Pharmaceutical Plant Administration

By Prof. Manohar A. Potdar

This book is a 'MUST READ', for Post Graduate pharmacy students who want to make their career in Plant Management and also for those who are already in the pharma industry. It provides a fundamental understanding of management concepts and its applications to pharmaceutical plant management.
Salient Features:
1. It lucidly explains the concepts of management.
2. Describes in simple language how a typical pharmaceutical plant is organized and functions.
3. A good text for M. Pharm students and also for the practicing industrial pharmacists.

• Language: English
• Publisher: BSP BOOKS
• Release date: Nov 3, 2019
• ISBN: 9789386211286

Book preview

Index

PART - I

BASIC PRINCIPLES OF

MANAGEMENT

CHAPTER 1

INTRODUCTION

Introduction

Pharmaceutical Administration is not a new subject; it is basically the application of administration theory and techniques to pharmaceutical industry. Pharma industry is normally divided into two main activities like:

1.   Technical or plant activities, and

2.   Commercial activities, which mainly involve marketing, purchase, finance and legal aspects like compliance to company’s act etc.

The scope of this book extends to only the first part, that is, Technical or plant administration.

Let us first try to understand the title of the book i.e. Pharmaceutical Plant Administration. Pharmaceutical means related to medicinal drugs i.e. a manufactured medical product or drug. Administration means running of an organisation, business or system. Plant refers to factory and related activities of factory.

If we agree the basic meaning of these three words, then we can say for our practical purpose that pharmaceutical plant administration means running of a pharmaceutical manufacturing unit and that exactly is the scope of our study in this book.

One other word Management though not exactly synonymous to administration, are very closely related and sometimes used interchangeably. Administration means action of managing and management means successfully doing some activity.

The word Management can further be defined as, ‘the process of designing and maintaining an environment in which the individuals working together as groups, efficiently accomplish selected aims.

The basic functions of management, as defined in the management literature and widely accepted by academicians and managers are:

•   Planning

•   Organising

•   Staffing

•   Leading and

•   Controlling

We are going to discuss all of this in more detail in the chapters that follow. All the efforts in this book are directed towards making a budding pharmacist know the basic concepts of management and how they can be applied in the pharmaceutical industry while working as an industrial pharmacist.

An industrial pharmacist plays roles starting from, an officer or supervisor in a plant to the levels of Vice president or President of technical operations. As the levels vary, the nature of his or her work will also vary, but the basic underlying principals will remain the same.

The function of management is essential to any organisation, small or big, pharmaceutical or any other industry. Managers are responsible for taking actions that will make it possible for individuals to make their best contributions to the group activities.

Now let us quickly look at the main functions of management. As we have already said that the management has five main functions namely,

•   Planning

•   Organising

•   Staffing

•   Leading

•   Controlling (and also co-ordinating)

Let us see what the functions actually are. Each of these functions, however, will be discussed in detail in the chapters to come.

1. Planning: Planning involves selecting missions and objectives, and the needed actions to achieve them. It involves decision making i.e. selecting the most appropriate future course of action from among all the available alternatives.

2. Organising: It is the part of management function that involves developing and establishing a desired structure of roles for people in the organisation. The main purpose of the organisation structure is to help in creating an appropriate environment for human perfo nuance.

3. Staffing: It involves, identifying the work force requirement at every level in the organisation, selecting suitable people, recruiting them, placing them in the right department, appraising their performance, promoting the right people, design and implement career plans, compensating, training and developing the existing and newly joined people to accomplish their duties effectively and efficiently.

4. Leading: It involves influencing people in the organisation to do their jobs effectively so that they contribute to personal and organisational group goals. This involves creating work environment by mainly dealing with interpersonal aspects of management. Leading involves motivation, leadership styles and approaches and communication.

5. Controlling: This deals with the measuring and correcting activities of subordinates to ensure that events conform to plans. It measures perfonnance against goals and plans and shows where negative deviations exist, and, by putting in motion, actions to correct the identified deviations.

6. Co-ordinating: To co-ordinate means to ensure that sections, departments and divisions co-operate in the achievement of the organisations objectives. The objectives of every section and of every employee should contribute to the goals of the organisation.

Except staffing, practically every managerial function is required to be perfonned at every level (hierarchy) of management and for carrying out these functions at every level requires certain skills and each of these skills are required in different quantum at each level.

Let us see what these skills are and what is the quantum of each required at each skill and at each hierarchical level in management.

