MỘT số GIẢI PHÁP NHẰM NÂNG CAO HIỆU QUẢ ỨNG DỤNG SCM tại CÔNG TY LD dược PHẨM SANOFI AVENTIS VIỆT NAM e

MỘT SỐ GIẢI PHÁP NHẰM NÂNG CAO HIỆU QUẢ ỨNG DỤNG SCM TẠI CÔNG TY LD DƯỢC PHẨM SANOFI-AVENTIS VIỆT NAM SOME SOLUTIONS TO IMPROVE SCM APPLICATION EFFECTIVENESS IN SANOFI-AVENTIS PHARMACEUTICAL JOINT VENTURE COMPANY Overview on pharmacy of Vietnam Before the liberation, Vietnam's pharmaceutical industry was hardly developed, the medicines were mainly imported from abroad After the liberation, with the help of finance and technology of SEV, Vietnam's pharmaceutical industry was formed, mainly in Hanoi and Ho Chi Minh In 1996, the Prime Minister promulgated the "National Drug Policy," Vietnam's pharmaceutical industry began to prosper and have made remarkable progress According to the Vietnam Drug Administration’s data, within 10 years (1995-1005), total market value of pharmaceutical industry increased 2.9 times from $280 million in 1995 to $810 million in 2005 Drug consumption per capita increased 2.4 times from $4.2 in 1995 to nearly $10 in 2005, increased 10 times compared to 1990 Production of the domestic produced drugs increased from 2,280 billion VND, equivalent to USD 152 million in 2000 to 6,300 billion VND, equivalent to USD 395 million in 2005 (accounting for over 48% pharmaceutical market), in which the area with foreign investment capital, there are 30 investment projects, providing an annual $40 million pharmaceutical products Goals by 2010, drug produced in the country satisfies 60% the needs of the market; drug consumption per capita is $1215/year, reaching 1.5 pharmacists/10.000 people 51 100 80 60 Eas 40 20 2n d 1s t Qt Qtr r t 3r d Qt r 4t h Qt r We st Nor th Development orientation of pharmaceutical industry, post-WTO chances and challenges 2.1 Development orientation of pharmaceutical industry Define the role of the pharmaceutical industry in the development of socio-economy and security of the country, on 30/6/2006, the Prime Minister signed Decision no 153/2006/QĐ-TTTg approving the master plan for development of Vietnam Health System for 2006-2010 and Vision 2020, defining the goal of the pharmaceutical industry in this period is : • Development of pharmaceutical industry to become a spearhead economic sector - Promote the potentiality, strength on medicine and traditional medicine By 2015, ensure 30% of domestically produced drugs are derived from medicinal plants and traditional medicine - Ensure the domestically produced drugs to meet 60% of pre-drug value in 2010, and 70% in 2015 - Construct and develop the circulation distribution and supply system of drugs from the centre to locality, ensuring all people have the demands are able to access to quality medicines and at reasonable prices - Goals by 2010, all drug production and business facilities must meet the Good Practices (GPs), a set of rules to good medicine practice including rules 2.2 Main changes on post-WTO trading environment of pharmacy Officially to become the 150th member of WTO or that Vietnam officially joints into the playing-field with the rules, general regulations in the world In particular, there are four basic principles: - Most favored Nation - MFN, accordingly, if a member gives another member the preferential treatment, it must also give such preference to all other members However, this principle is not absolute in nature but there are exceptions and exemptions - National Treatment - NT: imported goods, foreign services and intellectual property rights must be treated equally compared to domestic goods of the same type However, within the framework of WTO, NT only applies to goods, services and intellectual property rights, rather than to individuals and legal entities - Open the markets for goods, services and foreign investment, establishing a system of publically global trade - Fair competition: free competition in the same conditions The tax changes: - Expected that applicable duty to pharmaceutical products is only 0-5% of tax against 0-10% as before - Average tax is 2.5% after years as from Vietnam enters into WTO - The average tax for cosmetics reduces from 44% to 17.9% at the time Vietnam has to fulfill its commitments Change in business right: - Since 1/1/2009, the enterprises with foreign investment capital and branches of the foreign enterprise in Vietnam can directly import and export pharmaceutical products - Foreign enterprises can not participate into directly distributing pharmaceutical products in Vietnam Drugs produced by foreign enterprises are sold to enterprise specialized in distribution Opportunities and challenges for Vietnam's pharmaceutical enterprises 3.1 Opportunity With the advantage of a multi-national company, Sanofi-Aventis has two strong advantages in the pharmaceutical business including the ability of research and development (R & D), and ability of capital Also, with the network in most countries worldwide, the company is able to access to many resources of information on situation of diseases, as well as results of scientific researches outside the company Moreover, the company also owns a valuable asset that is Sanofi-Aventis brand that has been confirmed on the domestic and global markets According to a ranking list of the world's pharmaceutical companies, Sanofi-Aventis is currently the third pharmaceutical company in the world and the top one in Europe, this is an undeniable advantage, enabling the company to launch new products to the market In the