Zim Pharma
Zim Pharma
Zim Pharma
INTRODUCTION
TO
THE STUDY
Page No.1
1.1 INTRODUCTION
Prevalent from the birth of mankind, man involved himself in one or another business
through sole proprietorship and partnership form of business. But these forms appeared to
be less perpetual, because of unlimited liability and affections by natural factors viz
death, insolvency or lunacy of the owner or partners. Then company form of organization
came into existence which changed the ‘populi’ view of doing business.
An organization is defined as “a consciously coordinated social unit composed of
two or more people that functions on a relatively continuous basis to achieve a common
goal or set of goals”. In other way round it can also be defined as “a form of every human
association for the attainment of a common purpose or goal”. Thus in a way the term
organization emphasizes upon “the human groupings/associations and whose main
objective is to meet certain predefined goals that may vary from profit motive to serving
the society as well as the nation”.
An organizational study is the study of individual and group dynamics in an
organizational setting, as well as the nature of the organizations themselves. Whenever
people interact in organizations, many factors come into play. Organizational studies
attempts to understand and model these factors.
Being a part of the curriculum under 2 years MBA program, we got the
opportunity to carry out one such organizational study in a large cap public company. The
objective of this study was to enjoin the students with the functioning of the organization,
as also of its departments.
The main aim of the organizational study is to acquire the knowledge regarding
the functional as well as the management aspects of an organization, and its sustainability
towards achieving its mission, vision and values set for growth.
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1.3 OBJECTIVES OF THE STUDY
• To know about the market structure within which the organization is a player.
• To know about the market share and share of competitors.
• To understand key issues in strategy deployment like mission, vision, goals,
objectives etc.
• To study the organizational administrative structure.
• To understand as to how different functional areas of an organization work
together to achieve common objective of the firm.
• To study key business levels functions and process like Marketing, Finance,
HR, Operations, etc.
The study focuses on the overall structure of the organization. In this study, the
researcher analyzed the overall functioning of the firm and also the financial performance
of the enterprise. The researcher made a moderate attempt to have the SWOT analysis of
the study. The researcher also experienced practical application of the theoretical
knowledge gained
• As the project is prepared for the academic purpose only, it suffers from the
limitation of time, due to which the detailed report about the operations of the organization
was not possible.
• The information given by the persons may not be complete because of their busy
work schedules
• The report suffers from the limitation of meeting only the departmental heads
because of lack of permission to interact with other people.
Certain areas are restricted, so a detailed study is not possible.
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1.6 METHODOLOGY used for Organization study
Primary Data
1. Personal Interview- There were interview sessions with each of the functional
heads, and there was a questionnaire that was followed as questions which were asked
depending upon situations.
2. Observation- There was a keen sense of observation followed during the study
period to follow the various functions of the company.
Secondary Data
1. Internal Data- This includes data provided at the company’s office, like
Organization structures, Balance sheet, Annual reports etc.
2. External Data- It includes organization data derived from internet, and other
information media that gives a wide picture of the Organization with respect to the external
world.
Page No.4
CHAPTER 2
INTRODUCTION
TO THE
PHARMACEUTICAL INDUSTRY
Page No.5
2.1 INTRODUCTION
The pharmaceutical industry develops, produces, and markets drugs licensed for use
as medications. Pharmaceutical companies can deal in generic and/or brand medications.
They are subject to a variety of laws and regulations regarding the patenting, testing and
marketing of drugs.
The earliest drugstores date back to the Middle Ages. The first known drugstore
was opened by Arabian pharmacists in Baghdad in 754, and many more soon began
operating throughout the medieval Islamic world and eventually medieval Europe. By the
19th century, many of the drug stores in Europe and North America had eventually
developed into larger pharmaceutical companies.
Most of today's major pharmaceutical companies were founded in the late 19th
and early 20th centuries. Key discoveries of the 1920s and 1930s, such
as insulin and penicillin, became mass-manufactured and distributed. Switzerland,
Germany and Italy had particularly strong industries, with the UK, US, Belgium and the
Netherlands following suit.
Legislation was enacted to test and approve drugs and to require appropriate
labeling. Prescription and non-prescription drugs became legally distinguished from one
another as the pharmaceutical industry matured. The industry got underway in earnest
from the 1950s, due to the development of systematic scientific approaches,
understanding of human biology (including DNA) and sophisticated manufacturing
techniques.
Numerous new drugs were developed during the 1950s and mass-produced and
marketed through the 1960s. Cancer drugs were a feature of the 1970s. From 1978, India
took over as the primary center of pharmaceutical production without patent protection.
By the mid-1980s, small biotechnology firms were struggling for survival, which led to
the formation of mutually beneficial partnerships with large pharmaceutical companies
and a host of corporate buyouts of the smaller firms. Pharmaceutical manufacturing
became concentrated, with a few large companies holding a dominant position throughout
the world and with a few companies producing medicines within each country.
Page No.6
Global Pharmaceuticals Market
1. Size of the global pharmaceutical market was US$ 602 bn. The market has grown
at a CAGR of nearly 11% during 1998-2005.
2. The pharmaceutical markets worldwide can be classified as Regulated, Semi
Regulated and Non Regulated markets.
a. The regulated markets constitute 88% of the global pharmaceutical market.
b. The semi and non regulated markets of Asia, Africa, Australia and Latin
America have been growing at a rapid pace (registering double digit growth in
2005) highlighting the tremendous market potential of these regions.
