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September 28, 2010

RFID in Pharma Manufacturing and Regulatory Compliance

What has helped retailers eliminate costs, manage assets and provide self checkout facility to customers? What has eliminated multiple resource requirements for handling and tracking packages and parcels in transport industry? What has off late reduced the burden of manual intervention at the toll gates?

No reward for guessing and it is RFID (Radio-frequency identification). Simply put, RFID (also sometimes referred to as Auto ID) outlines a technique of identifying an entity relevant to business, by use of radio waves (with the help of RFID tags and tag readers). Now various industries have seen multi faced utility of RFID. Let's assess its usage in Pharma Manufacturing with focus on regulatory compliance.

Taking a step back, we already see the usage of RFID in Pharma in various pre-manufacturing phases of product lifecycle, such as handling manufacturing raw material and in Supply chain management. Asset management, tracking the candidate artifacts, warehouse management are areas where we already see the usage of RFID in terms of tracing the materials, tracing its locus within the storehouse and manufacturing units, etc. Apart from this, RFID has also added value in Supply chain management in terms of tracking orders, maintaining reorder levels, accuracy of orders, quality control and warranty / maintenance of the same.

RFID has spread its tentacles into various other related forums of importance to business. Post manufacturing for example sees the importance of RFID in terms of ensuring shelf availability of popular products, self checkout facility for the customer, checking theft and tracks product returns and recalls. This has made several organizations realize the benefit and huge potential of RFID technology even with experimental partial implementation and it's ROI.

Joining dots from Asset management, Supply chain management and Consumer we would like to assess how manufacturing can leverage RFID technology. In particular, let's see how RFID can help in Pharma Manufacturing from the compliance perspective.

Firstly let's get to know what makes Pharma manufacturing special and different from other manufacturing industries. Apart from many other differences, Pharma manufacturing comes with a burden of catering to various regulatory and incorporation of best practices to the process and thereby provides sufficient proof to the assessing / auditing regulatory authority of the foolproof manufacturing of the products. Investment that goes into ensuring the same is enormous and as these are being done manually or semi-manually, there are a lot of areas where automation of processes with non-intervention of manual workforce can maximized.

Apart from many other generic advantages, RFID can go a long way in enforcing and facilitating implementation of regulatory compliance guidelines and CGMP (Current Good Manufacturing Practice).

· RFID could be a technique to ensure that an entity in inventory has passed all phases of quality check that would ensure adherence to the regulatory standards

· To track and report to control systems, various phases of processing that the raw materials have passed which could formulate the proof of quality check

· To synchronously link up various systems like control systems, execution processes and production units.

· Facilitate compliance to 21 CFR Part 11 compliance with complete tracking, verification, and validation process

· Bring in precision in manufactured product tracking and genealogy by collecting historical information by referring to product ID, time stamp of manufacturing, production batch number, at each phase of manufacturing process, and across different manufacturing units. This will help automate reporting and labeling process as well.

· To track reusable assets and store details of the location and visibility of such assets

 Some critical Techno-functional steps involved in conceptualization and implementation of the solution are as under:

 · Blueprint a well thought out Technical architecture that weaves well with the existing infrastructure. More the deviation, more is pinch from investment and integration standpoint

· A lot of sub-systems will get affected in the process. Changes are rarely standalone and hence, middleware, wrapper applications, devices, ERP systems, reporting and control systems are to be integrated

· Budgetary plans need to incorporate support and maintenance of the system in an ongoing process that co-exists with rest of the IT infrastructure.

· This will affect the scope of regulatory assessment and audit. Hence SoPs, guidelines and custom thumb rules for RFID related processes is a must. A lot of documentation changes to the existing regulatory artifacts are inevitable.

Deploying RFID technology in Pharma manufacturing cannot adopt a big bang method. This involves a conscious assessment of impacts on various aspects, units and entities involved in manufacturing and the investment made on information systems presently. However, integration of the new information captured by RFID into existing systems needs to be a carefully thought approach and needs a lot of visibility into the adaptability of the same. Yet this can mean a better cost effective compliance, broader visualization of plant floor and information infrastructure that lead to minimized costs and uninterrupted production cycle.

September 24, 2010

Challenges for Pharma Contract Manufacturer Organizations

Pharma companies are trying to outsource more and more manufacturing activities to contract manufactures so that they can focus on core activities of drug discovery and marketing. One estimate pegs the annual revenue from contract manufacturing and research activities to approximately 180 Billion USD for year 2010 with the annual growth rate of approximately 11%.There is a rapid rise in the pharma contract manufacturing organizations in India and China in recent years and this will further aid to the growth of the contract manufacturing industry. The blog explorers various challenges that CMOs are likely to face in medium to long term timeframe.