1. Technical skill: It is the knowledge and proficiency in activities involving methods, processes and procedures. This means it involves working with tools and specific techniques. For example: At operators level:

•   Fixing of dies and punches of a tableting machine

•   Setting of flames of an ampoule filling and sealing machine

•   Operating an autoclave

•   Running a capsule filling machine

At supervisors level

•   Preparing a weekly production plan

•   Ordering batch wise raw and packaging materials form the stores

At managerial level

•   Preparing a monthly production performance report

2. Human skills: It is the ability to work with the people. It is a cooperative effort, a team work. It is creating a work environment, in which people contribute their best without being forced and feel secure and free to express their views.

3. Conceptual skills: It is the ability to see an overall picture, to recognise important elements in a situation and to understand the relationship among the elements.

This involves looking at the present event in its future potential; and also an ability to analyse the situation to find out the impact of such situation in future course.

4. Design skills: It is an ability to solve the faced problems or issues in ways that will benefit the organisation. Managers are not only expected to see the problem but to find out workable solutions for solving die problems and works on tiiat i.e. execute die solutions.

These four skills are needed in different quantum at various hierarchical levels. A very rough estimate may be given as follows.

If we look at various managerial functions in a similar fashion, a rough estimate can be given in the following way:

With the help of all these functions, skills, levels of hierarchy in tire organisation, the managers try to achieve the organisational goals. What is that goal then?

In the simplest possible terms the manager’s goal is to achieve highest possible desired objective using lowest possible resources.

In connection with the management theory some terms are used by the practicing managers as well as academicians. It will not be out of place to know them.

1. Productivity: productivity may be defined as the ratio of output to input, within a time period with due consideration to quality. It can be expressed by the following equation:

(Within a time period and with due consideration to quality)

Here the inputs can be labour, material, capital, etc. Percentage productivity can be expressed by multiplying the above ratio by 100. i.e.

2. Effectiveness: Effectiveness is the achievement of objective.

3. Efficiency: Efficiency is the achievement of objectives with the least amount of resources. Managers are required to be effective and efficient.

Now let us look at one often debated issue. The issue is What is management, an art or a science?

The answer is both difficult and simple. But in the simplest form we can say that Practising management is an ‘Art’, the organised knowledge underlying the practice is a ‘Science.

Here we would like to give you some basic elements of science which will prove management is a science,

(i)    Science is organised knowledge

(ii)   Science comprises of clear concepts, theories and accumulated knowledge developed from hypothesis, experimentation and analysis.

With this basic introduction, I think we can go ahead with the main subject matter of administration/management, as it is used in pharmaceutical plant administration.

CHAPTER 2

PLANNING

2.1 Defining Planning

1. Definition of Planning

Planning may be defined as A formulated and detailed method by which a thing is to be done.

If we try to analyse the above definition we must fragment it into various parts, eg.

(i)   Formulated and detailed method

(ii)   A thing is to be done

Here a thing is to be done means an objective to be achieved, and what exactly we should do to achieve that objective is formulating a detailed method.

Details of method may also incorporate the answer to questions such as;

✓   Who will do it? (Person)

✓   When will it be done? (Time)

✓   Why is it required to be done? (Reason)

✓   Where it should be done? (Place)

✓   What is required to do it? (Nature. Materials)

✓   How it is to be done? (Method)

The plan must provide the answer to all these questions.

In short, planning involves selecting mission and objectives and the action to achieve them; it requires decision making, i.e. choosing from among, alternative future courses of action. Plans thus provide a rational approach to preselected objectives.

Planning bridges the gap between where we are and where we want go. Planning and control actually go hand in hand. Any attempt to plan without control and control what is not planned is meaningless.

2. Types of Plans

One must clearly understand that there are many types of plans. There can be a big plan and then there are small plans, starting from an overall organisational purpose or mission to a smallest programme. This can be listed as,

Now let us understand the brief meaning of each of these terms:

(i)   Purpose or mission: The mission or purpose identifies the basic function or task of an enterprise or organisation or even a part of it, in a very large organisation.

In case of a pharmaceutical organisation we can say the purpose or mission of the organisation is to produce and distribute quality medicines and provide necessary support services to health profession thus contribute to promote health of the society and provide all these at affordable prices and at the same time generate surplus for the organisation.

(ii)   Objectives or goals: Objectives or goals are the end towards which the activity is aimed - they are the results to be achieved.

(iii)   Strategies: This term can be defined in various ways, eg.

(a)   They are general programmes of action and deployment of resources to attain comprehensive objectives.

(b)   They are programme of objectives of an organisation and their changes, resources used to attain these objectives, and policies governing the acquisition, use and disposition of their resources.

(c)   They are the detemiination of the basic long term objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve the goals.

The overall purpose of strategies then, is to determine and communicate through a system of major objectives and policies, that in short show a picture of what the organisation is looking for in near and also distant future.

These strategies provide a platform for thoughtful actions.

(iv) Policies: Policy can be defined as a course of action adopted as proposed by a business organisation.

