[i]

A PROJECT REPORT

ON

“Integration of Inventory and the Delivery Model for Operational

Efficiency and Minimal WIP in Pune City for QuikPills”

SUBMITTED TO

MAEER’S MIT SCHOOL OF BUSINESS

BY

MIRAJ PARESH PATEL

ROLL NO. 331418

33RD BATCH

IN PARTIAL FULFILMENT OF

POST GRADUATE DIPLOMA IN MANAGEMENT

- MARKETING

(PGDM)

APRIL – MAY 2016

MAEER’S MIT SCHOOL OF BUSINESS

PUNE

[ii]

Table of

CONTENTS

Chapter No. Title Page No. Declaration from student iv

Certificate from Company/Organization v

Certificate from Guide vi

Acknowledgement vii

List of Algorithms viii

List of Charts ix

Executive Summary x

I Introduction 1 – 7

1.1 Introduction 2

1.2 Industry Analysis 2

1.3 Company Profile 3

1.4 Objective 6

1.5 Scope 6

1.6 Limitations 7

II Research Methodology 8 – 13

2.1 Definition 9

2.2 Types of Research Methodology 9

2.3 Primary Data Collection 10

2.4 Secondary Data Collection 11

2.5 Sample Design 12

2.6 Population 12

2.7 Sample Size 12

2.8 Sample Selection Method 12

2.9 Method of Data Collection 12

2.10 Instrument for Data Collection 13

III Theoretical Background 14 – 22

IV Data Processing and Analysis 23 – 31

4.1 Market Research Analysis for the area of Kothrud 23

4.2 Flow of Medicine 30

4.3 Problems Faced by QuikPills to associate with the

Vendors (Pharmacy) 31

[iii]

4.4 Problems Faced by Vendors (Pharmacy) & Loop Holes

of E – Pharmacy 31

4.5 Competitor Analysis 31

V Operations 33 – 38

5.1 KNN + K – Mean algorithm 34

5.2 Travelling Salesman Problem 35

VI Management Lessons 39 – 45

VII Findings 46 – 47

VIII Recommendations 48 - 51

8.1 Recommended Algorithm 50

8.2 Research Based Recommendations 51

8.3 Operational Recommendations 51

IX Conclusion 52 – 53

Bibliography 54

Annexure A 55

[iv]

DECLARATION

I Mr. Miraj Paresh Patel hereby declare that this project report is the record of

authentic work carried out by me during the period from 1st April 2016 to 31st May

2016 and has not been submitted to any other University or Institute for the award

of any degree / diploma etc.

Miraj Paresh Patel

Date:

[v]

[vi]

CERTIFICATE

This is to certify that Mr. Miraj Paresh Patel of MAEER’s MIT School of Business has

successfully completed the project work titled “Integration of Inventory and the Delivery

Model for Operational Efficiency and Minimal WIP in Pune City for QuikPills” under the

guidance of Prof. Neelkanth Athalye for partial fulfillment of requirement for the completion of

PGDM course as prescribed by the MAEER’s MIT School of Business.

This project report is the record of authentic work carried out by him/her during the period from

1st April 2016 to 31st May 2016. He has worked under my guidance.

Signature

Name

Project Guide (Internal)

Date:

Signature

Name

Director

Date:

[vii]

ACKNOWLEDGMENT

I sincerely express my gratitude to Mr. Nikhil Gupta and Mr. Raghvendra

Singh for giving me an opportunity to work on a topic of my interest. I am thankful

for their contribution and guidance throughout my internship, without their help

completion of my project would have not been possible.

I appreciate Prof. Mr. Neelkanth Athalye for taking me under his guidance

and I am truly grateful for his support, advice and insight on my project.

I would like to extend special thanks to Prof. (Gp.Capt.) D. P. Apte and MIT

School of Business for sharing exceptional learning and academic experience that

has helped me put my theoretical learning to practical use.

I am extremely thankful to all those who have directly or indirectly

contributed towards success of my project.

[viii]

List of

ALGORITHMS

Algorithm Name Page No.

5.1 KNN + K Mean 34

5.2 Travelling Salesman Problem (Pune) 35

5.3 Travelling Salesman Problem (Kothrud) 36

5.4 Travelling Salesman Problem (Koregaon Park) 37

5.5 Travelling Salesman Problem (Katraj) 38

8.1 Recommended Flow 49

[ix]

List of

CHARTS

Chart

No. Name Page No.

4.1 Awareness about E - Pharmacy 24

4.2 Association with E - Pharmacy 24

4.3 Type of Pharmacy 25

4.4 Types of Products 25

4.5 Home Delivery 26

4.6 Provide Bill? VAT & CST Registration? 27

4.7 Regular Re-Supply 27

4.8 Shop Owner 28

4.9 Inventory Management 28

4.1 Monthly Offs? 29

4.11 Interested/Not Interested 29

4.12 Flow of Medicines 30

[x]

Executive Summery

Since the market is revolutionizing and the trend has shifted from what we called as

traditional buying (personal buying) to online buying and thus it is imperative for

every sector to evolve in this competitive market. QuikPills Wellness Pvt. Ltd. is an

E – Pharmacy platform which provides medicine to the customers on their door step.

QuikPills as such does not have its own inventory and thus they associate with the

local pharmacy for their operations. Therefore they act as a platform for the local

pharmacy to expand their market reach and join hands in the shifting trend.

QuikPills has started its operations in Jaipur & Delhi and they have planned to

commence with their operations in Pune for which market research had to be

conducted to collect relevant data about potential vendors (pharmacy) whom they

can associate with.

Currently the company is delivering medicines within the time frame of 2 hrs. to 24

hrs. but since medicine is something which is highly critical and needs to be

delivered within the shortest period of time. QuikPills recognized the need to deliver

the medicine and has a mission to deliver within 2 hrs. or less.

