North South University

MGT 314 – Project

Section: 17
 Submitted by

Asef Noor - 131 0786 030

Golam Mostafa - 142 1159 030
Shohag Ahmed - 142 1207 030
Ramisa Chaklader - 151 3373 030
Mushfique Ahmed - 161 1839 030

Submitted to

Dr. Mohammad Abdul Hoque

Professor
Dept. of Management
School of Business & Economics
North South University

Submission Date

18 August, 2018
 Table of Contents

Topics Page No
Executive Summary 1
Brief Description of the Business 2
Analysis of Existing Production
and Operations Strategies and 3-8
Analysis of the Facility Layout
Application of Production and
Operations Management 9-11
Concept
Process Map 12
Analysis of Quality Control
13-14
Issues
Analysis of Demand Forecasting 15-16

Operational Problems 17

Recommendations for
Improvement in Business 18
Operations
 EXECUTIVE SUMMARY

This report talks about the concepts of production & operation management of Square

Pharmaceuticals Limited. In this project we have talk about Square Pharmaceuticals operations

and research. We have talked about operation processes, activities, and strategies of Square

Pharmaceuticals limited.

The report deeply discussed about analysis of the existing product, operation strategies,

production and operation management concepts.

How Square Pharmaceuticals produces their product has been shown vai process map. Analysis

of quality control issues, analysis of demand forecasting has been projected in this report.

Also, their problems and how to get rid of those problems have been discussed at the last section

of this report.

Overall Square Pharmaceuticals operation is very efficient and effective as for the size of

company. Although, it is not absolutely perfect. It has some issues. This can be solved if they

follow proper method.

This report should reflect their overall operating method, and everything they have done or doing

to sustain the brand image of Square Group.

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 BRIEF DESCRIPTION OF THE BUSINESS

Square Pharmaceuticals Limited, the flagship company of Square Group. It is one of the biggest

leading pharmaceutical company in Bangladesh and is now trying to become a global brand. Its

head office is situated in Mohakhali, Dhaka.

The mission of Square Pharmaceuticals is to produce and provide quality & innovative

healthcare relief for people, maintain stringently ethical standard in business operation also

ensuring benefit to the shareholders, stakeholders and the society at large.

Square Pharmaceuticals was founded in 1958 as a partnership firm. By 1964, they became

private limited company and by 1991 they became public limited company.

Since 2009 Square Pharmaceuticals is manufacturing of insulin, hormone & steroid products

maintaining quality standards of US FDA, MHRA in dedicated manufacturing facility complying

with the cGMP of WHO.

The company has variety of product divided into three categories. These are, Pharma Product,

Herbal & Nutraceuticals Product and AgroVet & Pesticides Product.

The company is trying to conduct transparent business operation based on market mechanism

within the legal & social framework with aims to attain the mission.

Square Pharmaceuticals recognizes that progressive labour policies are good business practices;

especially for a company like them that has global ambition. They follow laws and encourage

work environment that welcomes diversity and also follow non-discrimination & fair treatment

policy both in the recruitment & selection process and performance management system.

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 ANALYSIS OF EXISTING PRODUCTION AND
OPERATIONS STRATEGIES
Operations are a regular administration type recreation making sure that a business makes use of

its sources efficiently to meet its patron commitments. Usually referring to the conversion

exercise of the business, i.e. the point the place the acquired sources and/or materials are

transformed into the product or provider that the commercial enterprise is selling on to its

customers. Sometimes found within Logistics Management, or Demand Planning or Operations,

Inventory Management generally takes accountability for each the replenishment of bodily stock,

the levels of physical stock, and of route storage and issue of bodily stock. Stock may

additionally be materials and goods sourced from suppliers, work in progress, or completed

items waiting for sale/dispatch. After visiting the company, we could identify few of the

production and operation management concepts which Square company limited using. We found

the rest of the concept after we interviewed the employees at the factory .Some of the concept

they share with us and now we discussed here more broadly in the sections.