Global Sales 2005 : US$ 602 billion
The top 10 Pharma companies are facing prospects of slowdown in sales as a large
number of blockbuster drugs that they possess are going off patent.
According to McKinsey & Company report (“India Pharma 2015), the following trends
are expected to influence the growth of the Indian pharmaceuticals market over the next
decade: doubling of disposable incomes and the number of middle-class households,
expansion of medical infrastructure, greater penetration of health insurance, rising
prevalence of chronic diseases, adoption of product patents, and aggressive market
penetration driven by the relatively smaller companies.
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US $ billion US $ billion
Page No.8
• Low production costs give India an edge over other generics-producing nations,
especially China and Israel .
CRAMS
• Rising pricing pressure on global revenues and falling trend in R&D productivity
is making it imperative for global pharma players to increase outsourcing to sustain
profitability.
• Custom manufacturing operations in India or China offer unparalleled cost
advantages and increasing pricing pressures is forcing innovators to minimize
manufacturing costs and shift operations to India and China .
• Indian custom manufacturing players have been aggressively acquiring custom
development companies in the EU in order to gain access to a wide gamut of valuable
client relationships, which would have been difficult to obtain otherwise.
• India is also an apt destination for outsourcing of research services due to its large
population with relative underexposure to drugs, significant cost advantage and the
availability of well qualified investigators.
Pharmaceutical Industry in India is one of the largest and most advanced among the
developing countries. It provides employment to millions and ensures that essential drugs
at affordable prices are available to the vast population of India. Indian Pharmaceutical
Industry has attained wide ranging capabilities in the complex field of drug manufacture
and technology. From simple pain killers to sophisticated antibiotics and complex cardiac
compounds, almost every type of drug is now made indigenously.
Indian Pharma Industry is playing a key role in promoting and sustaining
development in the vital field of medicines. Around 70% of the country's demand for
bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules,
Page No.9
orals and vaccines is met by Indian pharmaceutical industry. A number of Indian
pharmaceutical companies adhere to highest quality standards and are approved by
regulatory authorities in USA and UK.
Indian pharmaceutical industry is undergoing fast paced changes. The Indian
Generics market is witnessing rapid growth opening up immense opportunities for firms.
This is further triggered by the fact that generics worth over $40 billion are going off
patent in the coming few years which is close to 15% of the total prescription market of
the US.
The Indian pharmaceutical companies have been doing extremely well in
developed markets such as US and Europe, notable among these being Ranbaxy, Dr.
Reddy’s Labs, Wockhardt, Cipla, Nicholas Piramal and Lupin. The companies have their
strategies in place to leverage opportunities and appropriate values existing in
formulations, bulk drugs, generics, Novel Drug Delivery Systems, New Chemical
Entities, Biotechnology etc.
The Indian pharmaceutical industry registered strong growth during the Ninth and
Tenth Five Year Plan periods and has emerged as an area of strength especially in
generics. The adoption of world-class patent laws for pharmaceutical products w.e.f. 1
January 2005, pursuant to the obligations under the WTO Agreement, has not dampened
the robust growth but has improved the overall IPR environment. The turnover of the
industry was Rs.72000 crore during 2006-07, having risen more than 12times since 1990.
India has become one of the leading global players, holding fourth position in terms of
volume and thirteenth position in terms of value of production. Exports have also grown
significantly to over Rs.24942 crore in 2006-07 accounting for as much as 34% of the
turnover.
The industry has thrived so far on reverse engineering skills exploiting the lack of
process patent in the country. This has resulted in the Indian pharmaceutical players
offering their products at some of the lowest prices in the world. The quality of the
products is reflected in the fact that India has the highest number of manufacturing plants
approved by US FDA, which is next only to that in the US. Multinational companies have
traditionally dominated the industry, which is another trend seeing a reversal.
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Currently, it is the Indian companies which are dominating the marketplace with
the local players dominating a number of key therapeutic segments. The market is also
very fragmented with about 30,000 entities and the organized sector consisting of about
300 entities. Consolidation is increasing in the industry with many local players building
a global outlook and also growing inorganically through mergers and acquisitions.
The Key to success in this industry is research & development. R&D is the
starting of the industry value chain and is also the most important value creator.
Companies that involve in R&D do so in specific areas. They chose specific therapeutic
areas to target based on their strengths in the market, and the commercial potential.
Kinds of Research :
1. Basic R & D
2. Process Research & Reverse Engineering
3. Analogue or Discovery Research
4. Biotechnology Research
5. NDDS(New Drug Delivery System) Research
Page No.11
which is continuously growing.
(vi) Consolidation: For the first time in many years, the international
pharmaceutical industry is finding great opportunities in India. The process of
consolidation, which has become a generalized phenomenon in the world
pharmaceutical industry, has started taking place in India.
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Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units
and is very top heavy. The leading 250 pharmaceutical companies control 70% of the
market with market leader holding nearly 7% of the market share.
There are also 5 Central Public Sector Units that manufacture drugs. These units
produce complete range of pharmaceuticals, which include medicines ready for
consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic
value and used for production of pharmaceutical formulations. India is largely self-
sufficient in case of formulations.
More than 85% of the formulations produced in the country are sold in the domestic
market. Some life saving, new generation under-patent formulations are imported, by
MNCs, which they market in India. Over 60% of India's bulk drug production is exported
and the balance is sold locally to other formulators.
