As per Pharmabiz, Pharma MNCs are adopting the strategy of marketing their brand even after their product goes off a patent, by slashing down their brand’s price to the level of generics.

With the purpose of focusing on R&D and to get mileage out of their brands,  more and more global pharma companies have shunned their vertically integrated business models  and have resorted to outsourcing many of their operations.  This outsource is being majorly targeted to cost-efficient centers like India. As a result, the Indian Pharma Contract Manufacturing industry is witnessing a growth of 20% (As per the President of the Indian Drug Manufacturers’ Association (IDMA), Mr. S V Veerramani). While it may mean business time for Contract Manufacturers, factually, pharma companies are looking for  not just manufacturers. They are scouting for business partners who can handle all dimensions of their drug manufacturing. This also saves them from dealing and coordinating with multiple contractors along the complex supply chain.

This lands the contract manufacturers under pressure to have sufficient resources and tools in place to move ahead of the traditional role of providing cost efficiencies, capacity, labor and machinery.  They have to re-invent themselves to ensure that:

• Different quality requirements of different manufacturers are met
• Accurate costing of the drugs is achieved
• Production costs & losses are controlled
• In-depth visibility and complete control over inventory received from different customers exists
• Formulas received from customers are secured
• Complete documentation is maintained and easily available
• Real-time information about all the processes and products is accessible when needed

Re-inventing can be best achieved by adopting an ERP; but not any run-of-the-mill ERP. The purpose could only be solved with an ERP that is built specifically for Pharma Industry, more specifically, one which can accommodate the needs of contract manufacturers. An ERP with the following core features should be an ideal choice.

Process Manufacturing: First Step; First Challenge

Pharma manufacturing is a type of process manufacturing, which involves following a formula to typically mix the ingredients in specific proportions to create a bulk output. Few ERPs out there cater to just the process manufacturing requirements. Therefore, while choosing one, ensure that the ERP application acts as a custom fit to your industry and adheres to the best practices. It must be equipped and designed to cater to Pharma manufacturers that help in achieving safe and quality drugs by supporting the complete value chain from R&D to the formulation, planning & inventory management to Procurement & production, quality and compliance to Sales, and everything in between.

Formula Variations and Security

A good ERP can help strengthen the backbone of your process-manufacturing business. The formulas are the differentiators as far as a typical Pharma industry are concerned.  Formula Security is of utmost importance as any minute modification can cost lives. ERP keeps a trail of all the modifications saved, and immediately sending the trail of changes to all the concerned stakeholders seeking their approval. These get time stamped along with the details of the user. At any given point, only one version of the formula is active, which is passed on to production, leading to a state of no confusion.

Advanced Inventory Control & Planning

The move of inventory from one warehouse to another is easy to track. But, the real challenge is in tracking and recording the inventories that move to and from the contractor’s warehouses. Chances are, your contractor may be recording inventories in their own terminologies. An ERP records inventories based on GTIN numbers or the vendor lot number, which helps in accurate inventory tracking. Some ERPs can also help print reports for the different third party manufactured products based on custom-defined filter criteria.

ERPs also help effectively plan your inventories based on commitments like the Available to Promise (ATP), sales orders, and production orders. They efficiently schedule your production, based on the plant capacity, to meet the customer orders well on time.

Vendor Management

With ‘Supplier Verification’ gaining importance in the Pharma industry, having a sound Vendor Management is crucial. The ERP can strictly check for vendor recognition, and only pass raw materials procured from the recognized, approved vendors. You may even use the ERP to store information on the validity duration of the approved vendors. Alerts are automatically raised when the Vendor is about to reach the expiry date, assuring that only the quality material is received from the verified supplier.

Strict Quality Check

Maintaining quality of Pharma products is a critical process. A good ERP is equipped to handle strict quality-check procedures and work as per the norms of the Good Manufacturing Practices (GMP).  It restricts the movement of material based on quality statuses, ensuring that only the quality pass materials are received from the vendor, issued to production and shipped to the customer. ERP also enables printing a Certificate of Analysis (COA). It supports user-defined product characteristics (that align to the industry standards), such as the pH level, potency, expiration date, stability testing, and other physical and chemical properties.

Sample Management

You can even use ERP software to create and distribute samples to contract providers. The Sample Management capability can help you track the samples and their involved cost factors. Keeping a record of all the communications, number of iterations done, the batch in which they were produced, the QC tests that were performed, in-short, and all the information pertaining to the complete process from customer request to final selection/rejection of the sample.

Process Control and Compliance

From the security and compliance standpoint, it is critical for the companies to keep a log of the tracked and non-tracked items, the person-in-charge, or the affected accounts, in order to record and present a comprehensive view of transactions.

One must record these changes in the master data. And consequently maintain records of the added security compliance requirements, such as e-signatures, levels of approvals of changes, Batch Manufacturing Records, Adverse Event Reporting, NC/CAPA and more. To achieve this, ERPs should be compliant with CFR 21 Part 11, follow GAMP, be able to print labels in standard formats and ensure all the compliance reporting requirements are met.

Another aspect of implementing an ERP in the Pharma third party contract manufacturing scenarios is that the ERP can help record, display, and print customer-facing reports that comply with the norms set by the regulatory bodies. Reports, such as Ingredient Statement Report, Nutrition Information, and Fact Sheet, and Supplement Fact Sheet, can be of critical importance to customers. ERPs can help bring such information to the surface.

Other must-have features:

• Complete support for Batch Processing
• Batch Monitoring Activities by Inspection Plan
• Electronic Execution of SOPs
• Electronic Batch Ticket & Electronic Weigh Sheet
• Easy Material substitution
• Multiple Packaging of same formulation
• Allergen Management
• Bi-directional Lot Traceability
• Quality Assurance

Conclusion

Implementing ERPs for handling third party or contract manufacturing, addresses the industry challenges to a great extent and brings huge benefits in the long run. But at the core of this all, is selecting the right ERP. One ERP that comprehensively covers the third party manufacturing feature is BatchMaster ERP.

Think of more features that can be beneficial for Contract Manufacturers? Please share in the comment box below.