To optimize the delivery time algorithm was needed to be developed using K Nearest

Neighbor (KNN), K Mean and Travelling Salesmen algorithms in order to find the

shortest route which can be implemented in developing delivery software which can

automatically direct the shortest route for delivery to the deliveryman.

To deliver at the shortest possible time frame entire operation is required to be

optimized right from the time order is received till the order has been delivered, an

algorithm was recommended which will cover all the aspects of operations and

implementing the same QuikPills will be able to deliver the medicine efficiently with

minimal WIP within the shortest period of time.

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Chapter I

INTRODUCTION

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1.1 Introduction:

QuikPills Wellness Pvt. Ltd. is an E – commerce platform

With the rising trend of E – commerce market, QuikPills Wellness Pvt. Ltd. a startup company

based from Jaipur has a vision of delivering medicine online to the customers within 2 hours.

The aim of my project is to optimize the delivery process by preparing an algorithm which can be

applied to minimize the time frame of operation starting from validation of prescription to

delivering of the medicine.

1.2 Industry Analysis:

Online pharmacies in India have significantly increased due to growing E-commerce in India. An

online pharmacy is an Internet-based vendor of prescription drugs, and the term encompasses both

legitimate and illegitimate pharmacies. Online pharmacies have been increasing in India, with the

rise attributed to little regulation of the industry.

Technology can help in meeting the healthcare objective of India. Indian government is planning

to spend Rs 500 crore on computer literacy project for 50 lakh people over a period of 3 years.

This would help Indian citizens to access government services in the fields of e-education, e-health

and e-governance. Healthcare providers in India are also expected to spend $1.1 billion on IT

products and services in 2014.

Legal Status in India:

The Drugs and Cosmetics Act, 1940, and the Drugs and Cosmetics Rules, 1945, have guidelines

on the sale of Schedule H and Schedule X drugs. These can be sold only on prescription and there

are specific rules, including for labelling and bar coding.

It appears that electronic prescriptions should be valid especially in the light of the Pharmacy

Practice Regulations of 2015 declared by Pharmacy Council of India in January 2015. In these

regulations, “Prescription” is defined by regulation 2 (j)[3] ‘means a written or electronic direction

from a Registered Medical Practitioner…….’ On basis of existing regulations it appears that a

3 | P a g e

scanned copy of prescription will be perfectly considered as a valid prescription. However,

whether such electronic prescriptions can be used to buy medicine from online pharmacies has

been questioned.

1.3 Company Profile:

QuikPills Wellness Pvt. Ltd. is an E – Commerce Company serving in pharmaceutical and

healthcare products. Company commenced its operation in Jaipur and they have recently started

with their operation in Delhi. Types of product: Allopathy, Homeopathy, Ayurveda, Vaccines and

Heath Care Equipment.

QuikPills partners with local vendors for inventory. Customer place their order by uploading valid

prescription on the website or by sending through Email/WhatsApp.

QuikPills.com is operated and managed by SORR ventures, a partnership firm formed in New

Delhi, India. SORR Ventures was established with an objective of providing health care services

through its web portal (We are now converting it into a Pvt. Ltd. Company). We facilitate the

online sale and purchase of pharmaceutical, Ayurveda & Homoeopathic medicine and other health

care & wellness products and services offered by various sellers and service providers.

The team QuikPills comprises of people having a combined experience of 40+ years in ITeS,

Pharmaceuticals and Healthcare; committed to bring the online pharmacy services of QuikPills

with certitude that patients will get authentic medicines that are billed properly and Data base

recorded and maintained each time.

QuikPills are working on a marketplace model and we have planned to work on hybrid model,

wherein we shall also maintain some inventory for smooth functioning of business. We have

4 | P a g e

partnered with local sellers (Allopathic, Ayurveda, Homeopathy and health equipment dealers).

Customer will place the order on Quikpills.com by uploading prescription on the website or mobile

app or sending it through WhatsApp or email. These orders will be fulfilled by the sellers.

Seller/Vendor selection process:

We partner with reliable and professional sellers. Our legal team makes sure that all necessary

registration and documentation has been done by the prospective vendors/seller. For medicines,

we ensure that a registered pharmacist is handling the dispensing of drugs at the medical stores.

We also look into the age of seller’s/vendor’s business.

Operations:

Quikpills.com partners with local sellers (Medicines dealers – Allopathic, Ayurveda, Homeopathy

and health equipment’s) who maintain the stock.

Customer places the order on Quikpills.com by uploading prescription on the website/mobile app

or sending it through WhatsApp or email. For products that do not require prescription, customer

simply adds them to the cart and checkout.

Order Fulfillment Process at QuikPills:

Allopathic medicine – The pharmacist reviews the prescription and then calls the patient

and confirms the quantity of the medicines required. (If the customer has already

mentioned about the quantity of medicines. The pharmacist does not call the customer.)

The pharmacist enters the confirmed order in to the system for which the customer gets an

email and SMS confirming the order and value of the order. Pharmacist forwards the order

to registered sellers to pack the order and prepare the bill. Our delivery boy collects the

order from the vendor and delivers it to the customer. The payments for medicines are only

through cash on delivery, so the delivery boy collects the payment from the customer and

5 | P a g e

deposit it to the branch manager. In compliance with Drug and Cosmetic Act and Rules

1940 & 1945, we don't process requests for Schedule X and any other habit-forming drugs.

For Schedule H and H1 drugs customers need to upload a valid prescription from a

registered medical practitioner.

Other health care products- Our customer care team reviews order than forward it to the

nearest vendor. The vendor prepares the package and bill. Delivery boy collects the order

from the vendor and delivers it to the customer. Customer can pay online or choose cash

on delivery option for the payments.

Our motto is to deliver the medicines & other health care products within 2 to 24 hours

after getting the order. Orders received before 1 PM, will be delivered the same day and

orders received after 1 PM will be delivered next day before 12 PM.

