Example of an Organization Installing an ERP Package

Enterprise Resource Planning (ERP) System

Enterprise Resource Planning or ERP is an information system that integrates all data and processes of an organization into a single and centralized system. It is a broad set of activities that helps integrate all functions running in an organization such as marketing, manufacturing, supply chain management, human resources and costumer relations management.

Taro Pharmaceuticals (Israel)
About Taro

Taro was established in Haifa in 1950. Since then, Taro has produced many products sold in Israel and abroad and thus serves as a source of pride for the pharmaceutical industry in Israel. (http://www.taro.co.il/)

The Challenge – Efficiency and Innovation

Chief Information Officers in the pharmaceutical industries are planning to deploy business model straining to operate at scale. By doing so, pharma companies are asking their IT experts to do two things at once, these are: Dramatically improve the efficiency of IT and Use It to drive business innovation.

The Solution – Enterprise Resource Planning

The implementation of an ERP solution by the pharmaceutical firm potentially increases the effectiveness and improves the efficiency of the processes and streamlines internal operation.

Business Case for ERP Implementation

Implementing an ERP may have pros and cons. Many companies find ERP systems to extremely useful and help them in thorough decision making. Others discover that the company having an ERP system just multiplies the cost and schedule delays of their business transactions.

Implementation Phases

The implementation of ERP in a pharmaceutical industry follows a generic approach. In this approach there are 6 phases, which are

§ Planning
§ Requirements analysis
§ Design
§ Detailed design
§ Implementation
§ Maintenance

Planning

The planning phase includes the need assessment and business justification. The business justification for ERP includes both tangible and intangible benefits, including inventory reduction, operating cost reduction etc.

Requirement analysis 

Requirement analysis includes:
§ Analyzing business process
§ Specifying the processes to be supported by the ERP.

Design 

The fundamental decision in ERP systems design is re-engineering versus customization. In the re-engineering approach, the team selects a commercial off the shelf ERP and re-engineers business processes to fit the package. In the customization approach, the team selects a commercial ERP and customizes the ERP to meet unique requirements.

Detailed Design 

"Best practices" methodology provides models supporting the business processes of each functional area. The process for using the best practices involves the following steps:

§ Select applicable business processes
§ Discard inapplicable processes
§ Those processes that do not match the system will serve as foundation for re-engineering
§ Identify any areas not covered by the best practices as candidates for customization
§ It also involves interactive prototyping and extensive user involvement in determining systems design elements.

Implementation

ERP implementation could include issues like Configuration, Migration of Data, Building Interfaces, Implementing Reports, Pilot testing, Going Live, Training. Many companies contract with a technical support specialist from the software supplier to assist in implementation. Also following issues in Configuration should be taken care off. These issues range from Data Ownership, Distribution of procedures and transactions to Data Management. Some of the implementation strategies followed are Big Bang Approach, Phased Approach and a mixed approach.

SAP
Business Scenario Groups

§ Time to Market
Research and Development in the Life Sciences industry includes all processes of medicine discovery, scientific development, and preclinical and clinical evaluation. SAP's solutions enable customers to optimize investments, by assessing budget, costs and risks as well as forecasting and planning resource capacity. Customers can realize increased efficiency and accelerated development times by capturing critical information across development (e.g. analytical testing, product & packaging specifications), optimizing the Scale-up process and reducing the clinical trial supply cycle time and regulatory submission compilation time. Productivity can be enhanced by efficient collaboration within the company and with business partners.

§ Product Quality
As regulatory agencies continue their close global vigilance on the manufacturing practices in the Life Sciences industry to improve drug quality and safety, companies are also under increasing cost pressures that forces them to manufacture their products more efficiently. A key differentiator is the ability to enforce compliance throughout the manufacturing process. Achieving this goal requires the ability to improve product quality by decreasing the manufacturing variability therefore reducing the risk of non-compliance. An increase in production efficiency can be realized by integrating key information across the organization including capturing quality and equipment information into one system of record that can be easily maintained. This single view of the manufacturing data and processes will lead to a consistent and compliant batch record.

§ Time to Value
Pharmaceutical companies require the ability to decrease the time from drug launch to peak sales to maximize product revenues, not only by increasing their sales effectiveness but also optimizing their supply chain planning. Successful companies adopt a customer centric approach in order to integrate new multi-channel marketing capabilities with the classic detailing approach. This allows for better segmentation of physicians through analytical insights and ensures compliance for drug sampling. Flexible and responsive supply chain planning is critical to sustain revenues in an increasingly competitive market. Additional revenue generation can be gained by effectively managing chargeback and rebate volumes through tight control of contract and pricing guidelines helping to reduce overpayment thus improves profitability.

§ Product Safety
Regulatory agencies in the Life Sciences industry are vigilant in assuring the safety of medical products at all stages in the product lifecycle - manufacturing, distribution and consumption or usage. Those companies that excel at proactively managing product safety continuously improve their product quality. The solutions help customers maintain one global system with consistent information regarding all complaints; gain visibility on the progress of investigations and increase speed of communication and issue resolution. Reporting and trend analysis on a global level allows companies to anticipate potential product safety issues by utilizing early warning signals to support corrective actions. The goal of drug tracking and tracing is to prevent unsafe product from entering the supply chain by establishing a secure electronic pedigree so that every unit of medication is authenticated.

ERP Implementation compared to Standard SDLC

The ERP in the company based its implementation follows the generic approach in implementation phase, similar to SDLC. It has a Planning phase, Requirement Analysis phase, Design phase, Implementation phase and Maintenance phase. Additional phase is present in the company’s implementation phase and that is Detailed Design phase.




Source:
http://www.nickmutt.com/what-is-erp.htm
http://www.taro.co.il/
http://knol.google.com/k/erp-in-pharmaceutical industry#6(2E)0_Product_profiling_(28)mysap_suite(29)