E-Business solution in Drug Industry Case study for Pharmaceuticals Manufacturer in Egypt

Agenda

• About Pharmaceutical Industry in Egypt.

• Pharmaceuticals Manufacturing Standard Processes.

• Case Study: Selecting E-Business Solution . • E-Business Solution Scope.

Pharma industry in Egypt •Egypt Local Pharma Industry is the largest domestic drug

manufacturing in the MENA Region, Supplying 30% of the

total regional Market with total value about US$2 Billions.

•42% of the Egyptian Market is controlled by MNCs, 28%

by Private sector companies & 30% by Public sector.

http://www.amcham.org.eg/resources_publications/publications/business_studies/PDF%20Files/pharmasample.pdf

16%

14%

13%

10% 10%

9%

9%

8%

6% 5%

Private Pharmaceutical industry represents 70% of the Egyptian Market in 2007

GSK Egypt Novartis Sanofi Avantis EPICO Pharco Pfizer BMS Amoun

Pharma industry in Egypt •IMS Health announced in 2011 that 17 high-growth

pharmaceutical markets are now ranked as “Pharmerging,”

•the Pharmerging Markets are the most growing in spending.

•Egypt is one of those Pharmerging Markets.

http://www.imshealth.com/ims/Global/Content/Insights/IMS%20Institute%20for%20Healthcare%20Informatics/Documents/The_Global_Use_of_Medicines_Report.pdf

1st

Pharma industry in Egypt •Boosting of spending on medicines means Growing in that

profitable industry and leads to demand for applying more

E-Business solution for creating comparative advantages.

http://www.imshealth.com/ims/Global/Content/Insights/IMS%20Institute%20for%20Healthcare%20Informatics/Documents/The_Global_Use_of_Medicines_Report.pdf

• The Evolution of E-Business Solutions for Manufacturing: • 1960’s : Inventory Control Systems. • 1970’s: MRP-I Planning + Purchase + Inventory Management. • 1980’s: MRP-II MRP-I + Shop floor Automation + Distribution. • 1990’s: Enterprise Resources Planning. • 2000’s: ERP Collaborative Commerce Extending.

Process Manufacturing

• Pharmaceuticals • Food

Discrete Manufacturing

• Automobiles • Computers

Line Manufacturing

• Oil & Gas • Cement

Standard Business Processes

Make To Order

Make To Stock

•Main Manufacturing Types:

Standard Business Processes Pharmaceuticals Manufacturing Standard business cycle:

Marketing Forecasts

& Toll Production

Sales, Production & Purchase

Planning

Purchase &

Inventory

Quality & Production Processes

Sales Billing, Finance & Costing

Standard Business Processes

Planning Sales Planning Production

Plan

Purchase plan

Production Order

Production

Sample Order

Quality Control

Finance

Quality Assurance

Purchase Order

Warehouse

Material Inventory

Product Inventory

Sales Order

Base Structure

•Pharmaceuticals Manufacturing Simplest Processes Flow:

Case Study: •Brief about the process of selecting an ERP Solution for a Pharmaceuticals Manufacturing facility Located in Egypt.

•That produce an integrated wide range of cost effective, value adding Anticancer and intensive care products

• Lake of Integrated information system

• What’s the Common Problem …..????

Lake of Integrated System leads to • Discrete information Systems produces Islands of

information, resulting: • Difficulties To derive timely consistent Business Image.

• Daily operational monitoring for Proactive changes. • Periodical Financial Statements.

• Difficulties in managing rather than control • Inventory levels can be controlled but inventory mix can’t

be managed. • Inefficient Planning “Material apart of capacity or labor” • limited capability in maneuvering or reacting to

deviations.

• Inefficient in balancing the Conflict of interests: • Maximum Customer Service • Maximum Productivity. • Minimum Operations Costs.

Filling the GAP

Toward Growth…!!!

Selecting E-Business Solution • Criteria for selection:

The fulfillment of the Core business Processes & Standard Cycles.

A web-based Multi-Tier ERP solution

The Previous successful Applying

•But What’s an ERP Solution?? ERP Stands for Enterprise Resources Planning. ERP is an Electronic Business Solution that integrate internal and external information across an entire organization, Its' purpose is to facilitate the flow of information between all business functions.