By any chance, if the product that customer has ordered, is out of stock, customer will be

informed immediately and an extended delivery time would be given to him.

Customer can track/cancel the order from the options given on the website.

A customer care number has been provided on the website, where customer can call and

enquire about the order. Online chat facility with our customer care executive will also be

provided to the customer.

Minimum order value for free shipping is Rs. 300. If the customer places the order below

Rs. 300/- Shipping charges of Rs. 25 would be charged from the customer.

For the orders, where customer has sent the prescription only, our pharmacist calls the

customer and reviews the prescription and confirms the quantity of the order.

Customer can call or email us if they are looking for any specific medicine or healthcare

product which is not available in our stock.

6 | P a g e

1.4 Objectives:

Primary Objective:

To conduct a market research for finding potential vendors to associate with QuikPills in

the area of Kothrud.

To collect data from local vendors about their inventory, procurement and reordering

system, delivery system.

To prepare an algorithm to optimize the delivery time of the medicine and medical products

– Maximum time taken for delivery should be < 2 hours.

Secondary Objective

To study, find and analyze the problems faced by E – Pharmacy to associate with vendors.

To find problems and loop holes of E – Pharmacy system faced by vendors.

To perform competitive analysis

1.5 Scope:

Shifting market trend from traditional buying to online buying, i.e. through E – Commerce

platforms.

Only few online pharmacy in India such as Netmeds, Mchemist, etc.

Above mentioned E – Pharmacy delivers medicine PAN India from centralized location

which takes 3 to 4 working days to deliver the medicine thus giving scope for QuikPills to

have competitive advantage by establishing centers city wise and delivering medicines

within 2 hours.

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1.6 Limitations:

QuikPills as of yet has not started its operation in Pune, thus difficult to practically analyze

its operation.

Many pharmacy are not interested in associating with the E- Pharmacy because:

o Misconception about the online pharmacy

o Pharmacy affiliated with association are against E- Pharmacy because of fear of

losing their business

Many loop holes which are required to be countered such as checking authenticity of the

doctors, validation of fake prescription, validation for scheduled drugs, etc.

8 | P a g e

Chapter II

Research

Methodology

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2.1 Definition:

Research methodology is the way of systematically solving the research problem. It is a science of

studying how research is conducted scientifically. Under it, the researcher acquaints

himself/herself with the various steps generally adopted to study research problem, along with the

underlying logic behind them. Hence, it is not only important for the researcher to know the

research techniques/methods, but also the scientific approach called methodology.

2.2 Type of Research Methodology:

Quantitative Research

Qualitative Research

Quantitative Research:

Quantitative Research is considered to have as its main purpose the quantification of data. This

allows generalizations of results from a sample to an entire population of interest and the

measurement of the incidence of various views and opinions in a given sample. Yet, quantitative

research is not infrequently followed by qualitative research which then aims to explore select

findings further.

Types of Quantitative Research:

Correlation

Experimental

Qualitative Research:

Qualitative research is considered to be particularly suitable for gaining an in-depth understanding

of underlying reasons and motivations. It provides insights into the setting of a problem. At the

same time, it frequently generates ideas and hypotheses for later quantitative research.

Types of Qualitative Research:

• Historical

• Comparative

• Descriptive

• Evaluation

10 | P a g e

• Action

Descriptive Research:

A descriptive approach to research is called as a foundation for research. Its logic is based on the

statistics of the research analysis. So, the descriptive research can’t take into account the validity

of the research results, because it does not explain the causes of the result.

The descriptive research method is basically divided into three types:-

• Observation Method

• Case Study Method

• Survey Method

The Observation Method concentrates on observing the subject in both Natural and

Laboratory methods to draw the conclusions on the research. It’s highly useful in the

Natural observation because the original results of the research can be obtained. In

laboratory method the result would be according to the quantities of the data provided to

the observation.

Case study method involves a deep research on the problems discussed.

Survey method is based on the questionnaire prepared for the participants. After

participants answer the questionnaire, the research moves towards its final stage.

2.3 Primary Data Collection:

Primary research consists of a collection of original primary data collected by the researcher. It is

often undertaken after the researcher has gained some insight into the issue by reviewing secondary

research or by analyzing previously collected primary data.

Types of Primary Data Collection methods:

Observation Methods

Questionnaires

Personal Interview

Telephonic Interview

Mail Survey

11 | P a g e

2.4 Secondary Data Collection:

Secondary data refers to data that was collected by someone other than the user. Common sources

of secondary data for social science include censuses, information collected by government

departments, organizational records and data that was originally collected for other research

purposes. Primary data, by contrast, are collected by the investigator conducting the research.

Secondary data analysis can save time that would otherwise be spent collecting data and,

particularly in the case of quantitative data, can provide larger and higher-quality databases that

would be unfeasible for any individual researcher to collect on their own. In addition, analysts of

social and economic change consider secondary data essential, since it is impossible to conduct a

new survey that can adequately capture past change and/or developments. However, secondary

data analysis can be less useful in marketing research, as data may be outdated or inaccurate.

Types of Secondary Data:

Internal Data

Profit and Loss statement

Balance Sheets

Sales Figures

Inventory Records

Company’s Past Records

External Data

Published Data

Agencies

Electronic Data

Government Records

Internet

Sources Used:

Published Data

Electronic Data

Internet

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2.5 Sample Design

Probabilistic Sampling

Random

Stratified

Systematic

Cluster

Non – Probabilistic Sampling

Convenience

Consecutive

Quota

Judgmental

Snowball

2.6 Population:

Census: Kothrud

No. of Pharmacy: 60

2.7 Sample Size

Sample: 19 Pharmacy

2.8 Sample Selection Method:

Judgmental

Cluster

2.9 Method of Data Collection:

Primary Data Collection

Secondary Data Collection

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2.10 Instrument for Data Collection:

Personal Interview

Questionnaire (Filled by us)

Observation

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Chapter III

Theoretical

Background

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Business – to – Business (B2B):

Business to business (B To B) is a type of commerce transaction that exists between businesses,

such as those involving a manufacturer and wholesaler, or a wholesaler and a retailer. Business to

business refers to business that is conducted between companies, rather than between a company

and individual consumers. This is in contrast to business to consumer (B2C) and business to

government (B2G). A typical supply chain involves multiple business to business transactions, as

companies purchase components and other raw materials for use in its manufacturing processes.

