Report on the Operations Management of

Genvio Pharma Ltd.

Prepared For:
A.T.M Jakaria Khan
Assistant Professor
Institute of Business Administration,
University of Dhaka

Prepared By:
Kazi Pushpa Ahmed (Roll: 10)
Fatima Nafsia Taslim (Roll:14)
Mohiuddin Kader Arnab (Roll:30)
Najeeba Mohammed Altaf (Roll: 42)
Shaikh Raina Ali (Roll: 52)
MD. Asiful Haque (Roll: 53)
G.M. Asif Ahmed (Roll:54)
Khaled Atifi (Roll: 55)

Date of Submission:
5th November, 2019
Institute of Business Administration,
University of Dhaka

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Letter of Transmittal

5 November, 2019

A.T.M. Jakaria Khan

Assistant Professor
Institute of Business Administration
University of Dhaka

Dear Sir,

We herewith present our term-paper as assigned by you as a partial requirement for our Managing
Operations and Supply Chain course. We chose to work on Genvio Pharma Limited for the
purpose of this term-paper. Through your guidance, the help of our faculties and our fellow
students we tried making relation between theoretical knowledge and real life operations practice.
We also have incorporated our perceived recommendation into this term paper.
We hope you are pleased with the quality of our work and we ask for your forgiveness if we failed
to meet the guidelines set by you or if we fell short in any other way.

Sincerely,
______________

(On behalf of the team)

Khaled Atifi, ZR-55

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Executive Summary

In an answer to who they are, Genvio Pharma Ltd responds with, “Genvio is more than a company.
It is a company with genius people who can comprehend and visualize seemingly unsolvable
problems. Genvio Pharma Limited takes pride in being a specialty company. Understanding the
technicality of the industry GENVIO is teaming up Genius through research and entrepreneurs of
leadership who can visualize to be counted globally. Genvio believes that quality, safety, and
effectiveness must be designed and built into the product adhering QbD (Quality by Design)
principle. Genvio is the fastest growing oncology pharmaceutical company of Bangladesh with
state-of-the-art manufacturing facilities designed, built and operated with strict adherence to the
current Good Manufacturing Practice (cGMP) to meet and exceed international standards.
In this report we have done an overview of the company and the industry in which they operate in,
covering factors including the standard operation practices in places and the existing
pharmaceutical rules and regulation in this specific industry. We’ve also tried to get a grasp on
their thought process pertaining to devise location, layout, process design and planning. We tried
to understand how their inventory management is done and how material is sourced and processed
to produce life-saving drugs.
We put our observation into this report on how Genvio Pharma is meeting the international
oncology drug needs by satisfying a rigid quality control process. We made assumption on how
Genvio does their forecasting and aggregate planning. We tried to relate theory to the real life
practice throughout this report and made projection of our discretion crafted in operation
management course to produce recommendation.

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Table of Contents

Introduction ..................................................................................................................................... 5
Origin of the Report .................................................................................................................... 5
Objectives ................................................................................................................................... 5
Rationale ..................................................................................................................................... 5
Methodology ............................................................................................................................... 5
1.5 Scope and Limitations........................................................................................................... 6
Company Overview ........................................................................................................................ 6
Vision .......................................................................................................................................... 7
Mission........................................................................................................................................ 7
Industry Overview .......................................................................................................................... 7
1. Business Operations & Strategy ............................................................................................. 9
2. The implications of the four Vs of operation processes ....................................................... 11
2.1 The polar representations of performance objectives .................................................... 14
3. Product Design: ..................................................................................................................... 15
4. Process selection & design.................................................................................................... 18
4.1 Process type .................................................................................................................... 18
4.2 Facility Layout ............................................................................................................... 19
5. Layout Planning .................................................................................................................... 21
5.1 Plant Layout ................................................................................................................... 21
5.2 Production Layout .......................................................................................................... 23
6. Location Planning: ................................................................................................................ 24
7. Capacity planning: ................................................................................................................ 27
8. Forecasting ............................................................................................................................ 31
Forecasting: Genvio Pharma Context ....................................................................................... 32
9. Aggregate Planning:.................................................................................................................. 32
10. Material Requirement Planning .............................................................................................. 33
11. Inventory Management ........................................................................................................... 34
12. Quality Management:.............................................................................................................. 36
Recommendations: ........................................................................................................................ 39
Conclusion: ................................................................................................................................... 39
References ..................................................................................................................................... 40

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Introduction

Origin of the Report

This report is a partial requirement for our Managing Operations and Supply Chain course (course
code: P501) as assigned to us by our esteemed course instructor A.T.M. Jakaria Khan, Assistant
Professor, Institute of Business Administration, University of Dhaka. In it, we tried to understand
how operations of a state-of-art manufacturing plant is executed from the textbook context.

Objectives
The broad objective of this report is to get a real life experience of top notch operation practice
and to have a discussion with industry experts regarding operations management.
Specific objectives of this report include:
1. Understanding their operations strategy and performance objectives
2. Product design, process selection and design and forecasting
3. Layout and location planning
4. Capacity planning and management,
5. Material requirement planning, inventory management
6. Aggregate planning and quality issues and control

Rationale
This report is a partial requirement for our Managing Operations and Supply Chain course (course
code: P501) as assigned to us by our esteemed course instructor A.T.M. Jakaria Khan, Assistant
Professor, Institute of Business Administration, University of Dhaka. Apart from that, if the report
has been done properly, it can be beneficial to operation management enthusiast to get a holistic
view of how industry level operation practice relates to theory.

