The document discusses plans for a joint venture between MegaIndia and HealthyUS to establish a consolidated drug distribution system in India. Key points include: 1) The venture would eliminate intermediaries to cut costs and have end-to-end control of distribution. 2) Rural India is an untapped market that could be served through various transport methods like trucks, carts, and on foot. 3) An IT system would monitor inventory levels and place orders to maintain supply at outlets.

1. Team – Miracle Workers
Welingkar Institute of Management Development and Research
(WE School) Mumbai
Name Email Cell phone #
Lydia Jacob lydiasarahjacob@gmail.com 09833639212
Vrushali Nayak vrushalinayak@gmail.com 09769763986

2. Consolidated Drug Distribution
• Refers to the process where pharmaceutical
manufacturers supply dispensing points directly through a
limited number of distributors.
• Advantage of this system : The stock is owned by the
manufacturer who pays a fee to the distributors for their
service.
• Implications of this system :
1) Large companies can have end-to-end control of the
distribution process
2) Price control at the point of sale.
3) Reducing the threat of counterfeiting
4) Realise efficiency improvements in the distribution
process

3. Why should MegaIndia –
HealthyUS enter this JV
• Drug distribution venture will be welcomed by companies
as it eliminates atleast 1 level in the chain and thus cuts
down the cost.
• Boom of medical tourism in India. It has the potential to
grow into a $2 billion industry by 2012.
• 70% of the Indian population resides in the rural areas
and there are 593,731 inhabited villages in India which is
largely untapped market.
• Organised drug retail can flourish if its backbone i.e. the
distribution system is in place
• When M&A takes place in pharma sector, the stockists of
the two companies add up causing a lot of small
companies to go out of business. Hence, the one-stop
distribution model which will cater to all companies will be
useful to avoid this situation.

4. Logisitics
• Tie ups with certain companies :
1. FastCarry Courier and Cargo Ltd. for its courier
services.
2. ACME Cold Chain Solutions Ltd for cold chain
management. ACME has come up with a
technology (patented) that enables maintaining
desired temperatures of cold storages (8-16 h)
without having any dependence on a Diesel
Generator (DG) set. This not only saves energy, but
also the environment from noise and smoke
generated by the DG sets.

5. Delivery Process
• The model has two main views:
• Pharmacy centered-view: in this view, we only model
internal flows of the pharmacy: mobile medicine closet
inventory checking and refill, preparation of urgent
medicine requests, etc. Medicines and closets are
considered as entities while chemists and assistants are
considered as resources.
• Transporter centered-view: medicine transportation
flows are modelled in this view: it includes delivery by foot
in units near the pharmacy, delivery by tractor in
neighboring buildings and delivery by truck in other
facilities. Transporters are considered as entities in this
view.

6. Future path for Logistics
• The refrigerated (reefer) transport, which forms 12% of
the cold chain market, is valued at Rs.12 billion and is
expected to reach Rs.48 billion. In terms of volume,
current reefer transportation business is about four million
metric tonnes and is expected to reach 14 million metric
tonnes within five years. Majority of the demand (62.5%)
for refrigerated transport is export driven. Hence we can
venture into cold chain management at a later stage once.
• Need to use temperature monitoring with automatic
reporting, suitable alert systems so that appropriate timely
actions are taken in case of deviations. It is proven that
such measures improve the quality of cold chain and also
minimise wastage in long run.

7. IT Integration
Components for a web based generic SCMS :
OMS (Outlet Monitor System)
• Actual “point of sale” where the goods sold to the
customer. The OMS at each outlet keeps track of the
inventory at a particular outlet.
SMS (Supplier Management System)
• A supplier or the provider acts as the source of the raw
materials. The supplier responds and caters to the
requests and dispatches new inventory to the outlets on
demand.
CCS (Central Control System)
• The CCS forms the core of the system that monitors,
controls and manages the OMS and SMS.

8. IT Integration
• Step 1:Monitor product sales.
• The OMS monitors and records product sales at each
outlet.
• Step 2: OMS sending information.
• The OMS sends periodically the current inventory
information to the Central Control System.

9. IT Integration (Cont)
• Step 3: CCS processing information.
• The CCS processes the incoming information to take
delivery decisions.
• Step 4: CCS placing order.
• The CCS places order to a supplier.
• Step 5: Servicing product request.
• The SMS processes the product request submitted by
the CCS and dispatches the requested quantity of
products to the corresponding outlet.
• Step 6: Order receipt acknowledgement.
• The Outlet intimates the order receipt to the CCS.

10. Entering rural India
• Focus should be more on generic drugs. Branded drugs are
relatively expensive. Brands can later push their products
when they are ready to pass on the benefits received from the
reduction in supply chain costs.
• Distribution in rural markets can be done in two different ways
on the basis of types of drugs -
1) Drugs that need temperature controlled environment –
a. Temperature controlled trucks and vans.
b. Roads – Trucks, and if narrow roads, AC pushcarts
(trolleys) by Acme Cold Chain Solutions Ltd for shorter
distances to reach the retailers.
2) Drugs that don’t need temperature controlled environment -
All types of transportation facilities like trucks, vans, rickshaws,
and even bullock carts if need be.
• Catering to medical stores, Chaupal Saagars, hospitals,
melas, haats.

11. References
• http://www.expresspharmaonline.com/
• http://www.indg.gov.in/rural-india/number-of-villages
• http://www.censusindia.gov.in/Census_Data_2001/Census_data_finder/A_Series/Number_of_Vill
age.htm
• http://www.ngpharma.eu.com/article/Consolidated-distribution/
• http://www.dnaindia.com/india/report_fresh-veggies-to-storm-homes-in-ac-pushcart_1093446
• Cold Chain Infrastructure for Frozen Food: A Weak Link in Indian Retail Sector. By: Rathore,
Jitendra; Sharma, Anamika; Saxena, Karunesh. IUP Journal of Supply Chain Management,
Mar2010, Vol. 7 Issue 1/2, p90-103, 14p
• Redesigning pharmacy delivery processes of a health care complex Vincent Augusto · Xiaolan
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• RFID Adoption by Indian Retailers: An Exploratory Study
Chandan A Chavadi and Shilpa S Kokatnur
• Is Web-Based Supply Chain Integration Right for Your Company? by Charles E. Downing
• Logistics and Supply Chain Practices In India by Samir K. Srivastava