Submitted by:

Anjali Verma

PGDITM IV

Roll no.6

Business Process Flow Modeling & Quality Management in Project SHAPE

at Sandoz Private Limited

2

Project Report on

“Business process flow modelling

and Quality Management”

as a part of Project

Conducted at

Sandoz Private Limited

By

Anjali Verma PGDITM IV

NITIE, Mumbai

Under the guidance of:

Project Guide: Faculty Guide:

Mr. Thomas Brandacher, Prof A. D. Raoot

Shape ERP Project Manager Professor,

Sandoz Private Limited NITIE, Mumbai

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National Institute of Industrial Engineering

CERTIFICATE

This is to certify that Anjali Verma has successfully completed the project

“Business process flow modelling and quality management” in SHAPE project

during her summer internship at Sandoz Private Limited, a Novartis company,

from 12th April to 4

th June, 2010 in the partial fulfillment of ―Post-Graduate

Diploma in Information Technology Management" at NITIE.

I wish her a bright and prosperous future.

Prof. A. D. Raoot

Professor,

NITIE, Mumbai

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ACKNOWLEDGEMENT

First and foremost I‘d like to thank Sandoz Private Limited, for providing me an excellent

learning opportunity and Ms. Michelle Coutinho, Head HR Tech Ops, Asia Region and Mr.

Thomas Brandacher, Shape ERP Project Manager for organizing such a wonderful training

program in ERP. The association with SHAPE Project has indeed expanded my horizons and

given me deep insights into the nuances of the Pharmaceutical related process and SAP‘s ECC

6.0 modules.

Also I would like to sincerely thank my faculty guide Prof. A.D. Raoot, for giving

valuable inputs and timely feedback to execute my project in an optimized way and help me

complete it.

I would also like to thank Project Quality Management team‘s Mr. Arjun Guha

Thakurta and Mr. Omer Cimen, for their constant support throughout the project. Also I owe

sincere thanks to the SCM, Operations, Finance and Controlling team leads Mr. Rajkumar

Raut, Mr. Karthikeyan Ramanathan and Mr. George Daskalakis and their team members for

their constant cooperation.

I would also like to express my heartfelt gratitude towards Ms. Kashmiri Choudhury

and all those who have directly or indirectly helped in the completion of this Project.

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Table of Contents

1. EXECUTIVE SUMMARY .................................................................................................... 7

1.1 Company Background ...................................................................................................... 7

1.2 Project Objectives and Business Need ............................................................................. 7

1.3 Key Deliverables .............................................................................................................. 7

1.4 Scope ................................................................................................................................ 8

1.5 Limitations ....................................................................................................................... 8

2. ABOUT NOVARTIS.............................................................................................................. 9

2.1 Company History ............................................................................................................. 9

2.2 Healthcare portfolio.......................................................................................................... 9

3. ABOUT SANDOZ................................................................................................................ 12

3.1 Company Overview........................................................................................................ 12

3.2 Vision ............................................................................................................................. 12

3.3 Quality generics.............................................................................................................. 13

3.4 Leading the way in biosimilars ...................................................................................... 14

3.5 Difficult-to-make medicines - making a difference in generics ..................................... 15

3.6 Biosimilars – a major future market ............................................................................... 16

3.7 Anti-infectives ................................................................................................................ 17

4. Project SHAPE...................................................................................................................... 18

4.1 Need of SHAPE ............................................................................................................. 19

4.2 Management expectations: ............................................................................................. 19

4.3 Project Objectives .......................................................................................................... 20

4.4 Project Scope: ................................................................................................................. 21

5. NEED FOR THE PROJECT ................................................................................................ 22

6. OBJECTIVES ....................................................................................................................... 23

7. METHODOLOGY ............................................................................................................... 24

7.1 Phase I: Gap analysis between Sandoz‘s core and India‘s processes ............................ 24

7.2 Phase II: Designing process flows with Microsoft Visio ............................................... 24

7.3 Phase III: Creating follow up lists for specifying linkages ............................................ 25

7.4 Quality management methodology ................................................................................ 26

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8. MODELING ......................................................................................................................... 27

9. FUTURE SCOPE.................................................................................................................. 36

10. LIMITATIONS .................................................................................................................. 37

11. ACADEMIC CONTRIBUTION ....................................................................................... 37

11.1 Enterprise Resource Planning:.................................................................................... 37

11.2 SAP Implementation process...................................................................................... 39

11.3 SAP Blueprinting ........................................................................................................ 40

11.4 Pharmaceutical Business Processes * ......................................................................... 42

12. REFERENCES/ BIBLIOGRAPHY................................................................................... 46

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1. EXECUTIVE SUMMARY

1.1 Company Background

Sandoz, a Division of the Novartis group, is a global leader in the field of generic

pharmaceuticals, offering a wide array of high-quality, affordable products that are no longer

protected by patents. Sandoz has a portfolio of approximately 1000 compounds and sells its

products in more than 130 countries. Key product groups include antibiotics, treatments for

central nervous system disorders, gastrointestinal medicines, cardiovascular treatments and

hormone therapies. Sandoz develops, produces and markets these medicines along with

pharmaceutical and biotechnological active substances and anti-infective.

1.2 Project Objectives and Business Need

The project ―Business Process Flow Modeling and Quality Management‖ was under Project

SHAPE of Sandoz, India. SHAPE (Sandoz Harmonized Processes in ERP) is the global program

within Sandoz that aims to implement SAP in 28 countries from April 2006 to the end of 2010,

involving about 8,500 users. Involved business processes are Finance, Production, Quality

Management, Supply Chain Management, Sales & Distribution and Procurement.

The blueprint phase of SHAPE was in progress during the internship period. Blueprint phase will

propose the business processes and structures in order to build them into new system. The phase

involves workshops for gap analysis to design the business and user requirements and further

devise the business guidelines, process flows, business scenarios, functional specifications,

detailed designs. The key deliverables for the functional teams are FIT/ GAP analysis,

workshops with solutions for GAPs, BPML/ URL, Business improvement list, Development and

reporting lists, Process / System documentation, Business Guidelines, Process Flows, Functions,

and Business Scenarios. Quality Management needs to have process documentation approved

and uploaded in DocNavigator.