Policies are also plans in the sense that they are ‘general statements’ or ‘general understandings’ which guide or direct the organisational thinking in decision making process.

Policies define an area within which a decision is to be made and ensure that the decision will be consistent with, and contribute to, an objective. Policies help decide issues before they become problems, make it unnecessary to analyse the same situation every time it comes up, and unify other plans, thus permitting managers to delegate authority and still maintain control over what their subordinates do.

This can be explained by a very simple policies related to recruitment, which was followed in Cadila Pharmaceuticals.

The policy clearly defined certain basic policy matters regarding how to recmit new entry level employees. It said:

(a)   Minimum qualification for pharmacist as M. Pharm. In appropriate field of specialisation like chemistry, pharmaceutical technology, Quality assurance, etc.

(b)   A select list of colleges/universities was also provided, eg. B.I.T.S Pilani, L.M. College of pharmacy, U.I.C.T (Mumbai), B.H.U (Banares), Jadhavpur University’ (Kolkatta) etc.

(c)   Similarly level of selection committee and final approval required from whom was mentioned, eg. General Managers and above, the candidates will be approved only by the Managing Director of the company.

Policies do not necessarily exist only at the top level but they can exist at any level or rather all levels of the organisation. Only the influence or impact of the decision taken, on the overall functions of the organisation will decide the level.

Policies can cover a wide range of activities and hence they can be of various types, eg.

•   Employment policies

•   Deciding third party manufacturers

•   Bank borrowing

•   Market expansion

•   New product introduction etc.

Policies should not be so decided and elaborate to nuts and bolts, otherwise they seize to be policies and become rules. Policies, hence, should have some discretion. Policies must encourage discretion in decision making but in a restrictive and controlled atmosphere.

(v)   Procedures: Procedure may be defined as An established or official way of doing something i.e. a series of actions done in a certain way.

In other words, procedures are plans that establish a required method of handling future activities. They are guides to action, rather than to thinking, and they detail the exact manner in which certain activities must be accomplished. They are chronological sequences of required actions.

In our pharmaceutical plants we have lots of procedures, giving detailed action sequences which are known as "standard operating procedures or in short SOPs.

(vi)   Rules: Rules may be defined as A statement of what must be done and what must not be done.

In other words rules spell out specific required actions or non-actions, allowing no discretions. They are usually the simplest type of plan.

Rules and procedures, by their very nature are designed to repress thinking, we should use them only when we do not want people in an organisation to use their discretions.

(vii)   Programmes: Programme may be defined as A planned series of events; or a set of related measures or activities with a long tenn aim.

Programmes are a complex of goals, policies, rules, tasks, assignments, steps to be taken, resources to be employed and other elements necessary to carry out a given course of action are ordinarily supported by budgets.

To complete a main programme you need many supporting programmes.

(viii)   Budgets: A budget is a statement of expected results, expressed in numerical terms. A budget may be expressed cither in financial terms or in terms of labour hours, units of product, machine hour or some similar terms.

Making of a budget is undoubtedly a planning process.

3. The Planning Process

The planning process is divided into various steps. Dr. Harold Koontz has described the basic steps in a very simple and easy to understand manner in the following 8 steps.

(i) Being aware of opportunity: The planner has to be fully aware of the opportunities before he initiates the planning process. This awareness may be in the following areas namely;

✓   Market i.e. what is the demand we will have for our product, which geographical areas we can serve.

✓   Competition: Do we already have competition for our product? eg. A simple paracetamol tablet like product will have many competitors already in the market.

✓   What consumers want: market survey is needed to identify the needs of the customer, eg. If we want to bring a new medicinal product in the market, we may have to survey hospitals by having discussions, interviews with the medical specialists etc.

✓   Our strengths and weaknesses: What strengths or weakness the organisation has, eg. Are we strong in technology or in sales and marketing etc.

(ii) Setting objectives or goals: We must clearly define -What we want to be? What we want to accomplish and when? eg. A production plan may have to define the following things:

✓   What is the planning period? - A month, quarters, etc.

✓   What we want to accomplish? -Which products and in what quantity.

✓   What resources we want to use and in what quantity? eg. Facilities, equipment, materials, labour, etc.

✓   What should be our standard of cost per unit produced of a specific product? etc.

(iii) Considering planning premises: i.e. the basis on which the plans are made, this will include both the internal and external environmental factors, they will also have some controllable and some non-controllable etc.

eg. We had planned to start a new factory for ‘ALKEM’ at Baddi in Himachal Pradesh. In this plan we had controllable factors like, provision of money for the project, required manpower, etc. and at the same time some uncontrollable factors like, speedy approach from government agencies, climatic conditions such as, heavy rain, and early sunsets in winter. Similarly there were infrastructural issues like, non-availability of electrical power, bad roads for transport, etc.

