An ERP System for Pharmaceutical Companies

By: | Category: ERP

Choosing the right cost effective pharmaceutical manufacturing enterprise resource planning (ERP) solution is necessary for any organization that wants to improve visibility, increase efficiency, reduce costs, and improve product quality. While organizations initiate ERP projects for a variety of reasons, a substantial return on investment (ROI) is a motivation for most, if not all, organizations.

A business case outlining the costs, expected benefits, and ROI of an ERP implementation is an integral part of initiating an ERP project. Often, organizations make the mistake of buying solutions based solely on the initial cost of the product and its implementation; these organizations run the risk of incurring losses when the overall impact of the purchase on their budget is analyzed. Therefore, the ability to understand the potential return on your investment (ROI) before making that investment is invaluable to any enterprise. A recent study on “The Total Economic Impact of Sage X3” has demonstrated an impressive 177% ROI on using Sage X3.

In the pharmaceutical manufacturing industry, software selection can be the difference between life and death. Dramatic? Yes – but true, considering your ERP software is the backbone of your manufacturing process. Before getting too far into the selection process, you must first consider your needs as a manufacturer in the pharmaceutical industry.

Here’s why you’ll need an ERP system for pharmaceutical companies:

  • Managing and tracking ingredients and products.
  • Ensuring quality control requirements are met at all times.
  • Managing and meeting compliance regulations.
  • Insight into stock levels to ensure order fulfillment and on-time delivery.
  • The ability to manage production planning through the manufacturing process and sales.
  • Financial management across the organization.

You may have other requirements depending on your specific needs, but that list should get you started. Once you’ve nailed down your requirements list, start to consider the modules and capabilities you will need in an ERP solution.

As an organization in the manufacturing and selling business, you require basic features such as MRP, vendor management and material traceability, finance, customer management, reporting, etc. Being in the complex pharmaceutical industry, however, requires other critical features, such as:

Recipe Management, Tracking, Control, and Security

The success of a pharmaceutical manufacturer begins and ends with recipes and formulas. Therefore, it is critical that your ERP system aid in creating and protecting these critical assets. A pharmaceutical manufacturing ERP must be able to document various ingredients, their storage, the manufacturing process, pH values, particle size, and much more – along with the ability to review it at any given moment. Additionally, the system will need to track any revisions made to the formula, scale it to batches, and more. Further, the system must allow you to set security restrictions to ensure that only users with the authority to make changes can do so.

Title 21 CFR Part 11 Management & General Compliance Management

To remain in compliance with this critical FDA regulation, your ERP solution must have the functionality to ensure that, per the FDA, “Electronic records, electronic signatures, and handwritten signatures executed to electronic records [are] trustworthy, reliable, and generally equivalent to paper records and handwritten signatures executed on paper.”

Be sure that the system helps you remain in compliance with the many other requirements set by the various regulatory agencies you undoubtedly report to. Some things to think about include built-in forms, predefined workflows, and other features designed to simplify compliance management.

Inventory Management & Control

Managing inventory is a basic feature of any ERP system, but make sure yours allows you to follow the FEFO (first expired, first out) approach to inventory management. Similar to the FIFO and LIFO inventory systems used by other manufacturers, a system that supports FEFO allows you to see which ingredients will expire first, so you can use them in time to ensure safe and effective products as well as eliminate waste.

Production Transparency & Traceability

Managing production activities and providing insight into exactly what happened and when it happened is crucial to achieving product traceability. Your ERP system must be able to trace product origin, its path through the production process, and its final destination. This requires a recall plan directly into the system, data accuracy and traceability throughout the supply chain, documentation and retrieval of testing results on ingredients and finished goods, and more. Such transparency into materials is crucial to quality control and recall, should a situation call for it.

Quality Control

Producing consistent, high-quality pharmaceuticals that comply with regulations is another critical success factor for manufacturing companies in this industry. Make sure your system supports each step of the process and allows you to request quality control tests, track the results, and take corrective action.

For more information about choosing an appropriate pharmaceutical ERP, please contact Net At Work today.