Manpower cost analysis among Indian pharma industry: Dr. Reddy's Lab

Abstract

Dr. Reddys Laboratory has become the number one pharmaceuticals industry of India revenue wise. The major concern of the company is on the profitability aspect. As the company is young with just 20 years of experience there is plenty of opportunity to enhance bottom line. The company's profitability is just 8% where as the industry average for profitability is 17%. Sales and Marketing is the core activity of any large pharmaceutical company. For pharma industry the largest cost component in sales and marketing is manpower cost. This particular study is focused on DRLs stand in terms of Manpower cost and identifying areas for improvement. The primary analysis shows a scope of improvement of 4% on profitability when compared to industry average. The industry consists of 7 company chosen carefully based on strict criterion mentioned in the project. The Manpower cost at DRL is benchmarked. The findings are surprising at the same time an eye opener. It was found that DRL is poorest in manpower efficiency among major pharmaceutical companies in India. It stands 6th in Manpower productivity among set of 7 selected companies. The manpower cost is ?? 16 $ to generate 100 $ of revenue per annum highest in the industry. In the end of the report, recommendation is made based on the findings. Value drivers are identified for all BUs to be included in MIS as part of periodic review. The analysis clearly indicates that DRL is overstaffed and it needs to reduce/rationalize manpower.