The Indian industry has attained cost advantages in process research used for generic
drugs & value added generics production, which accounts for 60-80 percent of total sales.
This cost advantage is in the fact that:
- Most infrastructure facilities are much cheaper in India than in developed countries.
Page No.13
- Indian scientists can be attracted at much cheaper rates than their US counterparts.
The more value added basic research methodologies are being pursued by very
few players like Ranbaxy, Biocon & Dr. Reddys who are willing to take the risk of
investing millions in building research capabilities and developing molecules. In the
absence of product patents, Indian companies ignored basic research and concentrated
their R&D efforts toward producing drugs through alternative processes. Consequently,
total expenditure on R&D was low (multinational pharmaceutical players spend about 13-
16% of total sales on R&D).
Investments made in R&D by the Indian pharmaceutical companies would yield
3-4 molecules a year, which is a very small number. There is very little private initiative
to invest in R&D. The government continues to bear the burden, with industry chipping
in with 10% to 12%. This also evident in the data of patent granted in the country where
the top firms granted patents are mostly MNCs. Indian industry instead mastered the art
of reverse engineering to gain competitive advantage, as the industry structure did not
provide incentives to invest in basic research.
Indian firms have invested very little in R&D in India due to:
- Lack of Product Patent protection: The delayed adoption of TRIPS in India is cited as
the major impediment to the possible investment by international companies in India.
- Inadequate profit base: The price control has squeezed the profit margins making it
difficult for Indian and international companies to cull out and invest sizable sums in
R&D. The profitability of Indian companies is also much lower than international levels.
The pre-tax profit margin of pharmaceutical companies in India is much less than 6% on
sales in sharp contrast to the 18% profit margins common to international companies.
Page No.14
advantages can only be exploited if the necessary funds required can be sourced.
Following India’s acceptance of the provision of Trade Related Intellectual Property
Rights (TRIPS) under the GATT agreement, investments are expected to start flowing
into the area of basic research.
- Population advantages: A larger population base would facilitate clinical trials for
diseases especially prevalent in developing countries. Indian R&D efforts could be
directed towards infectious diseases that are especially prevalent in Asian countries. Such
R&D activities will be targeted towards segments such as antibiotics, anti-parasitics and
other anti-bacterials.
• Pest Factors – These are external forces which the organisation does not have direct
control over these factors. PEST is an acronym and each letter represents a type of factor
(Political, Economical Social and Technological).
• Micro environmental factors – These are internal factors, which the organisation can
control.
Page No.15
Diagram: PEST analysis and the marketing mix.
Page No.16
The pharmaceutical industry has thrived so far on reverse engineering skills exploiting
the lack of process patent in the country.
Looking at the recession period and in order to lower labor costs and savings in
manufacturing costs, several Indian pharmaceutical companies have acquired companies
in the US and Europe and many others are raising funds to do so. For example, Ranbaxy
acquired Romania's Terapia, Ethimed NV of Belgium and GSK's generic business Allen
Page No.17
SpA in Italy. Dr Reddy's acquired German generic drug maker Betapharm. Companies
like Glenmark Pharma, Lupin, Aurobindo and Jubilant Organosys are on the lookout for
lucrative acquisitions.
Page No.18
and safe enough to become an approved medicine, and about half of all new medicines
fail in the late stages of clinical trials.
Leading Indian companies have started to look beyond generics and are investing in
discovery R&D (NCE/ NDDS research) for sustainable long term growth. The discovery
R&D pipeline of Indian pharma players has been seeing a steady build up over the years.
Technology has created a society which expects instant results. This technological
revolution has increased the rate at which information is exchanged between
stakeholders. A faster exchange of information can benefit businesses as they are able to
react quickly to changes within their operating environment. However an ability to react
quickly also creates extra pressure as businesses are expected to deliver on their promises
within ever decreasing timescales.
Company Overview of discovery R&D programme
2 NCEs in Phase II and another 4 NCEs in Phase I along with a significant number of pre-clinical
Dr Reddy's Labs candidates. Also partnering with innovative companies on specialty drugs; has a very strong
biogenerics programme
One NCE in Phase II trials in USA ; Also focused on 3 other NCE projects and 4 very promising NDDS
Sun Pharma
platforms
Ranbaxy Has out-licensed a novel statin to PPD ; Has 1 Malaria NCE in Phase II
Conducting clinical trials on Oral Insulin and Monoclonal Antibody for inflammation Has launched
Biocon
another Monoclonal Antibody for head and neck cancer
Has 1 oncology NCE in Phase II and plans to have 7-8 NCEs in clinical trials over the next few
NPIL
quarters
Page No.19
Figure: Porter’s Five Forces Model for Industry Analysis
Porter explains that there are five forces that determine industry attractiveness and long-
run industry profitability. These five "competitive forces" are:
Page No.20
• Distribution of drugs and vaccines plays a major role with out which it is not
possible for manufacturer to reach prospective customers. The New entrants find
it difficult to cope up with this problem.
We can also infer here the entry of consolidated/amalgamated corporates or newly
acquired organization, which are generally taken up by already substantiable
organizations. These type of co-existence also affects to a great extent the functioning
of small and medium scale organizations. Recent acquisition of Ranbaxy by Daiichi
Sankyo will not only help Daiichi to strengthen its roots in the Indian Pharmaceutical
industry, but will affect the market share of other pharmaceutical organizations also.
