SUPPLY CHAIN MANAGEMENT PRACTICES OF PHARMACEUTICALS MANUFACTURING COMPANIES OF ETHIOPIA: THE CASE OF ETHIOPIAN PHARMACETUCIALS MANUFACTURING SHARE COMPANY

Abstract

Supply chain management (SCM) practices in pharmaceutical manufacturing companies are one of the focus areas to get competitive advantage over competitors. Pharmaceuticals manufacturing is not relatively attractive area for investors in Ethiopia, since there are stringent regulatory controls, very high technical standards need to meet and lacks of skills in SCM in pharmaceutical sectors. Most pharmaceuticals manufacturers have low level of capacity compared with their foreign counterparts. The objective of this research is to investigate the SCM practices of pharmaceuticals manufacturing companies of Ethiopia by studying the SCM practices of Ethiopian pharmaceuticals manufacturing (EPHARM) Share Company as a unit of analysis. Descriptive and quantitative methods of research were used and data were collected by interview questions, document review and questionnaires. Interview questions were used to study the suppliers’ relationship and the SCM practices in EPHARM. Document review was conducted to study the capacity utilization. Based on the questionnaires data were collected from distributors and retail outlets to measure the supply chain activities. It was found that there is no long term relationship with most of the suppliers, there is information sharing between departments of EPHARM but not with suppliers and distributors. The capacity utilization of the machines is low (only 56.42%). There are no on-time and direct delivery to most of its customers. The customers’ satisfaction with flexibility and customers query time is very low. But there is considerable performance with post sales customers’ satisfaction. From this study it is concluded that the SCM practices of pharmaceuticals manufacturing companies in Ethiopia is weak due to both internal capacity limitation and external factors including infrastructure such as transportation, information technology, financial sectors and regulatory enforcements. It is recommended to select best suppliers and distributors and establish long term relationship, increasing the capacity of the firm, strengthening the marketing unit of the firm and introduce direct delivery services.