1.3 Key Deliverables

To design various business process flows as per the Business Process Master List

(BPML) which accommodates changes that will be a part of process of

harmonization of Sandoz India processes with the global ones.

As a part of the project quality management team, review process flows and

business guidelines as per best practices followed by Sandoz

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1.4 Scope

The process flows to be designed were for the following modules of SAP ECC 6.0:

Financial Accounting

Controlling

Indirect Purchase/SRM

SCM Planning

SCM Execution

Commercial Operations

Inventory/ Warehouse Management

Purchasing

Manufacturing Planning

Manufacturing Execution

Quality and Batch Management

Plant Maintenance

1.5 Limitations

Due to the vast project scope, process flows were collectively modeled with help of team

members. For the process flows which were entirely done by other members only, complete

review was done to prevent any non-conformance.

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2. ABOUT NOVARTIS

Novartis International AG is a multinational pharmaceutical company based in Basel,

Switzerland, ranking number three in sales.

2.1 Company History

Novartis was created in 1996 through the merger of Ciba-Geigy and Sandoz, two companies

with a rich and diverse corporate history. Throughout the years, Novartis and its predecessor

companies have discovered and developed many innovative products for patients and consumers

worldwide.

2.2 Healthcare portfolio

Its portfolio best meets the varied and often complex needs of patients and societies. Novartis is

positioned to lead in innovation, partner with others and offer solutions to patients across a broad

healthcare spectrum. In addition, a diverse portfolio reduces financial risk, bringing greater value

to those who invest in our company.

Its portfolio, focused on broad areas of healthcare, aims to best meet the evolving needs of

patients and societies worldwide.

Novartis is the only company with leading positions in four key areas:

Pharmaceuticals: Innovative patent-protected medicines

The Pharmaceuticals Division of Novartis is recognized worldwide for the innovative

medicines we provide to patients, physicians and healthcare organizations. This growing

business develops and markets patent-protected prescription drugs for

important health needs. Our products are concentrated in major

therapeutic areas including:

- Cardiovascular and Metabolism

- Oncology (including Hematology

- Neuroscience and Ophthalmic

- Respiratory

- Immunology and Infectious Diseases

The current product portfolio includes more than 50 key marketed products, many of which

are leaders in their respective therapeutic areas. In 2009, Novartis received a total of 25 positive

regulatory decisions in the United States, Europe and Japan.

The product development pipeline has 135 projects in various stages of clinical development,

including potential new products as well as potential new indications or formulations for existing

products.

Vaccines and Diagnostics:

The Novartis Vaccines and Diagnostics Division provides more than 20

vaccines to prevent viral and bacterial diseases, as well as sophisticated

instruments, assays and software to protect the blood supply from the

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spread of infections.

The division consists of two businesses - Novartis Vaccines and Novartis Diagnostics, the blood

testing business.

Novartis Vaccines is dedicated to delivering on the promise of prevention through the research,

development and production of innovative, safe and effective vaccines. At the heart of

everything we do is our commitment to preventing the spread of life-threatening diseases,

protecting vulnerable populations, and keeping healthy people healthy.

By focusing on disease prevention, Novartis Vaccines plays a key role in the company's core

mission: keeping people healthy, alleviating suffering and enhancing quality of life.

The current vaccine portfolio includes vaccines to prevent:

Influenza

Meningitis

Rabies

Japanese encephalitis

Tick-borne encephalitis

Homophiles Influenzae type B (Hib)

Polio

Diphtheria

Tetanus

Pertussis (whooping cough)

Novartis Diagnostics: the blood testing business

Building on more than a decade of dedication to blood safety, Novartis Diagnostics is developing

a future of innovative solutions for preventive screening and the prediction of health outcomes.

Novartis Diagnostic‘s products are used to test millions of blood donations around the world

each year for pathogens such as HIV (the AIDS virus), hepatitis B and hepatitis C, and West Nile

virus.

More than 80 percent of the US blood supply is tested on Novartis diagnostics systems to ensure

safety for transfusion or use in other blood products.

Sandoz: Affordable, high-quality generic medicines and biosimilars

Novartis is the only pharmaceutical company with a global leadership position in both

patented prescription and generic pharmaceuticals.

Sandoz plays a critical role in the Novartis strategy of offering a range

of treatment options to patients, physicians and healthcare providers

worldwide. This broad portfolio helps to make affordable, high-quality

medicines available to patients around the world and stabilize

healthcare systems.

Two main elements empower the Sandoz business strategy:

Global reach and reputation: In addition to its unique position within Novartis, Sandoz

benefits from a strong global presence and powerful brand recognition worldwide.

Unique expertise: Sandoz distinguishes itself primarily through its ability to develop and

produce differentiated medicines. Sandoz is the pioneer of biosimilars — follow-on versions of

biopharmaceuticals following patent expiry — with the first three approved and marketed

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products in the EU (human growth hormone Omnitrope, anemia medicine Binocrit / epoetin alfa

Hexal, and oncology medicine Zarzio / Filgrastim Hexal).

Sandoz ―difficult-to-make‖ medicines add value by making life easier for patients. The portfolio

ranges from complex oral solids through injectables, high-tech patches and state-of-the-art

inhalers to biosimilars.

Consumer Health: Strong, trustworthy brands for increasingly knowledgeable consumers: OTC

(Over-the-Counter), Animal Health and CIBA Vision

The Consumer Health Division creates, develops and manufactures a wide range of products

designed to restore, maintain or improve the health and well-being of our customers.

The division focuses on three business units:

Over-the-Counter › Novartis Consumer Health, Inc. is a world leader in consumer healthcare,

providing self-medication products for the treatment and prevention of common illness and

conditions, and the enhancement of overall health and well being.

Animal Health › Novartis Animal Health focuses on the well-being of

companion animals and on the health and productivity of livestock, including

cultivated fish.

CIBA Vision › CIBA Vision is a global leader in the research, development and

manufacturing of contact lenses and lens care products.

Since Novartis was created in 1996 - when only 45% of net sales came from healthcare – the

company has shifted focus to fast-growing areas of healthcare. Its strategy is to provide

healthcare solutions that address the evolving needs of patients and societies worldwide.

