Pharmaceutical distribution in Pakistan: what a proper ERP changes in the first quarter

Pharmaceutical distribution in Pakistan runs on relationships, credit, and an enormous amount of manual record-keeping. The relationships are the business and should not change. The other two are where the money goes.

Expiry write-offs

This is the largest and most consistent loss we find, and it is almost entirely a sequencing problem.

Stock is picked by whatever is accessible. Short-dated cartons sit behind longer-dated ones and surface when they are already unsaleable. Nobody decided this. It is simply what happens when picking order is determined by warehouse geometry rather than by expiry date.

The fix is that the system, not the picker, decides what gets picked. First-expiry-first-out as a constraint rather than a policy. Combined with a rolling short-dated report covering anything inside ninety days, by product and by depot, this converts write-offs into discounted sales while there is still a window to move them.

For most distributors this single change covers the cost of the system within the first year. It is not sophisticated. It just cannot be done reliably by hand across four thousand SKUs.

Credit exposure

Every distributor here extends credit, and every distributor here has customers who are over their limit and still receiving stock.

This is rarely a decision. It happens because the credit position lives in accounts and the dispatch decision happens in the warehouse, hours or days apart. By the time the exposure is visible on a statement, three more deliveries have gone out.

When credit status is a condition of dispatch rather than a report reviewed afterwards, the exposure stops growing on its own. The commercial conversation about whether to release a particular customer’s order still happens, as it should, but it happens deliberately, with the number in front of the person deciding, before the van leaves.

DRAP and batch traceability

Regulatory requirements here are less onerous than MHRA in the UK, which has an unfortunate side effect: distributors under-invest in traceability because they are not being forced to.

The commercial case stands on its own regardless. Batch-level traceability is what makes a recall a query rather than a fortnight of phone calls, and it is increasingly what larger manufacturers ask to see before appointing a distributor. Several of our clients have won principal appointments specifically because they could demonstrate the system in a meeting.

If you export, or intend to, this stops being optional at the border rather than at DRAP.

What the first quarter actually looks like

Month one is data. Product masters, batch records, customer accounts, and outstanding balances migrated. This is the month where everyone discovers how much of the operation lived in one person’s memory. Expect that, budget for it, and treat what surfaces as the finding rather than the obstacle.

Month two is parallel running. Both systems, deliberately. The team hates this month. It is also the month that prevents a bad cutover, and skipping it is the single most reliable way to fail.

Month three is when the reports start telling you things. Short-dated exposure by depot. Credit ageing that matches reality. Actual margin by product line rather than blended. Most owners find at least one thing in the first quarter’s reporting that changes a commercial decision immediately.

The objection worth taking seriously

The most common resistance is not cost. It is that the sales team operates on discretion: a particular customer gets a particular price, a particular credit extension, a particular delivery priority, because of a relationship that predates everyone in the room.

A system that removes that discretion will be routed around, and a system that is routed around is worse than no system because the records now claim to be authoritative and are not.

So the requirement is that discretion is recorded, not eliminated. Special pricing is a field with an approver, not a conversation. Credit extension is an authorised override with a name and a date attached. The relationship continues to run the business; it just stops being invisible.

That distinction is the difference between a deployment that holds and one that quietly reverts to the ledger within six months.