A REPORT

ON

UNDERSTANDING PROCUREMENT AND

distribution model

(Supply Chain and Logistical Imperative

Study)

Industry Guide: Mr. B.M. Sharma

General Manager

Future Bio Science Pvt. Ltd

Faculty Guide: Prof. Rajkishan Nair

IILM-GSM, Greater Noida

DECLARATION FORM

I hereby declare that the Project work entitled “UNDERSTANDING PROCUREMENT

AND DISTRIBUTION MODEL (Supply Chain and Logistical Imperative Study)” submitted

by me for the Summer Internship during the Post Graduate Diploma in Management

Program to Institute for Integrated Learning in Management, Greater Noida is my own

original work and has not been submitted earlier either to IILM GSM or to any other

Institution for the fulfillment of the requirement for any course of study.

I also declare that no chapter of this manuscript in whole or in part is lifted and incorporated

in this report from any earlier / other work done by me or others.

All care has been taken to keep this report error free and we sincerely regret for any

unintended discrepancies that may have crept into this report. We shall be highly obliged if

errors (if any) be brought to our attention.

Thank You,

Bharat Chaujar

Email id:Bharat.chaujar@gmail.com

SUMMER INTERNSHIP

REPORT

ON

UNDERSTANDING

PROCUREMENT AND

distribution model (Supply Chain and Logistical Imperative

Study)

Prepared By:

Name: Bharat Chaujar

Roll No: PGDM – 20150098

Summer Project Certificate

This is to certify that Mr. / Ms. Bharat Chaujar_ Roll No. PGDM-20150098 a student of

PGDM (IB) has worked on summer project titled_UNDERSTANDING PROCUREMENT

AND DISTRIBUTION MODEL ” (SUPPLY CHAIN AND LOGISTICAL IMPERATIVE

STUDY)”At Future Bio Science after trimester-III in partial fulfilment of the requirement

for the programme. This is his/her original work to the best of my knowledge.

Date: - __________ Signature ___________

Seal: Name of Faculty________

ACKNOWLEDGEMENT

I wish to place on record my deep sense of gratitude to Future Bio Science India Pvt.

Ltd. for providing me an opportunity to take up this project and giving me a platform

which is the first step of my professional career.

The summer project, from the very beginning to the tail end has been carried out under the

guidance of Mr. B.M Sharma, General Manager. The more I try to thank them the least I

am, able to because words cannot ever express my indebtedness to them.

I am indebted to my guide Prof. Rajkishan Nair, IILM-GSM, Greater Noida for extending

his untiring guidance to me, by constantly discussing the project matter and helping me in

clarifying my thinking in several pertinent issues and providing a meaning full insight into

the subject.

In the end I would like to thank Almighty without whom nothing can be done and many

unknown individuals, whom I interacted with for end number of my needs. All of them with

their due cooperation and at times with detachment taught me the real lessons of business

world. Many a name and incident I still remember and they have become a part of my

experience and those whom I can’t recall to have enriched me directly or indirectly.

TABLE OF CONTENTS

Executive summary

Objectives

Company Profile

Working Methodology

Problems and Limitations

Swot Analysis

Porter’s Five Forces Model Analysis

Recommendations

Conclusions

Bibliography

EXECUTIVE SUMMARY

This report is a short description of my two month internship carried out as compulsory

component of the PGDM course which I am currently pursuing at Integrated Institute of

Learning In Management, Graduate School of Management (IILM-GSM), Greater Noida.

The internship was carried out within the company FUTURE BIO SCIENCE PVT LTD in

the year 2014. Since I am inclined to pursue Marketing and Operations as a specialisation in

my second year of PGDM, the work was concentrated on Procurement and Distribution

System of the company. At the beginning of the internship I formulated several learning

goals, which I wanted to achieve: to understand the functioning and working conditions of a

company; to see what is like to work in a professional environment; to see if this kind of

work is a possibility for my future career; to use my gained skills and knowledge; to see

what skills and knowledge I still need to developing a professional environment; to get

fieldwork experience; to enhance my communication skills; to build a network.

Future Bio Science is a company who is into the business of bio technical equipments which

are used by scientists in government institutions and hospitals all round India for carrying out

research work for the growth and development of the country in health sector. FBS is

immensely putting their hard work to give the Indian scientists and the doctors the best

laboratory equipments and machines of latest technology which are being used by scientists

and doctors outside India.

