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Whether you are a life sciences CMO (contract manufacturing organization), a pharmaceutical manufacturer with an R&D department, or a startup in the biotech space, you will need a structured system to handle the business complexities and challenges unique to your industry. Here are six important ERP features that biotech, life sciences, and pharmaceutical manufacturers should prioritize:
1. Integrating research and experimental trials
For companies in biotech, life sciences, and pharma, integrating research and development (R&D) for experimental trials and laboratory testing into the ERP can be immensely valuable for efficiency and reporting. The ability to track R&D orders for labor and consumed materials, along with specific operations for various types of trials, ensures that your experimental processes are as streamlined and transparent as your manufacturing processes.
An ERP system that can manage R&D operations allows you to assign operations for specific trial types/tests, to then log that labor type to work orders, track material usage and labor costs against those trials, and to generate reports that tie these experiments back to your broader operational goals. This integration is invaluable for startups where R&D is a significant part of the business model, enabling better resource allocation, more accurate cost tracking, and improved project management. To take this another step, integrating to an LIMS (laboratory information management system) can help track this data seamlessly without manual data entry in multiple systems.
By incorporating R&D processes into your ERP, you not only gain insights into the costs and efficiencies of your research efforts but also position your company for smoother transitions from R&D to full-scale production as your experimental successes evolve into market-ready products.
2. Traceability
In these highly regulated industries, traceability is paramount. The ability to track every component of a product from raw materials to finished goods ensures compliance with regulatory standards and facilitates quick and effective responses to recalls or quality issues. For a biotech or pharma company, ensuring full traceability means that if a defect is identified in a batch of products, you can trace back through the entire supply chain to identify where the issue occurred. This capability not only helps in managing recalls efficiently but also builds trust with regulatory bodies like the FDA. Moreover, full traceability supports internal audits and helps maintain a clear history of product lineage, crucial for maintaining high standards and compliance.
Three traceability functions are especially critical when considering an ERP system. First, the ability to track inventory at a lot (or serial) level. Many ERPs only track the quantity of an item and do not tie inventory back to a specific receipt. It is important to show all usage of raw material from the receipt level as well as from the finished goods level to track the lots/serials used to make the finished product. Second is the ability to align the ERP with your physical traceability practices in picking and putting away items. This is usually done with barcode scanning where a user prints a barcode label at receipt to be used downstream when inspecting that lot, transferring the product to the warehouse, and picking it to a work order. Third is the ability to control and identify shelf life items and expiration dates, to ensure these materials are not available to be used or consumed in the manufacturing or R&D processes.
Figure 1: Shows a Traceability Record within an ERP. The barcoded receiving label, documents for storing CoC/packing slips, and incoming inspection record are all linked for this lot. Additionally, every usage of the lot/batch, either on internal build orders or final customer shipments, is tracked. (Source: Cetec ERP)
3. Integrated Quality Control (QC) and Quality Management System (QMS)
Quality is non-negotiable in biotech manufacturing. An integrated QMS within your ERP and MES (manufacturing execution system) ensures that inspections and quality control drive the reporting necessary to a QMS. Additionally, your production processes are housed in the ERP (assuming it has MES capabilities), meaning that your QMS documentation is tied directly to your use of the ERP. Simplifying this handoff as much as possible helps you gather critical data faster and more accurately and helps you pass FDA or ISO-related audits more quickly as there are fewer places to locate and validate the information an auditor is looking for. For example, a failed in-process inspection within the ERP/MES (ideally with the ability to create inspection forms with custom validation ranges and conditions) should trigger an NCR or CAPA in the QMS by pulling data automatically and linking back to the source object.
4. Production control and tracking
Effective production control and tracking are essential for managing the complexities of manufacturing in these sectors, from handling complex recipes/formulas or large bills of materials (BOM) to coordinating with multiple suppliers and ensuring timely production. Having an ERP that can handle production control in a native MES pulls your critical work instructions (batch records in pharma), required signoffs, and traveler operations directly from the BOM router (or labor plan). When you enter the work order, all the data is available and drives the actual processing of the work order.
You can schedule, see, and track the movement of the work order through production; prevent the next operation from occurring until a required instruction is signed off on; see a full history of who touched or moved this work order over time (for your device history record); perform successive AQLs (acceptance quality limits); generate CoCs and/or CoAs natively within the system tied to the batch record (work order); and integrate laboratory testing. This, of course, is all in addition to the typical benefits of production tracking intimately integrated with the ERP as it unifies sales with scheduling, purchasing, and accounting. And a manufacturing ERP will allow you to manage scenarios and pain points unique to manufacturing like scrap (or yield loss), efficiency data (like OEE or employee efficiency), accurate cost accounting, and more.
Figure 2: Shows a work order (or batch record) within an ERP. This is a batch for quantity 10, which pulls materials, work instructions (formula), and documents from the Master Batch Record. It includes a full history of all work and movements of the work order and controls the production process with required signatures in the work instruction labor plan. (Source: Cetec ERP)
5. Document management and control
Manufacturing in these sectors involves extensive documentation from design specs to regulatory submissions to audit portfolios of SOPs, training certifications, and more. Efficient document management and control within an ERP system ensure that all documents are easily accessible, secure, and up-to-date.
A key example of this is work instructions. These are revision-controlled by your quality team but need to be accessed by your shop floor employees in the production process. Having a centralized system that allows for approved documents to be in circulation means you only have to store the document once, and it is immediately accessible where it is needed.
6. Scalability
Companies in the biotech, life sciences, and pharmaceutical industries must plan for the long term. An ERP system that scales with your business allows you to add functionalities and users without significant disruptions, ensuring seamless transitions from startup phase to full-scale production. This refers to the technology “under the hood” (e.g., cloud-based solutions are scalable from a technical perspective) as well as the configurability of the system (how easy is it to add new modules or, for an out-of-the-box solution, implement new portions of the software).
Knowing that you are moving towards a system that is flexible to long-term needs (it will grow with you) before you have years of history and ingrained processes in your culture means the ROI is higher. It is more cost-effective to implement earlier rather than later. This also means that your business is supported by a system focusing on best practices, ensuring that your company matures in the right ways.
Considering a Cloud-Based ERP System
Implementing the right ERP system can significantly impact the efficiency, compliance, and scalability of your biotech, life sciences, or pharma company. However, getting set up with the necessary features upfront can be cost-prohibitive to many startup companies. Selecting a cloud-based system can be the solution.
Cloud-based ERP solutions can offer a range of functionalities tailored to the biotech industry, including integrated suites that combine functionalities like ERP, MRP, CRM, and QMS, potentially offering cost savings compared to traditional on-premise systems. This can be particularly helpful for small to medium-sized biotech companies.
Scalability is a crucial factor for biotech companies, especially startups experiencing rapid growth. Cloud-based ERP systems can often adapt to increasing demands and support expanding operations. In addition, implementing a robust ERP system can assist companies in achieving industry certifications such as ISO.
Selecting an ERP vendor with a strong track record of customer support and implementation expertise is essential for successful ERP adoption. Biotech companies should look for systems that are specifically designed to address the unique challenges of their industry, including regulatory compliance, complex manufacturing processes, and research and development.
Scott Ryan is senior consultant at Cetec ERP, LLC.
Filed Under: Drug Discovery, Industry 4.0, Regulatory affairs