Methodology
All information collected and used for the purpose of this report are secondary information. The
data pertaining to location, production, layout, product, machine run time received from the
GENVIO PHARMA officials and our own observation. All relevant information in this paper have
been collected from sources in the internet in these sections as these contain no original work on
our part.
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1.5 Scope and Limitations
The scope of this report is to have a factory visit and discuss about the operations with the industry
professionals to get a clear view how theory relates to the industry practice.
The limitations of this report include:
1. Not having access to all relevant information required.
2. Permission to access the production facility was denied
3. A lot of assumptions were made throughout the observation to simplify the processes.
4. It is very difficult to get an overview on forecast, capacity planning and management and
aggregate planning without the relevant data. It is worth a mention that Genvio Pharma
denied to provide data related to those section with us on the basis of protection of trade
secret.

Company Overview

Genvio Pharma Limited is one of the pioneers in oncology product manufacturing company in
Dhaka, Bangladesh. Genvio Pharma Limited started its operation in 2014. It specializes in
producing oncology products. Genvio believes that quality, safety, and effectiveness must be
designed and built into the product adhering QbD (Quality by Design) principle. Genvio is growing
with state-of-the-art manufacturing facilities designed, built and operated with strict adherence to
the current Good Manufacturing Practice (cGMP) to meet and exceed international standards.
(About, 2019)
Genvio Pharma Limited specializes in oncology, CNS, virology, hormone products. It produces
18 different types of tablets and capsules related to these categories. (Products, 2019)
Genvio Pharma Limited has its corporate office situated in Baridhara, while its manufacturing
facility is located in Mymensingh. The manufacturing facility holds a total of 96000 sq.ft area
which is monitored with BMS/computer controlled HVAC system to maintain designated class A,
B, C & D according to the requirement of the specific area where the pressure, temperature, and
humidity are controlled to comply stringent International Standard. (Manufacturing Facilities,
2019)
Right now, Genvio is basically catering the Asian and African region with their different products.
Genvio’s products are exported to countries like Myanmar, Cambodia, Vietnam, Kenya, Uganda,

6
and some other countries. Also, they are also in negotiation with 38 other countries regarding their
export facilities.
Vision

To be at the forefront of the industry and to put global footprint as specialty pharmaceutical
company through a wide portfolio of Branded and Generic pharmaceutical products. Genvio
envisions to be counted locally as well as universally through organic growth, acquisitions, in
licensing and collaborations. (About, 2019)
Mission

• To make a true difference in patients’ Quality of Life globally through manufacturing

utmost quality medicines and maximizing values for our customers and stakeholders.
• To earn the leadership in the field of generic pharmaceutical through implementing and
translating our plan into action and also by conserving highest ethical values. (About, 2019)

Industry Overview

The pharmaceutical industry in Bangladesh, is currently estimated to be worth Tk 20,512 crore,

and is expected to grow 15.6% every year till 2023. The domestic pharmaceuticals industry, as is,
has its own key players (such as Beximco
Pharma, Square Pharmaceuticals and
Incepta Pharmaceuticals Ltd) who are not
only meeting 98% of the Bangladeshi
demand but are also exporting to 147
countries as of 2018, thereby contributing
their share to the 27% growth that has been
reported in Bangladesh’s export earnings. Pharmaceutical Exports Source: EPB
(Ovi & Mahmud, 2019)

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And as the Bangladeshi pharmaceutical manufacturers grow more sophisticated, utilizing modern
technology to adapt their production capacities to the burgeoning demand, both local and foreign,
the domestic scene in regards to pharmaceuticals manufacturers is becoming more saturated.
Where today, it is reported that 90% of the market share is composed of local manufacturers and
multinational corporations only take
up the remaining 10%. However,
local manufacturers are still highly
dependent on importing their raw
materials, both base components and
active ingredients, which are a cause
for concern when it comes to
competing internationally. (Ovi &
Mahmud, 2019)

As such, the local pharmaceutical companies are gradually obtained their certifications, such as
the US FDA and the UK MHRA (Medicines and Healthcare Products Regulatory Agency), to level
the playing field. While it is being reported that the Bangladeshi pharmaceuticals industry is going
to grow in tandem with the growing global market, the local manufacturers produce mostly generic
drugs. Specifically, of the total amount of drugs produced, 80% are generic and the rest are
patented products. (Ovi & Mahmud, 2019)
Which calls to attention to the fact, that despite the growing trajectory of the local pharmaceuticals
industry, Bangladesh still lacks adequate and easily accessible cancer treatment. Given that the
World Trade Organization, in 2015, has granted patent waiver extensions to least developed
countries which means Bangladesh need not pay royalties for patented drug manufacturing well
into 2033, the lack of accessible and innovative cancer treatment drugs is sorely felt by the 15 lakh
cancer patients currently reported to be in Bangladesh. (BSS, 2019)

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Of these cases, the
most common cases
are esophageal
cancer followed by
Lip & Oral cavity
cancer and Breast
cancer and the
numbers only keep
climbing whereby
now, cancer is currently stated to be the cause of 12% of all deaths by non-communicable diseases.
(Chaity, 2019)
In addition to the extension of patent waivers granted to Bangladesh in 2015, the government has
also provisioned a tax exemption for cancer medicine in 2019-2020 capital budget (Lankabangla,
2019). As the incentives grow for the industry to expand into oncology focused drugs and
treatment, oncology specialized drug manufacturing companies are still relatively in their nascent
stage in comparison to their much seasoned generic drug manufacturing companies, however it is
vital to monitor the potential that it brings. (FE, 2019)
As the incentives grow for the industry to expand into oncology focused drugs and treatment,
oncology specialized drug manufacturing companies are still relatively in their nascent stage in
comparison to their much seasoned generic drug manufacturing companies, however it is vital to
monitor the potential that it brings. (FE, 2019)

1. Business Operations & Strategy

Business strategy broadly relates to the plans that determine how an organization pursues its goals
that serve the mission of the organization. Operations strategy is particularly important in the case
of productivity and productivity relates to the effective use of resources and has a great impact on
competitiveness. Before we start to run a business, it is the most important thing to understand the
market of the product that we plan to sell and the competitive factors influencing the successful
operation.

