Ranbaxy hires BCG, Mercer for internal strategic project

Consultants are working with various teams on manufacturing, R&D, etc, to assess per-month productivity of each department

Ranbaxy Laboratories has hired the Boston Consulting Group (BCG) and Mercer as consultants for the company’s internal strategic project Ranbaxy Institutional Simplicity and Excellence (RISE), it is learnt. The project is primarily aimed at benchmarking operating standards and staff productivity according to industry principles. The consultants are also working to implement best practices within the company to ensure quality.

“BCG and Mercer have been hired recently. Both consultants are working with the management, as well as employees across ranks to establish best practices,” a company source told Business Standard. “The two consultants are working to implement the practices as part of a project called RISE. A lot of activities are being undertaken as part of this programme, at various levels.”

An e-mail questionnaire to Ranbaxy for this story did not elicit any response. While a BCG spokesperson said, “We will not be able to comment anything on client-specific matters,” Mercer said, “Our client contracts prevent us from revealing client names or any project-related information”.

According to the company source, the two consultants are working with various teams on manufacturing, operations, research and development, quality control, etc, to assess per-month productivity, with respect to the size of each department. “They are assessing the staff-productivity ratio and wherever there is a need, they will adjust it,” he said, adding restructuring had already started at the top management and the next changes were expected among second- and third-level officers.

The source said other functional restructuring was also underway. Earlier, Ranbaxy had four regional heads each for the US, west Europe, India and emerging markets; now, the number has been increased to six by splitting emerging markets into three separate verticals. This reflects the company’s strategic focus on emerging markets.

While new faces might be inducted as part of the project, Ranbaxy was likely to lay off quite a few people to right-size its teams wherever required, the source said. RISE, which was conceptualised earlier this year, would be concluded by the year-end, he added.

‘Our current drugs in India, global markets safe’

The company today claimed its “products currently in the Indian market and globally are safe and efficacious”.

During a recent interaction with Business Standard, Ranbaxy Chief Executive Officer and Managing Director Arun Sawhney said, “We want right staffing. I have not given any guidance…but we want to have the right kind of people and the right number of people.”

A fortnight ago, Ranbaxy had pleaded guilty to fraudulent statements to the US drug regulator about testing drugs to gain approvals for products manufactured at its facilities in Paonta Sahib, Dewas and Batamandi. The company had agreed to pay $500 million as penalty to the US Department of Justice. Besides, the US Food and Drugs Administration had also issued a decree to the company to take corrective measures.

Various hospitals have called for a review of Ranbaxy’s accounts. Earlier this week, Mumbai-based Jaslok Hospital had issued an advisory to its doctors, asking them to avoid prescribing Ranbaxy medicines. Also, Gurgaon-based Medanta Medicity Chairman and Managing Director Naresh Trehan said he had received queries from patients about medicines manufactured by the company.