Erp Implementation At Lupin Information Technology Essay

Lupin is a transnational pharmaceutical company producing an extensive range of quality specific generic and branded formulations and APIs in more than 70 countries like India, USA, Japan, South Africa, Australia, Philippines, with its headquarters located in Mumbai. Lupin was found in the year 1968 by Dr. Desh Bandhu Gupta who had the vision to fight life threatening infectious diseases and manufacture drugs which had superior quality. His dream has steered Lupin to be a part of India’s top 5 pharmaceutical companies. Lupin’s success story begins with the manufacture of tuberculosis drugs followed by a range of intermediaries and APIs and it also strengthened its position by making innumerable formulations.

Financial Performance

The following statistics about Lupin have been impacted by the recent changes in its business integration processes. In FY 2010, net sales grew by 26% to INR 47,405 million up from INR 37,759 the previous year and net profits grew at 36% to INR 6,816 million compared to INR 5,015 million in FY 2009

Manufacturing facilities

Lupin has formulation plants at 5 different locations namely Aurangabad, Jammu, Mandideep, Goa and Indore and API plants at Ankaleshwar, Mandideep, Tarapur and Vadodara. Its ultimate aim is to deliver quality and scale, with successful integration of their capabilities and capacities to deliver a wide product portfolio that caters to the varied needs of diverse markets. Precisely committed to quality, safety and the environment, most of their manufacturing facilities have been inspected and approved by the US FDA and UK MHRA, WHO, Australian TGA and Japan’s MHLW.

R&D

Research will continue to be the main driver for Lupin’s success. Lupin has a state of art Research and development centre at Pune, Maharashtra. It is a 19 acre land with more than 320 scientists working there. Lupin has 145 patents filed and 53 patents granted worldwide.

BACKGROUND BEFORE ERP IMPLEMENTATION

As we see above, with extensive manufacturing facilities and products coming in mainly from research, to sustain its position in the market it was essential for Lupin to integrate its manufacturing units by enhanced connectivity between them. In the year 2002, it had operations spread across 5 plants and more than 30 depots to manage. They were at this time using the FoxPro based systems. This system would not work online and the key issue with it was it used to take almost 10 days to get the month end sales figure compiled together and presented to the authorities.

With this key problem in the backdrop, Lupin felt the need to adopt and implement an ERP system for its operations. At this point, Lupin initially went for a localized ERP version which was specific for every location and as per location specific requirements. But the problem here was decentralization. Lack of cohesion hampered the successful implementation of this. Thus a ERP software which would help Lupin set up, implement, monitor and evaluate business processes and then make it possible to integrate that information so that management may take a review of efficiencies was required.

TIMELINE FOR IMPLEMENTATIONS OF VARIOUS ERPs AT LUPIN

IMPLEMENTATION OF SAP ERP

Impact

SAP ERP package has benefitted LUPIN by streamlining business processes increasing accessibility and connectivity.

From the time of implementation, Lupin has not required any additional staff in the service areas like accounting, IT, finance and HR.

The 4 main modules, namely materials, production and quality management, have been adapted into the system.

After implementation the company has doubled in size but this was possible with the same number of people.

It also improved ease of access to available information. For instance, now even a sales manager has access to real time data with respect to the inventory levels which was not possible earlier.

Online connectivity has improved the online accounting system considerably.

It has also enhanced the inventory tracking and helped in materials planning as now the required raw materials can be ordered online, resulting in cost saving to a large extent.

Implementation Problems and its overcoming

Lupin had to overcome certain hurdles for the successful implementation of this ERP package. Some of these included user training including basics such as the mere operation of a computer; master data supervision, day to day trouble shooting and configuring new business processes coming into the system as per requirements.

All these problems were mainly done by several rounds of user training, interaction, discussions which was mainly done by IBM. Also the 1st problem faced for implementation included to get all the disjoined systems connected online. This was done by establishing a complete VSAT network and Lotus workflows.

This implementation was done by IBM and the initial investment including up gradation of network, hardware installations and cost of implementation cost Lupin around Cr.15.

NEED FOR MORE ADVANCED AND SPECIFIC ERP MODULES

Between the years 2003 and 2008, Lupin had successfully got US FDA approvals for plants in 5 places across India. These approvals specified stringent quality levels which needed to be measured and tracked daily. Sales and order management, travel and expense management and environmental and safety compliance management also become more and more important.

It had started operations in Japan, South Africa, Australia, Germany and others through acquisitions. Regulatory compliance across these different countries needed to be managed. Accounting and financial reporting compliance was also a requirement.

It had started its own research centre in Pune which required extensive information protection and security. Management of investigator sites, proper documentation, site agreements and contracts management were some other problems faced by the company.

Increasing end-user productivity, product design cost estimations, shared services for HR, talent retention and attraction, procurement were some other business need faced.

SOLUTIONS

There were 4 major technology changes that were made to overcome a majority of these problems.

Upgradation of existing SAP software to SAP ERP 6.0

Laboratory Information Management System (LIMS) from LabWare

Quality Management System Enterprise version from Novatek International

Language Independent Proof Reader Enterprise version from Novatek International

Lupin has been successful in gaining a competitive advantage by using enterprise resource planning systems in combination with its existing systems. The major reason for this success lies in the fact that it decided to choose an ERP vendor which was familiar with the pharmaceutical industry and this gave it the advantage of financial savings and increased efficiencies.