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The company we are reporting about is a well-planned pharmaceutical company named ‘Genvio
pharma limited’. Their mission statement is ‘Caring through innovation’. As a healthcare
facilitator, Genvio strives for honesty, transparency & accountability to patients and society.
Genvio only produces medicines for oncology treatment targeting the niche market of cancer
patients. This differentiation in product from other existing pharmaceuticals was a planned market
penetration strategy with unique product design.
Identifying customer needs or wants and finding out the proper scope for business is also important
for successful operation. The percentage of cancer patients is increasing worldwide opening a new
window for a specialty company like Genvio who is aspiring to meet a great extent of demand in
the healthcare market. Genvio is the pioneer of the segment to be the first pharmaceutical company
that is purely focusing on cancer medicines. From the perspective of capacity, they would be
producing more cancer medicines than any other existing pharmaceutical company whereas the
other companies focus on generalized medicines. The product they are selling is one of the most

Figure 1: Price of cancer medicine

expensive medicines which is highly-priced in the USA market.
According to WHO, Cancer burden rose to 18.1 million new cases and 9.6 million cancer deaths
in 2018. Cancer is a leading cause of death worldwide, accounting for an estimated 9.6 million
deaths in 2018. The most common cancers are:

• Lung (2.09 million cases)

• Breast (2.09 million cases)
• Colorectal (1.80 million cases)
• Prostate (1.28 million cases)

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 • Skin cancer (non-melanoma) (1.04 million cases)
• Stomach (1.03 million cases)

Genvio has adequate capacity to produce enough amount of medicines that can surplus the local
market. They have a long-term plan of exporting medicines to the foreign market. Here is the price
factor that adds to the competitiveness. Genvio can sell the medicines at a lower price to the foreign
market than any other foreign pharma and that’s how to penetrate the mass market. They have to
sell a portion of their medicines to the local market due to compliance with National Drug policy
2016.

Genvio is following a specialization strategy by focusing on an inelastic product. The demand

might only increase the revenue but have very little chance of decreasing the existing demand. Till
now they are producing medicines only in the form of tablets and capsules while planning for a
breakthrough with injectable chemo liquid medicines. Genvio has already applied for permission
to export to 38 countries. They will eventually focus on export oriented operations management.

Genvio believes that quality, safety, and effectiveness must be designed and built into the product
adhering QbD(Quality by Design) principle. They have a well-developed and well-equipped
facility in a distant location to make sure of the quality aspects they want to meet. As a specialized
medicine, their products need to be handled with extreme caution where it is the question of safety.

2. The implications of the four Vs of operation processes

The four V’s of operational management are Volume, Variety, Variation (in demand) and
Visibility.

Volume refers to how much of a specific product is required to satisfy its demand. Low volume
operations tend to be less repetitive with staff performing more than one function (multitasking)
whereas high volume translates into repeatable processes, which in turn can be standardized or
automated. A high volume can easier satisfy a higher level of demand since the production process
is faster due to automated activities.

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Volume aspects of Genvio— They are producing in less volume now but have a plan to export to
38 countries based on their capacity.

Volume increases based on demand (for example some medicine had demanded 2 kg in 2017 and
10 kg in 2019).

Variety relates to the variety of goods/services to be produced and sold to the customer. This V is
all about diversity. The high variety gives more company’s flexibility to produce goods and/or
services to match the customer’s requirements. Variety and volume correlate, the higher the variety
the lower the volume of the products or services. Genvio is producing mostly oncology medicines

Figure 2: List of medicines

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and a few virology medicines (antiviral) at present. They will soon start producing chemo liquid
medicine as soon as they finish setting up the facilities.

Variation refers to how much the level of demand changes over a time period due to external
factors. However, a number of factors make it difficult to predict variation.
Genvio faces very little or no variation in demand as it focuses on only one genre of medicine.

Visibility refers to how much of the company’s process does the customer actually
experience. The service industries have a high level of visibility whereas the manufacturing
industry has little to no visibility to its customers. There are some companies that have a
mixture of both.

Genvio’s manufacturing process is not open for visitors due to safety and precaution issues.

Figure 3:4V diagram

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 2.1 The polar representations of performance objectives

A useful way of representing the relative importance of performance objectives for a product
or service is shown in Figure 2.11(a). This is called the polar representation because the
scales which represent the importance of each performance objective have the same origin.
High-quality operations do not waste time or effort having to re-do things, nor are there
internal customers inconvenienced by flawed service. Fast operations reduce the level of in-
process inventory between and within processes, as well as reducing administrative overheads.
Dependable operations do not spring any unwelcome surprises on their internal customers.
They can be relied on to deliver exactly as planned.
This eliminates wasteful disruption and allows the other micro-operations to operate efficiently.
Flexible operations adapt to changing circumstances quickly and without disrupting the rest of the
operation. Flexible micro-operations can also change over between tasks quickly and without
wasting time and capacity.

Figure 4: Performance polar diagram

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 3. Product Design:
Product development generally includes few steps. These are shown in block diagram below and
discussed further. Our finding on Genvio Pharma’s new product development is also discussed
and compared with the theoretical approach.

Evaluation Prototyping
Concept Concept Preliminary
and and final
Generation Screning design
improvement. design.

Figure 5: New product development stages

1) Concept generation: For new product development firstly there is idea generation. This
can be from few sources as discussed below,

a) Ideas From Customers: Marketers collect data from customers directly , which
product has high demand, what is customers need, what customers are expecting
from companies.
In this regard Genvio Pharma’s marketing department runs FGD among the top
hospitals in Bangladesh.
b) Ideas from Competitor Activity: What similar companies are doing and
offering to the market is a great source for new product ideas.
Genvio Pharma also watches market leaders like Square, Beximco in this regard
as they are new players and their market share is small compared to them.
c) Ideas From Staff: Genvio Pharma does not use this method. It has a core
strategic team who forecasts demand for new products and marketing team helps
in this.