The finished product can then be sold to individuals via business to consumer transactions.

Business-to-business (B2B) refers to a situation where one business makes a commercial

transaction with another. This typically occurs when:

A business is sourcing materials for their production process (e.g. a food manufacturer

purchasing salt).

A business needs the services of another for operational reasons (e.g. a food manufacturer

employing an accountancy firm to audit their finances).

A business re-sells goods and services produced by others (e.g. a retailer buying the end

product from the food manufacturer).

Business – to – Consumer (B2C):

Business to consumer (B2C) is business or transactions conducted directly between a company

and consumers who are the end-users of its products or services.

When a business is focused on B2C marketing, they must keep their customer in mind. They need

to know the needs, wants, problems, and challenges of their consumers. When they understand

their customer, they can create the marketing messages that answer their customers' needs.

16 | P a g e

K – Nearest Neighbor algorithm (KNN):

In pattern recognition, the k-Nearest Neighbors algorithm (or k-NN for short) is a non-

parametric method used for classification and regression. In both cases, the input consists of

the k closest training examples in the feature space. The output depends on whether k-NN is used

for classification or regression:

In k-NN classification, the output is a class membership. An object is classified by a

majority vote of its neighbors, with the object being assigned to the class most common

among its k nearest neighbors (k is a positive integer, typically small). If k = 1, then

the object is simply assigned to the class of that single nearest neighbor.

In k-NN regression, the output is the property value for the object. This value is the

average of the values of its k nearest neighbors.

k-NN is a type of instance-based learning, or lazy learning, where the function is only

approximated locally and all computation is deferred until classification. The k-NN

algorithm is among the simplest of all machine learning algorithms.

Both for classification and regression, it can be useful to assign weight to the contributions

of the neighbors, so that the nearer neighbors contribute more to the average than the more

distant ones. For example, a common weighting scheme consists in giving each neighbor

a weight of 1/d, where d is the distance to the neighbor.[2]

The neighbors are taken from a set of objects for which the class (for k-NN classification)

or the object property value (for k-NN regression) is known. This can be thought of as the

training set for the algorithm, though no explicit training step is required.

A shortcoming of the k-NN algorithm is that it is sensitive to the local structure of the data.

The algorithm is not to be confused with k-means, another popular machine

learning technique.

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K Mean:

K-means is one of the simplest unsupervised learning algorithms that solve the well-known

clustering problem. The procedure follows a simple and easy way to classify a given data set

through a certain number of clusters (assume k clusters) fixed a priori. The main idea is to define

k centroids, one for each cluster. These centroids should be placed in a cunning way because of

different location causes different result. So, the better choice is to place them as much as possible

far away from each other. The next step is to take each point belonging to a given data set and

associate it to the nearest centroid. When no point is pending, the first step is completed and an

early groupage is done. At this point we need to re-calculate k new centroids as barycenters of the

clusters resulting from the previous step. After we have these k new centroids, a new binding has

to be done between the same data set points and the nearest new centroid. A loop has been

generated. As a result of this loop we may notice that the k centroids change their location step by

step until no more changes are done. In other words centroids do not move any more.

Finally, this algorithm aims at minimizing an objective function, in this case a squared error

function. The objective function

,

Where is a chosen distance measure between a data point and the cluster center

, is an indicator of the distance of the n data points from their respective cluster centers.

he algorithm is composed of the following steps:

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1. Place K points into the space represented by the objects that are being clustered. These

points represent initial group centroids.

2. Assign each object to the group that has the closest centroid.

3. When all objects have been assigned, recalculate the positions of the K centroids.

Repeat Steps 2 and 3 until the centroids no longer move. This produces a separation of the objects

into groups from which the metric to be minimized can be calculated.

Although it can be proved that the procedure will always terminate, the k-means algorithm does

not necessarily find the most optimal configuration, corresponding to the global objective function

minimum. The algorithm is also significantly sensitive to the initial randomly selected cluster

centers. The k-means algorithm can be run multiple times to reduce this effect.

Travelling Salesman:

The travelling salesman problem (TSP) asks the following question: Given a list of cities and the

distances between each pair of cities, what is the shortest possible route that visits each city exactly

once and returns to the origin city? It is an NP-hard problem in combinatorial optimization,

important in operations research and theoretical computer science.

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Solution of a travelling salesman problem

TSP is a special case of the travelling purchaser problem and the vehicle routing problem.

In the theory of computational complexity, the decision version of the TSP (where, given a

length L, the task is to decide whether the graph has any tour shorter than L) belongs to the class

of NP-complete problems. Thus, it is possible that the worst-case running time for any algorithm

for the TSP increases superpolynomially (perhaps, specifically, exponentially) with the number of

cities.

Inventory:

Inventory management is a science primarily about specifying the shape and placement of stocked

goods. It is required at different locations within a facility or within many locations of a supply

network to precede the regular and planned course of production and stock of materials.

The scope of inventory management concerns the fine lines between replenishment lead time,

carrying costs of inventory, asset management, inventory forecasting, inventory valuation,

inventory visibility, future inventory price forecasting, physical inventory, available physical

space for inventory, quality management, replenishment, returns and defective goods, and demand

forecasting. Balancing these competing requirements leads to optimal inventory levels, which is

an ongoing process as the business needs shift and react to the wider environment.

