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An Electronic Supply chain of Medical products in Rural India

Some time back in November of 2014, I was approached by a customer to create a platform for a Electronic supply chain, with backend automation for the Pharma industry. The platform was conceptualized as a SaaS (Software as a Service) model connecting the medical community, providing order placement engines to the chemists and creating a channel of Chemists, Distributors, Pharma companies and Doctors as well as medical reps.

The platform thus created would cater to the following

– Distributors

– Chemists

– Pharma Companies

– Medical Reps

– Doctors

– Consumers

As a solution, this is a unique product and while it is in the piloting stage, we did an IP search and could not find an equivalent product, worldwide. So, hopefully this will be a first.

The functionality the platform provides is as follows –

 

For Distributors

– Order placement platform with the chemists, with delivery receipt printing and inventory, invoicing and collections.

– Information base from Pharma companies

– Doctors feedback reports

 

For Chemists

– Order placement Application

– Reorder level

– Basic Inventor

– Billing

 

For Pharma Companies

– Community specific channel and audience for marketing propos, launches and advertising

– Direct Connect with Distis and retailers for any specific feedback, complaints or other issues creating a good CSAT platform

 

For Doctors

– Information base from Pharma companies

– Drug information

 

Med Reps

– Community of distributors and retailers for pushing their products

 

The Social Connect

Although this was meant for the urban market initially, recently the customer requested me to develop a business model for the rural markets. That set me thinking whether such a platform would be able to work, whether it would serve a social purpose and what social benefits one could derive from this if it went rural.

After a lot of debate, internally as well as externally, through the Ennovent platform, we decided to take this up because we were confident that this had the potential of creating a social change or value addition in terms of  –

  • Livelihoods
  • Shorten the delivery cycle in the rural markets
  • Control drug piracy to an extent
  • Cut down unauthorized premiums due to non availability

 

Platform operation

 

The platform is basically an E-Business platform, connecting the chemist to his distributors, and equipping them with a very light E-Ordering application through which they could maintain inventory and reorder levels and automate the ordering process.  The platform also connects the companies, doctors and consumers. While all of this was not relevant to the rural markets, the E-Ordering tool was. Instead of a chemist waiting for a given day when the representative would come and collect orders, he is enabled to place orders on demand, thus shortening the delivery and availability cycle. This automated process also ensures, to a great extent, the delivery of genuine drugs. Of course it will not completely stop spurious drugs but since it will record all transactions, it will create an electronic trail of orders and delivery thereby creating evidence.

 

Challenges

The biggest challenge is the non usage of digital platforms in rural area shops. This is also the biggest opportunity.

 

Rural Business Model

We concluded that the only way this could work was to appoint a local village based sales agent, who would work in a cluster, equipped and trained on a Tablet, would maintain a record of the chemists stocks and take the chemists orders in person or on the phone and order the required drugs through the application on behalf of the chemist. Since this would be instantly locked into the distributors system, the lead time to deliver would be shortened and the delivery could be scheduled for the next day. Since the Agent would work in a cluster mode, he would be able to generate enough volume to justify his salary as well as delivery expenses on a more frequent basis. We envisage the agent as being an SHG member or an NGO partner. Therefore this process would add to their income as well, or generate fresh employment. (The model is pretty much based on the earlier Financial Inclusion adoption model of Business Correspondents.)

In six months, we plan on building a connect for Telemedicine or at least E-Diagnostics. This will further strengthen the platform to address the various critical needs of the segment of our citizens who do not have ready access even for basic diagnostics and treatment, unless they travel to such far locations where these facilities exist.

 

Why we think it may work? 

While this is pretty much uncharted territory, we feel it may work because –

– The need to cut down on the delivery cycle is very evident in the rural sector

– There is going to be a mandate very soon from the Government to E-Track all Pharma products shipped from the production units to end user, to cut down on piracy.

– Distributors have a high cost of procurement of orders as well as delivery due to the overhead of reach. So they normally schedule a weekly visit to rural chemists as opposed to a daily visit to urban chemists, thereby delaying not only supply, but their own collections and business as well.

– We are planning to work with a partner organization who is extremely entrenched in the rural areas and understand that market extremely well.

– Based on partner feedback, we are incorporating other OTC health products for women, children and some supporting products for men. This is enabling the Village agent to cross sell and upscale his / her monthly earnings.

 

Fulfillment of the Social Need

When we view the whole system in totality as well as the individual parts we are able to map out the solution to the following social needs –

– Availability of medicines in a shorter time to delivery

– Visibility of stocks enabling orders to be placed to the right distributor, negating sales reversals.

– Transparent supply chain process reducing piracy

– Availability of health and sanitation related products, relevant to the rural sector and with affordable pricing.

-Telemedicine / E-Diagnostics services to further help in the penetration of medical facilities.

 

 

Rohit Shipstone is a Business Growth specialist, Innovator, Strategic Marketer and member of the Ennovent Pool. To access Rohit Shipstone’s expertise in product development for low-income markets, new business model evaluation, strategy, marketing and sales, write to [email protected]

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