Dexteyra Consulting Group Inc.

ERP can master blend compliance for life sciences manufacturers

 

Mandeep S. Oberoi*

 

November 1, 2009

 

Abstract

 

The food, beverage, and pharmaceutical manufacturers face significant challenges such as increasing costs, safety, margin pressures, government regulation, traceability, constant changes in drug discovery, managing supply chains to maximize profitability, bio-terrorrism act, and to react quickly to or circumvent merchandise recalls.

 

The challenge is to reduce lead times, cut costs, and become more imprudent to consumer demands. Realistic forecasting capabilities are very crucial for these businesses, specifically when turn-around-times (TaTs) are very short and shelf-life monitoring is critical. Mistakes could be costly and may result in much wastage. Manufacturers are intrinsically realizing that the enterprise resource planning (ERP) softwares can help to integrate recipe management, inventory control, production, quality, regulatory reporting, purchasing, sales, electronic signatures, workflow, costing, accounting, serial numbers, and decision support system (DSS) - in a single box. Features such as bar coded lot tracking, material requirements planning (MRP), and automated labeling can help food, beverage, and pharmaceutical manufacturers and distributors to reduce costs, increase product quality, improvise safety,  and reduce wastage if the software is implemented correctly.

 

The product cycle changes constantly, so do the trends in consumption. The retail customers often demand changes in packaging, content, or label within weeks. Being able to transform manufacturing process to accommodate multiple products without losing efficiency is crucial. Guess work needs to be eliminated. Since the orders are booked continuously, the challenge is to optimize the frequency to run MRP because the process utilizes all critical resources during the cycle. Recipe management is quite important too for process industries in which the liquids flow through pipes and go in different directions according to customer demand.

 

Inherent Advantages

 

If implemented right, a good ERP solution can update real-time information on changes in demand, which arrive via electronic data interchange (EDI). Information on products and ingredients is available at each stage of the manufacturing process so that alterations in production schedules can be assessed instantly. It can simplify dispatch routines, thus reducing delivery lead times, refining consumer service levels, and overall sensitivity.

 

It is important to create invoices as soon as items are dispatched for efficient accounting and cash flow management. The invoice information is dispatched electronically to certain customers. Visibility of the inventory and the administration of line-side stocks can ensure that stock levels are kept low while sustaining the smooth running of the production lines. The information systems can interface easily to the outside partners and process control equipment. 


Training is very critical. Classroom training, manuals, and sand-box practice on terminals are critical elements to deliver training to end-users and super users. One of the biggest reimbursements of implementing efficient ERP is that factory staff can react promptly when tribulations are identified by the system. Reduction in expensive IT staff and subsequent cost benefits constitute one of the important deciding factors for the chief information officers (CIOs).

 

Another advantage of the ERP done right is the inbred quality management for defect tracking, usability decisions, and tracing ingredients all through the manufacturing process. Thus also reducing need for paper. The ERP system is typically linked with corporate offices and presents a much clearer picture of the production process to the management. It helps towards the purchase of regular packaging and the flow of raw materials into the factory that can be much effectively controlled while providing more rapid awareness of product dispatch to create accurate invoices.

 

If a machine breaks down, things can be rescheduled and new plans can be executed immediately. The system keeps track of any ingredient as soon as it arrives in the factory, and it can be tracked through the production process. Each production line can be organized and the quantities of the active pharmaceutical ingredients (APIs) can be validated to ensure consistent finished products. And then, manufactured goods can be tracked through the successive processes as they go to a lorry for onward delivery to the customers.

 

Effective planning, computerization of documents, and resulting automation have driven the demand for new functionality additions such as automated drug delivery and wireless pharmacies to integrate into the supply chain networks.

 

The nature of operations for food, beverage, and pharmaceutical manufacturing industry requires 24 hours and 365 days of consistent planning and execution capabilities. 


Wireless Pharmacies and the shelf-life cockpit

 

Wireless pharmacies are projected to be the next big stride in the ERP industry that will integrate automated drug delivery, data accuracy, efficiency, and tight inventory control through simplified, hand held devices to scan prescription barcodes. In ERP terminology, the system will control prompt goods receipt, bin transfers, and also enable shipping for on-line drug prescriptions. Stock levels will be monitored and shelf-life maintained through remote operations by top vendors. Shipping multi-media data formats are also sustained in the case where pictures of a palate on the shipping documents are desired to minimize the number of lost packages that traditional pharmacies occasionally encounter.

 

The shelf-life cockpit is a plug and play solution package that is currently available only with SAP ERP. This monitor analyzes the stock and requirement lists to identify those amounts of drugs that could expire. The cockpit contains conflict indicators for expiring quantities of material. For further analysis of these conflicts, a drill-down function is available to support the user.


Acquisitions and blending

 

Food, beverage, and pharmaceutical manufacturers comprise of conglomerates of multiple and independent business units placed at unique levels in the extended supply chain before the final product is manufactured. These independent units often merge their businesses or get acquired that creates a need to blend corporate operations. It becomes even more difficult to integrate the operations irrespective of whether or not they are already live on ERP. The maneuvers and restructuring not only provides additional strain to the administration, chartered accountants, and the company secretaries but also to the information integrators who need to then make critical decisions. This is usually a really difficult situation to handle since uniform data access needs to be established among one or more common platforms.

 

Conclusion

 

Significant success in the past has generated renewed confidence on the capabilities of the ERP applications. Supply chains that have implemented at least limited ERP applications in the past now understand the multitude of functionalities and possibilities these systems can deliver across diverse product portfolios and also, across the diverse demographies of operations of the clients. Regulatory compliances and new dimensional threats such as bio-terrorism are further driving the medium and large manufacturers to adapt to the ERP solutions, primarily as a long term investment to promote value for the shareholders. 

 

 

*Mandeep S. Oberoi works as Director & Principal Consultant with Dexteyra Consulting Group Inc. He has also worked with large consulting firms such as Hewlett-Packard Canada’s Business Consulting Group and Capgemini USA LLC, among others. Some of his key past clients include Canada Revenue Agency (CRA), Bank of Canada, MolsonCoors Brewing Company UK, Winnipeg Regional Health Authority, Ministry of Works - Government of Trinidad & Tobago, and Bacardi Rum, among others. He specializes in designing SAP Best Practices based banking, finance, public sector management, and supply chain solutions. Mr. Oberoi has worked on projects across North America, Caribbean, Europe, and Asia Pacific. He was awarded a Medallion by the Indian National Academy of Engineering (INAE) in 2001. 

 

 

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