Inventory management involves a retailer seeking to acquire and maintain a proper merchandise

assortment while ordering, shipping, handling, and related costs are kept in check. It also involves

20 | P a g e

systems and processes that identify inventory requirements, set targets, provide replenishment

techniques, report actual and projected inventory status and handle all functions related to the

tracking and management of material. This would include the monitoring of material moved into

and out of stockroom locations and the reconciling of the inventory balances. It also may

include ABC analysis, lot tracking, cycle counting support, etc. Management of the inventories,

with the primary objective of determining/controlling stock levels within the physical distribution

system, functions to balance the need for product availability against the need for minimizing stock

holding and handling costs.

Supply Chain:

In commerce, supply chain management (SCM), the management of the flow of goods and

services, involves the movement and storage of raw materials, of work-in-process inventory, and

of finished goods from point of origin to point of consumption. Interconnected or interlinked

networks, channels and node businesses combine 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."

SCM practice draws heavily from the areas of industrial engineering, systems

engineering, operations management, logistics, procurement, and information technology, and

strives for an integrated approach.

E – Commerce:

Electronic commerce, commonly written as e-commerce or E Commerce, is the trading or

facilitation of trading in products or services using computer networks, such as

the Internet or online social networks. Electronic commerce draws on technologies such as mobile

commerce, electronic funds transfer, supply chain management, Internet marketing, online

transaction processing, electronic data interchange (EDI), inventory management systems, and

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automated data collection systems. Modern electronic commerce typically uses the World Wide

Web for at least one part of the transaction's life cycle although it may also use other technologies

such as e-mail.

E-commerce businesses may employ some or all of the following:

Online shopping web sites for retail sales direct to consumers

Providing or participating in online marketplaces, which process third-party business-to-

consumer or consumer-to-consumer sales

Business-to-business buying and selling

Gathering and using demographic data through web contacts and social media

Business-to-business electronic data interchange

Marketing to prospective and established customers by e-mail or fax (for example,

with newsletters)

Engaging in pretail for launching new products and services

Online financial exchanges for currency exchanges or trading purposes

E – Pharmacy:

An online pharmacy, Internet pharmacy, or mail-order pharmacy is a pharmacy that operate over

the Internet and sends the orders to customers through the mail or shipping companies. Online

pharmacies might include: Pharmacy benefit manager – A large administrator of corporate

prescription drug plans.

Operational Efficiency:

In a business context, operational efficiency can be defined as the ratio between the input to run a

business operation and the output gained from the business. When improving operational

efficiency, the output to input ratio improves.

Inputs would typically be money (cost), people (measured either as headcount or as the number

of full-time equivalents) or time/effort. Outputs would typically be money (revenue, margin, and

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cash), new customers, customer loyalty, market differentiation, production, innovation, quality,

speed & agility, complexity or opportunities.

The terms "operational efficiency", "efficiency" and "productivity" are often used interchangeably.

An explanation to the difference between efficiency and (total factor) productivity is found in "An

Introduction to Efficiency and Productivity Analysis". To complicate, "operational excellence"

which is about continuous improvement - not limited to efficiency - is occasionally used when

meaning operational efficiency. From time to time "operating excellence" is also used with the

same meaning as "operational efficiency".

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Chapter IV

Data Processing and

Analysis

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4.1 Market Research Analysis for the area of Kothrud:

Number of pharmacy who are aware about the concept of E – Pharmacy?

Chart 4.1 – Awareness about E - Pharmacy

67% of the vendors were aware about E- Pharmacy

Pharmacy associating with any other E – Pharmacy?

Chart 4.2 – Association with E - Pharmacy

No vendors are associated with E- Pharmacy

33%

67%

Awareness about E- Pharmacy

No

Yes

100%

Association with E- Pharmacy

No

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Type of Pharmacy?

Chart 4.3 – Type of Pharmacy

Apart from wellness forever, every vendor is a general store, with sole ownership where

owners are the pharmacist or pharmacists are hired for full time.

Types of Medical products offered by the pharmacy

Chart 4.4 – Types of Products

94%

6%

Type of Pharmacy

Genral

Retailer

6%6%

44%

33%

11%

Types of products available at the storeAllopathy, Ayurveda

Allopathy, Ayurveda, Body buildingsuppliments, Vaccines and Injectables

Allopathy, Ayurveda, Healthequipments, Vaccines and Injectables

Allopathy, Ayurveda, Homeopathy,Health equipments, Body buildingsuppliments, Vaccines and Injectables

Allopathy, Ayurveda, Vaccines andInjectables

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Almost 33% of vendors have all the three types of medicines, i.e., Allopathic,

Homeopathic, and Ayurveda meds. Along with vaccines, health equipment and body

building supplements.

Number of pharmacy who follows home delivery system

Chart 4.5 – Home Delivery

67% of vendors have their own delivery system but everyone has different time for

delivering. Mostly everyone takes about 2 to 12 hours for delivering or they note the order

and deliver all the meds together in the evening.

They deliver to an average of 5 Km.

33%

67%

Home Delivery

No

Yes

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Number of pharmacy who provides bill and is VAT & CST registered

Chart 4.6 – Provide Bill? VAT & CST Registration?

Every vendor provides Bill and is VAT & CST registered

Inventory managing and resupply mechanism?

Chart 4.7 – Regular Re-Supply

Every vendor has regular resupply system with lead time of on an average of 1 day.

100%

Provide Bill? VAT & CST Registration?

Yes Yes

100%

Inventory Resupply

Regular re-supply

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Ownership of the pharmacy

Chart 4.8 – Shop Owner

Apart from wellness forever, every vendor is a general store, with sole ownership where

owners are the pharmacist or pharmacists are hired for full time.

Method of managing inventory

Chart 4.9 – Inventory Management

89% of vendors uses software for inventory Management.

