Published: <a target="_blank" rel="noopener noreferrer" href="https://www.expresspharma.in/">www.expresspharma.in</a> October 2022.When it comes to the supply of generic medicines, India is ranked number one in the world. However, of late, Indian generic pharma companies have been confronted with a few challenges. The most daunting of them is the quick price erosion of generic drugs after launch, mainly because of increased competition. Pressure on margins has made it necessary for companies to check out ways to increase productivity, reduce capacity wastage, etc., without adding to their costs. However, this is not an easy task owing to the stringent regulatory environment within which this industry has to function. One of the unique challenges this poses for the capacity utilisation of plants in generic pharma manufacturing is that each drug has to be processed on a pre-approved set of machines. The manufacturing route cannot be changed to other unapproved workstations, even if they are similar in nature. So, plant managers have no flexibility in case a particular machine/set of machines are overloaded. Planning for a month, failing every monthBecause of this unique challenge in this environment, planning to ensure both capacity utilization and on-time delivery of orders is not easy! In spite of detailed monthly production plans, capacity is often underutilized, and firefighting and expediting are often needed to meet delivery deadlines. Since planning managers cannot predict and accommodate all possible ‘Murphys’ and deviations that can happen during the manufacturing process, overloading and under-utilisation of machines is a norm in plants, leading to capacity wastage, increased lead time, and missed on-time delivery commitments. Tactics that never succeedTypically, managers use these two tactics to ensure on-time delivery while also protecting capacity. 1. Early release of orders to the shop floor: In order to give orders more lead time to complete, managers release orders as soon as they see that the initial work centers are free. However, instead of helping, this aggravates the problem by overloading some routes downstream. 2. Clubbing of orders: Planners try to cherry-pick and club available orders to try and save on setup times (very high in this environment) and release them as a big batch (called 'campaigns'). The problem here is that many of these orders cannot be dispatched immediately after production, increasing inventory, while some other orders that were needed for urgent dispatch get delayed. This situation of frequent expediting of delayed orders misleads companies to believe that they don’t have the required capacity- triggering unnecessary CAPEX investments. Daily scheduling, dynamic dispensing- a new solutionThe writing is on the wall – monthly planning just does not work here. But there is a better way. Scheduling, if done on a daily basis after taking into consideration the load on each manufacturing route (not just the first workstation), can protect the plant from traffic jams. This is similar to the railway track management system, where trains are only routed onto tracks that are available!Tactics to support daily dispensingHowever, for daily dynamic dispensing to work, other departments need to support the process. Raw materials, for example, should not be procured simply based on sales orders but as per changes in actual consumption. So, the system of maintaining and replenishing raw material buffers also has to be dynamic. A similar mechanism has to operate in the quality control department to ensure that cleared material is readily available for dispensing. Ideally, a separate team should be given the responsibility to ensure that a bank of orders is always fully ready for dispensing. And, to ensure that all stakeholders are working on the right set of orders, a simple colour coding mechanism can be used to indicate what is truly urgent (red colour), what will need attention soon, but not right away (yellow), and what is not on priority right now (green).Increased profits, reduced costs, and, no, not a pipe dreamImplement these steps while also focussing on further reducing capacity wastage (e.g., projects to reduce setup time), and see how output can increase by up to 30% and lead times can reduce by 30%. What’s more, you can also reduce costs because of inventory write-offs due to hold time deviations and can eliminate other ad hoc expenses such as penalties for delayed delivery of goods or having to expedite delivery through expensive means (air freights, for example). And, no, this is not a pipe dream. Many companies have already benefited from this, and so can you!

Key Takeaways

The typical monthly production planning method precipitates several for pharma companies. Only a dynamic approach that ensures flexibility on the shop floor can sustainably ensure reliability and high output.

India can continue to be no. 1 in the generic pharma business

Problem: Indian generic pharma faces shrinking margins due to rapid price erosion. However, rigid regulations lock drugs to specific manufacturing routes limiting flexibility to improve operational efficiency- leading to underutilised capacity, bottlenecks, long lead times, missed deliveries. Is there a way out? Solution: A shift from static monthly planning to daily dynamic scheduling and dispensing. Orders are scheduled only after checking actual load across the full manufacturing route—similar to railway traffic control—to prevent bottlenecks. Supporting tactics include dynamic raw material replenishment, QC alignment, a central team to keep orders ready for release, and a simple colour-coded system to prioritize urgent versus non-urgent orders Results: Companies report up to 30% higher output and 30% shorter lead times, while cutting inventory write-offs, avoiding penalties, and reducing costly expediting—turning rigid capacity constraints into a source of profitability.

India Can Continue to be No. 1 in the Generic Pharma Business