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Pharmaceutical ERP: The Key to Traceability (Part 2)

10 August 2012


When you’re thinking about traceability, materials management doesn’t usually come to mind. Consider some of the things that cause problems – not just for you, but for your inbound supply chain, and outbound distribution. While some materials, like packaging, have a long or indefinite shelf-life, other critical ingredients can spoil or cause production problems if not used at their peak.

ERP Manufacturing

Pharmaceutical ERP: The Key to Traceability (Part 2)

The ability to accurately forecast and report production, consumption, and fulfillment translates to a capacity to adjust inventories and material orders to optimal levels. For example, carrying less inventory, and placing more frequent chemical orders can mean significantly lower carrying cost. With accurate materials planning, ingredient throughput improves and often increases end-product shelf-life.  Ultimately, more rapid turnover of raw ingredients and product helps to reduce the likelihood of spoilage and helps you deliver higher quality to your customers.

#3 — MEDICATIONS BEGIN WITH FORMULATIONS, SO SHOULD YOUR ERP SYSTEM. Most ERP systems have been built for discrete manufacturing of engineered products. But, pharmaceutical manufacturers have distinct needs, and face risks that are unique to their business. Formulation-based materials management helps process-oriented manufacturers stay on target for “day one for day one” order and delivery processing. For example, when you have the ability to plan appropriately for multiple product attributes and grades, and retailer-specific packing and labeling, you can boost customer service levels while giving a shot to item-specific traceability. Formulation-based materials management improves

quality by streamlining planning and production activities, especially when data capture extends all the way back to the field or compound lab. Consider for a moment a bill of materials that’s optimized for formulations, and multiple units of measure. Setting up products and production processes becomes easier, and even difficult formulations can be accurately represented and traced.

 #4 — MAKING TRACEABILITY A PRIORITY NATURALLY IMPROVES UTILIZATION AND CAPACITY. Businesses that focus on traceability generally increase operations performance. When planning, scheduling, production, and inventories align with orders, line utilization improves. Drug companies that look to Lean, Six Sigma or other improvement methodologies fi nd that having the right tools and processes to manage traceability improve throughput, experience less waste, and reduce downtime due to unavailable ingredients. These dimensional improvements translate to cost savings or more capacity, and ultimately contribute to bottom-line performance.

Pharmaceutical manufacturers that successfully navigate the traceability maze will ultimately win the game. While they might not ever be free of drug-illness hazards, they will significantly reduce the risk and cost associated with mass recalls and useless inventory. Furthermore, these leaders will position themselves ahead of the compliance curve, and improve their competitive advantage. Origin-to-shelf traceability doesn’t have to be an IT nightmare when you arm yourself with the right ERP system. Look for one that addresses your specific needs and risks as a pharmaceutical manufacturer:

  • Uncovers and reports every element along the supply chain – from origin, all the way to the dispensing point
  • Offers unlimited layers of trace in both directions – inbound and outbound supply chain
  • Delivers robust, formulation-based, day-to-day materials management
  • Forecasts and reports production, consumption and fulfillment
  • Processes orders and delivery on a “day one for day one” basis
  • Captures multiple product attributes and grades, retailer-specific packing and labeling
  • Streamlines planning and production activities
  • Optimizes BOMs for formulations and multiple units of measure.


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