94%

6%

Shop Owner?

Sole

Pvt. Ltd.

11%

89%

Inventory Management

Manual book-keeping?

Software

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Pharmacy monthly offs?

Chart 4.10 – Monthly Offs?

94% of pharmacy are open every day of the month.

Number of pharmacy interested in associating with QuikPills

Chart 4.11 – Interested/Not Interested

6%

94%

Monthly Offs?

Last sunday of the month

No

67%

33%

Interested/Not Interested

Interested

Not Interested

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67% of the vendors are interested in associating with QuikPills

Few showed concerned about associating because of the confusion that was caused few

months earlier about ban on pharmacy, but as we tried to convince them about our process

and as we briefed that every prescription is authenticated by pharmacist and we are trying

to solve issues relating to the online concept, the response was positive and many seemed

interested for further talks.

4.2 Flow of Medicine:

Chart 4.12 – Flow of Medicines

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4.3 Problems Faced by QuikPills to associate with the Vendors (Pharmacy):

33% of the vendors were unaware about the E – Pharmacy, but the other 67% who were

aware about the existence of E – Pharmacy majority were unaware about the actual

functioning about the E – Pharmacy or had misconceptions.

Since there was an outbreak in news stating that the online pharmacy will be closely

monitored with strict regulatory terms and illegally functioning E – Pharmacy were shut

down. This created a misconception that there is a ban on all the online pharmacy and thus

many pharmacy seemed reluctant to associate.

Many pharmacy across Pune are associated with a pharmacy association body which

restricts them from associating with any E – Pharmacy chain. It is either the pharmacy can

associate with the association or with any of the E – Pharmacy company.

Perception of the pharmacist that the validation process of E – Pharmacy companies is not

authentic and they can sell medicines without prescription.

4.4 Problems Faced by Vendors (Pharmacy) & Loop Holes of E – Pharmacy:

The pharmacist doubt about the authenticity of validation of the prescription. They think E

– Pharmacy ignores the validation process and will fulfill the order where customers can

misuse the prescription to purchase the medicine online and use the same prescription to

purchase from local pharmacy.

Fear of providing fake prescription by creating photo-shopped image and uploading.

Ban on selling Scheduled H & Scheduled X drugs online.

4.5 Competitor Analysis:

Few major competitors: Netmeds, Mchemist, Apollo & MediPlus.

Netmeds, Mchemist deliver PAN India through central procurement and delivery method.

Apollo has pharmacy in all the major cities, customer has to place order online and has to

collect the medicines from the pharmacy itself.

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Whereas QuikPills has a presence city wise but only in Jaipur & Delhi thus this gives them

advantage over the competitors in the areas they will have their operations.

Delivery time taken by Netmeds and Mchemist is approximately 3 – 4 working days.

MediPlus does not deliver prescribed medicine, only deliver products listed on the website.

Apollo pharmacy does not provide home delivery option.

Whereas QuikPills will be delivering medicines within 2 working hours.

Netmeds, Apollo and MediPlus provide medical assistance to the patient.

QuikPills have not started with any such assistance as of yet.

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Chapter V

Operations

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5.1 KNN + K – Mean algorithm:

Algorithm 5.1 – KNN + K Mean

Clusters (Centers):

1. Kothrud, 2. Koregaon Park, 3. Katraj

The centers/clusters were selected after the market research was conducted. These three region were found

to be highly potential in associating with QuikPills. Also considering the spread of area, keeping these three

regions as center, major areas of Pune is covered and it will be optimal for any deliveryman to deliver the

medicine within the shortest time frame.

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5.2 Travelling Salesman Problem

Pune

Algorithm 5.2 – Travelling Salesman Problem (Pune)

The route has been prepared considering the shortest route. If the deliveryman is to travel on this

proposed path the time taken will be minimum which help in optimizing the delivery time.

Analysis:

Approximate Time Taken: 530 mins (approx. 9 Hours)

Approximate Distance Covered: 92.3 Km

Min Requirement of Delivery Boys: 8

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Travelling Salesman Problem (Kothrud):

Algorithm 5.3 – Travelling Salesman Problem (Kothrud)

Deliverymen deployed in Kothrud should follow the proposed path to attain operational efficiency

and minimal WIP.

Analysis:

Approximate Time Taken: 175 mins (approx. 3 Hours)

Approximate Distance Covered: 25 Km

Min Requirement of Delivery Boys: 2

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Travelling Salesman Problem (Koregaon Park):

Algorithm 5.4 – Travelling Salesman Problem (Koregaon Park)

Deliveryman deployed in Koregaon Park should follow the proposed path to attain operational

efficiency and minimal WIP.

Analysis:

Approximate Time Taken: 215 mins (approx. 3.6 Hours)

Approximate Distance Covered: 39 Km

Min Requirement of Delivery Boys: 3

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Travelling Salesman Problem (Katraj):

Algorithm 5.5 – Travelling Salesman Problem (Katraj)

Deliveryman deployed in Katraj should follow the proposed path to attain operational efficiency

and minimal WIP.

Analysis:

Approximate Time Taken: 195 mins (approx. 3.5 Hours)

Approximate Distance Covered: 35 Km

Min Requirement of Delivery Boys: 3

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Chapter VI

Management Lessons

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1. Punctuality

Punctuality is key to success. Few advantages which a person can experience for being

punctual:

People have a great regard for a punctual person.

Attending duties on time can help a person avoid a lot of stress due to pilling of work.

Punctuality is a sign of professionalism and helps you stand out as a reliable and

trustworthy person

2. Discipline

Discipline helps a person to

Be focused

Stay active

Relive internal stress

Get things done

3. Planning

Planning helps a person in

Decision making

Providing flexibility to change

Better evaluation and control

Achieving desired result

4. Execution

Planning is important in making and validating a decision in theory on paper, but the entire

planning is a waste if it is not executed rightly since execution will show actual results.