context that Vietnam's pharmaceutical industry is a young industry, with a high growth rate, the demand on drugs for treatment of the people is increasing (refer to data on drug consumption per capita in Vietnam), which promises an extremely potential pharmaceutical market The integration to WTO has prompted Vietnam to rapidly improve its legal system, At present, we have sets of important laws to regulate business activities in the pharmaceutical industry that are: Pharmacy Law and Commercial Law and Enterprise Law, Law on Intellectual Property, Law on Investment and Competition This helps the general business environment and business environment in the pharmaceutical industry more obvious and patent, enabling enterprises in planning long-term business strategy and development plans Currently, the company faces an extremely problematic issue that is counterfeit, fake, poor quality goods , the problems are causing serious losses to the company both prestige and sales On the market of Vietnam nowadays, there more than 10 products of the company are counterfeited and its brand is imitated by domestic companies, including many products being copied many times as Nautamine, Theralene In addition, there are some items not yet expired license had been launched by the company for mass production as Plavix These are matters beyond the control of the company, so with the introduction of intellectual property law, hoping that the company can solve this problem thoroughly and efficiently Joining the WTO also sets out the requirements for reductions in tariffs and import fees, which will help enterprises reduce business costs, and this is also an opportunity to help enterprises be able to access more customers 3.3.2 Challenges General Director Finance and Administr ation Marketing and Sales Regist ration office SCM Incharge Manageme nt of suppliers Goods purchase Order management Order performance Production Figure 2: Recommendation for new organization model in Sanofi-Aventis 52 Figure 2: Recommendation for new organization model in Sanofi-Aventis Through this model, we see that this organization is leaner than the older model, unifying the operations and supply chain functions within a department, this will help the chain can afford and scope to perform the task on all three areas is management of supplier, management of internal operations and management of customers This method will help the chain better understand the customer's needs, quickly grasp the changes in supply capacity to be able to make timely adjustments internally, to avoid gaps in communication news, and more favorable implementation strategies and activities of the company's supply chain 4.2 Building up overall operating strategies Building up business strategies, or competitive strategies in order to determine the operation direction is extremely necessary to keep the enterprise to the correct direction, and ensuring the coordination of activities most effectively, however, this is one of the weaknesses of the company today The way that the company are using at present is based on business results last year to set goals for next year's sales, then sales target will be allocated according to each item and charger of the label who will make own plans to achieve the above objectives About the company, the Company will support in form of discounts, sales bonus and invest a part of budget in marketing activities such as promoting products, materials for the promotion For the other departments, the company does not have any specific operational strategy to mutually carry out operation We know that competitive strategy begins by identifying customer needs, based on which will set out how to satisfy those needs with its products and services A good competitive strategy is a strategy that can maximize the effectiveness of the value chain in the enterprise, starting from the development of new products, marketing / sales, production, distribution and service, etc Implementation of competitive strategy requires the involvement and coordination of departments in the value chain, for example, product development strategy is to identify new orientation for which is in development for products in the future; marketing and sales strategy identifies market segments, how to position the products, pricing and sales policies and strategies on supply chain determine how to buy, transport, inventory, distribution, customer services, etc The success of the business depends on two conditions: first, the competitive strategy and functional strategies must fit together to form an overall corporate strategy, each one must be able to support other functions, and help enterprises to achieve competitive goals; secondly, the activities of functional departments must be in accordance with the available resources, to ensure that every department can implement proposed strategies Operations of the business will not be effective if strategies are not uniform, or resources can not support strategies, for example: marking the program of delivery to the customer hands within 24 hours, while the distribution department wants to reduce transportation costs and tends to collect all orders assigned to delivery goods at the same time, this conflicts with the marketing activities To develop a uniform strategy, it is important to identify needs of customers in every market segment that the business is trying to target, and consider problems of supply chain in satisfying this demand