Mission

It wants to discover, develop and successfully market innovative products to prevent and cure

diseases, to ease suffering and to enhance the quality of life.

It also wants to provide a shareholder return that reflects outstanding

performance and to adequately reward those who invest ideas and

work in the company.

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3. ABOUT SANDOZ

3.1 Company Overview

Sandoz - a healthy decision

Sandoz is a Novartis company with a

reputation for quality going back to its roots

in the 19th century (foundation of Sandoz

by Edouard Sandoz in 1886). It is a global

generic leader.

3.2 Vision

Sandoz is the main provider of high quality, affordable medicines helping secure long-term

access to healthcare for people around the world.

Worldwide, several factors - including an aging population and changing lifestyle patterns - are

converging to put increasing strain on its already-beleaguered healthcare systems. This steady

growth in patient needs leads in turn to ever-increasing cost pressures – a kind of ―perfect

storm‖.

This trend offers opportunities for the generics industry, which can provide significant savings

both for patients and for healthcare systems. Using generics frees up funds for new and

innovative medicines.

However, some companies will fare better than others. At Sandoz, it is well positioned to be the

global number one, thanks to its high quality standards, its global presence, its broad

development pipeline and its technological expertise.

It goes beyond traditional generic products and brings innovative technologies and delivery

systems to market, making a world of difference in generics.

Delivering a full range of traditional generic medicines is the core business of every company in

the industry. It goes a step further, constantly seeking new ways to improve patients‘ quality of

life.

Its decades of experience, combined with our global development and production

network, enable it to develop and manufacture the difficult-to-make generics that many

other companies cannot or do not make.

It is at the forefront of bringing biosimilars to patients worldwide following the

precedent-setting market launches of human growth hormone Omnitrope® and anemia

medicine Binocrit®.

It leads the industry, outperforming the market.

With its broad portfolio and leading positions in key markets, it is one of the two largest

generics companies in the world.

It aims for cost leadership across the board by optimally designing its operations and

building on synergies in its global development and production networks.

Its associates are empowered to act on their own initiative and actively seek opportunities

to leverage savings.

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It brings the care and passion our employees have for their work to its customers, patients

and communities.

It is a global generics leader, develops, produces and markets medicines that are no

longer protected by patents, along with pharmaceutical and biotechnological active

substances. It offers patients approximately 1.000 molecules worldwide. The medicines

are available to about 90% of the world‘s population.

It produces far more than just traditional off-patent products. It differentiates itself from

other companies by developing and producing differentiated products that require an

exceptionally high degree of expertise and knowledge and often involve complex high-

tech delivery systems. These range from oral solids and inhalers through patch

technologies to state-of-the-art biosimilars – approved versions of biopharmaceutical

medicines.

Sandoz has eight major global development centers and a worldwide network of production sites

and technology centers of excellence. It reported generic pharmaceutical sales of USD 7.5 billion

in 2009 and employs more than 23,000 associates in 130 countries. The global headquarters are

based in Holzkirchen, Germany, just south of Munich.

3.3 Quality generics

Its core business is the development, production and distribution of high-quality, cost-effective

generic medicines. Generics contain the same active substance as reference medicines and are

therapeutically equivalent to the brand name versions. The only real difference is that they do not

incur the same initial R&D costs, so they can be sold for a lower price. As a global generics

leader, Sandoz therefore helps to improve access to essential medicines worldwide.

Sandoz delivers high quality products that meet not only external regulatory requirements, but

our own rigorous internal standards. Indeed, they produce far more than just standard generics.

Its difficult-to-make products, including transdermal patches, inhalers and state-of-the-art

biosimilars, have few rivals in the industry. They also have an unrivalled position in the

production of generic versions of essential anti-infective medicines (e.g. antibiotics).

Its decades of experience in developing and producing such medicines have enabled us to

establish a pioneering position in many of the therapeutic areas of the future. Its global network

of development and production sites plays a key role in helping us to maintain this leading

position.

Sandoz develops, produces and markets medicines that are no longer protected by patents, along

with pharmaceutical and biotechnological active substances. This gives them a broad range of

products, within which the cardiovascular system and anti-infectives are particular areas of

focus.

Sandoz offers more than 950 generic compounds in over 5,000 forms worldwide. It develops and

manufactures off-patent medicines into finished dosage forms and sells them to wholesalers,

pharmacies, hospitals and other healthcare outlets. Separate business units focus on anti-

infectives and biopharmaceuticals respectively.

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Sandoz differentiates itself by its ability to develop and produce difficult-to-make generics. The

broad portfolio ranges from advanced application forms such as oral solids, through complex

technologies such as inhalers or injectables to transdermal patches, implants and

biopharmaceutical follow-ons (biosimilars).

Therapeutic areas

The portfolio covers both blockbusters and niche products for all major therapeutic areas,

in particular:

Systemic anti-infectives

Cardiovascular system

Central nervous system

Gastrointestinal system

Muscle and skeletal system

Hormone therapy

Respiratory system

Particular strength in anti-infectives

The high level of Sandoz know-how in anti-infectives is based on decades of experience,

particularly in producing intermediates. The wide range of products covers the various stages of

the production process, from basic molecules to finished medicines.

3.4 Leading the way in biosimilars

Sandoz has long been a biotechnological competence center within Novartis, and is now playing

a pioneer role in the emerging biosimilars market. Following the precedent-setting launch of

human growth hormone Omnitrope®, Sandoz in 2007 launched the first complex biosimilar

(anemia medicine epoetin alfa / Binocrit®) in the EU.

Every stage covered

The activities cover every stage of the pharmaceutical production process, from compound

synthesis through to enhancement of preparations, production and distribution. They combine the

highest standards with a strong customer focus. Low prices, united with top quality, are not a

contradiction in terms; they are the key to our success as a company.

Top 10 products worldwide

Amoxicillin / clavulanic acid

Omeprazole

Amlodipine / benazepril

Fentanyl

Simvastatin

Metoprolol

Acetylcystein

Amoxicillin

Tacrolimus

Amlodipine

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3.5 Difficult-to-make medicines - making a difference in generics

At Sandoz, there are other products manufactured along with traditional off-patent ones. They

stand out from the crowd thanks to our ability, honed through decades of experience, to add

value for patients by producing new and ―difficult-to-make‖ generic medicines.