Threat of Substitutes
The presence of substitute products in pharmaceutical industry can lower industry
attractiveness and profitability because they limit price levels. The threat of substitute
products depends on:
● In pharmaceutical industry, once competitor gets customer reliability(loyalty), it’s
difficult thereafter to divert customer mind to other substitutes.
● In pharmaceutical industry, price plays a major role and it’s totally dependant on
market price of the goods i.e. substitutes price. The relative price and performance
of substitutes affects the usage of the organizations drugs.
Suppliers are those business houses that supply raw materials & other products to the
industry, which go a long way in manufacturing the product.
The cost of items bought from suppliers (e.g. raw materials, components) can have a
significant impact on a company's profitability. Supplier is said to have high bargaining
power where the product sold by him has no substitute or even very close substitute.
If suppliers have high bargaining power over a company, then in theory the company's
industry is less attractive. The bargaining power of suppliers will be high when:
➢ In an industry there are many buyers and few suppliers. But in pharmaceutical
industry there are many buyers and many suppliers so bargaining power over a
company is not much. This factor may apply to new entrants in industry.
Page No.21
➢ The industry is not a key customer group to the suppliers. Pharmaceutical
industry is the key customer to the supplier because for suppliers other buyers
are few.
Pharmaceutical companies that offer patented drugs with distinctive medical benefits
have more power over hospitals, health maintenance organizations, and other drug buyers
than those drug companies offering generic (non-patented) products.
Page No.22
• Big pharma companies in India are competing on the basis of R & D facility and
through scheme of new drugs and vaccines.
• Such degree is very much required between the players in the pharmaceutical
industry, because they are also the provider of great employment opportunities in
urban as well as rural sectors.
Overall, the pharmaceutical industry shows an upward trend in its core markets. The
industry remains highly valued, has a favourable market position with strong financial
make-up and strong earnings growth. Its future potential demand trend is positive and
despite increased competition the industry still shows a continuing upward growth
momentum. The forecast of the leading 16 pharmaceutical companies for 2001 to 2007
suggests that combined sales will grow at a minimum rate of 5.2 percent based on the
potential of their product pipeline.
Page No.23
CHAPTER 3
COMPANY PROFILE
Page No.24
ZIM has made a significant mark as a maverick pharma innovator, constantly penetrating
newer areas of pharmaceutical business & technology, and successfully demonstrating its
commitment to its Missions & Goals.
Headquartered & set-up in the industrial belt of Nagpur City of Central India,
ZIM has established itself as one of the preferred healthcare solution providers in the
field of New Drug Delivery Systems (NDDS). ZIM & Associates are supported by
excellent technical team & sufficient capacity to produce large requirements for different
market segments.
3.1.1 Accomplishments
Felicitation of Mr. Zakir S.Vali, Chairman, by Award of Udyog Patra, but the
Deputy Chairman, Planning Commission of India, for being an Eminent
Industrialist.
Felicitation for contributing to Industrialization and other important, areas to
Mr.Anwar S.Daud, Managing Director by Central Institute of Business
Management Research & Development, India.
Award of the Best Managed Industry by D.I.C.(Govt.of Maharashtra, India).
The facilities provided by the organization are WHO CMP, certified by Food and
Drugs Administration, India.
Registration as vendor by Ministry of Defence (Director General Quality
Assurance), Govt.of India.
The organization’s systems and documents are in conformance with the ISO
9001:2000 Standards accredited by AQA of USA.
Page No.25
ZIM & its Associate Companies are engaged in the activities of manufacturing,
distribution & marketing of pharmaceuticals in Allopathic & Herbal categories
encompassing almost every dosage form, including Tablets, Capsules, Dry Syrups,
Liquid Orals, External Preparations, SVPs (Injectables), Ointments, Powders, etc.
ZIM has pioneered several innovative technologies & products particularly in the
spheres of Pellets, Multiplets, Resinates, Herbals & Diagnostics. Multiparticulates &
Modified Release Oral Solid Dosage Forms have been identified as a thrust area & key
formulations developed. The wide appreciation for its quality and prompt services to
clients, have ensured a strong presence in the domestic markets, as well as in
the international markets.
The Independent and well - organized Business
Development Department at this organization is in a
position to offer customer support from conception to
product delivery in a strict schedule and provides
services ranging from product development, packaging
development and design, material sourcing assistance
and developments of products based on client's specifications.
Page No.26
• DESIGN Products & • MARKET & SELL
Services. Products & Services
“We will exploit our Zeal for Excellence and Spirit of Innovation in the field of Medicine
to ensure our position as a premier pharmaceutical manufacturing
organization specialized in......
....... thereby contribution to make available of High Quality Affordable Healthcare for
the common man and meeting our Obligations to our Employees, Investors and the
Shareholders.”
“We believe that the pharmaceutical business is today poised for a great leap forward.
tryly innovative technologies with the potential to change the nature of human health &
Page No.27
longevity have already appeared and each day brings better & better innovations. There
is a desperate need for solutions that emerge out of these innovative technologies to
reach the common man at an affordable cost so that these benefits do not remain
accessible only to the rich and affluent sections of society.
Ever changing regulatory guidelines, advances in drug therapy & delivery systems, drug
industry Mergers Acquisitions, globalization & evolving market such as those for
nutritional supplements, old-age & alternative therapy medicines pose challenge to every
pharmaceutical organisation to manage and accelerate the drug development process.