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 d) Ideas from R&D: R&D is the most dominant section in any company for new
product development. Specially for tech industries and pharmaceutical industries.
Genvio Pharma has a dedicated and decorated Research and Development team.
Any new product idea goes through this R&D. Because medical products are very
sensitive and must be made without any error. So a thorough inspection and
screening via the R&D is a must. Genvio is no different in this manner.

2) Concept Screening: For new product design there are few criteria to follow

a) Feasibility: It includes the decision based on investments. Does a company has

the necessary investments available for the development of a new product.
Genvio for example are setting up new product related to chemo-therapy used on
cancer patients. They have the place, space and necessary investments for it. This
decisions are taken by high authorities as patents, government regulations, and code
of conducts are matter of concern here.

b) Acceptability: It depends on the probable returns on investments in a new

product. Is the product going to be beneficial to company’s growth and achieve
targeted sales.
For Genvio Pharma, the products are high valued in the market. Any new product
if they can get the approval is sure to be of benefitting to the growth of the
company.

c) Vulnerability: It indicates the risks associated with the new product. For any
pharmaceutical company it is more important.
Genvio Pharma has a dedicated R&D team for it. Any product goes through
rigorous approach by the team. And also during production each step is inspected
by a dedicated quality inspection team. This products have to maintain certain
standards and regulations set by the government.

16
 3) Preliminary design: When a new product idea comes to the R&D. They do the designs.
Few things are to be mentioned.

a) Components: Most medicines they produce have few common raw materials
and processed.
b) Standardization: Their process design has standard procedures like Granulation
,Capsulation, Blending which are common to most new medicines.
c) Commonalities: Commonalities are finding the common procedures in medicine
development.

4) Evaluation and Improvement: There are different ways to evaluate a new product like
QFD, Value Engineering, Taguchi methods. Genvio’s products are medicines, tablets and
capsules. They are now in for injectables. As a pharma company there is no scope for a
little mistake or anything like that. So their quality team esures quality in every single step
in product design and also during mass production.

5) Prototyping and final design: Any new product before it is produces in huge amount must
go through prototyping. Genvio Pharma has their R&D team on this work. No product goes
to production before their R&D recreates any old formulae or makes a new one and quality
is inspected in each step with high caution.

Genvio Pharma is very much aware of the sensitivity of its product line and during the product
design phase it follows state-of-art procedures to ensure quality of the highest order.

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 4. Process selection & design

The Research & Development department of Genvio Pharma decides upon the process design. At
the moment there are two processes for the production of medicine; one for tablet and one for
capsule. They will soon implement another process for injectable liquid solution for
chemotherapy as soon as the facility for producing is all set.

4.1 Process type

As a manufacturing company and especially pharmaceutical company, Genvio has the capability
to mass produce medicines. But due to the company being a relatively new one with focus on
meeting local demands at the moment till they are registered for exporting, Genvio is focusing on
manufacturing using “Batch process”. Only one batch of either one tablet or one capsule is
produced at a time in their production facility currently.
The steps in both tablet and capsule manufacturing have some steps common. They are given as
per sequence:
• Dispensing
• Granulate
• Blending

After these three steps, capsules and tablets have separate processes to go through. Capsules have
only one other step and that is Encapsulation; while tablets have two more steps, those are:
• Compression
• Coating.

After each step, quality control team checks for defects in the batch. The batch is only accepted
when the defect rate is below 10% and for compression it is considered up to 15%. After this
is done, the medicines are then sent out for primary and secondary packaging and then are sent to
the warehouse for safekeeping. The volume of WIP materials after each step reduces due to
production loss. Below a process mapping of their process is given to show how the whole
manufacturing process works.

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Figure 6: Process Mapping of Genvio Pharmaceuticals

But there is a huge downtime in their processes as they use roughly 60% of total manufacturing
time on cleaning their machines to avoid any unwarranted mixing of materials. The remaining
40% is spent on quality checking at each stage of the process.

4.2 Facility Layout

Although, we were not allowed to have a look at how the production facility is laid out, but when
considering how only one product is produced in the facility at a time and how that product only
follows only one assembly line, we have concluded that Genvio is using “Product layout” as their
facility layout. They described that each individual machine is situated in a different room for
obvious quality reasons. They had also described how after each stage of production quality is
checked and if the quality is satisfactory only then the WIP materials move on to the next stage of
production. This is also done to avoid the unwanted contamination of WIP materials as these
are very sensitive products. This way Genvio can also know how much they have as production
loss after each stage.

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Genvio emphasized that their flow of man and material is one-way. And their manpower is
specialized for each individual machine, as in one unique team is responsible for one machine only
and none from that particular team would work with any other machines.
Below a representation of their facility layout is given.

Figure 7: Facility Layout for Capsule

Figure 8: Facility Layout for Tablet

The primary difference with text book theory that we can consider is the strict quality checking
after each stage of production. This strict control assurance procedure is in implementation to meet
the requirements of Bangladesh Accreditation Board for and internationally from American
National Standards Institute National Accreditation Board (ANAB). Genvio Pharma is in

20
compliance with National Regulatory Authority to produce such life-saving drugs and their
process design satisfies National Drug Policy-2016, US FDA, EMA, UK-MHRA, Australian-
TGA certification. As per National Drug Policy, drug manufacturing companies need to meet this
pre-requisite to satisfy the conditions for entering in the international drug market.

