An Overview of Pharma Industry
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INTRODUCTION
OBJECTIVES
IMPORTANCE
PROCESS
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Management Planning and Control System
encompass “ A Financial or quantitative
statement prepared prior to a defined period
of time of a policy to be prepared for that
period to attain Short Term(Action Plan) and
Long Term(Strategic Plan)of the
organization”.
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Management Planning and Control Systems
provides a company wide systematic and
structured approach, which provides a
holistic framework to
◦ A) Plan
◦ B) Control
◦ C) Reduce & Eliminate Cost, throughout the value
chain.
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To concentrate on profitable activities and to
eliminate non-profitable activities.
In the highly competitive world, to
concentrate on,
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A) Research and Development
B) Innovation
C) New Products
D) Marketing Strategy
E) High tech production
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Which products are innovative and profitable.
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Which products should be emphasized more.
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Product profitability through cost reduction.
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•Sales forecasting
•Production Planning
•Capital Expenditure Planning
•Raw Material Scheduling
•Utility Planning
•Manpower Planning
•Estimates Factory Overhead
•Estimates Administrative Overhead
•Estimates Selling & Distribution Overhead
•Estimates of Finance Charges
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The Pharmaceutical Industry in India is the
world’s third largest in terms of volume.
According to the department of
Pharmaceuticals of the Indian Ministry of
Chemicals and Fertilizers, the total turnover
of India’s Pharma Industry was 50K Cr in
1995, 153K Cr in 2010 and expected to grow
600K Cr by 2020.
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If capacity is a problem, capacity planning
should also be planned in advance to meet
the future requirements, which is a Strategic
plan.
Criteria for Investment decision:
◦ A) Payback Period
◦ B) IRR
◦ C) NPV
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On the basis on production planning, Raw
material scheduling is done. What is
produced between 15th March to 15th April is
received between 15th February to 15th March.
Thus inventory control is also possible.
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In a highly competitive economy right type of
persons are difficult to get.
Replacement should be done in advance of
Top Management.
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Sun Pharma has achieved a turnover of 16K
Cr and Net Profit of 4500 Cr in 2013-14 of
which 70% is international business.
In H1 2014-15 they have achieved a turnover
of 9K Cr with NP of 2962 Cr.
Strategic plan of Sun Pharma is to reach
turnover of 40K Cr and NP of 10K Cr in next 2
Years.
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They are planning to achieve this strategic plan
by following actions:
◦ A) Taking over Ranbaxy.
◦ B) Taking over business in Japan and introducing some
new product for Japanese market.
◦ C) Plan to acquire business in Brazil and South Africa.
◦ D) Enhancing R&D activities by spending 8% of the
turnover on R&D and introducing new products not only
for domestic market but also for international markets.
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The turnover of Lupin for the year 2013-14 is
12K Cr with NP of 3000 Cr of which
international business id 65%.
They have achieved turnover of 8K Cr in H1
2014-15 with NP of 1800 Cr.
Strategic plan is to reach 20K Cr in next 2
Years with NP of 5500Cr.
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Turnover of Cadila is 8000Cr in 2013-14 with
NP of 960Cr.
In next 3 years, Cadila is targeting a turnover
of 15K Cr with NP of 1500Cr.
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Management control systems are tools to aid
management for steering an organization
toward its strategic objectives and
competitive advantage.
Management controls are only one of the
tools which managers use in implementing
desired strategies. However strategies get
implemented through management controls,
organizational structure, human resources
management and culture.
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A) Activity Based Costing
B) Balance Scorecard
C) Budgeting
D) Capital Budgeting
E) Just In Time
D) Kaizen(Continuous Improvement)
E) Target Costing
F) Total Quality Management(TQM)
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A)
B)
C)
D)
E)
F)
G)
Projected profitability statement of a
company as a whole.
Projected profitability of profit centers.
Projected profitability of products.
Projected balance sheet.
Estimates of working capital requirement.
Targeted contribution v/s Actual
Contribution.
Variances.
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CA Parin Kapadia
M:9427302046
CMA H R Kapadia
M:9426026536
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