd)
Demand Cycle
Based on the previous years demand, annual budgeting is
performed for the following year. This takes place in June of every
year.
While developing the annual budget, a comparison is made
between the actual and forecasted demand of the prior year to
analyze the trend and use it to develop the budget for the following
year.
Usually there is an average of 6% to 7% growth in the forecasted
annual budget due to increasing material requirements and rising
raw material costs.
Once the annual budget has been prepared, it is broken down
into monthly targets that is to be utilized each month.
Inventory Management

Supplier Selection
The local suppliers are Rafhan for glucose, Lever Brothers for glycerin.
The raw materials are mostly imported from two companies, BASF and
Rhodia, who have these materials as a part of their primary
manufactures and supply them to Glaxo
The criteria for selecting suppliers is quality, cost, consistency of supply,
stability, validation, turnover and reputation in the market
The company keeps a safety stock of between two to four weeks.
The packaging material is supplied mostly by local sources- 80% is
supplied by the local firms and 20% is imported.
The JIT system is not employed because of the political setup there
are too many strikes and power breakdowns that disrupt supply.
The rates with suppliers are set at the beginning of the year because of
recurring business.
Inventory Management (Contd)
PROCUREMENT
The Procurement department is involved in the purchase of raw materials. As far as
packaging material goes, 20% is imported while 80% is procured locally. Imported
packaging material includes aluminum foil, PVC film, components of inhalers etc. The local
packaging material includes boxes, tubes, ampoules, glass bottles etc.
It is the objective of GSK to provide quality medicines and fulfilling the current and future
needs of customers. The system implemented at GSK complies with all legal and quality
management system ISO 9001:200 requirements.
The company imports raw material and at times buys from local manufacturers in Pakistan.
The quality of the material is a priority for the firm.
GSKs field force in order to have quick communication with the firm contacts through cell
phones after holding meetings with different doctors. The prescriptions and demands of
the doctors are key source of information for the formation of new medical formulae and
medicines.
Therefore, the distributers and the company field force play an important role for the
marketing and demand forecast of the products.
THE VENDOR MANAGED INVENTORY SOLUTION
 RAW MATERIAL TESTING
Each item of raw material that is acquired is tested against predefined
standards, if it complies it is accepted otherwise it is rejected. It is standard
practice to test each procured item at least thrice.

FINISHED GOODS
Before the products are produced on a full scale they are first produced in
relatively small batches to be [passed through the quality assurance system,
if a green signal is given then the production process is continued, this is
done in order to avoid the huge costs that could arise if the faults are
discovered in the market.
However, if the sample fails to clear the test then the discrepancies identified
are reported to the production department and corrections are made.
It does not however mark an end to the checking procedure, because after
the final batches are ready they are again tested.
 WAREHOUSES
The warehouse consists of the following:
Quarantine
Raw Material store
Packaging materials store
Finished goods store
Rejected Materials store
Inflammable material store
Total Quality Management (TQM)

QUALITY MANAGEMENT ACTIVITIES OF GSK

Total Quality Management (TQM)
ADVANTAGES OF TOTAL DISADVANTAGES OF
QUALITY MANAGEMENT TQM
Strengthened competitive Initially higher cost
position Change in organization culture
Adaptability to Change Change allocation of time and
Improve productivity resources
Enhance market image and Slow outcome/result
presence Discourage Creativity
Improved cost management
Customer satisfaction
Higher Profitability
Improve job security and
employee morale
Statistical Process Control (SPC)
Statistical Process Control (SPC) is an industry-standard methodology
for measuring and controlling quality during the manufacturing process.
Quality data in the form of Product or Process measurements are
obtained in real-time during manufacturing. This data is then plotted on
a graph with pre-determined control limits.
Control limits are determined by the capability of the process, whereas
specification limits are determined by the client's needs.
Data that falls within the control limits indicates that everything is
operating as expected.
Any variation within the control limits is likely due to a common cause
the natural variation that is expected as part of the process.
If data falls outside of the control limits, this indicates that an assignable
cause is likely the source of the product variation, and something within
the process should be changed to fix the issue before defects occur.
 Operational Flowchart

Commercial
Departement
(Material
Marketing Production Making
Planning, Distribution
Forecast Department Capacity
Import and
Local
Procurment
Local Purchasing
Local purchasing department of GSK Laboratories Pakistan deals with local
vendors concerning:
Designing FP Plastics, Al-Ahad Plastics, Thermoplas (Korangi) > Lead
Time 30 Days
Printing Ammara Commercial Printing (Memon Goth, Malir) > Lead Time
30 Days
Packaging Saima Packaging (Korangi Industrial Area) > Lead Time 30
Days
Slicing Aluminum foils - Muhammad Corporations, Gulshan -e- Iqbal
Cartons Sultan Packages (Dalmiya, Karachi) > Lead time 7 Days
Cartons-King Packages (Lalukhait, Karachi) > Lead Time 7 Days
Cartons - Decent packages (S.I.T.E Area) > Lead time 7 Days
Dextrose Rafhan Industries (Faisalabad
Pseudo - Alpha Chemicals (Lahore)
Essential Chemicals (Lahore)
Import Purchasing
Some of the Indenters of GSK Pakistan are:

Rasheed sons - KHI

Munico Associates - KHI
S. Aijazuddinn - KHI
Arfeen - KHI
Thank you