5. Layout Planning

5.1 Plant Layout

Pharmaceutical plant layout/ factory layout refers to the allocation of space and the arrangement
of machines, furniture and other important administration and necessary services needed in a
production process within a factory building in other to perform the various unit operations
involved in the manufacturing process of dosage forms in a cost effective manner and with the
least amount of handling in processing the product from the receipt of raw material through the
distribution of the finished product.
Genvio Pharma has a total of 96000 sq.ft area which is monitored with BMS/computer controlled
HVAC system to maintain designated class A, B, C & D according to the requirement of the
specific area where the pressure, temperature and humidity are controlled to comply stringent
International Standard. To go through highest standard of safety and possible zero contamination,
Genvio’s Oncology Unit is equipped with room dedicated AHU (air handling unit), different kind
of filters, restricted access and personnel safety control through PPE (Personnel Protective
Equipment’s) like Saranex™ coveralls and hoods, PAPR (Powered Air Purifying Respirators) or
supplied air, proper gloves selection, chemical suits when needed by person for using
solvents/reagents.
All the process equipment starting from dispensing to packaging is done within a restraint system
to ensure possible zero contamination. Sterile processing and filling line is fully automatic with
tunnel based auto filling, sealing in a fully contained system where CIP (Critical Infrastructure
Procedure) and SIP (State Implementation Plant) are considered.
It is worth a mention that Genvio Pharma did not provide us with their layout planning. Fig-1 and
Fig-2 is completely produced at our own observation in accordance with the National Drug
Policy-2016.
Here are the findings we recorded while visiting the plant:

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 • Genvio Pharma is currently running a full-fledged operational plant (Plant-1) to produce
their oncology-specific product line. This operational plant also houses their medical
emergency center and administrative body for the operation.
• Complying with the National Environment Policy Act (Amended,2018), Genvio Pharma
has an ETP (Effluent Treatment Plant) in operation facility to purify the industrial water.
(Fig-1)
• Boiler, Compressor and Generator are in place to manage energy distribution throughout
the plant. Genvio pharma is not thinking about setting up any chiller plant right now.
• Plant-2 is the Genvio Pharma’s dream-child. It is currently under construction and
expecting to be in full swing operation by 2020 2nd quarter to become the first ever of such
kind in South Asia.

Figure 9: Genvio Pharma plant layout

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 5.2 Production Layout

• Genvio Pharma has 12 units in its production facility. Raw material goes through two gowning
facility where proper cleansing of the material is executed.
• After quality check and proper weighing, finished goods remain at the FG STORE and later
on goes to labelling to processing section.
• Regular tooling and machine wash carries out so that state-of-art quality control can be
maintained.

Figure 10 Genvio Pharma Production Layout

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 6. Location Planning:

Genvio Corporation is located at Bagan, Trishal in Mymensingh.

Followings are the factors which generally affect location planning for any pharmaceutical. These
factors are then evaluated with the information we could garner on Genvio.:

a) Availability of Raw Materials: Although raw materials are mostly imported from
China and India, the location of the plant is significant when it comes to storing the
inventories. Bagan at Trishal is apt for that purpose. There might be a debate that
Chittagong could have been a better source for the transportation of raw materials
given that it is a port city. But, on the other hand, a plant in Chittagong would be far
from Baridhara, Dhaka (its corporate office).

24
b) Supply of Labor:
Since the location is out of Dhaka city, and closer to the rural areas, it is easy to get
cheap labor. Apart from this, the following factors are conducive as well for setting up
a pharmaceutical plant in Mymensingh.

• Cost of management, technical and scientific employees in the area

• Needs, desires and financial situations of employees transferring to
the new site
• Spouse employment opportunities
• Employees’ definition of quality-of-life

c) Transportation Networks: The transportation system of Trishal and the surrounding

areas have improved a lot over the past few years.
Water supply: There are sufficient supply of water around the plant.
d) Suitability of Land and Climate: Being away from the Metropolitan cities, Bagan,
Trishal serves the purpose as an idea location for the plant.
e) Distribution details: Many manufacturers strive to be within delivery proximity of
their customers, which is why getting products out to the market must be done with
convenient access and great ease. Part of a pharmaceutical firm’s external relocation
criteria is accessibility to facilities that support its transportation and distribution
functions. Genvio is being benefitted from the following factors.
• Access to interstate highway systems
• Availability of suitable port and waterway facilities
• Accessibility of railroad services
• Supplier accessibility

f) Government Gratuity: Local government plays a key role in site selection, or at least
it should. Many companies don’t typically conduct this review until they first
determine geographically acceptable areas. In fact, many firms don’t realize the sheer
significance of local government on their decision until this point. Only then do they
begin the search for their definition of a business friendly government. Mymensingh is

25
 one districts of BD that is especially friendly to pharmaceutical and biomedical firms.
Some issues regarding a site’s local government that warrant advance consideration
are:
▪ Ability of local government to handle fast-track projects
▪ Tax rates
▪ Regulatory approval time
▪ Tax relief options available
▪ Tax structure
g) Environmental impact, waste disposal and Safety requirements: This has been
explained in the layout planning section.

Following is a comparative analysis with the help of factor rating for location selection in
Chittagong, Tongi, and Mymensingh:

Factors Scores (out of 100) Weighted Scores

Weight Chittagong Tongi Mymensingh Chittagon Tongi Mymensing

g h
Availability of .10 80 70 70 8 7 7
raw materials
Constant Power .10 50 70 70 5 7 7
supply
Supply of Labor .10 60 70 80 6 7 8

Transportation .10 60 40 70 6 4 7
Networks
Communication .05 60 50 70 3 2.5 3.5

Water supply .15 70 60 70 10.5 9 10.5

Suitability of .05 60 50 50 3 2.5 2.5

land and climate
Community .10 60 70 60 6 7 6
Concerns
Availability of .05 70 60 60 3.5 3 3
housing, other
amenities and
services
Local building .05 70 50 60 3.5 2.5 3
and planning
regulation

26
 Environmental .15 70 50 60 10.5 7.5 9
impact, waste
disposal and
Safety
requirements
Total 1.00
65 59 66.5

7. Capacity planning:
Capacity planning is the process of determining the production capacity needed by an organization
to meet changing demands for its products. It is one of the most important functions as it basically
determines whether or not the actual production will be able to keep up with the market demand,
leading to confirming approximate market share.
Here is a brief discussion of how we have associated the theoretical part of capacity planning with
the actual scenario of Genvio Pharmaceuticals.