QUALITY OF THE PRODUCT: SQUARE Ltd is the first healthcare entity with a robust

pledge to create a new era in the field of medication in Bangladesh. SQUARE Pharmaceuticals

Limited, the flagship enterprise of SQUARE Group, is preserving the robust leadership role in

the pharmaceutical industry of Bangladesh due to the fact 1985 and is now on its way to turning

into a high performance world player

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TRANSPERANCY: Already they have attained the core self-belief of our health care

companies with the best herbal products of basically Japanese and western origin, as well as

assembly ever predicted efficacy and protection of global standard. Where herbal medicinal drug

has created a revolution with its recognition and practice in the developed countries, being a

creating us of a it is their excellence to discover this style in line with the international

competition, to have world-class herbal merchandise on hand both for home and global use.

INVENTORY MANAGEMENT: Sometimes found within Logistics Management, or Demand

Planning or Operations, Inventory Management typically takes responsibility for both the

replenishment of physical stock, the levels of physical stock, and of course storage and issue of

physical stock. Stock may be materials and goods sourced from suppliers, work in progress, or

finished goods awaiting sale/dispatch.

LOGISTIC: In its strictest definition logistics refers to the motion of items or materials, whether

inbound, though, or outbound. In some manufacturing companies forecasting and planning will

be found inside a logistics department, in other agencies logistics will be solely managing the

movement and transportation of items and materials.

DISTRIBUTION: Distribution involves the physical distribution of the company’s products to

the sub-distributor or at once to the customer base. Typically this is a blended transport and

warehousing operation, accountable for storing and turning in merchandise to meet the

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customer’s needs. Again this mixed pastime will often be placed with a third celebration provide

who will control and put in force the processes.

SUPPLY CHAIN MANAGEMENT SYSTEM IN SQUARE: For any organization supply

chain administration communication system is very important. At existing every corporation is

trying to seize the latest supply chain management communication method to get the first-class

benefit. Before going to discuss the supply chain management communication gadget of

SQUARE I want to talk about a little about the company.

SENDER HAS IDEA: For any organization supply chain administration communication system

is very important. At existing every corporation is trying to seize the latest supply chain

management communication method to get the first-class benefit. Before going to discuss the

supply chain management communication gadget of SQUARE I want to talk about a little about

the company

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 FIGURE: THE COMMUNICATION PROCESS

SENDER ENCODES IDEA IN MESSEGE: The next step in the information sharing process

involves encoding, converting the idea into words or gestures that will convey meaning. A major

problem in sharing any message verbally is that words have different meanings for different

people. When misunderstandings result from missing meanings, it’s called bypassing. In

selecting proper symbols, senders must be alert to the receiver’s sharing skills, attitudes,

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background, experiences and culture. How will the selected words affect the receiver? To solve

these sorts of problems SQUARE Chooses appropriate words or symbols is the first step.

MESSEGE TRAVELS OVER CHANNEL: The medium over which the message is bodily

transmitted is the channel. Messages are delivered through computer, telephone, letter,

memorandum, report, announcement, picture, spoken word, fax, or thru some different channel

in SQUARE. Because sharing channels deliver both verbal and nonverbal messages, senders

need to pick out the channel and shape the message carefully.

FUNCTIONS: On the job one can share statistics internally and externally. Internally, SQUARE

is changing ideas with superiors, coworkers, and subordinates. When these messages need to be

written, SQUARE chooses emails or a printed memorandum. When SQUARE is sharing facts

externally with customers, suppliers, government, and the public, SQUARE will typically ship

letters on business enterprise stationery.

INTERNAL FUNCTIONS IN SQUARE:

activities and provide assistance

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EXTERNAL FUNCTIONS IN SQUARE:

Clarify supplier specifications and quality requirements

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 APPLICATION OF PRODUCTION AND
OPERATIONS MANAGEMENT CONCEPTS

We have visited Dhaka Unit Production site. We have also visited the Dhaka corporate office

which is situated in Mohakhali. By visiting and talking with them we have gathered information

about their production and operations management concept.

CONCEPT OF TYPE OF PROCESS: The process is Batch Processing. In Square

Pharmaceuticals, the production line is consisting of multiple work station where each worker

continuously performs the particular task under particular unit. For instance, in the AgroVet unit

employers work for only AgroVet product. The process of drug manufacturing can be broken

down into a series of unit operations, such as milling, granulation, coating, tablet pressing, and

others. Thus, it falls under “Batch Processing”

CONCEPT OF TYPE OF LAYOUT: As we mentioned above that Square Pharmaceuticals

falls under “Batch Processing”, that’s why they use layouts that can handle varied processing

requirements. Thus, it falls under “Process Layout”.