My Project was inclined to learn the processes of: -

1.) Logistics Department.

2.) Marketing Department.

3.) Imports from Principal Companies.

4.) Distribution Network.

5.) Inventory Management.

FBS imports biotechnical equipments and laboratory tools from the principal

companies. It imports from the manufacturing plants of principal companies in U.S.A

and Switzerland and many other countries for contributing in Health Care processes

of Indian Hospitals and Government Institutions through two channels of distribution

that is indirect selling and direct selling in the ratio of 9:1. The indirect selling here

refers to the channel partners, distributors and direct selling refers to FBS own sales

force.

FBS prefers for their contribution with full dedication through a supply chain having

its distribution through exclusive direct selling in order to provide better services to

end customers and to enhance the earnings.

The project envisages and identifies the processes of streamlining a distribution

network through exclusive direct selling channel without any impact on the existing

profits of FBS.

The primary objective of the project is to analyze distribution policy of FBS

emphasizing on exclusive direct selling and indirect selling distribution model.

Further the project is to analyze and learn the processes of foreign currency orders,

warehousing processes of the company, inventory management and documents

mandatory for imports of the company.

Introduction:-

Procurement: - Is the acquisition of goods, services or works from an

outside external source. It is favorable that the goods, services or works are appropriate

and that they are procured at the best possible cost to meet the needs of the purchaser in

terms of quality and quantity, time, and location. Corporations and public bodies often

define processes intended to promote fair and open competition for their business while

minimizing exposure to fraud and collusion.

Direct procurement and Indirect procurement

TYPES

Direct

procurement

Indirect

procurement

Raw

material and

production

goods

Maintenance,

repair, and

operating

supplies

Capital

goods

and

services

FEATURES

Quantity Large Low Low

Frequency High Relatively

high Low

Value Industry

specific Low High

Nature Operational Tactical Strategic

Examples

Crude oil in

petroleum

industry

Lubricants,

spare parts

Crude

oil

storage

facilities

Based on the consumption purposes of the acquired goods and services, procurement

activities are often split into two distinct categories. The first category being direct,

production-related procurement and the second being indirect, non-production-related

procurement.

Direct procurement occurs in manufacturing settings only. It encompasses all items that are

part of finished products, such as raw material, components and parts. Direct procurement,

which is the focus in supply chain management, directly affects the production process of

manufacturing firms. In contrast, Indirect procurement activities concern “operating

resources” that a company purchases to enable its operations. It comprises a wide variety of

goods and services, from standardized low value items like office supplies and

machine lubricants to complex and costly products and services; like heavy equipment and

consulting services.

Distribution:

Product distribution (or place) is one of the four elements of the marketing mix.

Distribution is the process of making a product or service available for use or consumption by

a consumer or business user, using direct means, or using indirect means with intermediaries.

Channels and Intermediaries

Distribution of products takes place by means of channels. Channels are sets of

interdependent organizations (called intermediaries) involved in making the product available

for consumption to end-user. Merchants are intermediaries that buy and resell products.

Agents and brokers are intermediaries that act on behalf of the producer but do not take title

to the products.

Supply Chain Management

Supply chain management (SCM) is the management of the flow of goods. It includes the

movement and storage of raw materials, work-in-process inventory, and finished goods from

point of origin to point of consumption. Interconnected or interlinked networks, channels and

node businesses are involved in the provision of products and services required by end

customers in a supply chain. Supply chain management has been defined as the "design,

planning, execution, control, and monitoring of supply chain activities with the objective of

creating net value, building a competitive infrastructure, leveraging worldwide logistics,

synchronizing supply with demand and measuring performance globally.

Main function of Supply Chain Management are as follows:

Inventory Management

Distribution Management

Channel Management

Payment Management

Financial Management

Supplier Management

Transportation Management

Customer Service Management

Objective:-

The primary objective of any Summer Training is to gain through practical experience, a

sound appreciation and understanding of the theoretical principles learnt in two semesters of

PGDM. My Summer Training was oriented towards developing the skills, knowledge and

attitudes needed to make an effective start as a member of the Management profession. I was

required to undergo 6 weeks summer training after 3rd trimester. This training was basically

meant to understand the practical aspects of concepts learned during all the trimesters in the

real life scenario. The training imparted practical exposure in the Industry. The objectives of

my Summer Training were: Understanding real life situations in organizations and their related environments and

accelerating the learning process of my knowledge could be used in a realistic way.