Design capacity:
The maximum theoretical amount of output an organization is capable of providing in a given
period based on its design.
We can measure capacity utilization by the following formula.
Utilization=Actual output÷Design capacity
Genvio's design capacity for tablet and capsule is:
● 1,82,000 tablet per hour
● 40,000 capsule per hour
● Liquid processing machine: 75, 150 & 300 litre

Effective capacity:
The maximum output that an organization expects to achieve given some constraints in a given
period. Efficiency of the planned system can be measured as,
Efficiency=Actual output÷effective capacity
Actual rate of successful production is:
● 85%-100% for compression stage

27
 ● 90%-100% for encapsulation stage

Study of capacity planning:

Before capacity planning, the main questions the plan has to go through is given below in terms
of GenVio.
Primary questions:

a. Kind of capacity: heavy

b. Capacity in terms of demand: much higher than local market demand
c. Required time for such capacity: throughout the year
Secondary questions:

a. Cost: the cost is fixed due to conventional industry regulations

b. Potential benefits and risks:
○ Benefits:
Being the first of its kind in this country the potential is high to meet local market
demand. Also as Genvio follows the international protocols in every stage of its
operations and supply chain it has a great opportunity for market expansion through
exporting.
○ Risks:
The forecasting is done by Core Strategic Management (CSM) department. As their
current local market coverage is very low, if the forecasting turns out to be wrong
for any unwanted circumstances like violation of regulation, change in local market
demand due to demographic factors, issues with export policy etc. they may have
to face an unbalanced production resulting in unestimated loss.
c. Sustainability:
Intensive globalization processes, increased competitiveness, fast changing structure of
competitors, complex strategic positioning, shrinking pipelines, expiring patents,
counterfeit drugs, increased regulatory scrutiny on profits and a fight for global
market share, are some of the factors giving the pharmaceutical companies new
challenges. However, counterfeit drugs are giving Genvio Phamra a headache.

28
 d. Change in capacity:
Genvio has a capacity infrastructure with fixed maximum level which is calculated
precisely to meet demand effectively. In case of extreme situation where demand goes
beyond their capacity, they will have to set up an entirely new facility. On the reverse,
they can not downsize their capacity as per demand as well.
e. Capability of handling changes:
As it is a very specialised organization, their current facility is set up after thorough analysis
and calculation which ensures they do not need to make any changes to existing capacity.
In an extreme scenario, if they have to, the process will be very time consuming and
expensive which might not be entirely beneficial for the company.

Overall equipment effectiveness (OEE):

• Availability of machine= 8 hours
• Performance= (actual time-idle time)/ actual time= 60% for cleaning purpose and 40% for
machine run
• Quality loss= after each step of process due to quality testing; variable for different batches
By multiplying these three factors, OEE can be obtained.

Capacity planning steps:

a) Genvio has set a very high benchmark for production capacity
b) Actual production increases every year and is expected to go upwards; no negative gap is
expected.
c) Qualitative issues are looked over by Quality Control Team (QCT)
d) Follows slow and steady incremental process to avoid sudden shock of major change in
production
e) Process implementation and monitoring are controlled by both CSM and QCT departments

29
Outsourcing:
Not possible for such an industry to outsource work. Genvio will use overtime if needed.

In-house capacity development issues:

• Design flexibility: Rigid infrastructure
• Lifecycle stage: On expansion
• Long term capacity planning: Equipments are selected in a manner to serve a longer time
period.
• Identifying optimal operating level:
Not utilizing their full potential currently due to insufficient demand
• Business strategy:
Looked over by CSM department.

Demand management approach:

Among the three pure options for planning capacity management, Genvio focuses on demand
management which means attempting to change demand to fit capacity availability. As Genvio has
a capacity that is much higher than current demand, it is working on expanding its ventures in
other Asian and African countries by exporting.
For example, their demand for tablets went up to 10 kg per month in 2019 from 2kg per month in
2017.

Constraint management:
Among several constraints, we pointed out market demand as the most significant constraint and
the measure taken again it as per constraint management is given below.
Market demand:
● Problem: local demand is much less than capacity; major portion of anticancer medicines
are imported from outside the country
● Change in operation: currently exporting to other countries to maximize process utilization
● Procedure going on for license of exporting to 38 more countries and also acquiring more
share of local market

30
 8. Forecasting

Forecasting is a basic input in the decision processes of operations management because they
provide information on future demand. The cost of bringing new pharmaceutical products to
market can be astronomical. Pharma companies sometimes spend fortunes on R&D and multi-
phase testing only to come up empty in late-stage trials. That’s a high cost of failure, but it can be
mitigated or even prevented with the right tool set for pharmaceutical forecasting and planning.
This is critical because predicting the future with relative accuracy helps pharma organizations run
better, from planning next month’s production schedule to strategizing revenue for the next two
decades.
Local manufacturers account for 75 percent of the local cancer drug market and the rest is
imported. The demand for cancer drugs in Bangladesh was about Tk 500 crore last year and the
demand is growing by 15 percent on average a year. (Chakma, 2018)
Forecasting has influences through function. Every major segment in a pharma business gets
affected by forecast to some extent. Critical sectors are shown below:

Finance (Roi,
valuations)

Manufacturi Corporate
ng (Time Strategy
horizon, (Business
inventories, units,
volumes) regions)

Forecast
Portfolio
Sales (Sales Managemen
force, Size) t (Product
line)

Marketing
(Marketing
mix)

Figure 11: Forecast links to other functions

Since different stakeholders are involved, different forecasting technique is adopted based on the
product nature. Time series forecast is applied across the pharma industry in Bangladesh in most
of the cases.