E-Business Solution Scope • In Pharmaceutical Manufacturing Industry E-Business

Solution Must Fulfill Process Manufacturing.

• The Required system must Automate & Control the following Standard Business cycles including: – Procure-To-Pay, Order-To-Cash – Make-To-Stock, Make-To-Order “Toll-In & Toll-out

Manufacturing Subcontracting.

• Validation & Compliance issues: • Ex.FDA “21 CFR part 12 Compliant” Concerned with systems

capability for generating Electronic batch Records & Electronic signature instead of hardcopies in drug manufacturing Process

• Annex 11 of the EU GMP regulations (EMEA 2011). Ref: http://en.wikipedia.org/wiki/Validation_(drug_manufacture)

http://www.21cfrpart11.com/files/library/compliance/cfr_whitepaper.pdf

E-Business Solution Scope

E-Business Solution functions Marketing

Logistics

Procure Inventory

Planning

Production

HR

Quality

Finance

Accounting Costing

•The Solution must Encompass the following functions:

• Quality Management, Production Shop-floor orders automation,(Materials, Production Capacity & Labor) Planning & Constrained Scheduling.

• Logistics including Procurement, Warehouse • Accounting including GL, Cash, A/P,A/R & Costing • Human Resources. • Marketing: involving Sales & Distribution.

E-Business Solution Scope • Standard Solution in Pharmaceutical Manufacturing

CRM CUSTOMER

Product Development

R&D

Registration

ERP Plan. Proc. Prod. QM Sales

CUSTOMER

Marketing Demand Creation

Fin. HR

BI - for Monitoring Operations

ERP in Local Pharma Industry SAP ERP Oracle ERP Microsoft Dynamics The Top 5 Pharma Manufacturers in Egypt Use SAP ERP:

More Than 13 of the Pharma Manufacturers in Egypt Use Oracle ERP:

Two Pharma Manufacturers in Egypt Use Microsoft ERP:

•Glaxo Kline Smith •Amoun Pharma •Bristol Myers Squibb •Sanofi Avantis •Hikma

•EVA Pharma •Mina Pharma •Global Nappi •SEDICO •October Pharma •Sunnny Medical •SIGMA. •Pharco Group. •Luna Group. •RAMEDA •Marcyri •Clariant •Orchidia Pharma

•Holdi Pharma •RIVA Pharma

http://www.amcham.org.eg/resources_publications/publications/business_studies/PDF%20Files/pharmasample.pdf

Tradeoffs Between Best ERPs SAP ERP Oracle ERP Microsoft Dynamics

•32% of the Global ERP

Market

•23% of the Global ERP Market

•14% of the Global ERP Market

•20.4%Top 3 short listed

•9.8%Top 3 short listed

•14.9%Top 3 short listed

•54.1% selection Rate from the Top 3 short listed

•54.2% selection Rate from the Top 3 short listed

•(Not rated) selection Rate from the Top 3 short listed

Payback Period About 3 years

Payback Period About 2.6 years

Payback Period About 2 years

Ref:. http://panorama-consulting.com/Documents/2011-ERP-Report.pdf

Tradeoffs Between Best ERPs

Ref: http://www.technologyevaluation.com/

Tradeoffs Between Best ERPs

SA

P B

usin

ess

All

in O

ne • Implementation

Duration within 6 Months

• Best Practices Solution Less Customization.

• Less Local Resources

• Total Acquisition Cost of $350K

• 1st Ranked in Pharmaceutical Manufacturing

Ora

cle

E-B

usin

ess

Sui

tes • Implementation

Duration within 12 Months

• More Possibility for customization.

• Availability of Local Resources

• Total Acquisition Cost of $250K

• 2nd Ranked in Pharmaceutical Manufacturing

SAP in Pharma Manufacturing SA

P ER

P

• SAP ERP Market Leader Ship In Pharma Industry worldwide

• Industry Expert & Best practices

SAP ERP in Life science Chain SA

P ER

P

• SAP ERP is the Life sciences Industry Standard

• Strong track record in supporting fast Growth Companies

Result with a similar SAP Client

Result with a similar SAP Client