CONCEPT OF TYPE OF DEMAND: While asking this questions, Square replied that they

use every forecasting as per requirement but as they have described their production style and

also what we have learned through our course, we can conclude that the factory’s demand

forecasting is most similar to the concept of Judgmental forecasting. Judgmental Forecasting is

done by subjective input. It is done in various ways including executive opinions, sales force

opinions, and consumer surveys, outside opinion and Delphi method. It helps to identify which

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product is important to consumers. Also which kind of medicine consumer need now. Depends

on this they produce their product.

CONCEPT OF QUALITY ASSURANCE: Square Pharmaceuticals is proactive, focusing on

preventing mistakes from occurring. They also give greater emphasis on customer satisfaction.

Thus they follow strategic approach. It helps them focuses on finding and correcting defects

before the product reaches to consumers. Every pharmaceutical product has been made with high

observation and professionally.

CONCEPT OF QUALITY CONFORMANCE: Square Pharmaceuticals is one of the biggest

brand in Bangladesh. They achieve this reputation by delivering high quality pharmaceutical

products. That is why consumers of Bangladesh have higher perceived thought about Square

Pharmaceuticals. They believe that Square will always give higher quality products. That is why

many doctors and also people in Bangladesh like and suggest other people to buy Square

Pharmaceuticals product. Thus it falls under Perceived Quality-which is based on reputation of

the company.

CONCEPT OF PULL SYSTEM: At beginning Square Pharmaceuticals uses push system to

sell their product. Since now they have become such big company, they have started to use pull

system. They only produces product in batch when it is needed. Although if they launch any new

product they use the push system first and after the product saw its growth stage, they use pull

system for it.

CONCEPT OF DIVISION OF LABOUR: As mentioned earlier, the processing of Square

Pharmaceuticals is “Batch Processing”. Labour can do their job without getting tired. The job is

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not boring for labour as they are able to shift when variety occurs. This division of labour makes

the workers highly specialized at what they do.

CONCEPT OF ECONOMICS OF SCALE: The aforementioned concept of division of labour,

coupled with the highly standardized production of products that the factory does, helps it

achieve economies of scale. This helps the factory better implement its strategies of maintaining

low cost.

CONCEPT OF TYPE OF INVENTORY: The factory produces various medicine products,

which falls into three categories in terms of trade name, these are, Pharma Product, Herbal &

Nutraceuticals Product and AgroVet & Pesticides Product. All of these products are made under

batch processing system. That is why Square Pharmaceuticals inventory is “Raw Materials &

Purchased parts”

CONCEPT OF BOTTLENECK: After passing through the ‘metal detector’ machine, finished

goods are left ‘on-hold’ for two hours until they are to be packaged and sealed. This is a

‘bottleneck’ for the business.

CONCEPT OF SUPPLY CHAIN: We discovered the concept of supply chain in practice. The

factory stressed on the importance of cordial and mutually beneficial relationships with suppliers

and highlighted certain issues which arise from these relationships. We learnt about that factory’s

major suppliers and what materials are purchased from them.

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PROCESS MAP

Start

Dispensing

Weighing

Preparation Sifting
of solution

Dispensing in Blending Preparation of

Mixing
Blender coating
suspension

Blending
Mixing

Tray bed Field bed Coating

drying drying suspension

Sifting Blending Sifting

Sift lubricant

Final Blend

Tableting Coating

Packaging

Storage

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 THE QUALITY CONTROL ISSUE OF SQUARE
PHARMACEUTICALS LTD.

The operation manager gave us the real insight of the quality control at Square pharmaceuticals

Limited. From the raw materials, packing materials products to finished products, Square

pharmaceuticals Limited promises world class quality. For maintaining this quality Square

pharmaceuticals limited follows a rigorous quality control process. They believe in total quality

as a continuous process of improvement in all spheres of business. So, they plan to achieve this

by:

1. At the very fast when the raw materials come to the industry. They analyses the raw

materials. They also analyses the packing raw materials. They run some physical and

chemical test for the raw materials.