5. Work Ethics

It is said that how a person behaves and reacts reflect about his ethicality and intellect. Thus it

is imperative to maintain work ethics such as

Professional Behavior

Dependability

Positive Attitude

Adaptability

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6. Love Learning

Every step of the way is a learning process. One should love learning because:

It helps you keep pace with the changing world

It grows you

It makes you self-efficient

It helps you develop skills

7. Be Eager

One should always be eager to ask this question “Why?”

This will help a person to analyze situation better and assist in solving the riddle. As a manager

a person should always be eager about new innovation, new things & new learning because

that’s how one can find a breakthrough for something innovative, something different.

8. Achieving Targets

Target is the ultimatum which one is required to achieve regardless the situation because

It increases your creditability

There will be no pilling of work to be completed later

Makes you reliable and trustworthy

You can gain incentives

9. Communication Skills

Good communication skill is imperative because

It creates a good impression

Creates interest

Increase productivity

10. Adopt new skills

Change is part of life and adopting to those change becomes very important. Adopting new

skills will:

Give you higher preference at workplace

Open up new opportunities

Help you grow

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11. Never leave any task unfinished

Today or tomorrow regardless the situation you will require to complete the task which has

been allotted. There is no point in prolonging the work as it is going to pileup till the end and

you will have to work extra hours to finish the past work. This can hinder your growth process

since you might lose an opportunity to work on a new innovative task while you were

completing the unfinished task.

12. Self – Motivating

One should not always wait for someone to appreciate. One should be self-motivated since this

will assist them in carrying optimistic approach and carry positive attitude which in turn can

help the person to grow and develop.

13. Dedication

Whether be it any circumstance, nothing will prove better than dedication. To achieve your

goal, one need to be dedicated to work regularly, consistently and with absolute determination.

14. You learn from your mistakes

Learning from your mistake is the best learning. That is the reason it is said that experience

speaks for itself. When you make a mistake, firstly one should accept it and then one should

take care that the mistake is resolved and take precautions that it will not be repeated thereafter.

15. Deadline is not your enemy

Do not consider deadline as your enemy, but as a motivation to achieve your target within the

given frame of time.

16. Maintaining relations

Maintaining relation is most crucial and important task because it

Improves teamwork

Increase productivity

High retention

Convincing becomes easy

Effective approach

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17. Better to accept failure rather than giving excuse

Accepting failure will grow you and not demote you. It can be very rightly said that accepting

your mistake and working on it is the first step towards success. It is the right direction to

improve your performance.

18. Optimistic vision

Motivates you

Helps you achieve target faster

Increase efficiency

19. No task is small or of less important

Every task is important and carries its own value. One can learn allot from completing more

small tasks than by just taking up a big task and reaching half way. Also perfection can be

achieve in small tasks and adding these small tasks will in turn improve in productivity or

efficiency of the company.

20. Decision making

Decision is not just required to be taken at the execution stage but also required in planning

and early stages. Even as small as defining objectives also requires decision to be made.

21. Ask for advice where it is necessary

You might not know it all every time and not necessary that one should complete every task

by self. Taking advice from experienced people always helps to greater extent since they have

immense experience but most importantly asking for advice from the people who are closely

working on the matter since they have first-hand experience.

22. Never settle for less

There will always be scope for improvement and one should not accept to settle where there is

scope to advance further, innovate or improvise till you reach utmost perfection.

23. Accept any suggestions

Suggestions should always be welcomed no matter who is giving it because sometimes best

ideas can be generated by brainstorming and random ideas.

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24. Co – ordination

Achieving of targets require a lot of coordination among the team members in order to achieve

targets within or before the given time frame. It helps you to keep yourself updates as to till

what stage you’re your project reached and what more is required.

25. Initiative

Taking initiative in the working of an organization and doing tasks and taking up

responsibilities is required for better performance of oneself and the company.

26. Be excellent listener

It is imperative to be an excellent listener because

Idea can be generated in between the conversation

To find solution one should first understand the problem and for that you need to be

active listener

27. Suggest only feasible and relevant solutions

One should only suggest feasible and relevant solution or else he/she will be taken for granted.

His/her creditability decreases and if the inputs are of no value addition from your suggestion,

the time and resources spent after finding will go in vague and that is what a company will

never accept.

28. Hard work is not to be taken for granted

Working hard will help you grow as an individual and help you overcome challenging

situations. It helps you analyze effectively since you have worked on the task and the effort

will be reflected

29. Team work is always appreciated

Working in team will

Improve your efficiency

Gives you more idea

Attain target effectively and sooner

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30. Be empathetic

Being emphatic means thinking differently or thinking from other people point of views too.

Being emphatic will help you develop good interpersonal relationships.

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Chapter VII

Findings

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Findings:

Kothrud can be selected as center since 67% of the pharmacy are interested in associating

with online pharmacy business.

Since 33% of pharmacy has all types of medicines i.e., Ayurveda, Allopathy &

Homeopathy along health instruments, body building supplements, and vaccine &

injectable, and 44% of pharmacy has all the above mentioned inventory accept

Homeopathy QuikPills has higher probability to fulfill the order without being stocked out

or due to unavailability of medicines.

Problem faced by E – Pharmacy to associate with the vendors:

Unawareness about the concept of E – Pharmacy

Pharmacy association restricts them from associating with the E – Pharmacy

Wrong perception that E – Pharmacy does not validate the prescription and the

authenticity is not maintained

Wrong outbreak about E – Pharmacy being declared illegal in India

Problem faced by vendors and loop holes to be tackled with:

Fake prescription

Prescription being reused after purchasing medicine from the pharmacy

Considering 3 centers:

- Kothrud

- Katraj

- Koregaon Park

These 3 centers are well connected with major regions of Pune and hence optimum to

establish centers to have greater operational efficiency and minimal WIP.