We at ZIM, aspire to play a significant role in making the fruits of such technologies
available as affordable healthcare solutions, teaming with like-minded associates in the
pharmaceutical technology business, aiming for Customer Satisfaction, while respecting
the rights of others.
Uniquely positioned to provide expertised drug delivery systems, we support our own &
customer's objectives with specialized formulations to reach the market faster & easier
than ever.
We are committed towards providing our national & international clients an easy &
timely access to sophisticated process technologies & products, give value for money, &
to offer our customers innovative & exclusive quality products that differentiate them
from their competitors & significantly impacts their bottom-line.
That's why, every day we continue to put our Zeal for Excellence and Spirit of Innovation
into all our actions.”
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Transacting business with Integrity & Transparency.
Respecting the Rights of all Stake-holders & Associates.
Aspiring for a Responsible Corporate Citizenship through our regard for
Environment, promotion of Education, and contribution towards Disease-free
Humanity in constant harmony and Peace.
Page No.29
There is production of drugs and vaccines that meet more than upto the
expectations of the clients. Moreover, facilitating the International Quality
Standards with innovative services tailored to users need, special care is taken at
every stage of the manufacturing process. A well equipped Quality Control
laboratory comprising sophisticated instruments manned by highly experienced
technocrats ensure that the laid down quality policy aspects are strictly adhered to.
ZIM believes that Quality is a continuous process an not an isolated stage.
Weaknesses
Capacity constraint
The organization faces the problem of meeting to the excess order requirements of the
clients, and that too because of the quality drugs manufactured by it. Many a times, the
order quantity poses a risk to production pattern and hence results in capacity constraint.
Opportunities
Export Potential
ZIM has great potentiality in the foreign markets because of its innovation driving
mechanism which is very well required in this sector. Presently, the company is exporting
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its products to more than 25 countries, some of which are Bangladesh, Libya, UAE,
Egypt, Algeria, Morocco, Latin America, Sri Lanka, Nigeria, Vietnam, Iraq and Yemen.
Besides it has also covered several Central and South states in the domestic sector, some
of which are Maharashtra, Chattisgarh and Madhya Pradesh.
The company sees a bright market prospect in the continents of Africa and America. The
reason why it places high dependence on export sales is because of its superior quality
drugs and processes, which makes it one of the better manufacturers among its sector.
Threats
Competition from Indian organizations operating outside India
Operating in the foreign markets requires huge investment besides facing a tough
competition from the operation of domestic organizations in the foreign markets.. The
organization is comprehended to the threat of operations of major domestic players like
Ranbaxy Laboratories, Glaxo SmithKline, and others.
PRODUCTS
Page No.31
Additionally, the company has the experience & ability
to manufacture and supply large volumes of standard
and customized finished formulations under different
labels & brand names. This large volume capacity
allows us to offer our customers products of consistent
quality with reduced lead-times.
PELLETS
Anti- Hyperacidity,Ulcers Anti- Anti-Allergics
inflammatory Hypertensive
Aspirin Esomeprazole Atenolol Chlorpheniramine
Maleate
Ibuprofen Lansoprazole Nicardipine Cetirizine/Levocetirizine
Indomethacin Omeprazole Nifedipine Loratadine
Ketoprofen Pantoprazole Nitroglycerin
Tramadol Verapamil
TABLETS
Anti- Anti-Hypertensive Anti-Depressant Anti-Diabetic
Asthamatics
Aminophylline Candesartan Clomipramine Glimepiride
Hydrate Cilexetil HCl
Montelukast Carvdilol Citalopram Metformin
Sodium Chewable
Diltiazem SR Metformin
Losartan potassium Repaglinide
& Ramipril
CAPSULES
Anti-Bacterial Anti-Viral Anti-Fungal Anti-Asthamatic
Cefixime & Didanosine Delayed Fluconazole Theophylline SR
Cefdinir Release
TASKS MASKS
Albendazole Azithromycin Cefixime Cefpodoxime proxetil
Cefuroxime axetil Ciprofloxacin Clarithromycin Erythromycin ethyl
succinate
Fluconazole Gatifloxacin Levofloxacin Nystatin
Ofloxacin Roxithromycin
Page No.32
3.5 BALANCED SCORE-CARD
Analysis of the Organization using Balanced Score Card Approach:
The success of any organization is reflected upon by its performance which is in turn
highly dependent upon its strategies. In this era of cut-throat competition, what an
organisation requires is not just framing the right strategies, but also managing the same.
The impact of the right strategies will automatically be reflected in the results. Moreover,
any organisation has to understand that it needs to give impetus not only towards the
financial results but also towards satisfaction of the customers, development of state-of-
the-art technologies and creation of an environment of learning and growth. The
Balanced Scorecard is such an innovative tool which has considered not just the financial
indices but also the non-financial indicators as equally critical in determining
organizational performance. This tool brings a link between strategy and action. Due to
these, the framework is gaining increasing importance among different business houses.
By focusing not only on financial outcomes but also on the operational, marketing and
developmental inputs to these, the Balanced Scorecard helps provide a more
comprehensive view of a business, which in turn helps organizations act in their best
long-term interests.
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Balance Scorecard Phases
Page No.34
The long-term success of any organization is determined by the capabilities and the
competencies it has developed. One of the tools for organizational appraisal that is
gaining immense popularity is the Balanced Scorecard, developed by Robert S Kaplan
and David P Norton in 1992. This innovative tool is unique in two ways compared to the
traditional performance measurement tools. They are–
(i) It considers the financial indices as well the non-financial ones in determining the
corporate performance level; and
(ii) It is not just a performance measurement tool but is also a performance management
system.
