Operational Excellence withCompliant ManufacturingOperations for Pharmaceuticals
Hussain Mooraj and Wayne McDonnellAMR Research
Andy Dé, Senior Director Industry SolutionsSAP for Life Sciences
Hussain Mooraj and Wayne McDonnellAMR Research
Trends and Key Metrics enablingOperations Performance Management
Summary
Trends and Key Metrics enablingOperations Performance Management
Achieving Superior Performance withCompliant Manufacturing in Life Sciences
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11% of Responses. N=100
2 weeks11%
Days13%
1-2 weeks6%
3- 4 weeks38%
4- 5 weeks32%
Time to Sense Changesin Customer Demand
Supply Network Operations– Average 22 Sites
40+ manufacturing sites30%
11-20 manufacturing sites15%
2-5 manufacturingsites17%
6-10 manufacturing sites17%
21-40 manufacturing sites19%
1 manufacturing site2%
Evolving Global Manufacturing Environment –the Challenges
Insight: complexity is increasing; need a new operating model
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Evolving Global Manufacturing Environment –the Drivers
More Product Variants
Shorter New Product Development & Launch
Regulatory Compliance
Cost Reduction
Better Short Term Demand Visibility
More Dynamic Supply Networks
Demand Supply
Product
Demand Driven Manufacturing:The synchronized execution of compliant
manufacturing and logistics processes acrossa dynamically reconfigurable supply network,
to profitably meet demand.
Insight: today’s business environment requires move to DDM model
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Manufacturing Architecture Integrated andGoverned With Enterprise Systems
Multiple Point SolutionsAutonomously Deployed
IT Strategy
VP Supply Network Operations, Plant ManagerVP Manufacturing, Plant ManagerManagement
Capability, Profitable To PromiseInventory, Available To PromiseOrder Promising
High Volume, High MixHigh Volume, Low MixProduct Flexibility
Outside-In Metrics: Right First Time, ScheduleAdherence, Supply Chain Cost, Profit Velocity
Set by Manufacturing: Material &Capacity Utilization, OEE
KPIs
VMI, SMI, CPFR - Networked and Real TimeSMI - SlowCollaboration
Real Time WIP, Schedules, Costs and CapabilityCompleted Orders, FG InventoryManufacturing Visibility
Event Driven S&OP, Closed Loop SchedulingMaster Production SchedulingPlanning
In-house/Outsourced, DynamicIn-houseCapacity
Dynamic Re-sequencingCampaignsOrder Execution
Pull, Lean ReplenishmentPush, RM/FG Buffer InventoriesInventory Philosophy
Rapid, In-house/Contracted R&D, Time To ValueInfrequent, In-house R&DNPD&L
Supply & DemandSupplyManaged Variability
ETO, MTO, ATO, CTO, Outsourced/ContractedMTSManufacturing Philosophy
Demand Driven ManufacturingTraditional ManufacturingCharacteristics
Demand-Driven Manufacturing
Source: “Demand-Driven Manufacturing”, AMR Research, 2007
Insight: think outside-in, execute inside-out
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Life Sciences Product Supply Strategies
% of Responses. N=98
6%
5%
13%
5%
5%
8%
7%
8%
7%
4%
7%
10%
13%
15%
12%
17%
7%
7%
9%
8%
7%
6%
2%
1%
3%
4%
Improve collaboration in your enterprise with internal partnersacross R&D/Man/Supply Chain/Sales & Mkt
Manufacturing outsourcing as an opportunity to boostproductivity and efficiency
Improve efficiencies and lower costs across the enterprise
Increased insight into downstream demand using near real-time data from distributors and other intermediaries
Improve manufacturing performance visibility acrossmanufacturing sites
Replicating best practices across the enterprise usingoperational excellence programs
Standardize manufacturing processes and systems
Redesign of your supply chain networks
Improve collaboration with your external partners such asContract Manufacturers, 3rd Party Logistics
Product authentication, track and trace, integrity of supplychain
Improve compliance across financial, manufacturing andquality processes
Detailed production scheduling, and adherence
Identify and eliminate waste in manufacturing using leanmanufacturing practices
20072012
Future Focus
Current Focus
Insight: focus is shiftingfrom cost & compliance to
velocity, agility, profitability
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Life Sciences Product Supply Strategies
62%
64%
67%
62%
62%
62%
64%
55%
62%
60%
57%
57%
41%
44%
51%
47%
48%
50%
41%
49%
48%
47%
47%
47%
Leverage contract manufacturers for new product launch and agileresponse to demand
Ability to forecast demand
Achieving compliant, predictable product supply by manufacturingright-first-time
Managing the cost of compliance while achieving the desired levelsof compliance
Ability to respond to changes in demand
A balanced S&OP processes which profitably matches demand andconstrained supply
Aligning manufacturing, supply chain, sales & marketing, regulatoryinteraction for successful new product launches
Leveraging global opportunities in sourcing
Planning and implementing master data management processesacross the organization
