Bio Spectrum — May 2017

I Richard Johnson

Director, Supply and Servicing, JJ Biotek

Shrikant Bhilare

Procurement Manager, Senior Manager API purchase, Sun Pharma

Explain purchasing process

Our sales team is formed for specific

customers and products. For example, different

teams for life sciences, diagnostic, government-

based institutes, private industries and CRO labs.

Routine visits are made, the team talks about the

products, gets inquiries and forwards to the support

team. Quotations are sent to customers and the deal

is frozen. Procedure is different for companies and

research institutes.

For example, at the Indian Institute of Science,

inquiries are sent to other companies as well for

comparing prices. After the order confirmation,

purchase order copy is generated, and then we

acknowledge receiving the document at the purchase

section of the institute. Advanced payment is made

to the company we take products from and the

product is shipped. We take care of documentation

and timely delivery before installation at the client

lab. We also allow customers who cannot carry out

immediate payment to purchase product and pay

later. Our company is registered with many research

institutes so we keep getting inquiries for instrument

or equipment. We also go through tender-based

procedures for government institutes but it is a long

process.

When choosing suppliers, what are the

most crucial criteria to consider?

Ours is a trading company and we represent a

couple of principals in south India, like Sanyo

Panasonic biomedicals from Japan which are into

biomedical instrumentation. We also represent

Qiagen from Germany which is into diagnostic kits,

instruments, extraction systems, real time PCR, next

How the

procurement process

has evolved over the years

The procurement

department has started gaining

much more attention as companies look at more and

more avenues for cost reduction and increasing

efficiencies. The focus has been attained due to the fact

that procurement accounts for about 50-60% of the

total cost to pharmaceutical companies. The

pharmaceutical sector has a high level of sourcing and

procurement maturity with respect to its direct spend.

Spend visibility and control over categories such as

APIs, intermediates and excipients is high.

Which segment is getting more matured

over the years?

The indirect spending area is gaining maturity

as compared to the maturity levels in the automotive

and retail sectors. The indirect spend in the

pharmaceutical industry does constitute categories

such as facilities management, MRO, IT, R&D, freight &

distribution, travel, marketing and sales, personnel and

professional services etc. like many other industrial

sectors. By 2025, procurement management will

undergo a major shift, moving away from emphasising

compliance to adopting a more holistic strategy that

includes total risk exposure, risk mitigation investments

and risk transfer pricing.

generation sequencing. We

also deal in imaging systems

from Uvitec, UK. We are

representing 15 different

principals. We see how good is the

company, especially in terms of quality. For example,

we had installed an instrument from Sanyo Panasonic

11-12 years back in a lab at IISc which is still functioning

well. The pricing is equally important.

What is a Qualified Products List (QPL)?

We have a few parameters. We don’t promote

just any product. We visit the factory where the product

is being manufactured and check things manually to be

sure of the quality. We have made visits to companies

in China and Japan. We do the servicing of instruments

locally.

Which are the key procurement metrics?

We compare the prices for a particular product

with respect to our competitors, and then we negotiate.

It all depends on different products. Nothing is fixed as

such.

How do you grow your network of

industry professionals, like suppliers?

Networking is very important. It marks our

success in the market. My competitors are my key

points. When I know a particular order belongs to the

other dealer, I will not fight for that. We talk to

customers about the new technology, for example we

are focusing on NGS through Qiagen. We did a project

for the biotech park with Institute of Bioinformatics

and Applied Biotechnology (IBAB), Department of

Biotechnology (DBT), last year. Similarly, this year we

got a very good project from Dharwad, again through

our networking.

(^32) COVERStory BioSpectrum | May 2017 | http://www.biospectrumindia.com