Systematic introduction to corporate Culture and development of requisite skills

Recognizing my responsibilities as a professional.

Understanding the formal and informal relationships in an organization.

Continuous learning.

Understanding problems and providing unique solutions.

The work assigned to me at Future Bio was primarily concerned with understanding how the

company is procuring the equipments from its principal companies that are located in

different parts of the world. Since we are into the business of importing the biotechnical

equipments which are used by scientists and doctors for their research work, my industry

guide asked me to learn the operations of different departments of the company. My work

was divided into two parts.

1.) Supply Chain Optimization.

2.) Distribution Model of the Company

Company Profile

Established nine years ago, FBS is today India‘s most reliable premier Biomedical company.

Future Bioscience offers services of representation, distribution and manufacturing of quality

biomedical products in India. With a broad spectrum of products for tissue culture, molecular

biology, electrophoresis, liquid handling, lab essentials and equipments FBS is a one stop

solution. FBS Represents more than a dozen iconic giants in the fields of Molecular biology,

Cell culture, Bio-Technology like TPP; Switzerland, HTL;Poland, Biocision;US, Cleaver

Scientific; UK, Grant Instruments;UK, Metertech;Taiwan and Sorenson;US, .

FBS has a dedicated field force and over 80 trusted channel partners. FBS is a choice name

for annual supply contracts to research organizations and many pharmaceutical companies.

FBS truly resonates ‘You can rely when we supply’.

The FBS range of plastic ware brings home a no compromise quality for less. Cooperation

and support from the scientific fraternity has kept us motivated into bringing in new and

latest product lines at affordable prices into India. With unflinching commitments towards

the global standards of quality and reliability Future Bioscience is all set to foray in the field

of advanced biosciences.

This Year, in addition to the existing above mentioned product lines and reputed international

manufacturers, it is a great privilege to express the inclusion of a whole new range of

products from

· National Scientific Company, USA- Pioneers of Universal fit bevelled pipette tips.

· Capp, Denmark- The manufacturers of advance micropipettes.

· Longene, China- Fast Thermal Cyclers.

. Air Clean Systems, US- Leaders in PCR workstations, Fume hoods and Enclosures.

· Launch of FBS Brand- Plastic wares and Molecular Biology Reagents.

We had introduced Cleaver’s, UK nine years ago in India and today we are one of their top

distributors globally. This position has been achieved because of a highly qualified and

experienced team of Technical, Product management and Marketing professionals. They keep

a tab of the market pulse, train the field force, arrange for promotional activities like coffee

table discussions, road shows, expositions and lab demonstrations.

Further to strengthen our focus into the market penetration we are looking forward to work as

a strong channel partner for Internationally acclaimed global manufacturers with a similar

ideology to work as a team for mutual benefits and on a long term.

Principal Companies

Cleaver Scientific Limited: Providing expertise and excellence in

Electrophoresis

Drawing on years of manufacturing and laboratory experience, Cleaver Scientific are a UK

based electrophoresis equipment suppliers who provide premium and technically enhanced

high specification, low cost electrophoresis equipment for the world market. These include

DNA electrophoresis units, protein electrophoresis units, Electro blotters, Radiation

protection and Gel Documentation Equipment.

Based in Rugby, Warwickshire, in the centre of the UK, our premises are well served by both

rail and road networks. Our location enables us to serve most businesses Worldwide in good

time.

Cleaver Scientific is an ISO9001:2000 accredited company and all our products comply with

CE regulations.

Techno Plastic Products Ltd

TPP, the color Yellow

TPP, the color Yellow is the Swiss Brand that belongs to the international circle of brands

for high quality plastic disposable products for tissue culture and laboratory technology.

Field of applications of TPP products can be among others found in biotechnology,

pharmaceutical, institutes and universities as well as in research institutes and others.

TPP is constantly active in the research and development of new products as well

as improvements on treatment of the cell growth areas. Also TPP aims to receive a leading

role in the area of hygienically standards in production.

These are TPP's engagements towards the end-users receipt of best results.

TPP home of tissue culture.

Biocision: Consistent Sample Management At All Temperature

Founded by a group of scientists, biomedical engineers, and drug discovery experts,

our patent-pending products enable researchers to achieve pre-analytical sample

reproducibility and consistency – experiment to experiment, lab to lab and site to site - and

are applicable to a wide array of scientific disciplines including cell and tissue culture and

cryopreservation, histology, immunohistochemistry, virus and bacterial research, molecular

biology, cell therapy, pharmaceutical manufacturing, biofuels research and many others.

