Enterprise Resource Planning (ERP) Systems in the Medical Industry

June 2, 2020

Drug and medical device development and manufacturing is a complex process that involves multiple supply chains, various monitoring systems, and countless players from R&D to market. Due to the sensitive nature of the products and the repercussions should anything go awry during production or distribution, the medical industry is under constant pressure for attention to detail, adherence to strict methodologies, and regulatory compliance. While many products in our daily life can be used despite a tiny flaw, pharmaceuticals and biotechs don’t have the luxury to sell subpar products.

The FDA closely watches manufacturing sites of companies that market to the US. Drug and medical equipment quality is front and center concern; site monitoring also includes other facilities involved in the supply chain, such as labeling and packaging sites and “no-application” sites.

Needless to say, the medical industry is held accountable for the quality of its products every step of the way. Facing a recall or withdrawal is a costly affair no organization wants to experience.

The complexity of the life sciences field, coupled with healthcare reforms and increasingly stringent regulations poses a conundrum: how to cut costs in a highly competitive market without jeopardizing product integrity? To solve the puzzle, once paper-heavy companies now turn to innovative production processes and Enterprise Resource Planning technology.


Process Shift: from Batch Producing to Continuous Manufacturing

The traditional drug manufacturing process involves batch manufacturing across multiple sites. Production stops between each step to make time for offline quality control. This process is lengthy and disruptive to the supply chain, not to mention it poses higher risks to quality.

In an effort to optimize the production process and eliminate unnecessary downtime and spend, manufacturers are shifting toward continuous manufacturing. By building directly quality into the process (quality by design), automation takes the place of cumbersome sampling and improves production flexibility (demand peaks).

This process also includes data-feed features and integrates naturally with a more holistic planning system, designed specifically to manage all the aspects of medical product manufacturing and distribution: ERP.

Benefits of ERP in the Medical Industry

An ERP system is a software solution designed into different modules that interact and exchange data in real-time. Any action taken in one module can update one or several other data points. As such, it acts like a super brain that receives and sends information to connected systems, centralizes information, interprets data, and delivers analytics. Not only is it a useful tool to eliminate manual processes, but it also is a great ally in compliance and risk management.

Some of ERP for biopharma benefits include:

Ingredient and Product Management & Tracking

From ingredient sourcing to final product inventory, ERP gives a complete picture of what’s available, where it is, where it came from, and where it’s going. It can trigger replenishment orders, send alerts on low availability, and overall eliminate gaps in the supply chain, one of the often neglected risks in the industry.


Formulation Management

Fierce competition leaves no room for recipe mistakes and material waste. Drugs need to reach the market at the best possible price. Enters ERP, to keep formulation precise and avoid extra-costs incurred by a difference in effectiveness, as small as may be.


Regulatory Compliance

Integrating norms and regulations in the system result in reaching compliance faster and with easier processes. From the protocol validation checklist to FDA requirements, everything is in one place and missing elements can be promptly identified.


Fulfillment Optimization

Visibility and efficiencies all the way to the end-user are a critical aspect of operations. Orders, specifications, billing, and shipping requests feed on one another. Less manual intervention, quicker response, and leaner execution result in less overstock/shortage and healthier bottom line.


Production Planning

In the mid to long-term, historical data offers an efficient way to manage production on specific products and specific markets. An analytic view of trends and seasonal shifts optimize time, costs, and operational needs.


Sales & Marketing Strategies

Aligning marketing and sales strategies is necessary to increase reach and conversion. From prospect management to clients’ records and purchase history, sales and marketing teams can devise and automate inbound campaigns and know where to focus their attention and energy based on response and target fit.


Document Management

Any heavily regulated industry knows the burden of gathering documents and record data. ERP systems designed for the pharma arena take the process of managing and controlling document compliance to a worry-free level, acting as a central repository for all mandatory documentation.


Analytics and Data 

Data collection and cross-functional data exchange can help identify gaps or silos, risks, and opportunities. With data visualization and predictive modeling, organizations can use ERP features to validate business strategies and use insights to contribute to more effective project management. It considerably assists in better decision making and provides a clear view of a company’s financial health and growth metrics.

Few industries face as many business challenges as the medical industry; From customer expectation, media scrutiny, regulatory bodies requirements to the cost of developing new products and risk mitigation, organizations battle on many fronts at once.

In order to stay competitive against global newcomers in unpredictable markets, ERP presents the much-needed solutions to reduce costs, streamline processes, increase efficiencies, and improve transparency without compromising quality, safety, and efficacy.


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