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The IUP Journal of Supply Chain Management :
The Integration of Project Management with Supply Chain Management in Indian Pharmaceutical Projects
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Different stages in a project have clearly articulated objectives and outcomes. Well-defined objectives and outcomes characterize the different stages of a project. Effective management of each stage contributes to the overall success of a project. Project Management (PM) methodology and techniques have attracted the attention of every sector of business. Even though they made a late entry into pharmaceutical industry when compared with others, the pharmaceutical industry has been aggressively adopting them. Supply Chain Management (SCM) in the pharmaceutical industry has gained a lot of prominence in view of the need to reduce the time in the delivery of projects. It plays a critical role in ensuring the supply of raw materials for manufacturing the pharmaceutical products. This paper attempts to analyze the integrative role of PM and SCM for successful delivery of pharmaceutical projects as per client requirements. It presents a real-world case study covering nine major projects of multinational companies (MNCs) that were outsourced to a leading Indian pharmaceutical company. The study examines the end-to-end activities involved in manufacturing of drug from the stage of project-proposal to delivery of product to the client. The results indicate the importance of integrating PM with SCM in meeting the requirements of the client projects.

 
 
 

Pharmaceutical companies in the US and Europe are expected to increase outsourcing of their manufacturing work to India and China. The objectives are clear—low cost and execution speed (Grace, 2004). Another factor for the likely surge in outsourcing to India is the enactment of Patent Amendment Act, 2005, which assures the MNCs of protection of their product patent rights in India (Jayashree and Rajesh, 2010).

Indian pharmaceutical industry has made great strides since 1991, with the opening up of the Indian economy to the forces of liberalization, privatization and globalization (Rao, 1998). A look at the turnover of the Indian pharmaceutical industry shows just how important these forces were to propel growth. As of 2015, the industry turnover stood at $21 bn, of which the domestic market contributed to $12 bn (IMS Health, 2015). The balance $9 bn came from exports. Today, India is the fourth largest market by volume and thirteenth largest by value. In addition, India, with more than 175 US FDA-approved manufacturing facilities, is quickly emerging as a global hub for pharmaceutical companies to outsource research, manufacturing services and clinical trials (ICRA Report, June 2011).

Indian firms have unique competitive advantage to cater to the outsourcing requirements of the global innovator companies, who are faced with the twin challenges in drug discovery—(a) speed to market; and (b) cost reduction. Despite breakthroughs in combinatorial chemistry and other screening technologies, the drug discovery program still takes around 12 years and a minimum cost of $800-1,200 mn to bring a new drug into the market (Abrol et al., 2017). Therefore, the MNCs outsource the noncritical activities to Indian firms to bring down costs and time. Indian firms with a vast pool of scientific talent, USFDA-approved manufacturing facilities and availability of cheap labor stand to gain immensely from the outsourcing activity (Joshi, 2003).


 
 
 

Supply Chain Management Journal,Effective management ,Project Management (PM) methodology,Pharmaceutical industry,Projects of multinational companies (MNCs).