Why SAP ERP Makes Sense for Pharmaceutical Manufacturing

Legacy software systems no longer make sense for life sciences businesses, especially growing organizations in the pharmaceutical manufacturing industry.

The problem is that complexity, regulation, and competition have changed how pharmaceutical and life sciences firms must do business. Today, life sciences firms need the power and features of industry-standard enterprise resource planning software such as SAP Business ByDesign and SAP S/4HANA Cloud, Public Edition. When that is lacking, situations arise like what happened recently at Public Health England.

Because Public Health England didn’t have the right backend systems in place, during the COVID-19 pandemic the organization partially relied on outdated Excel spreadsheets for COVID-19 test tracking. By using old technology, the organization lost nearly 16,000 COVID-19 test results.

This would never have happened if Public Health England had been using an ERP system by SAP.

The Case for SAP in Pharmaceutical Manufacturing

Life sciences firms such as pharmaceutical manufacturing companies must juggle a massive amount of variables in the course of business, from managing supply chains and exacting manufacturing processes to precisely tracking shipments and overseeing onerous compliance obligations. Then there is the pace of the life sciences industry today, and a host of startup firms looking to disrupt.

Legacy software doesn’t serve life sciences businesses well, be they biopharmaceutical makers or those manufacturing medical devices today. Data is siloed, hard to update, and time-consuming to store or use.

ERP solutions from SAP, be it Business ByDesign or other SAP offerings, can dramatically improve operational performance and data management.

That’s because SAP ERP solutions serve as a centralized platform for all data within an organization, ensuring it is authentic, relevant and referable. It creates a single source of truth, which is essential for complex data systems and networks like those found in the pharmaceutical industry.

By storing data in a single master location and linking back to this data as appropriate in a variety of different views based on access rights, ERP solutions provide users with a federated view of data that is accurate and reliable, eliminating redundancies and departmental data silos.

An SAP system serves as a central nervous system for a life sciences business, consolidating data from each department including purchasing, inventory management, sales and marketing, human resources and planning.

This centralizing of data is not the only reason that pharmaceutical manufacturing and other firms in the life sciences industry should embrace ERP systems from the likes of SAP, however. Other benefits include:

1. Manufacturing Coordination

With SAP, pharmaceutical manufacturing firms use one system to manage all aspects of manufacturing, such as planning, scheduling, procurement, production, shipping, and inventory.

SAP enables businesses to organize and refine the entire supply chain, along with minimizing redundancy, automating processes, optimizing operations, among other advantages.

2. Quality Control and Compliance

Compliance and quality management are critical for life science firms, be it a biopharmaceutical or device manufacturer. Firms must often navigate strict regulatory requirements mandated by the FDA and other regulatory bodies.

Life sciences firms are more able to strictly manage quality control and handle areas such as serialization and batch tracking with an SAP system that centrally manages all aspects of a company’s operations.

Startups also get an added advantage on the mandated systems validation process when they used a prepackaged industry solution that has been pre-validated, such as Business ByDesign’s prepackaged industry solutions for life science firms.

3. Inventory Management

Inventory is a critical part of any business, especially pharmaceutical manufacturing companies. SAP systems allow for supply chain transparency, enabling firms to track stock as it moves throughout the entire supply chain.

SAP systems also can automatically generate detailed reports, provide accurate counts, analyze inventory flow, perform quality checks, ease planning, delivery many other tools to make inventory management less demanding even with strict tracking requirements.

4. Order Management

For many businesses, issues and complexity with order management are what first suggests the move to an ERP system. Life sciences firms are no exception.

That’s because tracking orders and fulfillment is a core use case for ERP, and why SAP pioneered the software decades ago with its earlier iterations. Invoicing and order management can be completely customized for the specific needs of a life sciences company, and the system is able to connect with supplier systems and just about any third-party solution.

Because the entire business runs through the SAP system, businesses also can benefit from the improved visibility and tracking that often is necessary in the life sciences field. Management and staff can instantly see the status and location of orders, and coordinate it with manufacturing and supplier bottlenecks.

5. Better Financial Planning

Many businesses uses QuickBooks or Xero for financial management. But QuickBooks or Xero isn’t enough, despite the marketing material from those companies.

Pharmaceutical companies need robust financial management software that is able to handle multiple geographies, multiple sales channels, robust reporting and integration with third-party supplier systems. SAP easily handles all of this, which is why more than 90 percent of Fortune 500 companies use SAP.

For more on the differences between QuickBooks and ERP, download our free ebook, Comparing QuickBooks with SAP Business One ERP.

These are just some of the reasons why pharmaceutical manufacturers should be using SAP software for managing operations, if they aren’t already.

For more on ERP and how it can help your life sciences business, download our free guide, Understanding Cloud ERP.