The tool has given stress on the other areas which are required to ‘balance’ the financial
perspective in order to get a total view about the organizational performance and improve
the same. The framework tries to bring a balance and linkage between the –
(a) Financial and the Non-Financial indicators,
(b) Tangible and the Intangible measures,
(c) Internal and the External aspects and
(d) Leading and the Lagging indicators.
Advantages of using Balanced Scorecard approach :
1. It translates vision and strategy into action.
2. It defines the strategic linkages to integrate performance across
organizations.
3. It communicates the objectives and measures to a business unit.
4. It aligns the strategic initiatives in order to attain the long-term goals.
5. It aligns everyone within an organization so that all employees understand how
they support the strategy.
6. It provides a basis for compensation for performance.
7. The scorecard provides a feedback to the senior management if the strategy is
working.
Example of Balanced Scorecard
A typical scorecard of an organization can be prepared as under:
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Observational Analysis of ZIM Laboratories
The Financial Perspective:
The company follows effective financial strategies to maintain stability in
finance and allocation of funds. Since the company is an unlisted one, there arises no
questions of return to the shareholders. Besides, company has negligible funding from
outside sources.
The Customer Perspective:
The company satisfies its customers in an effective way and caters to the
customer requirements very efficiently. They set goals according to national and
international standards and accordingly they take effective measures to achieve them.
This has been carried out to a large extent by the highly efficient Business Development
Department of the company, which looks out for overall satisfaction of its customers.
The Process Perspective:
Page No.36
In process perspective also the company have a very specific goals regarding like
production, logistics or sales and then set goals related to such things as quality,
time/efficiency, and cost reduction. Company generally follows production on the basis
of orders generated from the customers, in order to avoid wastage and spoilage.
The Innovation and Learning Perspective:
In this area, the company is examining measures relating to employee development,
retention, and skills improvement. It also look at measures for research and development.
It focus here is on continuous improvement and value creation, by using the people
resources most effectively.
Note:
Company doesn’t follow balanced score-card approach. The above analysis
has been carried on the basis of observations brought out during the organizational
study.
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CHAPTER 4
ORGANISATION STRUCTURE
AND
CRITICAL REVIEW
Page No.38
4.1.1 Why Organizational Design ?
Organizations have become the primary form of social institution in contemporary
society. The way in which an organization is structured creates/restrains opportunities for
interactions with other organizational members, influencing the attitudes and social
relations that emerge over time and the ways in which work related tasks are completed.
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Vertical and Horizontal structures
In an organization, both absolute centralization and decentralization are neither desirable
nor possible. Hence, the writers and organizations began to explore ways to modify the
two structures. The essence of modified structure lies in the modifications to the classical
principles of delegation of authority and standard of control. Accordingly, organizations
having a series of narrow span of control were termed as vertical structures.
On the contrary, structures incorporating wide spans and limited layers of control at
horizontal levels were called horizontal structures. However, both these structure have
their own advantages and disadvantages.
Matrix Structure
The matrix organization structure was proposed by Dairs and Lawrence for Aero space
programme of the United States. In this structure, attempts were made to combine the
advantage of product and functional departmentalization to achieve the organizational
goals. In other words, this dual structure simultaneously organizes part of organization
along product lines and part of the organization along functional lines to gain the
advantages of both.
In a matrix organization, each department reports simultaneously to both product
managers and functional managers. The product managers and functional managers have
equal authority within the organization, and employees report to both of them.
Matrix forms of management can be regarded as an early form of 'network' structure.
They focus on project teams, bringing skilled individuals together from different parts of
the organization. Individuals were made responsible both to their line manager and the
project manager involved.
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Federations
This form is a variant of the divisional organizational structure which has great
importance because of its human resource factor. The federations is a loosely connected
arrangement of businesses with a single holding company or separate firms in alliance.
But this form of organization has attracted criticism from stock market analysts who find
difficulty in comprehending its subtle informality.
CHAIRMAN
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MANAGING DIRECTOR
INWARD /
ASST. ACCOUNTANT ADMIN. OUTWARD
PURCHASE ASST. INCHARGE
QC QA MANAGER
MAINTENANCE
ENGG.
Page No.42
2. The Managing Director is entrusted with the functions of routine management.
3. During the Board Meetings there has to be reporting of policies framed and
exceptional functions performed during the routine management.
4. The Finance and the Executive Directors are under the supervision of the MD.
5. The Finance Director controls not only the accounts department, but also the
purchase department, EDP and ERP functions also.
6. The MD also supervises the working of the following departments / functions :
a. Business Development Department
b. Quality Control and Quality Assurance
c. Internal Audit
d. Research and Development
e. Operations
f. Projects
7. Like a just organization, the production, stores and personnel departments are
under the control and supervision of Operations department.
8. The organization operates in a B2B market, wherein it is desirable to have a
horizontal organization design. The only misconception about this form of design
is that the MD has to operate and hear from all the departments functioning within
it. Therefore he is burdened with the task of responding to each of them, which
requires technical as well as functional expertise on his part.
9. Since MD is to concern himself with the making of policies in an organization,
this form of organization design poses a great challenge for him, which can have,
to some extent, a demeaning effect on the working of the MD.
