New Generation ERP 'Master Blends' Regulatory Compliances in Food, Beverage, and Pharmaceutical Manufacturing Industries
M.S. Oberoi*
November 1, 2009
Abstract
Experience has taught that the art of 'blending' corporate ERP operations by a System Integrator is not very different from the work of a 'Master Blender' in alcoholic beverage industry who chooses which single malts and grain whiskies among hundreds are combined to make a particular blend of whisky consistently over time. As the economy is turbulent due to financial crisis, food, beverage, and pharmaceutical manufacturers have a renewed need for better information connectivity at lower cost because timing and content of information to be traded is critical as an inherent remedial gauge.
The complexity and volatility of these businesses demand specific solutions to integrate the demand management, manufacturing, and distribution processes that encompass key technologies such as shelf-life monitoring, batch management (for 'Fork to Field' traceability), electronic signatures, serial numbers, and workflow at optimum cost. The new generation solutions must connect certain Partner Functions such as customers and vendors to the extended enterprise resource planning (ERP) networks where Businesses talk electronically to each other.
The desire to bring more connectivity and to match it with critical timing remains the penultimate dream for the System Integration Partners. Currently, not all supply chains have been able to truly meet these requirements.
Inherent Challenges
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, and to react quickly to or circumvent merchandise recalls. Other inherited challenges include complying with the Bioterrorism Act and managing expiration dates.
Goal 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 ERP 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.
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. ERP needs to eliminate guesswork. Since the Orders are booked continuously, challenge is to how often run MRP because the process utilizes all critical resources during the cycle. ERPs need to be strong on recipe management, which is at the core of MRP for process industry, in which liquids flow through pipes and go in different directions according to customer demand.
Inherent Advantages
ERP updates 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 simplifies dispatch routines, thus reducing delivery lead times, refining consumer service levels, and overall sensitivity.
ERP creates 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, ensures that stock levels are kept low while sustaining the smooth running of the production lines.
ERP's ability to interface easily to other systems and process control equipment provides freedom to pick best-of-breed applications to fit other parts of the business. Staff needs and training: 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 Managements.
Another advantage of any ERP is the inbred Quality Management module, with its capabilities in 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 customers.
Rapid implementation of ERP for 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.
Work Culture
The working pattern of ERP software is very complicated and requires high level of expertise for managing food, beverage, and pharmaceutical manufacturing processes. Therefore, new generations of System Integrators and Practitioners have evolved that have hands-on configuration experience on ERP systems specific for US Food and Drug Administration (FDA) controlled manufacturing to bridge this vital gap.
The nature of operations for food, beverage, and pharmaceutical manufacturing industry requires "24 hours and 365 days" of consistent planning and execution capabilities. This requires a motivated obligation to work at any time to feed the hungry and to provide medicines to the deserving.
Wireless Pharmacy is the new technology to drive automation in health care
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.
Shelf Life Cockpit
The Shelf Life Cockpit is a plug and play solution package that is currently applicable 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, as well as detailed information about the corresponding expiration dates. For further analysis of these conflicts, a drill-down function is available to support the user in detail.
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 stress to the administration, chartered accountants, and the company secretaries but also to the ERP System Integrators who design a new ERP if the old systems will not work in combinations anymore. Similarly the implementation partners face the challenges of designing new ERP software if the companies have not already implemented one. 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 thrust on the capabilities of the current ERP applications. Supply Chains that have implemented at least limited ERP in the past now understand the multitude of functionalities and options these systems can deliver through better information connectivity across diverse product portfolios and also, across diverse geographies 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 New Generation ERP Solutions, primarily as a long term investment to promote value for the shareholders.
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