Case Example

Rationalizing and Redesigning the Support Functions for Big-Pharma MNC

Client Challenge

ABC, one of the largest pharma companies in India, operates its generic pharma business i.e. Established Pharmaceutical Division (EPD) through following organizations
● Client Company
● Healthcare Solutions
● True Care
- In 2014, ABC launched ‘One EPD’ initiative to harmonize operations of all EPD organizations in India. The objective is to leverage the combined presence of operations to grow above market growth and to strengthen its leadership position
- As part of the above initiative, Client was redefining its Go-to-Market (GTM) strategy to capture the synergy benefits of the three organizations and also to tap into new opportunities in the marketplace
-In addition, Client is planning to undertake a detailed review of the structure of its various support functions.
- Leadership at Client would like UC to evaluate following Support Functions as part of the project
- Medical Marketing
- Sales Training
- Regulatory
- Established Pharmaceutical Operations
- Sales Force Excellence
- Commercial Excellence
- Quality
- Strategic Marketing
- Business Development and New Products
- PMO
- Admin
- Secretarial services
- Shared Services (Review progress against design and recommendations of earlier study)
- The key objectives are
- Making support functions more productive and efficient
- Improving governance, optimizing processes and allowing standardization and unification of processes
- Allow flexibility and best sharing of ideas and practices

Our Approach

Step 1
● Understand and outline the strategic context for the support function optimization exercise-
- Optimizing costs to balance growth whilst maintaining/ increasing productivity
- Potential Drivers, e.g.
● Resources & skill sets required now and over a period of time to accommodate planned growth and expansion in product portfolio
● Speak with business heads and key customers of the support functions to understand performance of and feedback for various support functions
● Understand role and importance of various support functions
● Understand size of various support functions and key cost heads
● Also review the business feedback for the various support functions
Step 2
● For each support function, understand all key roles & responsibilities
- Job functions and descriptions for different positions
- Staffing levels
- Job families*
- Skill sets and capabilities required
- People performance metrics
● Having understood individual roles, analyze processes and process ownership
- Operating procedures
- Work-flow
- Activities/ responsibilities of each entity for that work-flow
- If required, document time taken for each activity
- Identify and if required, document a list of all activities within a function
● Based on the process diagram and analysis of activities and activity ownership, assess opportunities for optimization
● Eliminate activities
- This would focus on identifying activities that are
● Non-value-added activities
● Redundant or repetitive activities
- Such activities will be eliminated from the process
- This may result in lower utilization of one or more personnel in a function that will allow combining roles for optimizing manpower usage
- Merge similar roles. Ascertain technical knowledge and skill sets after grouping together similar roles in order to avoid duplication of effort
● Delegate activities to lower levels
- Delegating activities to lower designations optimizing costs through using a lower cost employee to conduct the same activity
● Reassign job descriptions to reflect the change in responsibilities, if any
- Job title & reporting structure
- Purpose/ objectives
- Primary and secondary responsibilities
- Working area
- Re-define job descriptions
● Automate activities
- Identify activities (where standardization/ templatization is possible) that could be automated through IT or automation tools
● Evaluate the benefit of outsourcing any activities or process
- Identify activities or processes that could be executed using an external service provider
- Conduct cost-benefit analysis of outsourcing
● Benchmark internal costs of personnel against that of outsourcing
● Assess potential improvement in quality and speed of execution
● Assess ease of implementation in terms of transfer of responsibilities
● Evaluate risks associated in terms of initial hand-off as well as ongoing execution
● Prepare a diagnostic report outlining key issues, e.g.
- Issues with existing processes:
● Redundant processes
● Performance metrics misaligned
● Distinct formats for each department. Lack of standardization
● Issues with existing organization
- Lack of segmentation between primary & secondary responsibilities
- Structural relationship not defined
- Job experience and qualifications common across roles
● Gain consensus from ABC team on issues highlighted in Diagnostic Report
● Interview relevant personnel from comparable leading players in Pharma and Non-pharma space (e.g. FMCG) to derive learnings from their experience:
- Org structure
- Team size
- Span of control
- Job profiles
Step 3
● Redesign Processes
● Define Key Performance Indicators (KPIs) for the processes
● Assign KPIs to functions
● Redesign organization structure
- Positions
- Span of control at various positions
- Number of personnel required for each position
Step 4
● We will quantify the potential cost savings, where possible. Summarize cost saving opportunities across all the areas
● Prioritize initiatives based on –
- Potential cost savings
- Ease of implementation
● Categorize initiatives into various buckets from an implementation stand-point
- Quick wins/ Immediate initiatives
- Mid-to-Long term initiatives
● Develop a detailed implementation plan
- Outline activities, priorities and
- Define ownership/ responsibility
- Define start and end dates

Our Impact

● UC recommended process improvements across functions and recommended creating a centralized support function wherever possible.
● This reduced the workforce from 546 to 406 and personnel costs by ~ Rs. 15 crores