Wednesday, February 29, 2012

Era of operations

Above image from here. The missing emphasis in many pharma companies is OPERATIONS. It is time to look at things anew - from the operations angle to regain the competitive edge!

In the dynamic field of pharmaceutical marketing, there have been distinct phases:

a) Upto the 1980s: it was production led marketing approach. Pharmaceutical companies vied with each other to offer quality products with a competitive fervour, and took pride in creating world class production facilities. However, slowly this backward integration was no more interesting in the clinic - nor did it lend any competitive edge ...

b) From the 1980s to late 1990s: there was a strong selling and marketing flavour in pharmaceutical company activities. The approach was to create a tantalizing bundle of satisfiers to target doctors and pharmacies, and this boosted sales and market share.

Now it is the era of operations in pharma...

With the rise of H & H, Mankind, Mcleods, Zuventus & Eris Lifesciences - who have burst onto the national pharma scenario - a new trend is on the rise. People think their success lies only on aggressive pricing, sales promotion (bonus offers) and customer relationship management (communication, sponsorships and freebies to doctors). The answer is yes and no to these points, yes - the above activities have mattered, yet there is more to their story ...

It is not just about manufacturing and quality, nor is it only about marketing, it is about these companies also having THE OPERATIONS EDGE, for competitive success.

What is operations?

Operations is about managing the operating core of organizations. It is about managing the activities related to creation, production, distribution and delivery of organizational goods and services (which matters a lot in pharma marketing). Operations management is using resources efficiently and meeting customer requirements effectively.

Operations is the process through which goods and services are created. It can be through self-owned factories or through third party manufacturing. It is interesting to note that Mankind and such other fast growing firms rely on third party manufacturing to a significant extent, the focus is on ultimately creating goods and services that satisfy wants of target audience. This emphasis has helped create a new energy in such firms and they are enjoying high growth thanks to their operations management, not just manufacturing, sales or marketing management alone.

Operations is defined as the process of changing inputs into outputs (goods + services) and thereby adding value to some entity; this constitutes the primary function of virtually every organization.

By focusing on operational excellence, fast growing pharma firms have laid emphasis on this primary function - hence they have gained lustre in the market. Operations can thus be understood as a conversion process. Operations converts resource inputs into useful outputs. The idea is to do it with least wastage ie., highest efficiency.

Operations produces goods or services in required quantities and of prescribed quality at a minimum cost - that has been the cachet of Mankind, Mcleods, Eris... To have operational excellence, the bedrock is planning. It includes product selection, process selection, facilities location, material handling systems, and capacity planning.

This is what such companies did. They went on investing only on those activities that yielded better market share and brand growth, verily, they succeeded through operations management rather than marketing or selling activity alone. Marketing focus of Mankind was a part of their overall operations management strategy. Today, Mcleods, Eris and such other companies are growing rapidly through their savvy operations management strategy. It is about keeping processes efficient, cost-effective, and yet meeting customer requirements ably.

CAVEAT: One may wonder whether above thoughts are random and without basis. As such, one can say the above thoughts are of a keen pharmaceutical practitioner and hands-on manager. However, it would definitely be nice if a deep management study of above companies is done by way of gathering data, analyzing their working and other parameters. Nevertheless, the plain truth is that such companies are growing fast, outbeating competition, and this cannot just come through plain marketing and selling (something that companies like Micro and such others should note) - it is the era of operational excellence now in pharma India!

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Sunday, February 5, 2012

Hijacked in Varanasi

We pose in front of Kashi Vishwanathji temple

Waiting for the start of Ganga arati at Dashashmavedha ghat

The atmosphere is devout, peaceful and enchanting

The Ganga arati is a magical experience - the mood is ethereal!

At Varanasi a Govt. owned shop sells Bhang (a psychotropic substance), it is considered a substance favoured by Shiva

Our stall was the best! Our stall was admired by many in the crowd. Above: Dr. Medha Dongre - skin specialist, (wife of Dr. Kishore Patwardhan, Dr. Kishore is MD in Ayurveda and Ph D, this intelligent man is at BHU - Benaras Hindu University, and is doing very good in his career. In fact I had blogged about him, earlier - click here!) poses with her children at the first floor of our stall. Dr Kishore was off to Tokyo for a lecture series, so he could not see our stall.