The Pharma Contract Manufacture Organizations (CMOs) needs to reinvent themselves for the challenges that lie ahead. From the traditional role of providing cost efficiencies, capacity, labor and machinery the CMOs have to get ready to the more complex process technology that would be required to manufacture new drugs. The challenges of stringent process control and increased automation will require further skills and new ways of working. Also, it is foreseen that specialty drug administration will have an element of information technology in it as controlled dosage would be required to be released at a targeted spot in patient's body. Though the technical know-how will be supplied by the pharma company but the CMOs have to invest both in technology and people to meet this challenge. To achieve efficiencies and to beat the competition, CMOs would have to invest in IT Application in areas of ERP, MES and Industrial Automation.

Adoption of GAMP (Good Automated Manufacturing Practice) will help CMOs to build in quality in every process step apart from having it in a batch of a pharma product. GAMP will ensure that quality is covered on all aspects of production for e.g. technical equipments, staff hygiene, raw materials etc. GAMP coupled with cGMP (current Good Manufacturing Practices) will yield better compliance of manufacturing installations, processes and related systems. Since the products are sold in global markets, it will be important for CMOs to have Quality system that meets the regulation of the various markets and of the pharma companies. Documentation compliance will be important as process is evolved and confirmed during trials.

CMOs will have to invest in project management skills as project scope would be exposed to scope changes owing to manufacturing complexity and various trial manufacturing runs and subsequent revisions during Lab to Plant Scale-up phases.

It will be interesting to know about other challenges as well. Please highlight any other

challenges that in your opinion will impact CMOs. 



September 17, 2010

Service Introduction- In IT space

The concept 'Service Introduction' is gaining rapid popularity in IT world as an 'effective tool' to introduce a new application/service into an established system.

In short, Service Introduction is the management of activities to ensure that applications/systems being developed to meet all operational requirements before getting introduced to 'Production or Live' environment. It also has to ensure 'Maintenance teams' are comfortable in providing the required services from the day one.

Key Stakeholders:

Typically the SI team needs to work closely with the following stakeholders...

• Application Development Team (functional/technical team)
• Project Manager - Application Development
• SI Lead/POC - Client Team
• Contract Management team
• Sales/Client facing group
• Client SMEs
• Project Managers - Third party tools/systems (if involved)
• Application Maintenance -Client team
• Application Maintenance- Service provider
• End users

Key SI activities and Deliverables:

Here are some of the key activities and deliverables from SI manager / team in the relevant Project life cycle phases.

a. Justify & Initiate phase - Receive Purchase order and provide initial response to   Statement of Work (SOW)

b. Plan phase - Identify and finalize the 'Service Acceptance Criteria' for the introduction of the new application/service

c. Design Phase -

• Produce Final and Firm commercial response and estimates
• SI work plan
• Support Impact Statement ( A comprehensive document, which talks about the support team's understanding of the new application/service getting developed)

d. Build Phase -

• Review Testing Approach, plan and schedule of AD team
• Identify KT topics along with AM team

e. Test Phase - 

• Publish KT plan and Schedule
• Coordinate KT and Reverse KT activities

f. Deploy Phase

• Review of Test results /Test report
• SAC review and Go/No Go decision
• Finalize 'Warranty timelines' and 'Support Model' during warranty

g. Close Phase

• Observe ticket/issues pattern during warranty
• Closure of pending SAC & other SI activities
• Work on other PMO docs like 'Lessons learned' etc

To have a successful 'Service Introduction' of new application, it requires maximum possible support from all stakeholders. Here are some of the responsibilities of Application Development and Application Maintenance teams.

Application Development Team's responsibilities:

• Intimate and communicate appropriately incase of any change in project scope, deliverables and timelines etc.
• Place all project deliverables in applicable place holders
• To work with client SMEs to identify key business scenarios to be included as part of testing
• Complete comprehensive and detailed KT sessions with concerned support teams
• To make sure all 'Must Have' requirements have been met as part of application development
• To close all open tickets as part of testing phase
• To work proactively for the closure of SAC
• To work with End users and Third party tool/service providers for the benefit of overall solution

AM (Support Team's) responsibilities:

