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The Role of ERP in the Pharmaceutical Industry

The pharmaceutical industry has been transformed in recent years by pressure from intensely competitive markets and the need to comply with new regulations that mandate the highest quality standards across all processes.

The industry is a complex one and highly regulated as well, as it deals with the safety of people’s lives. It requires not just R&D capability, talent, and strong capital investment over the long term, but also the need for a strong digital infrastructure.

As such, cloud ERP is critical for pharmaceutical operations today given this environment.

A cloud-based ERP solution for the pharmaceutical industry not only enables the consolidation and integration of manufacturing processes across multiple departments, but also helps to track and trace sensitive operations across organizations to meet the needs of regulation compliance, expiry management, quality control, and formulation costing.

Key Roles of ERP in the Pharmaceutical Industry

ERP handles the basic needs of any organization, including accounting, finance, human resources, inventory, purchasing, supply-chain management, manufacturing, and reporting. But there are also specific ERP functions that support pharmaceutical businesses in particular.


  1. Compliance management. Pharmaceutical businesses must deal with regulations by the FDA, and must implement standard quality metrics that measure, evaluate, and monitor the product and process lifecycle.
  2. Real-time bi-directional material traceability that helps to monitor availability of key materials. This helps to prevent losses of opportunity and minimize risk if there is a possible shortage of material.
  3. Batch tracking in Work-In-Process (WIP) with yield reconciliation, created on an operation- or phase-related basis. The operation or phase is displayed for the WIP batch in the batch where-used list.
  4. Effective management of Batch Manufacturing Record (BMR) or Batch Processing Record (BPR) per good manufacturing processes. BMRs or BPRs are written documentation of a manufactured batch as it moves from the dispensing to the inspection stage. These documents outline the procedures and step-wise instructions to be followed during the manufacturing of each batch.
  5. Waste elimination through expiry alerts and first expire date/first out (FEFO)-based material consumption. These alerts can prevent unnecessary expenditures.
  6. Quality management. ERP software can help with In Process Quality Control (IPQC), In Process Inspection, and Certificate of Analysis. These are all checks that are carried out before the manufacturing process is completed. Such in-process controls monitor and, if necessary, adapt the manufacturing process in order to comply with specifications.
  7. Managing information reporting at various levels. Because the industry is so highly regulated, pharmaceutical companies must generate a lot of reports to submit to auditors and external parties.
  8. Managing outsourced lab testing for microbiology tests. Pharmaceutical companies often use external laboratories for various stages of research and expertise rather than heavily investing in their own facilities for non-core business activities.
  9. Minimizing operational work through automatic alerts between departments. Pharmaceutical businesses have complex internal operations, might have employees distributed across several locations, and work closely with external partners and outsourcing companies. Having automatic alerts will minimize miscommunication and unexpected errors in collaboration.

A Scalable Platform to Prepare for Sustainable Growth

Like many other sectors, the pharmaceutical industry has many small startups and that aim to grow and become stablished firms. An ERP platform for such a company must support the business’s future scalability; otherwise, the company would need to replace their existing system if it outgrows the old one, which could result in lost business opportunities during migration.

As pharmaceutical companies grow, their business often starts extending into multiple countries. This could involve overseas office operations, arrangements with outsourcing partners, sourcing procurement, or exports. To handle all that, a firm’s ERP platform should support multiple currencies.

Pharmaceutical manufacturers have dynamic product life cycles that run from development and clinical trials through distribution and revenue. To master such a business, companies must control complex supply chains, meet demanding regulations, track all processes, and deliver compliance and reports for multiple countries.

In a nutshell, ERP will enable pharmaceutical companies to gain a complete overview of all their processes, track all manufacturing batches, and increase flexibility in their production processes, all while improving their supply chain and making their distribution more efficient.

The bottom line: A successful ERP deployment will increase efficiency, improve productivity, streamline workflows, and decrease production costs.

The Value of Prepackaged Industry Solutions

Because ERP is critically important for pharmaceutical companies, and these companies have specific needs, we’ve developed prepackaged industry solutions that help pharmaceutical companies roll out their ERP system in half the time and at half the cost. This is done by pre-configuring these industry solutions for specific industry needs and best practices.

Learn more about our  ERP solutions for pharmaceutical companies, or contact one of our consultants at (801) 642-0123 or by emailing us at info@nbs-us.com for additional information about how ERP can help support your pharmaceutical business.

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