The mysticism of Varanasi: A Yogi Baba with a foreign couple on the banks of Ganga at Dashasmavedha ghat (we were transfixed and watched them for about an hour at night)

The interesting yogis loved smoking ganja!

One of the most fascinating cities is Varanasi or Kasi or Benaras. The crowded lanes, the gullies, ghats and the dirty but holy river Ganga beside Varanasi was a memorable experience. Although it was biting cold at Varanasi - with stinky rooms to stay for our night, our AICOG 2012, Varanasi in-stall activity was nevertheless, truly memorable.

Our transactions with doctors was superb, the crowd of doctors was overall excellent - they were very academic, mature, sober and affectionate (perhaps because the place was Varanasi, a very high quality doctor crowd was attracted to Varanasi); our stall itself was a landmark one, and the night visits to temples of Kashi Vishwanath, Tulsidas, Sankat Mochan and early morning visit to Shri Kaalbhairav were elevating and sobering.

Kashi is a backward holy city. Yet there is something special - very special about the place. In spite of the awful stay facility and other backward features of Varanasi there is something special about the place, there is truly something very great - the vibrations are spiritual and elevating. Kashi is anachronistic.

Kashi is a place where you would want to go back again and again, alone and perhaps incognito. It is a place where you see life in reality - that life is ephemeral. People at Varanasi are quite simple, perhaps that is why corrupt politicians have looted them!

Today, it is the era of doctor in the pharmaceutical profession - this trend is very firmly rooted. Earlier was an era of the MR, since the MR's in-clinic activity was very vital for sales generation. However, it is the doctor who generates the sales today. There is a change in the ethics paradigm. To engineer sales:

a) offer personalized services

b) provide non-clinical services in exchange for sales (like insurance premium payment of doctors' children, payment of hostel fees of children studying medicine and whose parents are doctors, payment of electricity bills etc)

c) think of going beyond MR activity, today there is pressure on MRs to ensure gifting to doctors and exhaustion of budgets as planned!

d) development of intimate relations has become a necessity!


AICOG, PEDICON etc are all medical events that are hijacked! The medical men are no longer in control of these events. They are hijacked by pharmaceutical companies with their agendas, and event managers all eager to get a pool of doctors so they may profit from the setting. Event management companies block hotel rooms in thousands, pharma companies buy these rooms and mobilize doctors to visit the places, tourism is an added attraction for attendees ... the idea is to create an opportunity to oblige prescribers. For the 2013 Mumbai AICOG, Mercury Travels has already booked 2000 rooms and is in the process of blocking more rooms!! So if you want the rooms, don't contact the hotels, contact these middlemen! Even the organizing doctors ask you to contact the middlemen (I wonder why?!)!

Contrast this to the earlier days, where the medical personnel were in charge of such events, medical panel discussions were not the agenda of pharmaceutical companies ... and in-stall activity was the only commercial face of the event. Today, medical events are hijacked by other stakeholders, doctors are just actors playing their role on the platform created by the middlemen and pharma companies.

AICOG, Varanasi has the dubious distinction of attracting negative press in the Hindi daily Amar Ujala - Dr. Lalji Singh, VC of BHU was sad with the state of affairs - he thought it was a pure scientific event. The District Magistrate of Varanasi, too launched an investigation into the alleged acts of omission and commission by middlemen during AICOG, Varanasi.

Still... the AICOG, Varanasi event was an overall successful one for pharma marketers. It was great to promote to some of the very excellent doctors - the place attracted the best people in the OBG profession.

Recommended readings (books one must read before dying!):

1) Autobiography of a Yogi, by Paramahamsa Yogananda

2) Himalayan Masters, by Swami Rama

3) Apprenticed to a Himalayan Master, A Yogi's Autobiography by Sri M

4) Swami Vivekananda, A Biography by Swami Nikhilananda (Published by Ramakrishna Math)

5) A booklet: Powers of the Mind, by Swami Vivekananda (Published by Ramakrishna Math)

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