• Through review of basic project documents like User Requirement specification, Business blueprint and Configuration rationale.
• To identify the key personnel to work on SI activities of the development project
• Review the testing approach, plan and schedule of AD teams and to provide the inputs as required.
• Indentify KT topics and duration of KT
• Prepare and present Reverse KT activities
• Review Test scripts and results
• Proactively involve in resolution of issues/tickets identified in testing phase.
• Make sure relevant Support roles are in place and resourced in advance of the 'Service commencement' into support
Practical Implications:

Successful 'Service Introduction' into support functions isn't that easy as it appears, simply because of involvement of

• Multiple stakeholders
• Different vendors
• Customer specific requirements
• Organizational change management aspects
• Budget and time constraints and
• IT related technical aspects


Each organization can have its own approach towards 'Service Introduction' but prime focus on some of the key activities like, thorough understanding of priorities of multiple stakeholders/vendors, defining the SI responsibilities of each team, effective monitoring & review mechanism and quantifiable SI deliverables are important for success.

Needless to say right people in right places can only enhance overall system.



September 8, 2010

SAP Financial Supply Chain Management - An overview

Financial Supply Chain Management (FSCM) in simple terms means managing demand and supply of cash/cash equivalents. SAP has come out with SAP FSCM functionality or suite of applications to manage this more effectively and efficiently thus helping companies to manage the costs associated with this process better. In this posting we will look at what are the features and functionalities available in SAP FSCM and how it can be leveraged better for the benefit of business.

Key business areas where SAP FSCM functionalities can be leveraged are input for more efficient working capital management, receivables management and cost management of payments.  SAP FSCM functionalities are enabled by SAP Netweaver technology to enhance the reach and better integration - both within and outside the organization applications as well as integrated within SAP ERP Financials.

SAP Financials is broadly organized in 4 broad functionality areas to support all financial management processes as well as integration with other business processes:

  • Financial and Management Accounting
  • Financial Supply Chain Management
  • Treasury and Risk Management
  • Corporate Governance

Prior to ECC 5.0 most of the functionality supporting business processes related to claims, dispute, and credit management were handled outside SAP application using legacy systems or handled manually. Integration with the Account receivable and cash management was more of a manual activity in most of the cases.

With ECC 5.0 SAP introduced SAP Financial Supply Chain Management (FSCM). Key objective is to bring business processes on the receivables and collection side within SAP solution thus providing more value. It helps in tying all the loose ends around receivables, collections and cash management within the organization thus leading to better integration and last step connect with the customers.

As with other SAP products this has also evolved over a period of time. Initially Cash and Treasury Management were also part of FSCM due to close integration needs but today they are part of Treasury functionality. Though some of the functionalities were available in previous versions but benefits were limited. Most of the other functional areas are well established and mature from functionality perspective while FSCM is a new functionality with very limited knowledge and implementation experience available in the market.

Key functionalities/applications within FSCM are:

  • Electronic Bill Presentment and Payment - This application provides a better and more real time interfacing with the customers and vendors with added benefit of self service to view the accounts as well as make electronic payments. It is mainly caters to presenting the invoices and account statements to the customer and vendors over the internet. Key benefit is reduction in  overheads and cycle time associated with this process for both - organization as well as its customer and vendors.
  • Collections Management - This application provides the functionality to manage the collections more efficiently and effectively. This is similar to the collection management functionality already present in SAP FI-AR component with added features like sending payment reminders, portal catering to collection agents, devising collection strategies and managing agreements related to payments from customer.
  • Credit Management -   Provides with functionality to manage credit policies and risks associated with the receivables centrally - even for scenarios where the business is supported by multiple instances across the globe. Thus helps in implementing uniform credit policies and rules across the globe as well as have one view for a customer who is dealing in multiple countries. It also brings in functionality of managing complex customer credit account hierarchies and rules associated with it.
  • Dispute Management - Facilitate and automate a lot of manual activities involved in handling disputes related to payments related to receivables in electronic form. This also leads to better integration and flow of information across multiple stakeholders involved to resolve the disputes.

Some of the key benefits SAP FSCM brings in are:

  • Last step integration with customers and vendors with minimal infrastructure requirements from customer or vendor side thus leading to higher adoption rate
  • Reduction in manual activities, communication and co-ordination efforts thus leading to reduction in overall cost of managing and doing activities in the receivables related process areas
  • Usage of business partners across multiple functionalities provide more flexibility as well as streamline the m data maintenance across the landscape
  • Information available almost in real time to better manage the working capital and receivables thus reducing the cost associated with it

In subsequent posting on this topic we will understand in more detail each of the application areas in SAP FSCM in more detail.

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