BioCision’s first products, the CoolRack® line, were made from a novel aluminum alloy that

is 300 times more conductive than ice and adapts rapidly to the temperature of any freezing

or cooling medium. The CoolRack® line includes thermo-conductive modules that hold tube

or plate samples of different sizes to standardize temperature control right at the benchtop.

Subsequent product lines include CoolBox™portable ice-free cooling and freezing devices

and CoolCell®, a novel cell freezing device for blood, stem cells, cord blood and cell lines,

as well as a line of TruCool™ consumables.

Grant: Scientific Instruments

Grant Instruments, based near Cambridge, England, is an independent, privately owned

company, founded in 1952 by Peter Ward and Cecil Chapman. Grant is a world leader in the

manufacture and design of equipment for sample preparation, scientific analysis, data

acquisition and data analysis providing solutions to the global scientific and industrial . The

company has a worldwide reputation for paying the highest attention to quality, reliability,

service and support. Grant works strictly to all legal and regulatory requirements and pays

particular attention to the safety testing of products. The company operates

to ISO9001:2008 quality management system and ISO 14001:2004environmental

management standard, regulated by British Standards Institute .In the last 60 years, Grant has

expanded both organically and through partnership and acquisition. The company is

organized into two focus areas - Scientific and Data Acquisition. Grant also provides custom

solutions for unique or special applications.

Grant Instruments designs and manufactures a wide range of high quality scientific

equipment used in many applications for analytical, diagnostic and research purposes which

includes temperature controlled unstirred water baths, heated circulating baths, chillers,

refrigerated baths and circulators, dry block heaters, shaking baths, boiling baths and

ultrasonic baths for cleaning. In addition it offers a wide range of products aimed for life

science applications. These include thermostatic shakers, rotators, rockers, centrifuges and

centrifuge-vortex mixers, heating / cooling dry blocks, magnetic stirrers, UV cabinets and

shaker-incubators.

The Drucker Company:

From humble beginnings, The Drucker Company continues the tradition of providing

quality centrifuges. With little more than a vision and determination, Ken Drucker

purchased the Phillips Company, a St. Louis, Missouri instrument repair company, in 1932.

Hard work, superior craftsmanship and unique engineering resulted in a centrifuge design

with features far advanced for the time. Success quickly followed and the company was

transformed into the business of manufacturing centrifuges.

After relocating to Astoria, Oregon, the company experienced rapid growth as customer

acceptance grew. In 1983 the business was moved to Hialeah, Florida. New product offerings

and increased demand resulted in two subsequent moves; first to Kendall, Florida and then to

Sunrise, Florida.

In 1995 a Sales and office was opened in State College, Pennsylvania. Within a year of

opening the State College office, the manufacturing operations and all administrative

functions were relocated from Florida to its current location in Port Matilda, Pennsylvania.

After more than 75 years, The Drucker Company remains focused on centrifuges. Our new

corporate headquarters in Port Matilda, Pennsylvania is now complete and houses our

administration, customer service, technical service, accounting, and engineering departments.

Our belief in designing and offering quality, high-performance centrifuges coupled with

superior customer service remains steadfast and continues to be the cornerstone for future

success for both our employees and valued customers.

Work Methodology

The work methodology at FBS was a mixture of both study/office job and field work.

Supply Chain Optimization across Business for Future Bio

Science Pvt. Ltd

Units being imported

through air. CHA CHA

FBS – Principal Companies

(Imports)- Cleaver TPP Grant

Manufacturing in Solan

Mother Warehouse,

New Delhi

Mother Warehouse,

Solan, Himachal Pardesh

Janak Puri

Warehouse

JanakPuri

Warehouse

DISTRIBUTORS DISTRIBUTORS

DISTRIBUTORS

Hospitals Hospitals Hospitals Hospitals

Future Bio Science:-

Established nine years ago, FBS is today India‘s most reliable premier Biomedical company.

Future Bioscience offers services of representation, distribution and manufacturing of quality

biomedical products in India.

Future Bio Science:-

FBS is a sister concern of Genaxy India Private Limited.

Genaxy Private Limited:-

Genaxy India is a leading company of biotechnical equipments in India and is a 100%

subsidiary of world renowned company Genaxy Private Limited which is an American based

company. It has its headquarters located in U.S.A.