2. Involving employees at all levels and providing knowledge and training. They provide a

very efficient training so that they can get the best their employee and they can maintain

the higher quality. They also ensure that their employee can have safe and healthy

environment. So the outcome will be good.

3. They supervise very effectively at each stage of the production process. They run some

physical and chemical test after finishing every stage.

4. They use of latest technology and industrial operational models.

5. They use very effective and efficient technology so that they can improve the

productivity and reduces the cost.

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6. They establish a control limits for a certain process and tracking the parameter to make

sure the relevant process is kept within the limits.

7. They also operating and maintaining their quality control instruments.

8. They are conducting their documents, keeping record for the raw materials so that they

can maintain the quality. They also ensure the conduction of daily accuracy of analytical

balance.

9. And obviously they ensure very good laboratory practice in every steps of laboratory. So

that the product will be maintained very highly.

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 ANALYSIS OF DEMAND FORCASTING

Demand forecasting is basically to predict the expected future demand for a specific period of

time. The forecasting activities are done through based on the company’s various activities such

as records, events, past data, etc. it varies from company to company. It has great significance in

determining the targeted sales volume of a company. They also forecast based on their capacity

of production. According to their production manager sometimes the actual demand doesn’t

match with their forecasted demand. This is due to the market competition and lower growth rate

of the demand. Sometimes it is also affected by the economic, social, natural, industrial and

political condition of the country. SCM has explored different ways to forecast demand. These

methods can be used to forecast not only operational requirements for production, but also

internal operational demand as well. The methods to forecast demand that Square follows are

given below:

To forecast the market demand Square takes expert opinion this involves consulting people with

experience and expertise for their opinions. They analyze the scenario and make comments over

it.

To test Market Square follows to predict the demand first. This requires identifying a sample or

service is aimed at, and conducting trial sales for a limited period of time to ascertain likely

demand through different types of quantitative analysis like time series analysis, causal methods

are used to forecast the market demand. Through using computer-based materials planning

system like materials requirement planning, distributed resource planning, enterprise resource

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planning is used to predict the demand. They also determine different market trends of each

product and through comparing the trend line to actual demand they calculate base seasonal

variations.

Square manages their inventory and reduces the wastage of products cost through demand

forecasting. But these forecasting methods only help them to understand the demand for a short-

term period.

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 OPERATIONAL PROBLEMS
1. Managing overheads is one of the main problems of Square. Excessive overheads can be

particularly damaging if not managed in a timely fashion and they have suffered for this many

times and still suffering.

2. Although Square claims that they are monitoring performance but there is a huge gap between

the team and the company when it comes to receiving feedback. And also in case of the

merchandiser and suppliers as much feedback can’t be achieved from them either.

3. There should be up an upgrade on quality monitoring tools which are causing bottlenecks.

With proper quality monitoring tools, they can save time and faster the production.

4. Also language becomes a barrier when it comes to instruction as they can’t follow it

sometimes.

5. Most of the jobs are done by hand so it creates monotony in the work which slows done

production.

6. With so much easily-accessible information and guidance out there, there can theoretically be

more competition in the same market and thus it leads to a lot of new entrants. And the new

companies are fairly competitive with new products and Square is having a hard time competing

with them with due to product innovation.

7. As it’s a highly competitive market demand forecasting becomes hard and it leads to over

production most of the times.

8. They are also having cash flow problems because of so many things to maintain and balance at

the same time.

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 RECOMMENADATIONS

1. Square can increase the number of resources that are performing the operation without adding

head count if they can assign an employee from another operation to help perform the bottleneck

operation during unutilized time.

2. Worrying about the customers is not only the sales department's job. Investigating customer

satisfaction and reporting any issues also falls on the shoulders of operation. They should follow

lean production to not overproduce and balance the cash flow.

3. They should be focusing on demand for casting more as they are suffering from it due to high

competition.

4. Employees should be given proper training on different skills so that there is no monotony and

no barrier when to comes to understanding and communication.

5. They should look at the characteristics of their current best customers; those that generate

most profit repeatedly use their product and speak highly about your brand. There should be

higher communication to retain the customer and keep them satisfied as it’s a highly completive

market they don’t want to lose their customer.

6. Improve R&D for new products to compete in the market.

7. They should plan and budget as much as possible. There are plenty of money management

tools there to keep track of the cash flow.

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