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CHAPTER 5
BUSINESS LEVEL FUNCTIONS
AND
PROCESSES
Page No.44
2. Administrative Department
3. Purchase Department
4. Accounts Department
5. Research & Development
6. EDP & ERP
7. Quality Assurance
8. Quality Control
9. Production Department
10. Materials Department
a. Raw Materials
b. Packing Materials
c. Finished Goods & Dispatch
11. Maintenance Department
12. Personnel Department
13. Human Resources Department
14. Marketing Department
A Committee Panel is established and a date & time is decided from the Panel
Candidates selected from Preliminary Interview are called for Final Interview
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Selected candidates are called for Preliminary Interview
Induction Process
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Casual (on contract basis) 300-400
ZIM Laboratories has its registered office in Mumbai, for the reason of it being the
financial capital of India.
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8. Tender participation
9. Tender awarded
10. Finally, supply of goods.
However, export marketing usually involves following steps :
A. Where organization visits foreign country :-
1. Country visit
2. Appointment of local agents in foreign country
3. Meeting customers through local agents appointed in that country.
B. Buyers directly approach the organization through informed visits to factory, and
thereafter places the order accordingly.
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90%, since production is carried out only after receiving the specification or
requirements of the order.
4. Loan License Manufacturing
Under this strategy, the organization used to sell/manufacture drugs with specific
names of clients on the products as per its requirements. This is just indirect
manufacture, wherein ZIM used to manufacture the drugs and medicines and
dispatched them under the name and seal of the client, as if to appear that the
product has been marketed by that client. In fact the manufacturing rights
remained with ZIM and were displayed as ‘Marketed By : ZIM Laboratories’ on
the tablet / capsule strips or syrups or related products.
5. Government and Institutes
ZIM also supplies drugs and syrups to government and allied institutions, some of
which are ESIC, WCL, RDPL,etc. The organization holds a Certificate of
registration from DGQA i.e.Director General of Quality and Assurance for supply
in Defence sector.
6. Trade Marketing
This comprises of own marketing of products, which excludes direct marketing
techniques. It is the customer who directly approaches the organization either
through
7. Trading
ZIM also aids those organizations which find it difficult to import instrument parts
and other quality control equipments for manufacturing purposes. Many a times, it
is the foreign entities who approach ZIM in order to purchase these machinery
and equipments, since these organizations face the problem of finding the right
supplier.
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Conferences, Gifts, Coupons and Prizes.
2. In case of Export Sales, tools and techniques adopted are :
Bonus goods or free goods, Commission or Discount on further purchases.
3. In case of Marketing of products, ZIM provides only promotional materials to its
customers, simply because the superior quality of products provided by it to them.
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5.4.1 Posting of Transactions
After issue of GRN, there is made an entry of receipts in registers kept for the purpose :
i. Receipt Register (Raw/Packing Materials)
ii. Inward/Fixed Assets Register (Production Department)
iii. Receipt Register (Stores Department)
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Generally, payment for raw material purchases is done on cash or cheque basis. In case of
cash payment, payment entry is posted in Party account by cash register. Similarly, on
payment through cheque, entry is posted in respective Party account by Bank Register.
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8. Ledger Accounts
5.4.8 Budgets
In consonance with the general practices and like other organizations, ZIM also concerns
itself with the preparation of various budgets viz.
1. Cash Budget
2. Sales Budget
3. Purchase Budget
4. Financial Budget
5. Overheads Budget / Cost Budget
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2. Ensuring shipment of products in time.
3. Follow-up of customer and agent payment.
4. Timely intimation to customers about introduction of new drugs and processes.
5. Monitoring performance of the agents appointed in foreign countries as also the
performance of the customers with regard to the use of the products.
6. Payment of Commission to agents appointed in foreign countries on time.
The BDD acts as a connecting link between the organization departments on one hand
and the agents and customers on the other hand. The position can be better explained with
the help of following diagram :-
5.5.3 THE BDD CUSTOMER RELATIONSHIP MODELS
BDD Relationship Domestic Customer Model
Prodn
Customer
.
1
HR Customer
2
BDD
QC Customer
3
Mkg Customer
4
A/c
Page No.54
schedule. The BDD provides services in the form of product development, packaging
development and design, material sourcing assistance and developments of products
(drugs) based on specifications provided by the clients.
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5.6.2 Production Processes
The normal production process followed by ZIM is given below :
1. Receipt of order from the customer.
2. Raw Material and Packing Material planning
3. Material requirement planning
4. Receipt of Inputs
5. Testing of Inputs received.
6. Actual manufacturing of products (drugs or processes)
7. Testing of the manufactured product.
8. Packing of products.
9. Sampling and re-testing of products packed.
10. Transfer of packaged products to Finished Goods store for dispatch.
Steps involved in CAPSULE PROCESSING
1. Bringing in Raw Material(Active/Inactive)
2. Checking ; Sifting; Blending & Weighing
3. Analysis & Release
4. Passing to Quarantine area
5. Empty capsule loading
6. Capsule filling
7. Inspection and Polishing of the Capsule
8. In Process Quality Control Check and Release
9. Unit Packing and re-IPQC Check and Release
10. Final Packing of the Capsules
11. Quality Assurance Analysis and release
12. Passing to Quarantine section
13. Passing to Finished Goods and Packing Material Stores
Finally, the capsules are ready for packing and distribution. Capsule section is divided
into following :
1. Mixing / Blending
2. Polishing Section.
Steps involved in the process of PELLETS and TABLETS Manufacturing
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1. First, Powder is prepared
2. The defective tablets are purified using the Bulk Tablet Machine.
3. Thereafter using PVC Sheets, the tablets are covered in the Blister Cell.
The Double track machine.