Working:-

FBS imports units or products (implants) from the principal companies situated in different

parts of the world. It also manufactures the laboratory equipments in its factory and

manufacturing plant located in Solan, Himachal Pardesh and does the forecasting of imports

of units prior one year and places its order to the principal companies. But variations are done

on purchase orders monthly for imports with the principal companies after first month.

Shipments come through air. Shipments arrive at the New Delhi airport. This is because

Future Bio Science has its Mother Warehouses located at New Delhi. From airports, the

Custom House Clearance (CHA) clears the shipments and delivers the same to the mother

warehouses. From mother warehouses located in New Delhi units are further transferred to

warehouses in other cities of India owned by FBS Pvt. Ltd. Warehouses are located in almost

all the major metropolitan cities in India (Mumbai, Chennai, Kolkata). All these transfer

processes of units are carried by C and F agents.

Product Line Offered by the Company:-

FBS Liquid Handling Products

FBS Futurfit Microcentrifuge Tubes.

FBS futurfit Micropipette Tips.

PCR Tubes and Plates

FBS Plasticware and Generic Products

FBS ELISA Plates.

FBS futurfit Nitrilite Gloves.

FBS Futurfit Screw Cap Conical Centrifuge Tubes.

FBS Petri Dishes.

FBS Molecular Biology Reagents

FBS Taq Polymerase

PCR Master Mixes

DNTP’s

FBS Mini Centrifuge

Future Bio does its business in India with the distributors so as to reach their target segment

which has been identified as premium hospitals, medical institutions and medical

representatives and surgeons. Future Bio has 80 active distributors. They are located all over

India. Units after reaching the warehouses in New Delhi, Chennai, Ahmadabad and Mumbai

are further transferred to the active chain of distributors on demand. Distributors take sales

orders and then pass on to the FBS and then invoice is generated by Future Bio. It currently

has a distribution model which performs sales through two channels and proportions:

Indirect Selling – Through Distributors (90%)

Direct Selling – On its own (10%)

Its 90 % sales are through distributors and 10% direct sales. In direct sales FBS has key

accounts the leading Government Institutes engaged in research work and many leading

universities of the country which are actively participating and giving their immense

contribution in health sector.

Proposed Business to Customer Distribution Model

Future Bio Science

FUTURE BIO

WAREHOUSES

FUTURE BIO

WAREHOUSES

Distributors Distributors

Distributors

Distributors

Scientists/Doctor

s

FUTURE BIO DISTRIBUTION MODEL

CURRENT SCENARIO

For implementation and practicing of distribution model of direct selling, the company needs

to understand the market and customers. Our end customers are big corporate and

government institutions and doctors engaged in research and development processes. The

patients or general public benefited from these research processes are not our end customers.

The product is a technical product and requires huge amount of knowledge to sell. As bio-

technical equipments are products used by scientists and doctors, the company cannot go for

advertising through electronic and print media as restricted by Indian authorities through

various rules and laws. At the same time, we also have extreme pressure from the same

Indian authorities not to increase the selling prices of the products further and the authorities

SUPPLIERS

• Company manufacturing units and imports(Laboratory Equipments)

• Company supplying units to distributors

DISTRIBUTORS

• Distributors Recieving units(Lab Equip)

• Further supplying to Hospitals and Scientists and govt. institutions.

Scientists

• Institutes recieves imports.

• Scientists uses them for research and devlopment processes.

require under the rules to fix a maximum retail price (MRP) on the products. The reason of

this is the same that all the products are being biotechnical equipments used for R and D

processes for further development of health products.

To go for direct selling model FBS needs to understand market point of view and its

customer. What they think about the direct selling. Are they happy with the current scenario

in which distributors are involved? Are the doctors ready to accept supplies of units through

the middlemen that are distributors or do they want to trade with company directly?

Survey Conducted On Hospitals:

I conducted a survey on big corporate hospitals to understand the hospitals point of view.

The Big corporate hospitals where I conducted the survey are:

B.L Kapoor, Hospital, New Delhi

Sir Ganga Ram, Hospital, New Delhi

Action Cancer, Hospital, New Delhi

Max, Hospital, New Delhi

These hospitals are not hospitals they are now big corporate. They employ doctors on

packages and operate in a corporate manner.

