Pharmaceuticals have been used to treat illnesses for thousands of years. The early days of medication included plants and herbal remedies to treat a variety of diseases and traumas. Today, the long and complex journey to demonstrate the safety and efficacy of a compound and bring it from the laboratory into the hands of patients in need is a multi-billion-dollar global industry.
Morden Age Pharmas continually strive towards innovative new treatments that help people live longer and healthier lives. These therapies are developed, manufactured, marketed and distributed around the world by pharmaceutical companies every day. Increased complexities in manufacturing pharmaceuticals can be efficiently tackled and organised with SAP’s RISE with SAP for Pharmaceuticals offering.
Today Pharmaceutical companies grapple with the complexities of ensuring the safe consumption of their products while also battling with supply chain disruptions, tracking distributions from manufacturers to retailers, and undergoing a digital transformation of their vast data repositories. To solve these challenges, the need for a robust, integrated solution has never been more urgent.
In this article, we delve into the pivotal role that SAP S/4 HANA Private Cloud Edition can play in the pharmaceutical sector, addressing the industry’s unique demands. Specifically, we explore the transformative power of SAP’s groundbreaking offering, RISE with SAP.
Understanding RISE with SAP
The pharmaceutical industry has witnessed a lot of growth in terms of research and development, but over some time, the industry has faced numerous market challenges like a highly disjointed distribution network, and a lack of advanced set-up & framework in legacy ERP systems which led to, increased operational costs also making it hard to manage strict regulatory affairs & statutory governance during manufacturing, storage and distribution of products.
For pharmaceutical companies, RISE with SAP emerges as a strategic ally known as a transformative Business Transformation as a Service (BTaaS) offering, this subscription-based service brings together a range of products and services, providing businesses with a holistic approach to modernizing, standardizing, and digitizing their operations.
Business Process Intelligence
SAP Business Process Intelligence empowers businesses to understand, improve, and transform their operations comprehensively. It includes tools like Signavio Process Intelligence to identify opportunities for enhancement, and streamlining business processes for increased efficiency.
Tools and Services for Technical Migration
RISE with SAP offers technical migration support, providing tools and services for a smooth transition from other legacy ERP systems to SAP S/4 HANA private Cloud. This includes identifying custom code that requires migration and ensuring a seamless transformation process.
SAP S/4 HANA Private Edition
Through SAP S/4HANA Private Cloud, you gain a tailored-to-fit cloud ERP that adapts to your organisation’s unique transformation journey and drives productivity across lines of business.
Equip your finance team and CFO with a range of advanced capabilities that make it easier for them to manage the finances of your company. pe consolidated financial reporting, supplier collaboration, cash and receivables management to advanced financial planning, budgeting cost accounting etc.
Streamline financial consolidation and unify operational and group reporting to enhance efficiency. Make decisions from financial data with a strong audit trail of documents to ensure the accuracy and usefulness of the financial information. Get real-time cash visibility and payment traceability for swift analysis and actions.
SAP Business Technology Platform (SAP BTP)
SAP BTP enables businesses to build, integrate, and extend applications seamlessly. It combines database and data management technologies, analytics, application development, and intelligent technologies. This integration enhances agility and responsiveness to evolving challenges
SAP Business Network Starter Pack
The integration of SAP S/4HANA Cloud with the Business Network Starter Pack fosters collaboration and transparency within the supply chain. Components like Ariba Business Network, Asset Intelligence Network (AIN), and Logistics Business Network (LBN) connect buyers, suppliers, and carriers, streamlining operations and decision-making.
RISE with SAP is a comprehensive solution for the pharmaceutical industry designed to guide enterprises through digital transformation, offering industry best practices and business intelligence tools tailored to their business processes.
Before we understand how RISE with SAP does that, let’s understand some of the challenges faced by the Pharmaceutical industry.
Challenges Faced by Pharmaceutical Companies
A pharmaceutical company needs to document every step in its manufacturing process and manage sensitive operational data across an organization, including the expiry dates, non-conformance, corrigenda, SOPs, and masterbatches. Between managing supplier networks and expiry dates, pharmaceutical companies have a lot of other problems here we take a look at some of them:
Expiry Date Management
Pharmaceutical companies face problems with effectively managing expiry dates for their products. Ensuring that medications reach patients before expiration requires extensive tracking procedures in place. Certain preventive measures and systems are necessary to avoid wastage and potential risks associate with expired drugs.