31
Forecasting: Genvio Pharma Context

During our visit, officials from Genvio Pharma repeatedly refused to give any data on its forecasts.
However, they do follow a structured procedure before taking decision on forecasting:
• Genvio Pharma runs FGD among oncology department of certain hospitals in Bangladesh
to get a holistic view on existing demand
• Dynamic R&D department prepares forecasting plan and send it to operation department.
Operation department then execute the plan.
• During the interview, Genvio Pharma’s executive informed us about their continuous
adjustment to fast-changing variations to meet market demands. Also demands in the past
quarters also has influence on forecasting decisions. They also consider the amount of
wastages/ rejected goods in formulating forecasts plan.

From this piece of information, we deduce that Genvio Pharma is applying Exponential
Smoothing Forecasting Technique to devise forecasts.

9. Aggregate Planning:

Some of the major principles Genvio follows are:

Since the company deals with oncology products, which are very niche and specialized products,
the variations in demand are rare. They forecast their demand with extreme ransacking and
rummaging of the market and produce their products accordingly. So far, they have not yet
experienced any demand higher than any unattainable production rate.
• As the demand variations occur rarely, the combination of inventory, overtime,
overtime/part-time workers, subcontracting, and back orders are not used frequently.
• All the workers are permanent.
• They do not hire part-time workers.
• If there happens to be any requirement of meeting the variations in demand; which is rare,
they go or will go for overtime facilities to be performed by the existing workers.

32
Following is a tentative aggregate planning for a 12-month-period product forecasting and output
based on above mentioned assumptions.

10. Material Requirement Planning

Material Requirement Planning (MRP) basically referred

to a methodology that translates master scheduling
requirements for end items into period specific
requirements for subassemblies, components and raw
materials. Later the concept was modified as an expanded
approach to production resource planning, involving other
areas of a firm in the planning process and enabling
capacity requirements planning.
Material requirements planning is at the heart of the
process. The process begins with an aggregation of demand
from all sources (e.g., firm orders, forecasts, safety stock
requirements). Production, marketing, and finance
personnel work toward developing a master production
schedule. The rationale for having these functional areas
work together is the increased likelihood of developing a
plan that works and with which everyone can live. In
Figure 12 An overview of MRP
addition to the obvious manufacturing resources needed to
33
 support the plan, financing resources will be
needed and must be planned for, both in amount
and timing. Similarly, marketing resources also
will be needed in varying degrees throughout the
process. For the plan to work, the firm must have
all of the necessary resources available as needed.
Often, an initial plan must be revised based on an
assessment of the availability of various resources.
Figure 13 Raw Material Import Map
Once these have been decided, the master production
schedule can be firmed up. (Stevenson, 2019)
In Genvio Pharma Limited, the Core Strategic Management (CSM) team determines the demand
for each of their products and generates a production schedule and according to that, determines
the amount of raw materials they need for that particular product. The marketing team later delivers
the schedule to the production team, and the production department acts according to that.
The raw materials are usually procured from foreign suppliers, and a very negligible portion comes
from local suppliers. The foreign suppliers are based in different countries. They mostly import
from India and China. They seldom import from European countries, if they receive orders from
European clients.
The orders are usually placed on a regular basis for each product and the quantity is same for each
order. When a rise in the demand and thus in the production requirement is expected, the
production department places order for material for the excess requirement separately.
As the suppliers for each product is different, and may be situated in different country, the elapsed
time between placing order and getting the materials delivered is different for each item in the
materials. The expiration limit of the raw materials is 5 years.

11. Inventory Management

Generally, inventory management in a pharmaceuticals company resembles the conventional

inventory tracking systems that are usually applied to any other manufacturing entity across
industries. However, some of the points that differentiate a pharmaceutical company and any other
manufacturer of goods is the sensitive nature of medicinal products. Where raw materials are time

34
sensitive in nature and are continually tested for meeting quality standards throughout the
manufacturing process and end products are tested for stability. (Mondal, 2014)
In theory, an inventory control and management system consists of three different aspects as shown
below:

Develop and
Figuring out optimal
Creating an inventory implement an
level of inventory to
purchase plan inventory record
hold
keeping system

STEP 1 STEP 2 STEP 3

A pharmaceuticals company would be concerned with what the optimal level of inventory would
be relative to how much capital the company has to invest in purchasing inventory in the first place
and how much their carrying costs would be given the amount they chose to keep in store.
The second step is more concerned with the acquisition of raw materials to meet production needs.
In this case, the company would be specifically addressing the needs for setting an economic order
quantity as well as an appropriate reordering point for the all types of raw materials needed.
And the third step would the creation and implementation of an inventory record keeping or
tracking system. (Mondal, 2014)Which, besides being used for the company’s financial
statements, is needed for the tracking the time spent of raw materials or finished goods in storage
as well as deducing how much of each is currently in stock at any given point in time.
Conventionally, mathematical methods are used to calculate the required quantities of raw
materials to be ordered and their reordering points as well as frequency of reordering in order to
balance both holding costs and purchase costs and stock out costs. (Management Sciences for
Health, 2012)
In the context of Genvio Pharmaceuticals however, where they manufacture highly specialized
oncology products and are one of the only leading oncology focused medicine manufacturers in
Bangladesh. They adopt a dependent demand system for their inventory requirements. Genvio’s
separate marketing department is also responsible for identifying customers’ needs and wants in
the local market and communicating this information back to Genvio’s Core strategic department
who then create forecast and create productions schedules which are then dispensed to the
appropriate departments.

