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| Conservation of Resources |
| Conservation of resources encompasses a whole gamut of activities right from the sourcing of raw material, to its transportation, storage in our production facility and finally, the disposal of expired material and residues. |
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| Inventory Management |
| Dr. Reddy’s inventory management functions on two types of indicators: Lag indicators and Lead indicators. The lag indicator is the sales (also called primary sales) by the Company to its distributors, whereas, the sales (also called secondary sales) by the distributor to the pharmacist is the lead indicator. Lead indicators give us a future perspective and help maintain optimum inventory levels. We are leveraging technology in order to shift the focus of inventory management from primary sales-led demand (stock by forecast) to secondary sales-led demand (stock by demand). In other words, we want to ensure that we stock and produce only what is needed by the customer and only when it is needed. |
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| We are also conscious of how we transport inventory. This year, in order to rationalise the cost of transportation and reduce our carbon footprint, we started sending shipments to the US, a major market for us, by sea instead of the usual air freight. This was made possible by setting up a stock storage facility in the US which ensured that we had enough stock in the market to compensate for the increase in lead time of the delivery. |
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| Rationalising Consumption |
| Our focus is not just on how we procure, but also on how we consume. Considering the rate of depletion of vital resources, rationalised consumption might soon become a regulatory compulsion rather than just a sound business sense. Some of the areas where we have made efforts to rationalise our consumption are highlighted below: |
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At Dr. Reddy’s, we make a conscious effort to identify and restrict processes that use paper. All the administrative work at our offices takes place through emails. We have also started issuing purchase orders to our vendors through email. Efforts are on to extend the use of paperless alternatives in all our processes. We understand that implementing this throughout the organisation (particularly packaging) is not feasible currently, but we continue to strive to make Dr. Reddy’s a completely paperless organisation. |
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Previously, BOPP lamination was used on product cartons that were exported. This has now been replaced with Aqueous varnish or UV varnish which is more eco-friendly. Additionally the new cartons have reduced the usage of plastic. |
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Sudden spikes and falls in market demand result in situations where non-moving products become a reality. These medicines gradually exceed their shelf life and expire. As per regulations, in the past these expired medicines along with their packaging material were incinerated, but this process enhanced our carbon footprint. |
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This year we set up a team to identify the non-moving inventory which still had a shelf-life of around 3-6 months. These products were then either given free of cost to charities and social foundations that required them urgently or the medicines were sold at extremely competitive rates to markets where there was a demand. Care was taken in choosing the markets so as to ensure that there was no cannibalism of our own products. |
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| We have empowered our pilot sales representatives with specialised handheld devices so that they not only track movement of stock from the Company to the distributors but also from the distributor to the pharmacist. |
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| ‘Vikreta’- Dr. Reddy’s portal for suppliers, which was introduced in 2008, has been fleshed out and stabilised. |
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