ERP IMPLEMENTATION

SAP ERP 6.0

BUSINESS CHALLENGE

ERP 6.0 ENHANCEMENT

IMPACT

Support growth plan

Service in new therapy areas and business segments

Accounting and Financial report Compliance:

Enhanced contract accounting and collections

Automated allocations and balancing by multiple dimensions

Ability to operate a HR shared service center

New general ledger for consolidated financial statements

Better management of internal controls of 8 manufacturing units across the globe

Contract Accounting with almost 10 contractors

Advanced financial supply chain management

Universal work lists for global operations

Time management

HR administrator

Ensure quality & compliance in products

Ability to import rules & regulations from third party providers

Support for OSHA

Monitoring dangerous material

Increased support to:

Occupational health

Waste management

Industrial hygiene

Hazardous material management

These factors are of utmost importance for a pharmaceutical company

Sustain position of Global market leader in several drugs like cardiovascular & anti-tuberculosis

Better planning

Better forecasting tools

Investment tracking

Superior product costing module

Enables express Planning

Business consolidations

Product design cost estimate

Important from global operations point of view

Improve operational efficiencies in core business processes while bringing down interim costs

Sales & Order Management

Better order-entry process

Support to internet sales

Price configurations

Travel & Expense management

Speedy expense reporting

Better travel planning

Order & quotation management

Automated credit card feeds

Integrated mileage calculation

Mobile travel & expense

Integration with travel agency

The implementation was done by a multi disciplinary core team from Lupin in partnership with Bristlecone, a company which specializes in SAP supply chain ERP implementation.

Increasing end user productivity

New application interfaces

Updated role-based access

Greater use of adobe interactive forms

Self-serviced employees, managers

Employee interaction center

Laboratory Information Management System (LIMS) from LabWare

Need

Patent of new drugs is a very integral part of pharmaceutical companies. Also at Lupin, documentation for intellectual property management was not organized and the IP registration rules were becoming more and more stringent.

Another problem faced at Lupin was that research labs were treated as a separate part of the business. As the pharmaceutical industry has gradually progressed, it has been seen that research laboratories have become an integral part if the company want sustainable growth. The key problem here was that it was difficult to communicate R&D with other business systems like MRP and Process Control System.

WHY LabWare LIMS

Can be integrated with SAP ERP

The core code is separated from the configuration and thus allows LIMS systems to be implemented with ease.

Easy Upgradation

Scalable architecture for centralized operations at Lupin

Multi lingual support which allows application across Lupin’s operation globally

High level of security required by research laboratories in the pharmaceutical sector

Compatible with any browser including Mozilla FireFox operated in Lupin

LIMS Implementation & Support for LUPIN

Templates were designed in accordance with the requirements of Lupin as decided by the core team. Some of the important templates designed were stability testing, environment monitoring and QA/QC manufacturing.

The following chart gives an indication of the various modules of LIMS used by LUPIN

Main Business System(s)

Electronic Document Management Systems (EDMS)

Project Management (PM)

Customer Relationship Management (CRM)

Testing/Stability/Shelf-Life

Please refer appendix 1 for snapshots of stability and shelf life testing using LIMS

Please refer appendix 2 for snapshot of a summary report of sample testing prepared by LIMS

Impact:

The benefit seen after the implementation of LIMS was that today when Lupin develops a new product, LIMS is used to;

Test the new prototype product.

Scale up manufacturing of the product

Release to the market

Testing defective samples after production.

Environment monitoring

Storage of historical research data

Full sample tracking

User certification

Instrument and calibration management

Standards & reagents management

Full auditing

Report and sample scheduling

Bar coding

Please refer appendix 3 to get detailed understanding of how modules work, and information flow within the system using LIMS

Quality Management System Enterprise version from Novatek International

Need:

Risk Reduction

Integration to Key Systems

Reporting: Documentation

Flexibility

Industry Best Practices

Document Management Application Modules:

SOPs, policies, work instructions

Batch records

Certificates of Analysis (COAs)

Regulatory submissions

Regulatory correspondence

CAPA objective evidence

Documentation related to change control

Validation documentation

Manuals, instructions

Employee training and qualification records

Project documentation

Investigation documents, photographs, etc.

Contractor batch records, quality records

Audit reports and follow-ups

Impact:

Allows compliance with industry standards like 21 CFR Part 11, 21 CFR Part 210, 211, and ISO

Consistent with FDA

Compatible with ERP

Maintenance of quality across different plants

Reduce re-works & scrap cost

Reduce cycle time and process down time

By implementing this software, Lupin has been able to manage audits like GMP/GLP/GCP, Clinical support audits, internal quality audits, site audits, pre-clinical studies etc.

Language Independent Proof Reader Enterprise version from Novatek International

This software is basically related to Automatic packaging. It has an Analyzer which proof reads insets, cartons and other printed material. It is language indifferent and hence most suitable for Lupin packaging as Lupin is a supplier of drugs across the globe.

This software allows to spot and correct not only discrepancies between characters but also changes in color and pictures. This is very important for any drug packaging as it has life threatening outcomes.

SOLUTIONS FOR THE FUTURE

Lupin plans to implement more applications like the Human resources, to control attrition rates and developing the internal organizational structure.

ERP 6.0 has been successful in bringing together core business components. Lupin now plans to upgrade to SAP Netweaver 7.0 and also Business Intelligence for a more extensive and specific approach to pharmaceutical operations.

Personally, I believe the company should aim at integrating their system with the customers i.e. contract manufacturers to enhance their supply chain further.

Bandwidth and infrastructure are the two biggest setbacks that Lupin is currently facing and needs to improve upon.

APPENDIX

Appendix 1

LIMS from LabWare

Module: Testing Stability of a product

(Various graphs for pH testing have been produced)

Appendix 2

Snapshot of LIMS showing a summary report of a sample produced

Appendix 3

Modules used in LIMS

along with their information flow throughout the system