The broad portfolio of difficult-to-make generics ranges from advanced application forms such

as oral solids, through progressively more complex technologies such as inhalers or injectables to

transdermal patches and implants. At the top of the technological pyramid is their pioneering

position in the rapidly emerging market for biosimilars (authorized versions of existing

biopharmaceuticals).

The graphic below gives an idea of the scope of our difficult-to-make portfolio. The Sandoz

centers of excellence are currently working on 900 further development projects, including many

in the field of biotechnology.

Difficult-to-make - how we make a difference

Biosimilars

Leading the way with Omnitrope and

EPO

Collaboration with Momenta

Leading experience in fermentation

technologies

Patches

Fentanyl – top position in US and

Germany

Adding strengths and markets

Using technology for at least six other

products

Inhalers

Top position in Germany with

budesonide

Collaboration synergies in dry powder

inhalers

Expanding manufacturing capacities

Oral solids

Strong in modified release forms, e.g.

MUPS®1

Specialized know-how and dedicated

equipment

Metoprolol succinate launch

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3.6 Biosimilars – a major future market

By 2010, it is estimated that more than 50% of newly approved medicines will be

biopharmaceuticals. The period beginning in 2010 will also see an increasing number of major

biotechnology-based medicines coming off patent and facing generic competition.

Biosimilars, or follow-on proteins, are new versions of existing biopharmaceuticals whose

patents have expired. They are produced using the same core genetic material and are approved

on the basis that they are equal to the reference product in terms of both safety and efficacy.

Biosimilars are large, complex molecules produced by living organisms, which are sensitive to

manufacturing changes; generics are small molecules, produced by chemical synthesis, which

are usually very stable. Biosimilars is an official term used by the European medical authorities;

the US terminology is follow-on protein products (FOPPs).

At Sandoz, we are playing a pioneer role in the development of this exciting new field, which

offers major savings to patients and healthcare systems and promises to become a major future

market for companies like Sandoz.

With decades of experience in biotechnology, a global development and production network and

an unrivalled reputation for quality, Sandoz is ideally placed to capture the biosimilars

opportunity. Indeed, we are already at the forefront of bringing affordable high-quality

biosimilars to patients once patents expire. Following the precedent-setting launch of human

growth hormone Omnitrope® in both the EU and the US, we have now also marketed the first

truly complex biosimilar (anemia medicine epoetin alfa) in the EU.

How are biosimilars different?

Small molecule generics Biosimilars

Product

characteristics

Small molecules

Often very stable

Mostly without a device

Large, complex molecules

Stability requires special handling

Device is often a key differentiator

Production Produced by chemical

synthesis

Produced in living organisms

Highly sensitive to manufacturing changes

Often comparatively high costs

Development

Very limited clinical

trials (often only Phase I

PK/PD studies)

Significant R&D (i.e. cell lines)

Extensive clinical trials, including Phase I

and Phase III studies

Regulation

Abbreviated registration

procedures in Europe and

US

Usually enjoy

Regulatory pathway now defined by

EMEA

"Comparability" status

No pathway yet in US under BLA

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"substitutability" status

Marketing

No or limited detailing to

physicians

Key role of wholesalers

and payers

Market substitution in

pharmacies

High price discounts

Detailing to (specialist) physicians

required

Pharmacists may not substitute

Price discounts smaller; price sensitivity is

product specific

3.7 Anti-infectives

Leading the fight against infectious diseases

Sandoz is the global leader in generic anti-infective medicines. Our high level of know-how in

the field is based on decades of experience, particularly in producing intermediates. The wide

range of products covers the various stages of the production process, from basic molecules to

finished medicines.

Penicillin V (Phenoxymethylpenicillin)

Penicillin G (Benzylpenicillin)

Semisynthetic Penicillins

Cephalosporins

ß-Lactamase Inhibitor and Blends

Macrolides

ß-Lactam Intermediates

Sandoz, the specialist for ß-Lactam Intermediates - in particular for Cephalosporins - offers long

term production expertise combined with patented know-how for all types of advanced

Cephalosporin Intermediates.

Tailor-made 3-substituted Cephalosporin Intermediates

Enzymes/Hormones/Others

Sandoz has traditionally been among the leading specialists in microbial fermentation of classic

and recombinant microorganisms. Its comprehensive know-how is based on more than five

decades of experience in the field of classical microbial products and more than two decades in

recombinant microbial production at commercial scale.

In 2004 we have successfully extended our production technology into the field of mammalian

cell culture.

Today, Sandoz is a fully integrated manufacturer of recombinant products and is providing

solutions for all steps in the value chain of a project from development to production and fill and

finish to customers.

This combination of long lasting experience and solutions for all steps is making us an ideal

partner for production cooperation.

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4. Project SHAPE

SHAPE (Sandoz Harmonized Processes in ERP) is the

name of the global program within Sandoz that aims to implement

SAP in 28 countries from April 2006 to the end of 2010, involving

about 8,500 users.

SHAPE is a joint initiative between business functions and

IT. It will change the way of working and improves and

harmonizes key business processes in Finance, Supply Chain,

Purchasing and Reporting (Compliance).

The program name emphasizes

the aim to support business processes

the ambition to create a harmonized business and system framework which also

contributes to the integration of the former companies

the opportunity to actively build a common Sandoz system environment

SHAPE supports Sandoz‘ vision being an innovative global leader in generics, a trusted partner

to its customers and a performance-driven organization

Sandoz India is implementing SHAPE in 2010 according to the global roadmap, in order to

change-over and Go-Live per January 2011. Project implementation is aligned and compliant

with global SHAPE Program governance and is strictly managed according to the SHAPE

Methodology. The SHAPE project team consists of a carefully considered combination of

selected business representatives and internal/external ERP experts

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4.1 Need of SHAPE

Currently, Sandoz‘s system landscape is fragmented (11 Sandoz SAP R/3 systems and more than

15 non SAP ERP systems). The ambition is to create a harmonized business and system

framework.