Maintaining stringent quality control measures is paramount in the pharmaceutical industry. Companies must adhere to rigorous standards to guarantee the safety, efficacy, and consistency of their products, safeguarding both patient health and brand reputation.
Lack of Flexibility in Manufacturing:
The pharmaceutical manufacturing process often involves intricate procedures and specialized equipment. The challenge lies in introducing flexibility to adapt to changing demands, new formulations, or unexpected disruptions while maintaining the necessary precision and compliance with regulatory requirements.
Storage and Assessment of Data:
The vast amount of data generated in pharmaceutical operations, from research and development to production and distribution, requires efficient storage and analysis. Companies need to organise and assess this data to derive meaningful insights, streamline processes, and enhance decision-making.
Compliance with Changing Government Regulations:
The pharmaceutical industry operates in a highly regulated environment with evolving government regulations. Non-compliance can result in legal consequences, product recalls, and damage to the company’s reputation.
Recipe and Formula Management
Managing the recipes and formulas for pharmaceutical products involves precise measurements and adherence to specific formulations. Companies face challenges in maintaining accuracy, consistency, and confidentiality while ensuring the efficient production of high-quality medications.
Supply Chain, Batch Control, Traceability
To maintain the quality of pharmaceutical products and ensure patient safety, it is crucial to have an integrated tracking system that can monitor the movement of the products from production through distribution.
Batch control and traceability are important challenges that require sophisticated tracking systems to minimize the risk of contamination or counterfeiting. These tracking systems provide visibility into the supply chain, enabling pharmaceutical companies to identify the source of any quality issues and take corrective action quickly.
Additionally, by ensuring the integrity of the pharmaceutical supply chain, companies can maintain the trust of their customers and regulators, and ultimately, improve patient outcomes.
The procurement of raw materials, equipment, and services in the pharmaceutical industry demands a strategic approach. Challenges include negotiating favorable terms, ensuring the reliability of suppliers, and managing costs without compromising on quality, all while navigating complex supply chains.
Digital transformation is a significant challenge for pharmaceutical companies due to the use of legacy ERP systems (e.g. ECC). Integrating advanced technologies such as artificial intelligence, big data analytics, and automation can enhance efficiency, but implementing these changes is slowed down by the resistance to new processes from existing staff.
RISE with SAP which includes the SAP S/4 HANA Private Cloud version comes as a heaven to the pharma industry. Apart from all the above-listed challenges, SAP S/4 HANA also helps your company in managing and updating sensitive information such as expiry dates in real-time, following strict regulations, and managing complex drug formulas.
RISE with SAP for Pharmaceuticals to Streamline Expiry Date Management
Expiry date management is crucial in the pharmaceutical and life sciences sectors due to the critical nature of product shelf life. These products often have specified expiration dates beyond which their efficacy may be reduced or they might become unsafe for consumption or use. Managing these expiry dates effectively ensures product quality, safety, and regulatory compliance.
SAP S/4HANA, an integrated enterprise resource planning (ERP) system from SAP, provides comprehensive solutions for various industries, including pharmaceuticals and life sciences. Within SAP S/4HANA, expiry date management can be tackled in various ways:
In SAP, products that need to be tracked by expiry dates are often managed as batches. Each batch will have a unique identifier and can have its shelf-life expiration date (SLED).
Shelf Life Management
SAP S/4HANA supports shelf life management where products are assigned a production date (or a date of entry into the warehouse) and a defined shelf life. This allows the system to automatically determine the expiration date.
First Expired, First Out (FEFO) Management
Instead of the traditional “First In, First Out” (FIFO) inventory management, companies can use FEFO. This ensures that products that are closest to their expiry are dispatched or utilized first.
The system can be set up to provide alerts when products are nearing their expiry dates. This can be useful for sales, distribution, and warehouse teams to take necessary actions.
Quality Management (QM) Integration
SAP’s QM module can be integrated to ensure that products nearing their expiry undergo quality checks, and necessary actions like re-validation or disposal are taken based on results.
