Pharma Supply Chain Term Paper Presentation

Global Pharmaceutical Enterprise Systems

Mike Romanov, Tyler Lepore, Anik Patel, Dylan Levine

What is an enterprise system?

● Set of interfacing software applications designed to solve enterprise challenges or

problems.

● End to end business management software systems

Why implement?

● Allow large global organizations to aggregate company- wide resources,

information and operational components

● Allow uniformity of data

● Facilitate data-driven decision making and strategy

Key Drivers for Adoption

● Increased regulatory pressure

● Need for compliance and audit management

● Increased focus on quality and product life cycle management

● Security and risk management

Implementation Phases1. Planning

2. System/Vendor Selection

3. Implementation

4. Acceptance

5. Full assimilation

Implementation opportunities● Aggregate data

● Improved visibility

● Streamline business processes

● Standardization and optimization of processes

- Enhanced communication and collaboration across departments

● Cost reductions

Implementation risks and costs● Significant capital investment

-direct and indirect costs

● Cost savings may not be realized right away

● Resource allocation

● Risk of implementation or operational failure

● Difficulty with data migration

SAP and Oracle market overview● Two of the biggest competitors in the ERP market.

● Compete on the basis of product and service

differentiation NOT price.

● Arguably the best quality, customizable and easy-to-use ERP software

applications relative to the price.

○ Higher cost options of internally developing your own ERP system.

SAPSystems Applications and Products in Data processing

● Founded in 1972 by five former IBM employees

● First Market leader to integrate a company's

worldwide functions into one ERP system.

● Focused on ERP systems from the inception of the

company.

OracleFounded in 1977 with an initial focus on relational database management systems.

● Later moved into the ERP space through acquiring various software companies.

○ Big names acquired were JD Edwards, PeopleSoft and Siebel Systems

● These acquisitions gave Oracle the expertise needed to integrate there RDMS into

full out ERP systems.

● Since these innovations Oracle is now the second highest used ERP software.

● Premium costs which

come with (arguably)

premium features

● Better for companies

with changing

environments. (Brand

name Vs. Generic drug

companies)

● Larger market share

● Lower relative cost

than SAP

● Less customizability

● More standardized for

user friendliness

● More innovation in

the cloud computing

space

● Longer

implementation time

SAP Oracle

Common Enterprise Management Systems

● SRM and CRM

● QMS

● Strategic Sourcing and procurement

● DRP

Strategic Sourcing Modules● Very important in the procurement department.

○ Instant savings at the bottom line

● Easy access to data that may be overlooked in any other situation

○ A system where data is consistently being added and edited

● Allows for quick comparisons of large amounts of suppliers

○ Gives procurement departments the ability to look at more than just a handful of suppliers

● Can give procurement departments more power in negotiations

○ Using past supplier history and other metrics against them

● Can help raise quality

○ By meticulously searching through many suppliers and harder negotiating procurement

departments can get better materials at better prices.

Quality Management System (QMS) Module● Pharmaceutical Companies have a great need for QMS modules

○ Products can have lasting impacts on a person's health.

● Streamlines internal operations

○ Reduction in paper documentation and complications due to vast number of processes.

● Some companies will go so far as to implement multiple QMS modules creating

redundancies.

○ Basic fail-safes

● QMS modules can also help keep certifications

○ ISO level certifications can be gained and maintained.

Supplier Relationship Management (SRM)

● The application to interact with suppliers

● “Viewed as an organized approach to defining what they need and want from a supplier and establishing and managing the company-to-company link to obtain these needs” (Cavinato 1)

SRM (continued)● 5 Step Process:

○ Qualify■ AQSCIR

■ Assure supply, Quality suppliers, provide Service, Cost value of these select suppliers, provide Innovation, and abide by the Regulatory environment

○ Segment■ Portfolio Analysis - Strategic/Bottleneck suppliers - APIs, excipients, unique specifications

○ Measure○ Assess

■ Issue: internally, systems are not in place to keep track of the metrics, thus the supplier will have to relay the results to the pharmaceutical company

○ Optimize■ What else do they offer

Customer Relationship Management (CRM)

● The application to interact with customers

● Defined as “a business strategy that helps your business to better understand your customer, retain customers, provide excellent customer service, win new clients and increase profitably” (Beal 1)

CRM (continued)● CRM software systems are complex and usability is difficult to use● However, having a single location for customer data is much more efficient and

creates visibility● Professor McLaury, (formerly at Novartis) “It depends on the company, most

[pharmaceutical] companies don’t dive deep into it […] they don’t do a lot with CRM because they typically sell to the wholesalers.”

CRM (continued)● “it's long been considered too resource-intensive to actively market new drugs to the

entire medical community, so manufacturers have to focus on what are known as key opinion leaders” (Lager 1)

● A KOL is a respected physician who influences his or her peers for a certain medical practice

● A strong relationship with KOLs can thus help pharmaceutical companies reach their target market

● KOL Management - Give just the right amount of attention● KOL Management systems and CRM systems then coincide and need to be integrated

together

CRM (continued)● “solutions such as these offer you "tactical" benefits […] when it comes to dealing

with sales, marketing and customer service. But to stay relevant to customers […] enterprises have to go further. The key to success is to become a customer adaptive enterprise (CAE)” (Rubens 1)

● A customer adaptive enterprise is a business that delivers value based upon the changing consumer market by forging a deeper understanding of the customers

● Pharmaceutical industry, however, is difficult to adapt due to long process of discovery and commercialization

DRP -- Disaster Recovery Planning● A support system that assists in companies dealing with disasters

● A necessity to deal with disasters so companies do not lose too much money

● Both preventative and reactive measures can be utilized

○ Prevent a fire. React to the events of a hurricane

● If DRP measures aren’t in place up to $5,000 can be lost every single minute

● Need to have protocols in place when supply chains are diverted and when you

can’t reach your personnel.

Future Trends ● Migration to the Cloud

● Increasing options for customization and system flexibility

● More user friendly experience

● Data decentralization and increased security

Questions ?