4.2 Management expectations:

Implement business processes based on proven SHAPE templates

Implement globally aligned business processes designed during CORE and

proven by implementation in Slovenia, Italy and all following countries

Align and harmonize local processes with global Sandoz / Novartis requirements

– in areas like SCM, logistics execution, finance, manufacturing

Deliver a system that supports overall GxP, SOX and InControl compliance

SHAPE should bring more transparency into the supply chain leading to

Increased service levels

Reduced inventory levels and thus working capital

Less inventory write-offs

And overall an easier management of complex supply chain

Harmonized Costing across all sites

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Three benefits will be delivered.

The program name emphasizes

the aim to support business processes. ERP is not an IT project, but a

joint initiative between business and IT.

the ambition to create a harmonized business and system framework

which also contributes to the integration of the former companies.

the opportunity to actively build something, i.e. shaping the future.

Right by design, Business continuity and operational excellence are the 3 key things to be kept

into mind throughout the project.

SHAPE Values:

Speed and simplicity

Customer and quality focus

Trust and mutual respect

4.3 Project Objectives

Implement SHAPE for Sandoz India – in TechOps, ComOps and Finance areas

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Implementation of SHAPE in India, replacing existing SAP,

Pharmanet, and MMR.

2 legal entities – Sandoz India and Novartis India (―Generics

Business‖)

Covering all relevant business processes in finance, manufacturing,

SCM, ComOps, and reporting.

Covering locations in Kalwe, Turbhe, Mahad, Kanjurmarg

Implement business processes based on proven template

Implement globally aligned business processes designed during

CORE, and proven during pilot projects in Slovenia & Italy

Align and harmonise local processes with global Sandoz / Novartis

requirements - in areas like SCM, logistic execution, finance, and

manufacturing.

Deliver a system that supports overall GxP, SOX and InControl

compliance.

4.4 Project Scope:

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5. NEED FOR THE PROJECT

The SHAPE, India project kick off was on 13th

April 2010. During my allocation to the project it

was under the blueprint phase. The blueprint phase will propose the business processes and

structures in order to build them into new system. The phase involves workshops for gap analysis

to design the business and user requirements and further devise the business guidelines, process

flows, business scenarios, functional specifications, detailed designs.

The business guidelines and process flow modeling required a lot of brainstorming and

discussions with the cross functional teams to come to a common point of process designing

while considering the user requirement lists (URL) and Business Process Master List (BPML).

Also, the business guidelines and process flows required a stringent check on the quality to align

them with best practices of Sandoz at international level.

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6. OBJECTIVES

Objectives and

deliverables of the project

/ assignment

Objective.

To design various business process flows as per the

Business Process Master List (BPML) that will

accommodates changes that are part of process of

harmonization of Sandoz India processes with the global

ones. Business Process Flows are a part of traceability

and serve as basis for Integration/User Acceptance Test.

They are devised on the basis of the URLs and Business

guidelines.

As a part of the project quality management team,

review process flows and business guidelines as per best

practices followed by Sandoz at international level

Deliverables.

1. Working with the teams of Manufacturing execution,

Manufacturing planning, Plant Maintenance, Quality

and batch management, Finance, Controlling, Indirect

purchasing, commercial operations, inventory

management, purchasing, SCM planning to discuss

about the various processes.

2. Assist team members of various modules to design

business process flows with the help of Microsoft Visio

3. Initial review and rectification of Ready for Approval

documents namely Process flows and Business

guidelines for all the modules.

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7. METHODOLOGY

Towards fulfillment of the modeling of process flows, the following methodology was adopted.

Broadly, the steps taken can be divided into three phases:

7.1 Phase I: Gap analysis between Sandoz’s core and India’s processes

In the first phase of the project, brainstorming sessions with the Sandoz business representatives

were conducted with the purpose of understanding the different flow of the process and

comparing them with the core and other countries‘ processes at Sandoz Private Limited. This

gave result to a gap which was analyzed with the help of discussions. The process flows then

formulated to a flowchart as per the above discussion.

7.2 Phase II: Designing process flows with Microsoft Visio

The resulting flowcharts were then documented using Microsoft Visio. Designed for line-of-

business professionals, Visio enables users to create diagrams of a business process by arranging,

ordering, labeling, and linking various symbols that represent activities, events, decisions, flow,

and transactions.

Microsoft office Visio is the diagramming tool of choice for business and technical

professionals who need to quickly and easily visualize, explore, and communicate information.

With Office Visio, creating a wide range of diagrams such as business process diagrams, value

stream maps, TQM diagrams, work flow diagrams, and cause and effect diagrams is a snap. With

Office Visio, easily diagram complex processes that conform to particular standards such as

Lean or Six Sigma. Office Visio includes a variety of business process shapes so your diagrams

look exactly the way that is required.

Business processes are dependant and ordered activities that result in predictable and repeatable

outcomes. Consisting of an organization‘s operating procedures, institutional working

knowledge, and information resources, business processes are designed to satisfy defined

business objectives in an efficient and timely manner. Business Process Management (BPM)

tools are designed to provide for such agility by facilitating the creation and execution of highly

transparent and modular process-oriented workflows that meet the operational performance

standards IT organizations demand.

Automated business processes developed and executed within such an environment are

characterized by the following attributes:

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• Visibility of end-to-end process activities

• Process components and functionality that is exposed and self-describing

• Ability to integrate disparate information source and application functionality into a

process

• Information flow and event notification that can be automated and monitored throughout

a process

• Workflow participation that makes the most of desktop productivity and communication

tools

• Service level agreements that can be specified, monitored, and enforced for activities in a

process

• Ability to add, removes, or reconfigures any process activity or component, without

disrupting the process

• Processes that can be monitored in real time or near real time

• Process designs that can accommodate any exception handling requirement

• Processes that can be easily replicated, extended, and scaled

To take advantage of a business process paradigm that is exposed, loosely coupled, and

document-driven, development tools and methodologies that incorporate these concepts are

required. Microsoft Visio is the ideal tool for the business processes modeling.

Microsoft Visio turns the visual overview into information portal.

The process flows could be mapped using any of the business process templates supplied with

Visio, but Sandoz uses a particular standard template for same.

7.3 Phase III: Creating follow up lists for specifying linkages

Follow up lists were created in excel to indicate all linkages between the Process Flows (PF) and

Functional Specifications (FS) and also between the PFs along with their description and roles. It

also specified where the particular user requirement as per the FS is a part of SAP transaction,

SAP function, Manual or Interface function.

