Improve Supply Chain

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Improve Supply Chain Efficiency through a Web-Based System: A Case Study on a Pharmaceutical Company in Thailand Panthip Pothitong Assumption University Email: panthip_pothitong@yahoo.com Chayakrit Charoensiriwath, Ph.D. National Electronics and Computer Technology Center Email: chayakrit.charoensiriwath@nectec.or.th

Abstract - The supply chain operations in pharmaceutical industry are one of the most complex operations to manage. To efficiently manage the supply chain in this industry, information technology (IT) plays the crucial role. Over the last few decades, Electronic Data Interchange (EDI) has been employed in the pharmaceutical industry to synchronize information between business partners. However, an information standard is also needed to seamlessly exchange electronic documents between business partners. XML-based information technology is a promising tool and is starting to gain popularity over EDI-based technology. In this research, we study a medium size multinational pharmaceutical company in Thailand, and how a web-based system and a business standard for information flow (RosettaNet standard in this case) can be applied to improve efficiency in its supply chain operations. In particular, we examine the information flow during the process of order transactions between the pharmaceutical company, its customers (hospitals), and its distributors. We first examine the current business process and propose a new process with a web-based system. The new system is examined and the result is analyzed. Key Words: RosettaNet, Pharmaceutical, XML, Webbased system 1. Introduction Pharmaceutical products differ from almost all other consumer goods because the buying decisions are not always made by the final consumers. Medications are usually prescribed by general practitioners and paid for by patients [1]. For some items, consumers can purchase themselves from drugstores. Therefore, the distribution channel for pharmaceutical products can be separated into 2 main channels. The first channel is through hospitals; also know as the ethical sector. This channel controls the

majority of drugs shipped to consumers (66%). The second channel is through drugstores, or the Over-TheCounter (OTC) sector. The OTC channel controls 24% of the market. The consumption growth rate is strong in the ethical sector at 21%. This study focuses on the ethical sector of the pharmaceutical supply chain. A typical supply chain of a pharmaceutical product starts from the manufacturer’s production facility. The products are transported from the manufacturer to the distributor’s warehouse, and then through the wholesaler, retailer, health centers or private clinics and hospitals and finally reaches the consumers. In this research, we study a medium size multinational pharmaceutical company in Thailand, and how a webbased system and a business standard for information flow (RosettaNet standard in this case) can be applied to improve efficiency in its supply chain. In particular, we examine and improve the process of order transactions between the pharmaceutical company, its customers (hospitals), and its distributors. We first examine the current business process and propose a new process with a web-based system. The new system is examined and the result is analyzed. 2. Literature Review The supply chain operations in pharmaceutical industry are one of the most complex operations to manage [2]. To efficiently manage the supply chain in this industry, information technology (IT) plays the crucial role [3]. In the 1990s, companies focused on re-designing and improvement of their internal business processes to overcome functional barriers. The integration of enterprise applications is the first step to synchronize information flow within hospital [4], [5]. However, to efficiently manage the whole pharmaceutical supply chain, a form of extended enterprise information system is needed. During the 2000s, most companies focus on the integration of...
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