Reliable drug track and trace, authentication, reduce counterfeitingand fraud monitoring
Manage contract manufacturing relationships, compliance andproduct quality
Accessing existing unstructured information in manufacturing
Importance Performance
-10%
-12%
-10%
-13%
-14%
-14%
-14%
-15%
-15%
-16%
-20%
-21%
Gap
% of Responses. N=98
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Life Sciences Product Supply Strategies
62%
64%
67%
62%
62%
62%
64%
55%
62%
60%
57%
57%
41%
44%
51%
47%
48%
50%
41%
49%
48%
47%
47%
47%
Leverage contract manufacturers for new product launch and agileresponse to demand
Ability to forecast demand
Achieving compliant, predictable product supply by manufacturingright-first-time
Managing the cost of compliance while achieving the desired levelsof compliance
Ability to respond to changes in demand
A balanced S&OP processes which profitably matches demand andconstrained supply
Aligning manufacturing, supply chain, sales & marketing, regulatoryinteraction for successful new product launches
Leveraging global opportunities in sourcing
Planning and implementing master data management processesacross the organization
Reliable drug track and trace, authentication, reduce counterfeitingand fraud monitoring
Manage contract manufacturing relationships, compliance andproduct quality
Accessing existing unstructured information in manufacturing
Importance Performance
-10%
-12%
-10%
-13%
-14%
-14%
-14%
-15%
-15%
-16%
-20%
-21%
Gap
% of Responses. N=98
Insight: Gaps are in leveraging 3rd party capabilities, demand forecasting,right first time manufacturing
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
An Hierarchy of Manufacturing Metrics
What it is What it tells you
OperationalExcellence
DemandVolatility
RightFirstTime
MfgCost
RM, WIP +FG
Inventory
RightFirstTimeDetail
MfgCostDetail
SupplierQuality
SupplierOn-Time
ScheduleCycle
Variances
AssetPerformance
(OEE+)
ScheduleAdherence
Complexity(COs vs
Mix)
ScheduleChanges
FirstPassYield
Req. RMTo Prod
Cycle TimesRM
InspectStageTimes
FGInspect
Sched ToDispatch
Production ContractComplexity
Supply NetworkInvestment
• Responsiveness• Costs
PerformanceConstraints
Mfg Cycle Times • Manufacturing Complexity• Manufacturing Agility
• Root Cause Analysis• Surgical Intervention
Insight: becoming Demand Driven requiresRight First Time manufacturing capabilities
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
2006 Manufacturing Metrics Study
AMR Research examined 100 manufacturing firmsto prioritize, segment, and assess theimportance/impact of manufacturing metrics.The research sample was split between process
and discrete manufacturers to enable side-by-sidecomparisons.The sample distribution also enabled comparisons
by company size (under 10,000 employees vs. over10,000 employees), and by job function/role (IT vs.Executive Management vs. ManufacturingManagement).
• Process industries included:Pharma, CPG, Chem, Pulp andPaper, Oil and Gas, andPrimary Metals
• Discrete industries included:Auto, High Tech, A&D, andFabricated Metals
• Respondent titles includedCorporate executives (36%),IT (23%), Ops/Production (27%)
• The average responding firmhad over 22 manufacturingfacilities
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Manufacturing Metrics Tracked Today
% of Responses. N=100
Mfg quality metrics
Supplier qualitymetrics
Mfg costs metrics
Mfg responsivenessmetrics
Schedule adherencemetrics
Mfg flexibilitymetrics
Measuringdemand metrics
Insight: metrics are driving performance toward quality, compliance and cost
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Key Research Findings: Manufacturing Metrics
The typical manufacturing organization only tracks 9different performance metrics.
Of the nearly 20 different manufacturing metricsexamined, only 6 were used by more than 60% of therespondents. None were used by all.
Most manufacturing firms rely on static metrics suchas inventory levels, fixed cost measures, and averageproduction or cycle time. Very few rely on predictivemeasures such as asset availability, varianceanalyses, or supplier-related metrics.
Between 30% and 60% of responding firms believestheir management ability and their agility is impactedby a lack of metrics.
Visibility into performancelevels are moderately highin some areas, but thesystems, tools, and opticsprovided tend not to focuson advanced/predictivemetrics.
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Manufacturing Metrics Gap Analysis:Importance vs. Perceived Performance
% of Responses indicating a 4 or 5 on a 5-point scale
Insight: measurement strategy must align with business & manufacturing
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Key Research Takeaways: Metrics & Performance
Among the vast array of metrics examined, quality-related issues ranked as the most important, followedby cost metrics, and agility/flexibility/responsiveness.