35
These projected production schedules are what are used to base their ordering intervals and
quantities on. After the finished oncology products are obtained, the batches’ numbers and their
respective expiry dates are recorded on bin cards and these are cyclically monitored to prevent any
losses that could occur to oversight of expired medicines as well as to not disrupt their daily
operation. However, if any of the finished goods do expire, Genvio follows their own procedure
of decontaminating said products and disposing of them in an environmentally safe process and
concluding that there will not be any further use of the expired product.
The batches of finished goods are kept in cold rooms in temperatures ranging from 2°c to 15°c to
preserve their integrity and their holding time has been stated as being 30 days on average.
However, the shelf life of their products do go up to 5 years.

12. Quality Management:

Genvio follows Total Quality Management (TQM). The elements of their TQM approach is
described as:
i. Continuous Improvement: The Japanese use the term kaizen to refer to continuous
improvement. The philosophy that seeks to improve all factors related to the process of
converting inputs into outputs on an ongoing basis is called continuous improvement.
Genvio believes in continuous improvement. Although, the company has not been in the
industry for a long time, but being an oncology manufacturer, the stringent requirement to
keep up the quality with continuous improvement is a must which they are doing at their
best for the time being.

ii. Competitive Benchmarking: Since the competition is not that happening in this industry,
the benchmarking does not or have not yet been used by this organization that much.
iii. Employee Empowerment: The employees of this organization are given enough
opportunitites for empowerment by taking part in decision making.

iv. Team Approach: Comprising of 100 employees in total (35 from management and 65
labor/factory workers) the company works as a team.

36
 v. Fact Driven Decision Making Process: Oncology products are extremely sensitive given
the presence of this in the health care industry. Hence, the decisions are taken rigidly on
facts rather on opinions.
vi. Knowledge of Tools: The whole org including all the employees and staffs are given the
appropriate knowledge of the quality tools. Workers have to wear designated gowns and
carry oxygen inside the production facility.
vii. Champion: Yes, there are designated authorities who are entitled with the responsibility
to promote the culture, value throughout the organization.
viii. Quality at Source: This is given one of the highest priority when it comes to the quality
control. The workers are given the utmost legitimate instructions on how to use their tools
in the most pragmatic ways. They are also constantly being trained so that they are
constantly updated about the sensitivity of the products they are producing.
ix. Suppliers: Their suppliers are mostly from China and India. For ensuring the required
quality, Genvio always tries to impart their knowledge of their products to their suppliers
so that the suppliers be well-aware of the the company’s demand in terms of the raw
materials they provide with.

Furthermore, for the sake of quality assurance, they follow a few rules which are meant to be
followed by each and every personnel involved with this organization:
● TQM team supervises overall quality of production process, products, raw
materials and they work for operations only.
● TQM does not allow visitors inside the facility.
● Workers have to wear designated gowns and carry oxygen inside the production
facility
● Every day 60% of work-hour is for cleaning; even when production does not run.
40% of work hours are machine hours.
● Stability study for checking shelf life
● Raw materials tested shelf life: 5 years
● Raw materials retesting: every 1 year
● Facilities are different from those of other pharmaceutical plants.

37
6-Sigma quality improvement theory: Quality within all industries is important, but within the
pharmaceutical industry, it is essential. Because lives are at stake, quality, when it comes to
creating and manufacturing medicines for individuals, is necessary. Any business theory that
could help in this realm of industry is necessary to explore. Because the six sigma quality
improvement theory boasts less than 3.4 defects per million opportunities, it is worth exploring in
any industry, especially this one! As technology becomes more and more integrated into our daily
lives, exploring these theories together is worthwhile for any pharmaceutical manufacturer.
Genvio follows this principle strictly. Again, the importance of safety of the product is given a
priority. Hence, there is no room available to avoid 6 sigma for this organization.

Following is a Pareto chart drawn based on the issues Genvio experiences on a regular basis.

4.5

3.5

2.5

1.5

0.5

0
Raw Materials Workers' Conflicts Sewage issues

38
Recommendations:
Based on our visit and interview session, we recommend the following, regarding the fact that
Genvio is a Pioneer of its kind here and it is very much export-focused,
● Genvio has an 8-hour work day [9am -5pm) within which 60% time is for cleaning and
40% is for actual manufacturing process. To avoid such unwanted capacity restraints,
Genvio should focus on reducing the underutilization of capacity
● With that level of design capacity, Genvio should work on acquiring more local market
share as technically it does not have a competitor from his own kind
● Genvio has only two distributing points, Dhaka and Chittagong. It should increase its
distribution points throughout the country so it can be more accessible.
● Genvio pharma’s second plant is at close proximity to cafeteria. This plant is supposed to
go on operation by 2020 and it is an injectable chemo solution plant. As chemo contains
radioactive elements, there is risk that this radioactive element might be carried by air and
eventually contaminate food and water available at cafeteria. Genvio needs to think to
relocate its cafeteria to avoid such health hazard.

Conclusion:

The pharmaceuticals industry in Bangladesh has been booming for years now, responsible for a
sizeable portion of the nation’s export earnings as well as for meeting nearly all of the local
demand. And all of this would not have been possible without efficient and effective operations
managements on the part of the local pharmaceutical companies. However, the only area within
pharmaceuticals industry here that went under the radar was the provision of cancer focused drugs
and treatment. With the rates of cancer stricken patients on the rise in Bangladesh, oncology
specialized drug manufacturing companies are limited in number. Which is why Genvio Pharma,
a relatively new company in a growing area of the pharmaceuticals industry has been instrumental
in understanding the ins and outs of what operations management in such a specialized area could
look like and what potential it could bring.

39
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APPENDIX

41