After receiving units from distributors, these corporate hospitals intentionally and

deliberately make delay in payments to the distributors, say after six months or 4 months on

an average. The hospitals make delay in payments deliberately to bother them and with the

intent to throw them out of the chain. The delay in payments suffocates the distributors. They

receive payments very late and have to make the payments to their supplier in time that is on

dates which are fixed, usually it is 30 days. The distributors receive payments late from the

hospitals and make the payments to their supplier early. This puts distributors in credit

crunch.

These corporate hospitals want to deal and trade with companies directly. They want to

remove the middlemen tactfully by delaying their payments and putting them in financial

crunch. They know the financial limitations of the distributors and their credit limits with the

company normally being one month. Most importantly they want to remove their margin as

to bring down the cost.

After removing distributors and wiping out their margins hospitals will be able to bring

down the average cost and budget allotted for research and development. On the other hand

distributors are indeed fed up with the corporate hospitals as these hospitals make payments

late and they (distributors) have to pay to their suppliers early. This puts distributors in credit

crunch.

Loss to the Company:

The company wants to directly deal with these research institutes but at the same time

company has to maintain the inflow of the cash as importing these equipments from the

principal companies involves huge investments as these equipments are very expensive.

So, for encouraging the distributors not to quit and keep doing business for us FBS cut down

its own margins for distributors to lure them for keep ordering and maintaining the inflow of

the cash. The distributors not only makes the payment on time but also eradicates the

company’s obligation of getting the equipments installed at the location. Distributor hires the

team of engineers who are well aware of the product not only installs the machinery but also

take cares repair and maintenance of these high end machineries.

Distributor Operating Network

Catering Different

Parts of Delhi

Distributor’s

Office

Location –

Janak Puri

New Delhi

Distributor’s

Warehouse

Location –

Janak Puri

New Delhi

FBS

Problems and Limitations

All studies have limitations. The limitations of the study are those characteristics of design or

methodology that impacted or influenced the application or interpretation of the results of the

study. They are the constraints on the generalizability and utility of findings. The following

were some of the limitations of the project-

As we are importing all the equipments. So, all the orders are invoiced in foreign

currency and dollar value keeps on fluctuating every day.

Government Policies, governments at times keep changing the excise duty rate

usually higher than the previous or existing rates which drastically effects the

profitability of the company.

Mishandling of the goods while the goods are shipped or in the process transit.

Shipment in transit for longer durations, when shipment remains in transit for longer

duration and the delivery of the goods cannot made on time to the part as committed it

effects the goodwill of the company as well as the penalty as per written in the terms

and conditions of the order .

Many customers were more inclined towards hefty discounts but being the company

policy not more than 10 % discount was allowed to the customers with the exception

being bulk orders.

As the project is prepared for academic purpose it suffers from the limitation of the

time and due to which a detailed study into all the strategies adopted by the

organization was not possible.

The Product in which we are dealing is very technical and I had no idea about the

product and the equipments to be handled.

In doing market observation survey, the resistance and reluctance shown at the

distributor and the customer end have caused time consuming activity keeping my

observation to limit only.

Analysis

Swot Analysis

STRENGTHS-

Core competencies in quality and performance technologies. The Quality we are

supplying at FBS is unmatched and far better than other players in the same segment.

Strong brand name, image and reputation among the scientists and doctors and corporate

hospitals.

The supply chain network of the company is very effective as already discussed under the

head of methodology.

We are doing 90% of our sales through the distributors which provides the institutes and

the hospitals to have enough time to make the payment.

Employees at FBS are very much motivated and dedicated.

WEAKNESS-

Unmatched quality comes with a hefty price tag, so this sometimes acts as a weakness

and many scientists are not convinced with our prices for whom budget is a constraint

prefer other inferior brands.

No advertising and promotions- Since the product is technical and is of no use for the

general public we cannot market are products through the electronic media or through

papers. It becomes very difficult to convince our end customers the scientists and the

doctors or to reach them at mass.

OPPORTUNITY-

Nowadays institutes not only the private institutes engaged into research work but also

the government institutes are heavily spending on research work and activities requires

research. So it has given a lot of opportunities to players already into the business and for

new entrants.

THREATS-

The manufacturing plants of these high end equipments involves huge investment. China

has seen immense growth in this industry and heftily investing for the manufacturing

units and supplying at much cheaper rates. Also any change in the Govt. policies would

also act as a potential threat.