4. Then there is weighing of the powder and tablets using the electronic
balance.
5. After weighing, preparation of Binder and there is drug layering through
coating the pan.
6. Then the tablets/pellets are dried using an Oven and passed through
vibratory sifter.
7. It is then proceeded by an IPQC checking with regards to Moisture
content, bulk density and total assay & drug release.
8. The products are then coated and dried using a coating pan/fluid bed
coater.
9. There is re-IPQC checking.
10. Finally, the tablets and pellets are packed after electronic balance
checking.
The above steps lays down the general process for the production of tablets and pellets.
However there are certain additional steps in the preparation and processing of tablets.
Page No.57
These talented team members ensure that the company’s customers, to a great extent and
even perpetually, derive the advantage of Innovative, cost-effective and Quality products
being produced after much research & development. This ensures the company an
unbeatable edge in the competitive market place.
Page No.58
2. Formulation Redesigning
ZIM also undertakes the redesigning of formulations pertaining to products
already in the market. Formulation redesigning is done only after receiving the
requisition from the client regarding redesigning of product subject to change in
the processes previously involved in the manufacture of the product. The
company generally carries out this activity with regard to the products already
manufactured by it.
Page No.59
CHAPTER 6
OBSERVATIONS
LEARNINGS
AND
CONCLUSIONS
It was an interesting and practical experience that was gained at ZIM Laboratories during
the study .The company Heads and Managers have been highly cooperative and had made
good arrangements for the interactions despite their tight schedule.
6.1 OBSERVATIONS
Page No.60
1. For efficient functioning of its departments, ZIM has divided them into 15
different departments. This ensures timely implementation of functions
concerned.
2. The company has excellent research and development wing, which ensures
quality products and processes.
3. The company has ensured following of the quality policy through quality control
and assurance department.
4. The company in consonance with point 2 facilitates international quality standards
with innovative services tailored to users need.
5. The company’s market strategies which comprises of seven different models are
unique and distinguishing.
6. The machinery used in the production of powders, pellets, tablets and capsules
have all been imported from China, which can be operated using the touch-screen
system.
7. Despite the general performance appraisal procedures, ZIM goes for self-
appraisal, which ensures evaluation of the true and correct productivity of the
employees. The self-appraisal forms are then re-evaluated by a separate team of
members appointed from each department, specially the department heads.
8. The company has not involved itself in the providing of extra incentives to its
workers and employees, but follows the simple and lucid system of crediting of
excess worked hours towards emergency hours required by the workers.
9. Because of the quick functioning of the BDD, it ensures, besides, timely delivery
of products to its customers, proper co-ordination between the different
departments functioning within the organization.
Page No.61
3. Placing Customer care and Customer Service at the apex of objectives list.
4. Necessity of great division of labour and technical skills in such an industry is of
vital importance, and that no organization can succeed without taking into
consideration this fact.
5. Learned how to carry on the SWOT, PEST and Porter’s Five Forces analysis.
6. Understanding the organization structure and the decision making process, as also
the reporting procedure between the departments.
6.3 CONCLUSIONS
An organization is a unified group of individuals who work laterally to achieve the
desired goals and objectives. But what comes of more importance is the functions of the
organization, or to be more specific, the departments comprised in the organization. The
working of an organization is very well reflected by the working of its departments. The
better the co-ordination between the departments, more will be the growth of the
organization. Through this organizational study, we get to know the working of
organization and have an overview of its functional departments.
Thus the overall study in ZIM Laboratories was a learning experience. ZIM is a
pharmaceutical manufacturing company having diversified market strategies, and fame &
reputation in the central industrial belt comprising Maharashtra and adjoining states. The
company believes in providing “Affordable Quality Healthcare through Zeal and
Innovation in Medicine”.
The main focus on the study in ZIM was on coverage of all the departments in average.
The unique feature observed was that the Business Development Department was the
intermediary between the customer and the organization. All the departments are linked
with each other. They maintain good relation within the employees as well as with the
customers.
There is healthy competition in the industry with entry of global giants. The Indian firms
should put in good efforts to overcome the competition. By having joint venture and
collaboration with the foreign companies the industry can overcome the competition and
at the same time it can upgrade its production technology. The company has good
marketing strategy for export and domestic market.
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Thus the company has enabled me to learn the various aspects of management,
production, marketing, finance which will be useful for my further studies.
Drug discovery is the process by which potential drugs are discovered or designed.
Page No.63
development are to determine appropriate Formulation and Dosing, as well as to
establish safety.
Insulin is a polypeptide pancreatic hormone which lowers the glucose levels in the blood,
a lack of which causes diabetes.
Penicillin is an antibiotic produced naturally by certain blue moulds, and which is now
prepared synthetically.
Generic Drug is a drug which is produced and distributed without patent protection.
BIBLIOGRAPHY
Page No.64
Websites
1. www.zimlab.in
2. www.special.rediff.com
3. www.marksonspharma.com
4. www.learnmarketing.net
5. www.wikipedia.org
6. www.hrmguide.net (orgnaisation structure)
7. www.marketingteacher.com (balance scorecard)
8. www.balancedscorecard.org
9. www.managementhelp.org
10. www.themanager.org
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