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7.4 Quality management methodology

Considering the wide scope of designing process flows for each module, not all were personally

drawn by me. For remaining PF and all Business Guidelines, review was conducted against the

standards set by Sandoz for each of the documents. They were also examined for the logical

errors, Functional Specification and Process flow linkages as per Business Process Master Lists

(BPML). It was a part of initial review for the documents in Ready for approval uploaded in

Team space in Lotus Notes. After this, another round of review and finalization had the

documents in approved status.

These approved Business Guidelines and Process Flows are input to design Functional

Specifications which will be later used in realization phase by Technical consultants to code

extra functionalities as desired by the Users. Also, Process Flows are a part of traceability and

used in testing phase to confirm to the user requirements.

The realization phase, testing and training phase, data migration and Go live will progress based

on this Blueprint phase.

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8. MODELING

The Business process flow modeling was done with help of Microsoft Visio and the flow charts

were drawn as per the standard template used by Sandoz. Modeling of the process flows(PF) was

a repetitive procedure as the same basics routine were required for the different processes in the

Sandoz generic product manufacturing, sales, supply chain and finance. Approximately 130 of

them were to be designed for processes under following modules of SAP ECC 6.0:

Financial Accounting

Controlling

Indirect Purchase/SRM

SCM Planning

SCM Execution

Commercial Operations

Inventory/ Warehouse Management

Purchasing

Manufacturing Planning

Manufacturing Execution

Quality and Batch Management

Plant Maintenance

Data Migration

PFs are based on User requirement lists and Business Guidelines. SHAPE Project maintains

one User Requirement List (URL) that lists all project relevant User Requirements (UR).

User Requirements are linked to one or more Functional Specifications (FS). Vice-versa all

FS need to have a link to a UR.

Business Guidelines are high level papers that describe general concepts for various

business areas (e.g. Batch Management, Product Costing, and Toll Manufacturing)

• Core Business Guidelines describe mandatory as well as best practice solutions

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• Local Business Guidelines and BG Addendum describe the local concept

Business Guidelines describes significant variation from SAP standard.

Business Process Flows are graphical process description (e.g. Purchase Materials/Services).

They are only created for processes in scope of the SHAPE SAP systems.

Steps in a Process Flow resemble system and non-system related functions

System functions: SAP Transactions (e.g. VA01), SAP System Functions (e.g.

ATP check should be possible) and Interfaces

Non-system functions: Manual activities and Functions in external system

Process Flows serve as basis for Integration/User Acceptance Test and are part of

traceability.

*A schematic of Process Flow is given as follows:

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30

Following diagrams represent the sample cover page, main page format, Icons for FS Type

and general icons that are allowed to be used for designing PFs.

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Main Process Flow page format:

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Icons for FS type:

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General Icons:

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The Business Guidelines, Process Flows, Functional specifications should synchronize with

the Business Process Master List (BPML).

The BPML is a project support document and managed by Integration Management and

Quality Management team. As stated, it lists all Business Guidelines, Business Process

Flows, Functional Specification and Detail Design Documents that are in scope. It is not part

of traceability, but with the BPML traceability will be established. The following links

between documents/metadata need to be established:

• FS UR

• FS which are indicated in the boxes of the flows PF

• FS Function FS Transaction

• FS (Data Flow Description) FS (Interface Overview)

• Development DD FS

• DMOW Data Migration FS

• Customizing DD FS (rational: Risk assessment)

• All PF and FS BG (rational: Ownership)

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The review or validation process of each document being made in Blueprint phase (and

further) is based on the following strategy:

The Process Flows and User requirement lists will be validated in testing stage of

Accelerated SAP through User Acceptance test. The initial checks are done in blueprint stage

through the Validation plan so that these process flows represent the actual Sandoz

Pharmaceutical Practices.

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9. FUTURE SCOPE

The Blueprint phase of SHAPE (Sandoz Harmonized Processes in ERP) forms a part of global

integration of key business processes in Finance, Supply Chain, Purchasing and Reporting

(Compliance). The key deliverables Business Guidelines and Process Flows are input to design

Functional Specifications which will be later used in realization phase by Technical consultants

to code extra functionalities as desired by the Users.

Also, Process Flows are a part of traceability and used in testing phase to confirm to the user

requirements.

The realization phase, testing and training phase, data migration and Go live will progress based

on this Blueprint phase.

Review as part of Project Quality Management The Sandoz SAP Systems will support, control, monitor, and supervise many functions in

various pharmaceutical processes, e.g.

Purchasing (starting material specifications)

Warehousing (managing material status, temperature)

Production execution (material reconciliation)

Quality control (certificates of analysis)

Sales and distribution (recall process)

Therefore, the SHAPE SAP Systems can influence our processes and may have an impact on the

quality of Sandoz products.

Thus, each and every component being modeled has a significant role in future product. So each

process in the SAP ECC 6.0 requires a thorough validation. The future scope of the project is:

Improved operating efficiency (More robust processes, better understanding of the

processes)

Reduced risk of system failure

Reduced risk of failure during the program/projects

From GxP perspective validation is simply a must

No second chance for a prospective validation of SAP

High likelihood that the SAP systems will be subject to inspections

Validation provides knowledge of all aspects of the SAP processes/system

Enables reasonable knowledge transfer (e.g. when people are leaving the project)

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10. LIMITATIONS

Considering the vast scope of project in terms of number of process flows (133 approx.) to be

modeled, it was structured so that priority was given to the teams facing problem. The areas of

SCM Planning, Commercial Operations, Inventory Management, Purchasing and Plant

Maintenance were mainly considered for designing of process flows. Other modules were

covered in the review portion.

11. ACADEMIC CONTRIBUTION

This summer internship project gave me insight into following aspects:

Enterprise Resource Planning (ERP)

SAP Implementation overview

SAP Blueprint phase

Pharmaceutical Business Process (Sandoz)

11.1 Enterprise Resource Planning:

ERP is a Business Software system that enables an organization to effectively and efficiently

manage its resources including material, people, plant and equipment across the entire enterprise.

It is intended to facilitate information sharing, business planning, and decision making on an

enterprise-wide basis.

