Demand Forecast:

Demand forecasting is systematic a method that is used to predict the future demand of a firms
particular product. Renata Ltd is operating in Bangladesh for more than 47 years. So basically
they have an idea about the demand in the market and how much stock to order and hold. Renata
Ltd demand forecast is normally carried out for more than 12 months to 24 months in advance
for capacity planning and sourcing key materials needed for production. Renata’s aim of
forecasting is to meet their consumers demand with their supply and cutting out waste, whilst
ensuring quality.

According to Mr.Fokrul Islam when it comes to forecasting Renata Ltd follows IMS Health
Experience. IMS Health is a mixture of both judgmental and time-series forecasting method.

Judgmental forecast: Renata Ltd when making a demand forecast will focus on subjective
inputs gathered from taking opinions of managers who are in marketing, operation and finance
and the members of the sale and customer service staff and also by conducting a consumer
survey. By doing this they will gather valuable information and data and the organization can
easily understand and make better decisions to improve their strategies that will result in an
increase in market share growth.

Time-series: The organization uses some techniques to predict events through a sequence of
time and uses historical data method to forecast and assume that the future values based on past
values. The mangers when making any decision will analyze the past data collected by Renata
Ltd to estimate future demand, cash inflows, output level and sales value. The demand for the
Maxpro capsule might remain the same but a long-term upward or downward movement in the
data due to population shift and increase in life expectancy. Renata Ltd can take this opportunity
to increase its market size as it is expected to grow at 15% year on year to reach 5.11 billion by
2023.

Naive Approach: Furthermore, Renata Ltd also uses the Naive forecast method as a standard for
accuracy of future demand by using the previous value of a time series with trends like
population shift. Even though it provides less accuracy but it requires virtually no cost, quick to
prepare and is easy to understand. If the accuracy resulting from this method is acceptable by the
managers then it will hold as a great value for the pharmaceutical company.
Operational problem:

During our visit to Renata Ltd we were only given access to see the infrastructure of the Mirpur
site and Mr. Fokrul explained the roles of each infrastructure. But due to our own safety and not
getting exposed to the chemical reaction we were not given access inside the infrastructure of
Renata Ltd. So, we hardly got to see how the whole operational process takes place and observe
any operational problem.

Later we contacted Mr. Fokrul again and according to him these were the operational problems
Renata Ltd was facing:

 Due to lack of proper government laws and regulation smuggled counterfeit products
enter the market and hamper the growth of the organization. Furthermore, it can also
hamper the brand image of the pharmaceutical company.
 Often they face problems at ports and irresponsibility of custom officers hampers timely
export which makes the production process expensive and chaotic for the workers.
 Unstable political situation in Bangladesh is one of the major reasons for not achieving
the expectation in export and put the firm at risk of goods getting damaged.
 Sometimes they have to deal with machine breakdown which slows down the production
process and makes it hard to exploit any gap or opportunities to maximize growth in the
market.
 There are times when wrong amount of chemical gets mixed during the production
process due to human error and the organization has to start the whole process of
manufacturing the medicines which is not only time consuming but also increases the
operation cost and make the firm less efficient.
 Most of the time customer does not have the purchase power or choice of medicinal
products. Customers buy their product according to the prescription of doctors and
doctors often are influenced and motivated by other pharmaceutical companies to
recommend their own products which make it hard for managers to forecast and estimate
future demand and sales value.
 Power generating problem is one of the major reasons that cause operational problem
with Renata Ltd and other pharmaceutical companies in the industry. They are not getting
the required power according to their demand. Also, lack of supply of emergency power
hinders production and the continuation process.

Recommendations:
 Renata Ltd needs to carry out employee motivation and engagement activities to
encourage knowledge sharing in a creative way. The workforce often feels isolated in
doing their project and often suffers from boredom in their workplace. By having
mandatory creative session and motivational activity based on improving the work moral
can help Renata Ltd to be more efficient and more productive. Even though Renata Ltd
does this by only rewarding the top performers with money, still they can perform other
effective methods to encourage and motivate the workers and remove the communication
gap. Motivated workers are likely to improve the quality of the product and will spread
positivity in the workplace environment. By improving employee satisfaction the
pharmaceutical company can lead towards a better positive growth.

 Even though Renata Ltd holds the fourth position in Bangladesh with 5.2% of the market
share, they are reluctant to take certain risk. In order to improve an exploit unforeseen
opportunities businesses need to take calculative risk to improve their position in the
market. By taking risks Renata Ltd will be able to stand out more and the organizations
product will catch the eye of the consumers. Also they can learn from the risk as it helps
to learn new skills, improve and evolve the existing skills. The managers can make more
effective decisions as it improves creative thinking.

 By talking to Mr. Fokrul we found out about 70% of the raw materials are imported from
foreign countries. By producing the raw materials in our country in sufficient amount will
help Renata Ltd to get supply according to their demand. There will be fewer challenges
in the communication process and less chance of communication breakdowns. Also by
producing domestically will help the firm to get positive press and positive perception.
This will also help to reduce shipping cost and flexible payment options with the
domestic manufactures can easily take place.

 The pharmaceutical company needs to focus heavily on external Corporate Social

Responsibility. Corporate giving’s, sponsoring and social activities plays a vital role in
today’s market. By performing these activities Renata Ltd will improve their brand
reorganization and uplift their brand status. Not only this they will have a positive brand
recognition and positive word of mouth from the targeted consumers which result in
better sales and thus making the organization to enjoy economies of scale. This will result
in attracting better specialized workers and in retaining the current staff. The Government
will provide grants and subsides which will take the organization to reach new heights.