Respondents stated that their lack of optics intosupplier quality, demand measurement, andmanufacturing costs were their most criticalvulnerabilities.
Visibility into performance metrics is impacted byinaccurate reporting/forecasting processes, disparatesystems, lack of participation by key stakeholders, andinadequate staffing/tools.
The research clearlyshows that respondentsare both aware anddeeply concerned aboutthe lack of performanceoptics and metrics acrosstheir manufacturinglifecycle.
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Capabilities Gap Analysis: Importance vs. PerceivedPerformance
%of Responses indicating a 4 or 5 on a 5-point scale
Insight: end-to-end visibility is key
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Key Research Findings: SupportingCapabilities
A multi-site view of performance is perceived asimportant; respondents are beginning to connect corecapabilities with that desired outcome.
Composite metrics are desired, but remain elusive.
Establishing relationships between key performanceindicators and key performance drivers is the nextchallenge that manufacturers will focus on. A multi-site, multi-
environment, and multi-geography focus areincreasingly important tomajor manufacturers.
Mature manufacturers arefocused on aligningcapabilities that willsupport performancevisibility on this scale.
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Enterprise Manufacturing Intelligence (EMI) is a keyarea of investment in Life Sciences…
Q41. Which of the following PRODUCT SUPPLY software components does your company currently use?
Q42. What PRODUCT SUPPLY software components does your company plan to continue to use or use for the first time in 2012, 5 years from now?
% of Responses. N=98
16%
28%
20%
22%
21%
24%
21%
25%
32%
26%
27%
36%
27%
29%
27%
30%
25%
29%
33%
27%
Enterprise ManufacturingIntelligence (EMI)
Supply chain planning
Specification/Formula/RecipeManagement
Lean Planning
Manufacturing ExecutionSystems (MES)
Supplier and customerportals
EH&S Waste/EmissionsManagement
Lean Execution
Continuous ImprovementTools (e.g. 6 Sigma)
Enterprise AssetManagement (EAM)
20072012
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Perceptions of Technology on the Plant Floor –Enterprise Players Wanted
Perceptions of Plant Floor & Manufacturing Applications/Technology% of Responses
77%
71%
67%
64%
61%
54%
53%
17%
22%
24%
26%
27%
31%
30%
5%
7%
9%
11%
12%
14%
17%
I would prefer to have a single, integrated solution formanaging our manufacturing capabilities
It would be valuable to allow shop floor and manufacturingpersonnel to access a broader range of operational
information
I would prefer to source my manufacturing solution from alarge stable software provider
My organization can effectively collaborate and shareinformation between headquarters and shop floor systems
I would prefer to source my manufacturing application frommy ERP provider
My organization can effectively collaborate and shareinformation between our operations and my contract
manufacturer's systems
My organization can effectively collaborate and shareinformation between our operations and my supplier's
systems
Agree Neutral Disagree
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
REAL-TIME OFF-LINE, BATCHEDTRANSACTIONAL
Historians
EMI Frameworks
Real-time Process Control, SCADA,HMI/MMI
OPE
RA
TIO
NS
PRO
CES
SB
USI
NES
S
MES Operational Data Store
Interfaces to ERP/EAM
PureBusiness
IntelligenceApplications
/ DataMining
Who will deliver Composite Applications?
Enterprise Resource Planning,Supply Chain Management,
Enterprise Asset Management,Advanced Planning and
Scheduling
AdvancedAnalytics
andModeling
Tools
EMI
TIME GRANULARITY OF ANALYTICAL INFORMATION
CO
NTI
NU
UM
OF
OPE
RA
TIN
G C
ON
TEXT
S
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
REAL-TIME OFF-LINE, BATCHEDTRANSACTIONAL
Historians
EMI Frameworks
Real-time Process Control, SCADA,HMI/MMI
OPE
RA
TIO
NS
PRO
CES
SB
USI
NES
S
MES Operational Data Store
Interfaces to ERP/EAM
PureBusiness
IntelligenceApplications
/ DataMining
Who will deliver Composite Applications?
