Essentially supply chain is the backbone of any business, be it fashion or pharma. The pharma supply chain particularly is a massive challenge, especially in our country, if one were to zoom into the pharma supply chain, one would find that the supply chain is extremely fragmented, what I mean by that is it’s a traditional supply chain with limited penetration of information technology. Statistically speaking, there are anywhere between 7.5 to 8 lakh independent distinct registered retailers of medicines in the country. All of them are disconnected from each other, so what I mean by that is, let’s say there are XYZ medicals in your neighborhood and then there are ABC medicals, both are 500 meters apart and are totally disconnected from each other in the sense that they do not have any idea of what medicines are available at each other’s stores. What it leads to is that as a patient when I walk into a pharmacy to get my prescription filled, in our country chances are that only 60% of all the medicines will be available in one shot, this is the country’s average. Now if you see, we are fortunate to be living in big cities where we have access to multiple pharmacies, the moment you start to step into tier 2, tier 3 cities it becomes an acute problem, there are limited pharmacies with limited space, they can only keep so many medicines.
Today roughly, there are around 300 thousand stock-keeping units of different medicines available in the country, and a normal, even good pharmacy can only keep anywhere between 5000 to 10,000 SKUs in stock, around 2,90,000 SKUs have to be procured from somewhere else. You will want to know where is that somewhere, it is basically a distributor. There are 8 lakh retailers and then there are anywhere between 80 thousand to 1 lakh distributors in the country, these are again independent isolated distributors with very less penetration of technology. Let’s take an example, a lot of people have experienced this in a pharmacy while getting their particular medicines – “sir I don’t have this medicine right now, I can deliver it to you tomorrow or the day after or whenever I can’t procure it”. When you look at the process behind the scene what happens is that the retailer calls his distributor to procure the medicines. It is possible that this retailer in hand is working with two, three, four, or maybe even five distributors over the last decade or two, this is entirely relationship-based. Now, the retailer calls his distributor to ask about a particular medicine, and the distributor says sure, you will get this medicine tomorrow or the day after. This further leads to a different problem because even the distributor has very little idea of what all SKUs and quantity of these medicines he has with him. Thus again because of the lack of technology the two invested parties here who make a promise to the actual person in need are frankly unaware of what’s available in the market and what’s available with them. This creates some massive access problems in this fragmented supply chain, and we are trying to solve these bigger problems at PharmEasy.
We are not only trying to solve the problem of immediate access online we are also solving these problems for the retailers and the distributors. We happen to have our biggest marketplace of retailers and distributors; on one side you have the retailers and on the other side you have the distributors, our technology is kind of embedded in these entities and we present a real-time view to both the retailers and the distributors of what’s available in the market, what are the service level agreements (SLA) on which one can get these medicines, what discounts are available, what schemes are available, where is the order when placed, if you have to make a payment, where it is stuck, you can make a payment on the platform and a lot of other things from logistic to warehousing, demand visibility to price visibility and discount visibility, one can have all the information available on one single platform.
If compared this is somehow similar to what the likes of Uber and Amazon are doing to us as a consumer. I mean 10 years ago, hailing a cab would be a nightmare right? You have a flight to catch at 5 in the morning and you are at the mercy of the driver, you make a call and you have to literally beg ‘Sir, I have a flight to catch at 5 in the morning, please be there at 4’ this was the challenge that Uber solved, all the information that you needed as a consumer to make a decision is right at your fingertips, from who the driver is, the rating of the driver, the condition of the cab, you get the information about the route, the cost, which just makes things highly convenient for you to make an informed decision. It’s the same thing with the likes of Amazon for instance or Myntra or Flipkart, right? They are consciously making information available to the consumer so that they can seamlessly decide, this solves the problem of the supply chain in a different domain. We are solving that problem in the disconnected domain of pharma where the need is critical. This is a genuine need, this is not optional, so getting it right and making these distinct pieces connected with technology is our vision, we want to make sure that every independent entity in this pharma ecosystem – the patient, doctor, retailer, distributor, and the manufacturer are connected, who in the present scenario are highly disconnected from each other.
The doctor, for instance, prescribes medicine to you but the prescription is handwritten in most cases and this handwritten prescription is not digital so you cannot look at this prescription at a later point in time, you cannot take this prescription to a different doctor. Let’s say I happen to be in Banglore and my doctor has prescribed certain things to me and for whatever reason, I have to go to Delhi or someplace outside the country, that doctor I consult at that place has to start all the way from the beginning noting down all my allergies to all the conditions that I may have had in the past. This all is a result of a non-digital, non-technology based disconnected ecosystem; we are building capabilities to digitize the doctor practices as well so that the doctor gets the benefits of referring things from the past and also extend those capabilities to you as a patient, so you also get access to your own prescriptions, your history, your symptoms, and your diagnosis. All of this now becomes available to you in a connected ecosystem where even the doctor is digitized, when the doctor gets digitized, the retailer is digitized, the distributor is digitized, now the manufacturers are also directly reaching out to people in the ecosystem using the same connected ecosystem.
So, fundamentally from an overall supply chain perspective, the basic problem is that you have five key entities and these have largely been non-digital and they have been disconnected from each other for all this time and in an economy like ours where there are 1.3 billion people and there are only 0.64 doctors for every 1000 individuals in our country, in that kind of a set up a totally disconnected ecosystem would mean a lot of inefficiencies. That is what we are trying to solve by building technology that sits across all of these entities together. Technology, in general, is able to talk to each other better compared to humans and processes, it’s a simple and straightforward thing. Once you build it properly, these pieces can talk to each other in their own languages and the technology does the translation between them and thereby giving you a highly connected ecosystem where every stakeholder gets the visibility of every transaction they are making in the system.
Authored by Pratheek. V
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