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The biggest learning from the pandemic is around agility and robustness of the supply chain

Prabhat Verma, India Head, Integrated Supply Chain Operations (ISCO), Merck Life Science, gives details to Viveka Roychowdhury on how the new plant at Patalganga helped enable customers to accelerate the development and production of COVID therapies during the difficult pandemic times in the last two years

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How does Merck Life Sciences’s recently-launched third plant in Patalganga meet the company’s business objectives in India, in terms of product portfolio?

Patalganga is a state-of-the- art distribution-cum-manufacturing facility spread over an area of approximately 40,000 sq mtr. We handle distribution of 2,00,000+ SKUs across India for multiple sectors such as pharma, diagnostics, academia, government institutions, chemical labs and chemical distributors. We also manufacture and down fill organic solids in various pack sizes for our domestic customers. The primary objective of introducing a new plant at Patalganga was to ensure that we meet our long- term customer strategy through improved fill rate and minimal supply disruptions. The site is 100 per cent compliant to National Building Code and amp; Merck EHS Standards, adherence to local regulations and licences.

Our warehouse automation systems and advance material handling equipment such as Very Narrow Aisle (VNA) equipment, flameproof stackers and battery-operated trucks help in safe, agile and seamless operations, thereby guaranteeing that 95 per cent of our orders are shipped out the same day. We have a stand-alone Petroleum Explosives Solvent Organization (PESO) building, which is licensed to store 500 KL flammable liquids, and is 10 times our previous warehouse capacity. A robust automated temperature monitoring system ensures that a wide range of products in the category of two to eight degrees, 15 to 25 degrees, -20 degrees, -70 degrees and non-temperature material is stored in controlled environment, as per their label storage conditions.

What are the learnings from the pandemic, given the demand-supply disruptions, price escalation in input chemicals due to scarcity and increased demand, etc? What are the other challenges outlasting the pandemic, and what measures have been taken to ensure productivity is not impacted?

With tremendous opportunities for growth in emerging markets, many manufacturers follow a trend of aggressive globalisation and outsourcing strategies. There is growing reliability on third-party logistics service providers for manufacturing as well as distribution. The biggest learning from the pandemic is around agility and robustness of the supply chain. Those organisations, which were able to quickly respond to the changing demand and situation, got the maximum benefits. The need to be more technology-driven came out as stronger need than ever before as most life science industries are moving away from traditional technology-based solutions to digital solutions. The need of remapping the imported raw material supply network emerged more strongly because of geo-political scenario emerging in several geographies.

Lifescience supply chain challenges include inadequate visibility of product and services from an end-to-end supply chain network perspective to supply chain agility being limited due to long procurement/manufacturing lead times. Other key factors include specific mandates by regulatory bodies and insufficient technology initiatives. To manage this dynamic environment, lifescience industry would need more skilled workforce, which, currently, is a challenge.

Could you highlight the safety protocols and standards being maintained inside the plant?

Our Navi Mumbai Distribution Centre located at Patalganga boasts of a state-of-the-art warehouse including a PESO licensed class-III hazardous storage facility. Our EHS & legal compliance services cover Indian environmental & safety laws and Indian Factory Rules. Fire fighting system is designed as per NFPA standards and National Building Code 2004 & 2016. The prominent highlight of the site is the safety systems like fire detection, fire-hydrant, foam-based fire suppression system and in-rack sprinkler systems. The building infra has been designed as per the class of chemical stored in that area. The chemicals are stored as per the compatibility matrix to avoid any cross contamination or hazard.

Our safety protocols are designed as per global standards, which include employee and visitor entry/exit management, robust contractor management, work permit systems, lock-out tag-out system and daily toolbox talk before commencement of operations, are a few to mention.

What are the areas of the business showing the most growth potential? How will the newly started Patalganga plant add to the growth and revenue prospects of the company?

The pandemic has led to significant geo-economic and geopolitical shifts, with government driving self-sufficiency agenda and industries recalibrating their business models. Our warehouse at Patalganga is well-connected to all the pharma hubs in the country and proximity to port facilitates rapid and cost-efficient movement of goods. Lifescience is growing at an unprecedented rate across the globe. The DC caters to the needs of markets across APAC and South Africa, which have a good growth potential in this sector. Industries like biopharma, vaccine manufacturing, new molecule discovery organisation are the fastest growing segments in a post-COVID world.

The growth driven by vaccine and biosimilar customers has been powered by Patalganga warehouse. We could supply products from this warehouse to enable our customers to accelerate the development and production of COVID therapies during the difficult pandemic times in the last two years.

The warehouse is among the largest in the nation for the lifesciences sector. In order to serve Regional CFAs, direct customers and distributors across India, the warehouse operations manage approximately 200,000 SKUs. The warehouse stores these specialities and PESO chemicals to ensure faster deliveries to our customers, driving research and development activities across various industries, pharma, biotech, testing labs, CROs and academia.

The facility also has state-of-the-art facility to repackage high-grade solid chemicals and plans to have a quality check laboratory to ensure top-class chemicals are served to Merck’s customers.

The Indian pharmac industry is predicted to reach $100 billion in sales by 2025, according to a report by the India Brand Equity Foundation (IBEF); so, we think India will need strong capabilities like Patalganga warehouse to support the country’s growth, which will undoubtedly boost Merck’s growth and revenue, too.

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