Considering 8 deliveryman, average time taken for completing entire process will be

approximately 1 hour.

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Chapter VIII

Recommendations

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Algorithm 8.1 – Recommended Flow

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8.1 Recommended Algorithm (Description):

Step 1: Receive order from customer

Step 2: Pharmacist will check the prescription

If order is repeat or to refill from existing customer, directly go to confirm order

For new order

Step 3: Validate the Prescription

If invalid or not readable, call customer to reconfirm the order or get valid

prescription

For schedule X Drug, Exit

If they cancel order, Exit

If they provide with valid prescription, proceed to customer’s account

Step 4: Check if customer has an account

If no, create account for the customer

If yes, proceed to add prescription

If yes & it is Repeat/Refill order, move to confirming the order

Step 5: Add Prescription to customers account

Add unique order ID for the prescription and save it in customer’s profile and date

wise folder

Step 6: Check availability of the medicine with the vendor

If unavailable, check with other vendors

If not available with other vendors, check with wholesalers

If not available with wholesaler, call doctor for alternate medicine

Confirm with customer if they will accept the alternate medicine,

o If no, Exit

o If yes, proceed to checking listed medicals

Step 7: Check medicine on our QuikPills list

If not listed, add medicine to the list

If listed, confirm order with the customer

Step 8: Call and confirm order with the customer

Step 9: Send SMS & Email to customer regarding confirmation with GPS tracking link and order

details.

Step 10: Ask vendor to pack medicine, bill and pamphlet of QuikPills and get it ready for delivery

Step 11: Call delivery boy in the area of delivery to pick the medicine from the vendor to deliver

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Step 12: Delivery boys picks the medicine

Step 13: Order is delivered and take feedback from customers

8.2 Research Based Recommendations:

There are seven highly potential vendors (pharmacy) with ample inventory in area of

Kothrud who can be approached and targeted to convert them in associating with QuikPills

(Names and data of the pharmacy cannot be disclosed due to confidentiality clause).

In case there is no medicine available with the Vendors (Pharmacy), QuikPills should also

associate with the wholesalers and the distributors so that in case of emergency medicine

can be arranged quickly and delivered within the time frame.

QuikPills should also associate with a doctor who could suggest alternatives for a particular

medicine if the ordered medicine is not available with the Vendors (Pharmacy) or

Distributors/Wholesalers.

8.3 Operational Recommendations:

The proposed travelling salesman algorithm should be implemented in developing software

which will provide the deliveryman a well-defined shortest route once the order is received.

There should be 2 pharmacist, one to receive prescription from QuikPills website and

application, and the other pharmacist will receive prescription from customers through

WhatsApp and simultaneously be involved in creating accounts of the customers who are

not registered with QuikPills.

Feedback link should be sent to the customer after the ordered has been delivered QuikPills

can get review about their service and can determine the efficiency of business. Since

QuikPills is a startup, feedback will provide them a clear idea on what changes and

challenges they are to require to tackle to innovate and evolve.

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Chapter IX

Conclusion

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Looking at the future scope and shifting trend towards online buying of products, QuikPills has

the right approach to minimize the time of delivery to less than 2 hours. Medicine and related

products being critical and it is imperative to deliver within the minimum possible time.

With the research conducted in all the three region Kothrud, Koregaon Park and Katraj, QuikPills

has decided to commence with the operations in Pune. The recommended algorithm will be

implemented at the time of commencing their operations in Pune and QuikPills will also

implement the same in its future operations as well as for operations in Delhi and Jaipur. Travelling

salesman algorithm is being implemented in developing the software which will provide

deliveryman the shortest route for delivering the medicine.

Implementation of the following will minimize the delivery time to obtain optimal operational

efficiency with minimal WIP.

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Bibliography

http://en.wikipedia.org/

http://www.investopedia.com

http://www.slideshare.net/

http://quikpills.com/

https://www.legitscript.com/wp-content/uploads/2016/06/Country_by_Country_-

_Internet_Pharmacy_Regulations_-_3-23-15.pdf

http://www.csas.ed.ac.uk/__data/assets/pdf_file/0003/38829/PharmaDistributionIndia.pdf

http://www.bioplanassociates.com/publications/articles/BPIBioPlanDISTRIBIndiaTodayOct08.p

df

http://www.slideshare.net/anupsoans/march-medicin-man-2013

http://www.drugscontrol.org/pdf/Licence_sales_Allopathic.pdf

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Annexure A

Questionnaire Design

1. Name of the Pharmacy

2. Are you aware about E – Pharmacy?

Yes

No

3. Are you associated with any E – Pharmacy Company?

Yes

No

4. If yes, name of the company you associated with?

5. If no, have you ever been contacted by any E – Pharmacy Company?

Yes

No

6. If yes, mention the name of the company that contacted you?

7. What type of Pharmacy are you?

General

Retail

Wholesaler

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8. What are the different types of medical products you offer?

Allopathy

Ayurveda

Homeopathy

Health Equipment

Body Building Supplements

Vaccines and Injectable

9. Do you perform home delivery?

Yes

No

10. What is your minimum order value for home delivery?

11. How long do you take to deliver medicine?

12. What is the radius of delivery?

13. Do you provide bill to every customer?

Yes

No

14. Are you a VAT & CST registered pharmacy?

Yes

No

15. Do you offer discount?

Yes (_________)

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No

16. How is your Inventory resupply mechanism?

17. What is the lead time of procuring medicines from wholesalers or distributors?

18. How do you manage your inventory?

Software

Manual Book-Keeping

19. If software, which software do you use?

20. Do you follow prescription of any particular Doctor?

Yes, Name:_______________

No

21. What is the timing of your shop?

22. Do you keep you pharmacy close on any particular day?

Yes, Which Day:__________

No

23. Ownership of the pharmacy?

Sole Proprietorship

Partnership

Private Ltd.