PORTER’S FIVE FORCES MODEL

Threat of Substitute Products - High

Demand for research products is connected to the growth in the economy as the budget for

research activities is made in the beginning of the financial year. The biotech industry has

seen an increase in substitute products due to the increase in demand for biotech equipments

over the past ten years. This threat of substitution for bio-technical equipment manufacturers

is currently high, however, we would expect a decrease in substitution threat as the recession

lingers.

Threat of New Entrants - Low

There are many manufacturers in this industry with a declining long-term demand. We

would not expect to see new entrants because manufacturing these units requires huge

investments and already the economic condition of the country is not stable. We are

witnessing the low budget allocation towards the health care sector.

Bargaining Power of Buyers - High

Buyers have ultimate buying power with numerous options from competitors and

substitute products. Buyers also only buy biotech equipments sporadically and are

therefore not typically loyal to one brand. The demand for these products does not rises

seasonally and also requires huge cash support. Also the end customers the scientists have

discretion to buy products in which they go for their personal interests and benefits.

Bargaining Power of Suppliers – Low

The inputs to manufacturing are not basic commodities and are specialized and

technologically advanced and requires huge cash support. Also demand for these products

generates sporadically, given this understanding of the products being supplied we can

assess that supplier power is low.

Rivalry Among Competitors – Intense

The competitive forces (downward pressure on prices, declining demand, increased

imports) are causing increasing rivalry among competitors, including foreign competition.

Thus, for FBS the Rivalry among its competitors is intense.

Recommendations

A. Future Bio should prefer for direct selling distribution model or Business to Customer

model because by eliminating the distributors or channel partners:-

i. The company gains profits while withholding margin of distributors.

ii. The company further gains profits in the form revenues from selling the

medical equipments directly to the hospitals and medical institutes.

iii. There is an increase in profits of the company due to reduction of variable

cost. The elimination of intermediaries is the reason of lowering of the

variable cost.

iv. The company further enhances its earnings through increase in sales as the

cost of distributors will reduce and more customers will go end buying for

FBS those earlier could not afford due to lack of money or budget constraints.

B. As the research recommendations are mostly made by the doctors and scientists and

not by the hospitals, the company can have tie ups with different medical

institutes and colleges where they can incorporate courses where training can be

provided to doctors and scientists using FBS instruments and machineries. Each

principal company has their own set of instruments that are used while researching

and developing activities are being performed. As till now in medical institutes and

colleges, the knowledge provided to upcoming doctors and scientists are on by theory

classes. Only after the completion of the courses, the companies train doctors and

scientists using their instruments. So if the company has their own training programs

in medical colleges, the doctors can get a practical experience along with the

knowledge provided by the Institute. Doing this the company can not only make the

doctor’s brand loyal as they have been trained using FBS instruments but also market

their products.

C. FBS is hiring majority of its employees from biotech background as they believe they

have better product knowledge and understanding towards highly technical products

and not from management background as the product line does not require and

marketing and sales promotion activities.

But I believe the management background professional are very innovative and can be

very effective in enhancing the overall growth of the business.

Conclusion

The past months of my internship have been very instructive for me. FBS has offered me

opportunities to learn and develop myself in many areas. I gained a lot of experience,

especially in the field of operations. A lot of the tasks and activities that I have worked on

during my internship are familiar with what I’m studying at the moment. I worked in many

areas where I did different work. This gave me the chance to find out which areas I want to

work in after my education. The area that I found most interesting is supply chain

management.

Before my internship started my ideas did not match the experiences that I have gained

during my internship. There is a big difference in the school projects and the tasks and

activities during the actual work. In school we learn how to describe the work in projects,

where in work you learn how to implement them in reality. This internship was definitely an

introduction to the actual work field for me. I have learned to work in a business organisation

and apply my knowledge into practice.

On the whole, this internship was a useful experience. I have gained new knowledge, skills

and met many new people. I achieved several of my learning goals, however for some the

conditions did not permit. I got insight into professional practice. I learned the different facet

of working within real life situations. The internship was also good to find out what my

strengths and weaknesses are. This helped me to define what skills and knowledge I have to

improve in the coming time. It would be better that the knowledge level of the language is

sufficient to contribute fully to projects. After my master I think that I could start my working

career.

At last this internship has given me new insights and motivation to pursue a career in supply

chain in future. This internship was definitely beneficial for me and I’m grateful and thankful

that I got to experience and learn many things.

Bibliography

http://en.wikipedia.org/wiki/Distribution_(business)

http://en.wikipedia.org/wiki/Procurement

http://www.futurebioscience.net/