An enterprise processes is a companywide process that cuts across functional areas, business

units, geographic regions and product lines.

ERP software can be used to:

o Manage product planning

o Parts purchasing

o Inventories Interacting with suppliers

o Providing customer service

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o Tracking orders

ERP also include applications modules for the finance and human resource aspects of a

business.

It allows data sharing b/w different systems (modules) and joint execution of business processes

among different systems (modules). APICS Standard ERP Flowchart:

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11.2 SAP Implementation process

ASAP implementation methodology is being adopted in SHAPE Project. ASAP stands for

Accelerated Systems Application and Products in Data Processing.

All implementation projects have the following phases:

Scoping - What is to be implemented i.e. which sub-modules are to be implemented

some clients may not require credit management for example. Project scope document is

carefully observed to know what sub-modules in SAP are prepared for. Usually the sales

people along with project manager do it.

As is - Here existing business processes of the client are understood. Business Process

Owner(BPO) collect all the ISO-documentation (if client is ISO certified), reports and

forms at this stage and analyze how and when the reports/forms are generated, where the

data is coming from.

Once this is over BPO can start learning with the consultants help more about SAP. This

is crucial because if any transactions are missed out the BPO may forget about some of

his Business processes which may come up later. It is a good practice to ask the BPO to

make flow charts to explain business processes.

To-Be - These processes are to be mapped to SAP. Processes are not sure of as to

whether they are present in SAP or not, a configuration of those processes should be

done, and along with the BPO. BPO involvement is required as he may be able to tell his

requirements better. Once the business modeling is done, there will be awareness of the

gaps between as-is and to-be, here decisions have to be made as to whether an ABAP

development/system modification is required or not and so on.

Business blueprint - Here the as-is and to-be and gap analysis is explained. This is the

document that will be used to do configuration in the realization phase.

Realization phase - Here configuration is done in the development server (there are three

clients -development, quality, and production). Also, decision made on the master data

format, so that BPO can go collect the master data. ABAP specifications for forms,

reports etc, system modifications etc are given.

Unit testing - The BPOs and a few key users sit down and test the configuration in each

module only.

Integration testing - Once all modules unit testing is over then the configuration is

transported to the Quality server, where testing for all the modules is done by BPOs and

end user, this is to check if any problems are there in integration between various

modules. Once all is okay from the QA server configuration is transported to the

production server.

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Go live preparation - Data uploading: The collected master data is checked and the

uploaded into production server. Now it is ready for go live i.e. users can now use the

production server.

ASAP methodology is standard process for implementation of SAP; it consists of 5

phases as also discussed above:

1. Project preparation - consists of identifying team members and developing strategy as

how to go.

2. Business Blue print - consists of identifying the client current process, requirement and

how SAP provides solution. It consists of detailed documentation.

3. Realization -The purpose of this phase is to implement all the business and process

requirements based on the Business Blueprint.

4. Final Preparation - The purpose of this phase is to complete testing, end-user training,

5. Go Live and Support All the functional consultants need good rapport with ABAP

coders right from uploading of legacy data, developing customized reports, BDC's,

Forms etc, here functional consultants need to give guidance as to get the required data

for reports.

11.3 SAP Blueprinting

The "Blueprint" refers to all the activities, which are necessary for the reproduction and

description of the customer's business operations in an ERP System. These activities commence

before the ERP project itself. This activity is to complete the Blueprint, which is one of the main

deliverable. The Blueprint serves as the master plan, and becomes a detailed written document.

This document shows the business requirements in detail, and serves as the basis for

organization, configuration and, if necessary, development activities.

Before any transactions can be reproduced in the system, the total business extent involved must

first be defined. This is done by writing down the essential business processes that are to be

supported by the ERP System. Once the framework has been defined (overall implementation

plan), the individual business operations can be systematically analyzed in greater detail,

documented ("scripted") and reproduced ("prototyped"). The activities stretching from the

conceptual design to the documented prototype thus lead to the detailed solution.

The Blueprinting phase is made up of seven major sections.

1. Project Management: The purpose is to establish a proper cycle of project management

activities to ensure that the implementation project is on target. It determines all project planning,

controlling and updating activities. It also identifies where changes in the relationship between

business processes and the organizational structure need to be managed, in consultation with

departmental management. Activities:

Conduct project team status meetings

Conduct steering committee meetings

General project management.

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2. Change Management: The change management section addresses the organizational and

human resource factors that impact the ERP implementation, ensuring the timely success of the

implementation. This includes a series of change processes that allow the change team to manage

organizational risk, accelerate the implementation, and optimize organizational processes. These

change management processes ensure that the change team understands and manages the

organization‘s perceptions of and responses to the changes that will occur as a result of

implementing the ERP system. Activities:

Create a Business Impact Map

Complete the leadership risk assessment

Develop sponsorship strategy

Complete the baseline project team risk assessment

Complete the baseline organizational risk assessment

Establish the change communications framework

Establish management structure for skills development process

Establish management structure for knowledge transfer process

3. Project Team Training: The purpose is to train the project team to implement the system

efficiently. Training should reflect the scope of the implementation, and the needs of the

individual team members.

4. Develop System Environment: The purpose is to install and technically configure the

technical sandbox client and development systems. Quality assurance system administration

procedures are developed and checked for the development system. Activities:

Create technical design

Set up development environment

Install setup of system landscape

Systems administration

Initialize implementation table settings

5. Business Organization Structure: The purpose is to define the enterprise organizational

structure using organizational units, such as company codes and sales organizations. In

conducting the organization structure workshop, several topics are discussed, including what

enterprise process areas and business processes will be used in the ERP system setup or

configuration? What organizational units within the company will be affected by the

implementation? This will be the creation and definition of the organizational structure.

6. Business Process Definition: The purpose is to define the company requirements based on

ERP business processes, to provide the required functions. Organizational structure is first

defined. The business process definitions create your Business Blueprint. Activities:

Prepare for business process workshops

Conduct global requirements workshop

Conduct business process workshops

Conduct detailed requirements workshops

Prepare end user training plan

Complete Business Blueprint

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Business Blueprint review and sign off

7. Business Blueprint Quality Check: The purpose is final verification of all deliverables from

this phase. It is critical that quality checks be performed throughout the phase, as tasks are

completed. The Business Blueprint ensures that everybody has an accurate understanding of the

final scope of the project regarding business processes, organizational structure, and system

environment. In addition, this includes project team member training, project standards, and

strategies in the technical area. Perform quality check and obtain a signed approval.