So during planning all these factors are to be considered.

(iv) Identifying alternatives: This refers to identifying the most promising alternative to accomplishing our objectives. Here one must remember that the problem is not in identifying the alternatives but in keeping the number of such alternatives to a practical minimum; so as to keep it easy to select the best from that and act upon it.

(v) Evaluating alternatives: Purpose of this step is to find out which alternative will give us the best chance of meeting our goals at the most economic cost (optimum cost) and highest profit? In short to find the most productive alternative from among the identified ones.

(vi) Choosing alternatives: This is the step where we select the course of action that we are going to pursue. This is the real point of decision making. At the evaluation stage the analyst finally comes up with more than one alternative which are equally suitable, and he is in a real dilemma to select one from them. And at times the manager may select more than one alternative to act on simultaneously to get synergistic effect. (This is real challenge).

(vii) Formulating supporting plans: When a decision is made planning is not often complete, and a seventh step is indicated. Derivative plans or supporting plans are almost invariably required to support the basic plan, eg. If we take a decision to make a new pharma plant then we also need supporting plans like:

✓   Buying equipment

✓   Buying materials

✓   Hire and train workers

✓   Develop new products

(viii) Numbering plans by making budgets: After decisions are made and plans are set, the final step in giving them meaning is to numberise them by converting them into budgets.

If done well, budgets become a means of adding together the various plans and also set important standards against which planning progress can be measured i.e. the control part of planning. In pharma plant we have various budgets eg.

✓    Plant operating budget

✓    Capital equipment budget

✓    Manpower budget etc.

(ix) The commitment principle: Some criteria must be used in selecting the time range for company planning. The key to choose the right planning period seems to lie in the commitment principle. The commitment principle can be stated as Logical planning encompasses a future period of time necessary to fulfil,, through a series of actions, the commitments involved in decisions made today.

The commitment principle implies that long range planning is not really planning for future decisions but rather planning for future impact of today's decisions.

In fact there is no uniform or arbitrary length of time for which a company should plan or for which a given programme or any of its parts should be planned.

Often short range plans are made without reference to long range plans. This is plainly a serious error. The importance of integrating the two types can hardly be over emphasised, and no short term plans should be made unless it contributes to the achievement of the relevant long term plan. Much waste arises from decisions about immediate situations that fail to consider their effect on more remote objectives.

Sometimes short range decisions not only fail to contribute to a long range plan but actually impede, or require changes in long term plans.

The point to remember here is that there should be a coordination between long range and short range plans and two way communications between the managers responsible for short and long range planning decisions.

2.2 Objectives of Planning

1. Definition and Nature of Objectives

We have already defined objectives earlier as, The important ends toward which organisational and individual activities are directed.

In this chapter we will be talking about verifiable objectives. Verifiable objectives means when the predefined period is over we should be able to verify whether the objectives planned are achieved or not. This verification may be quantitative or non-quantitative. Sometimes these may only be qualitative. However when we have quantitatively verifiable objectives, then one must clearly know as to how these quantitative techniques are to be used.

Verifiable objectives will help the management to know whether the management process of setting and achieving objectives is effective and efficient or not.

The objectives are short term and long term. Also they can be classified as personal and organisational. The overall process of organisational, personal and short and long tenu objectives must have a good co-ordination. Personal objectives must have a low priority over the organisational objectives if they are obstructing the overall organisational achievement. Similarly the short term objectives must dove-tail into the long term objectives of the organisation.

Hierarchy of objectives

All main objectives will have supporting objectives. These objectives, both the main and the supporting thus form a hierarchy and network of objectives. These should be such that they always support each other (even interdepartmental objectives) and help the organisation to proceed in the predefined path, eg. Production department may require more inventories of R.M & P.M. However material department may like to operate on low inventory levels. These may look like contradictory objectives but with proper understanding production planning department can achieve both the objectives of production as well as materials department.

In any organisation there is an organisational hierarchy and hierarchy of objectives. These can be shown in a simple chart as follows:

In this chart you will find that certain objectives in the hierarchy are overlapping and that will happen and cannot be avoided.

1. Socio economic objectives

(a)   To provide phannaceutical products, medicines to lay public, of good quality at affordable price.

(b)   To develop, produce and distribute phannaceutical products, to meet the current and future needs of the society, etc.

2. Mission

(a)   To become the most quality driven company in the pharmaceutical industry in India.

(b)   To become one of the first 10 companies in the ORG listing, in India, etc.

3. Long term and strategic objectives

(a)   To create a new phannaceutical facility in Special Economic Zones, within the next two to three years.

(b)   To adopt the most modem technology for single dose injectables to achieve the desired high level of quality and productivity, etc.

4. More specific objectives.

(a)   Get the plant approved by USFDA & MHRA for sterile