Tranzone

Harnessing Six Sigma Methodology in Pharma Procurement and Distribution

Tried and tested Six Sigma Systems can be effectively applied to the pharma procurement and distribution processes thereby adding value to the business affirms Nilesh Tamhane, Warehouse Operations Manager at Tranzone FZCO in JAFZA South, Dubai, who has used this methodology in his workplace with demonstrable success—Editor.

As a Warehouse, Logistics, and Operations professional with over two decades of proven experience, I have increased levels of efficacy and streamlined sourcing and delivery systems, utilizing the practical applications of Six Sigma Management.

In my most recent position as Warehouse Operation Manager at one of the oldest pharmaceutical distributor in the region, I have developed and maintained a consistent track record of achieving organizational and individual goals in the warehousing and distribution realm adhering to Six Sigma standards and using these to attain operational objectives.

The areas of application include but are not limited to: • Annual Budgeting for Warehouse

Operations • Increase capabilities and improve operational services • Monitoring KPIs for the operations team every quarter • Inventory categorization with high value and high consumable individual

ABC analysis • Cost control by business process reengineering in Logistics and transportation. Below are the important areas Six Sigma methods can be used in the purchase.

1. Adopt new technology

Adopting new technology is critical for an organization. The ability of an organization to deliver goods and services efficiently and to reduce costs effectively can be determined. Six Sigma offers a framework that makes it easy to adapt application software, IT infrastructure and digital systems.

One of the applications you should consider is the Contract Management System. This helps manage responsibilities and this convenient setup benefits both parties. This helps entrepreneurs to determine which contracts can be reused to move from one vendor to another.

2. Enhance staff capacity and skills

Training and development is another critical factor that can determine the direction of an enterprise. Part of the Six Sigma philosophy is to help employees build members’ confidence and help them work successfully. Purchasing managers can incorporate six Sigma methods to train employees and ensure smooth implementation of policies.

The inclusion of Six Sigma is beneficial not only for the employees but also for the efficiency of the organization and the bottom line. In addition, it promotes goodwill between business and suppliers, sets high rates of customer satisfaction, and accelerates growth while reducing costs.

3. Help to maintain good relationship with suppliers

The Purchasing Manager’s goal is to ensure that suppliers are satisfied with the organization’s policies and processes. You can ask for bids from new suppliers when you feel the need, but this process often proves to be costly and time consuming.

If you take the example of a supplier of businesses that have applied the Lean Six Sigma method for the last two to three decades, you will notice that these businesses have a different approach to suppliers. These organizations are not in the habit of changing vendors frequently.

Sending requests for bids every time you want something from sellers is time consuming. This includes analyzing each application, such as answering your request, gaining information about their position in the industry, as well as identifying the best negotiation tactics for shortlisted suppliers.

4. Reduce costs

The most desirable quality of a purchasing officer is the ability to procure the goods required by the company and at the same time reduce the associated costs.

So the important question is how do we get this? Care must be taken before purchasing. The process is not always as

simple as it seems. Some inexperienced purchasing staff may choose to create a purchase order for each application.

This is one of the areas where unnecessary costs can be incurred. These sigma methods are often applied to search, identify, purchase, and manage items and orders related to your company.

5. Encourage analytical and negotiation skills

Purchased managers will have to handle a myriad of tasks during the planning and implementation phases of their maintenance projects.

This means that experienced managers may have developed analytical skills, but it is also important to ensure that analytical skills are used in more than one area of the process. It is important to have a good knowledge of the quantitative data related to these processes.

It completes an integral part of the Six Sigma procedure (the analysis phase of DMAIC- Define, Measure, Analyze, Improve, and Control, a data-driven quality strategy used to improve processes) which requires a thorough analysis of each process.

A purchasing manager who adheres to the principles of Six Sigma needs to understand that negotiating with sellers is a complex process. The challenge for the organization is to strike a balance between achieving the terms of the agreement while ensuring that the organization and the supplier maintain their business relationship.

Equipping your purchasing process for quick summaries increases a company’s profitability and efficiency. Adopting six sigma tools and techniques may seem like a daunting task, but it can be beneficial for your organization in a very positive way. n Nilesh Tamhane is a Warehouse, Logistics, and Operations professional with more than 22 years of demonstrable experience with CISCM qualification from IPSCMI-US, Lean Six Sigma Black Belt from IQF-US.

He joined Tranzone in 2019 as facilities officer to look over the Facilities Management & Procurement Division.