The Business Blueprint is one of the main deliverables. It results in

Documented and approved project goals and objectives.

A well-grounded and detail implementation plan.

Overall project schedule and implementation sequence

Business process definition and organization structure

A coordinated, cost-effective, and organizationally effective rollout plan.

A successful ERP implementation.

11.4 Pharmaceutical Business Processes *

The different processes covered under SHAPE are as follows:

Finance:

Process and Validate Invoices

Manage Outgoing Payments

Perform Manual Postings

Manage Collection Process

Manage Asset Master Data

Manage Asset Acquisition

Manage Assets Under Construction

Manage Asset Adjustments

Manage Asset Sales/Disposals

Manage period end closing (Asset Management)

Maintain master data (Chart of Accounts)

Manage Journal Processing

Manage period end closing (General Ledger)

Credit Management

Controlling:

Create Master Data (Controlling)

Plan Overhead Costs

Manage Period-end Closing (Overhead Controlling)

Calculate Standard Product Cost

Cost Object Controlling

Manage Period-end Closing (PC)

Manufacturing Planning Integration

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Manage Operational Budgeting

Manage Project Structuring and Master Data

Manage Project Status Management

Manage period end closing (Project Controlling)

Manage investment program

Budget Control

Maintain Investment Program

Manage Period-end Closing Inventory

Indirect Purchasing:

Manage Contracts

Manage Stock Material

Manage Supplier

Supplier & Catalogs

Manage Organization & User

Requisition to Goods Receipt

Inventory Management

Receive and Put Away Product received into warehouse

Receive and Put Away Product from in house production

Material Staging for Production

Manage Inventory Counting

Pick Pack and Ship from Warehouse

Stock Transfer Plant to Plant

Transfer Postings

Material Disposal and Miscellaneous Consumption

Put away Product in Warehouse

Pick Product in Warehouse

Manage Transfers in Warehouse

Physical Inventory in Warehouse

Packing process for Outbound

Receive and Put Away Product received into warehouse from Subcontracting and

components consumption

Net Requirement Transmission

Commercial operations

Commercial sales order generation

Manage commercial sales backorders

Manage commercial sales order deliveries

Commercial invoice generation

Maintain 3rd party customer

Manage commercial sales master data

Manage commercial sales returns and recalls

Manage commercial credit & debit requests

Consignment Sales

Manage scraps and recyclables sales

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Purchasing

Manage Subcontractor Manufacturing

Direct Purchasing

Manage Supplier Returns

Maintain info records and source lists

Manage Outline Agreements

Third Party Vendor Master Data Maintenance - Direct Purchasing

SCM Planning

Manage intra-company deliveries

Net Requirement Planning (FDF Heuristic)

Maintain SCM Planning Master Data

Inter-company sales order generation

Manage inter-company deliveries

Load building and shipment execution for inter-company deliveries

Inter-company invoice generation

Inter-company purchase order generation

Inter-company info flow error monitoring

Manage inter-company purchase order changes

Manage inter-company sales order changes

Intercompany invoice verification

Manage inter-company returns and credit & debit notes

Manage inter-company returns to vendor

Maintain inter-company sales master data

Maintain inter-company purchase master data

Maintain supply price database

Data Preparation

Forecast Creation

Forecast Review and Release

Direct Shipment from Vendor

Manufacturing execution and Planning

MRP for production and direct purchasing

Schedule Bulk Production

Execute Production

Maintain BoM and Master Recipe

Maintain Resources

Rework & Repackaging

Execute Production API

MRP for production and direct purchasing API

Rework & Repackaging API

Schedule Production API

Manage Loan License Manufacturing

Manage Reject Production w/o output

Manage Solvent Recovery Process

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Plant Maintenance

Overview - Create site structure for Maintenance & Calibration

Maintain Functional Location

Maintain Equipment

Maintain Reference instrument as equipment

Maintain Work Center

Maintain Task List

Maintain Maintenance Plan

Schedule Maintenance Plan

Work Order

Corrective Maintenance

Preventive Maintenance

Planned Calibration

Unplanned Calibration

Maintenance Reporting

Calibration Reporting

Quality and Batch Management

Perform Quality Inspection for externally procured goods

Perform Quality Inspection for in-house produced goods

Perform batch recalls

Perform quality inspection for stock transfers

Perform quality inspection for customer returns

Deadline monitoring of batches (SLED, Re-Inspection)

Batch Status Labels Procedures

SLIM Maintenance of inspection plan

SLIM Inspection Lot Processing

SLIM Stability Management

SLIM Master Data Maintenance

SLIM Inspection lot processing in case of samples received directly in the Lab

Capacity Evaluation

MPS for Global Products

GMP

GMP‗s are rules for the manufacture of human and veterinary pharmaceutical and biological

products

GMP = Good Manufacturing Practices

Good manufacturing practice (GMP) is a system for ensuring that products are consistently

produced and controlled according to predefined quality standards.

It is designed to minimize the risks involved in any pharmaceutical production that cannot be

eliminated through testing the final product.

* - The standard processes are property of Sandoz and should not be reproduced. Thank you.

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12. REFERENCES/ BIBLIOGRAPHY

Books/Magazines/Paper:

―ERP Executive Summary,‖ CIO Magazine.

Davenport, T. H. ―Putting the Enterprise into Enterprise Systems,‖ Harvard

Business\

APICS guidelines for ERP

―The Enterprise Resource Planning Decade: Lessons Learned and Issues for the

Future‖ Idea group Publishing

―ERP Demystified‖ by Alexis Leon

Website:

www.sandoz.com

www.novartis.com

http://www.erp.com/component/content/article/3-general/4070-the-erp-systems-

blueprint-where-it-all-begins.html

www.sapfans.com/sapfans/asap/be_01_e.htm

http://help.sap.com/saphelp_47x200/helpdata/en/48/623972d55a11d2bbf700105a

5e5b3c/content.htm