With SAP S/4HANA’s advanced reporting capabilities, businesses can gain insights into product batches nearing expiry, the value of such stock, potential write-offs, etc.
The system can assist in ensuring compliance with various regulations that mandate tracking and reporting of expiry dates. This is especially crucial in regions with stringent pharmaceutical regulations.
Returns and Recalls
Should there be a need to recall products, the batch management feature can be instrumental in identifying which products to recall, based on production dates and expiry dates.
Link to Procurement
In scenarios where raw materials or semi-finished goods have expiry dates, this can be linked to the procurement process. Purchase orders can be created with stipulations about the minimum shelf life required upon receipt.
Effective expiry date management in SAP S/4HANA ensures that pharmaceutical and life sciences manufacturers reduce waste, maintain high product quality, ensure patient safety, and remain compliant with regulatory requirements. Proper training and configuration are essential to maximize these capabilities.
Batch management and SLED (Shelf Life Expiration Date) are intertwined concepts in SAP S/4HANA, especially for industries where product shelf life is critical, such as pharmaceuticals and life sciences.
Here’s a deeper dive into how these functionalities work inside SAP S/4 HANA:
A “batch” represents a quantity of a material produced during a given production run. Each batch is unique and can have distinct characteristics.
Every batch is associated with a unique batch number. This allows for traceability of each batch from production through to sales.
SAP provides a feature called “Classification” that allows users to record specific attributes of a batch. For pharmaceuticals, this could be attributes like potency, source, production date, etc.
When creating a sales order or a delivery, SAP can automatically determine which batch of a product to allocate based on predefined criteria, such as FEFO (First Expired, First Out).
Shelf Life Expiration Date (SLED)
SAP S/4 HANA’s Shelf Life Expiration Date function helps you keep a tap on the Shelf life is a continuous and living process in the pharmaceutical industry, and it is essential to ensure products are used or sold before they expire.
Shelf Life Period
When a material is defined in SAP, you can specify its total shelf life in days. This is the period for which the product remains viable for use.
For each batch, you can specify the date on which it was produced or the date it was received in the warehouse (for purchased items).
Expiration Date Calculation
The system automatically calculates the expiry date of a batch by adding the shelf life period to the production/inbound date.
Batch Status Management
Batches in SAP can have statuses like “Unrestricted”, “Restricted”, “Blocked”, etc. As batches approach or surpass their SLED, you can configure your system to automatically change their status. For instance, batches past their SLED can be automatically set to “Blocked” status to prevent their accidental dispatch.
In some cases, if a product batch is re-validated and found to be still good, its SLED might be extended. This functionality allows for flexibility in managing exceptional scenarios.
Integration with Other Functions of the Business
Expiry Date Management is crucial to various areas of the business, from warehouse to quality checks to sales. Integration with other functions is vital as it ensures seamless data flow and collaboration across different areas of the business.Let’s explore how the SAP S/4 HANA Private Cloud ensures that the flow of information is consistent between all the areas of business.
Integration with the warehouse management function ensures that batches nearing their SLED are staged for picking before other batches. This assists in the FEFO approach.
Batches can be subjected to quality inspections based on their SLED. For instance, batches nearing expiration can undergo a quality check to ensure they’re still viable.
Sales and Distribution
When creating sales orders or deliveries, the system can automatically select batches based on their SLED, ensuring older batches (or those nearing expiration) are shipped out first.
This integration enhances efficiency, minimizes redundancies, and provides an end-to-end view of the organisation enabling informed decision-making and a unified approach to business processes
Choose the best for RISE with SAP Pharmaceuticals with VC ERP
SAP S/4HANA Cloud is undoubtedly the future of modern ERP systems, offering businesses the lowest total cost of ownership and advanced automation capabilities.
Choose VC ERP for your RISE with SAP journey in the Pharmaceuticals sector, and experience unparalleled expertise tailored to your industry needs.
We go beyond software provision – our specialized training programs ensure your staff is well-versed in compliance standards. With VC ERP, rest assured that before full implementation, rigorous testing is conducted on configured scenarios to guarantee seamless integration of SAP S/4 HANA into your pharmaceutical operations.