Understanding customer needs is the first request to determine requirements for service and costs properly, and find out the unusual factors to help the businesses identify situations that may occur deal with them 4.3 Market segment of pharmacy We know that the first point in building a competitive strategy is a market segment or customer classification which is one of the conditions for solutions to uniformity of operational strategy As mentioned earlier, currently the company has three main objects of customers: resellers, importers and pharmacies Objects have a range of different activities, so they are unable to compete against each other On the other hand, few agents and importers and long-term contracts lead to few problems, so pharmacies are considered main customers of the company Therefore, in this section, we mention only pharmacies We know that different customers have demand different on the following aspects: • Number of orders • Delivery time • The required commodity • Requirements of service levels • Prices Since the level of service is closely related to cost, high service will increase cost of both time and money, whereas low service will lose customers and may lose business opportunities, so it is important to define service policies for different customers appropriately For those reasons, the company should classify pharmacies into three categories I, II and III based on the size and potential of the drug For every class of customer, a separate policy on discount terms, service levels, delivery times and sales policies will be applied This, on one hand helps the company reduce and rationalize costs, on the other hand encourage pharmacies to enjoy the higher level of service However, because the company wants to target at as many customers as possible, a solid foundation in the market, the customer classification should focus more on classification of services rather than the discount rate, to avoid too many differences between regular customers and irregular customers Recommendations Through practical activities and assessment of individuals, to improve the performance of business in general and supply chain in particular, I have two recommendations as follows: 5.1 Develop of "open" management system Sanofi-Aventis Vietnam is one of enterprises with large scale in Vietnam; employees have a high degree of qualification; all tasks are described with the detailed implementation process, leading to high productivity, and ensuring implementation of the work as required However, since business conditions and regulatory environment are always changing, while the regulations and processes have not been changed and updated frequently, organization of the work is done mainly by routines, path, losing activeness, creativeness and lack of flexibility in handling the job For effectiveness of SCM, it is essential to organize the business towards promoting activeness, creativeness and sense of responsibility of all members towards the common goal of the entire enterprise Therefore, it is necessary to build quality monitoring division, in charge of reviewing the process and receiving comments or complaints from customers and internal departments in order to implement reform of functional departments across the enterprise This division shall receive and propose plans for continuous and comprehensive improvement of the system, and evaluate and inspect internally to detect threats and deviations in the operation of the organization for timely correction 5.2 Modernization of production and improvement of staff The labor structure of the company shows that the company still has too many unskilled workers due to obsolete equipments With the trend of industrialization and modernization today, I think the company should invest more in machinery and technology, modernize production processes, reduce unskilled labor and improve product quality In addition, the company should develop self-training policies to improve skills and qualifications of employees in the company, and qualified staffs that are ready to adapt to new business conditions of the company CONCLUSION: By analyzing post- WTO conditions, opportunities and challenges of the pharmaceutical industry in Vietnam in general and Sanofi-Aventis in particular, the thesis provided some measures and proposals to improve the efficiency of SCM in Sanofi-Aventis company including reorganization of corporate structure; planning the overall competitive strategies, development of strategy for departments; customer segmentation; development of open management mechanism and modernization of production, improvement of staff’s qualification With solutions and recommendations stated above, I hope that the company may consider and apply them to build a better organizational structure, reduce costs and bring more benefits to the customers and patients in Vietnam  ... overall operating strategies Building up business strategies, or competitive strategies in order to determine the operation direction is extremely necessary to keep the enterprise to the correct... member gives another member the preferential treatment, it must also give such preference to all other members However, this principle is not absolute in nature but there are exceptions and exemptions... commodity • Requirements of service levels • Prices Since the level of service is closely related to cost, high service will increase cost of both time and money, whereas low service will lose customers