Enterprise Resource Planning,Supply Chain Management,
Enterprise Asset Management,Advanced Planning and
Scheduling
AdvancedAnalytics
andModeling
Tools
EMI
TIME GRANULARITY OF ANALYTICAL INFORMATION
CO
NTI
NU
UM
OF
OPE
RA
TIN
G C
ON
TEXT
S
ERP
Ecosystem partners
SAP MII as the EMI framework
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
In Closing
Life Sciences now recognizes the strategic nature of manufacturing operationsand are prepared to make investments
Visibility into predictable and profitable product supply performance is a keydriver for prioritizing manufacturing investments
Performance metrics on this scale will require architectures that providefederation of data from multiple disparate applications and data stores – financialand operational
Composite applications – including EMI or Operations Intelligence - offer amechanism that coordinates the architectural elements that comprise emergingmanufacturing operations management architectures
Life Sciences Buyers would prefer applications from a single, stable, provider –ERP is the logical point of contact
Andy DéSAP for Life Sciences
SAP Labs LLC
Achieving Superior Performancewith Compliant Manufacturing inPharmaceuticals
Summary
Trends and Key Metrics enablingOperations Performance Management
Achieving Superior Performance withCompliant Manufacturing in Life Sciences
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Global Competitiveness is HERE placing tremendous pressure oncost, quality and responsiveness
Lack of Visibility and Control into Manufacturing Exceptions in Real-Time and inability to profitably fulfill new orders
LOB Managers and Production Personnel cannot monitor, measure,analyze and control performance deviations in real-time across people,processes, asset and plants
Inability to rapidly design and deliver innovative plant-to-enterprisecomposite business processes and metrics for operational excellence
High TCO (total-cost-of-ownership) of integrating and extendingManufacturing Processes from ERP into the Plant Floor
Pharma Manufacturing today has some keychallenges…
Connecting the Factory to the Enterprise and enablingProduction Personnel are critical to cost-effectively deliveron customer expectations
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Root Cause: Manufacturing and Enterprise businessprocesses need to be integrated …
What’s happening during every shift?Material availability and consumptionCapacity availability and utilizationSchedule changesProduct Genealogy tracking and QM
What’s happening at each line?Cycle Times / Operating EfficienciesMachine Breakdowns /Unplanned DowntimeQuality IndexPredictive Maintenance requirements
How are we hitting our targets?Total Cost of Production and VarianceLabor and Resource ProductivityOrder Fill Rates and Cycle TimesFixed and Variable Asset UtilizationERP
SFAC - Shop Floor Automation and Control SystemsMES – Manufacturing Execution SystemsDCS – Distributed Control Systems
MES
SFAC*
?
?
?
DISCONNECT
DISCONNECT
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Integrating the real-time Plant Floor with theEnterprise poses formidable challenges….
Disparate Plant System Landscape
A Typical manufacturing plant will havebetween 10 and 50 shop floor automationsystems (SFA)
A multi-site manufacturer will have between40 and 700 SFA systems across itsenterprise
Factory
Enterprise
DISCONNECT
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Current State
EnterpriseManufacturing integration
“Less than 1% of respondents indicated thatmanufacturing data is automatically integrated
with ERP with no manual intervention”Managing Automation and AMR Research
September 2005, Customer Survey
Manufacturing intelligence“There are gaps in providing adequate visibilityinto manufacturing KPIs, Financial performance
and multi-site performance analysis”Managing Automation and AMR Research
September 2005, Customer Survey
Plant
DISCONNECT
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Plant Manager
MANUFACTURINGPLANT
MANUFACTURINGPLANT
MANUFACTURINGPLANT
VARIABILITY
Field Sales
CustomerService
Plant Manager Plant Manager
VP ofManufacturing
Payers
$Contract Organizations
Wholesalers
Patients
MembersPhysicians
Distributors
The World Without SAP …
Lack of integrated Manufacturing, Quality and Compliance in a singlesolution impacts ability to consistently deliver quality products,compliant with GxP**….
ContractManufacturers
** GxP = Good Manufacturing/ Clinical/ Lab Practices
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Plant Manager
MANUFACTURINGPLANT
MANUFACTURINGPLANT
MANUFACTURINGPLANT
VARIABILITY
Field Sales
CustomerService
Plant Manager Plant Manager
VP ofManufacturing
Payers
$Contract Organizations
Wholesalers
Patients
MembersPhysicians
Distributors
The World Without SAP …
Lack of integrated Manufacturing, Quality and Compliance in a singlesolution impacts ability to consistently deliver quality products,compliant with GxP**….
ContractManufacturers
Implications:• Very high TCO - less than 2% of Pharma
Manufacturers have integrated plant-to-enterprise business processes
Pain: Disconnect between and acrossthe Plant Floor and the Enterprise
Implications:• Warning letters from the FDA, high penalties, fines and
unplanned shutdowns - very high cost of compliance (10-30%)
Pain: Inability to document, validate and complywith GxP requirements, at the lowest cost
Implications:• Low order fill rates and missed
shipments (5-25%)• Excessive fire-fighting and
expedites• Higher rejects, re-work etc. and
higher cost of Quality (5-15%)
Pain: Production Personnel cannot deliver qualityproducts consistently to customers, and meetperformance targets
** GxP = Good Manufacturing/ Clinical/ Lab Practices
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Plant Manager
MANUFACTURINGPLANT
MANUFACTURINGPLANT
MANUFACTURINGPLANT
VARIABILITY
Field Sales
CustomerService
Plant Manager Plant Manager
VP ofManufacturing
Payers
$Contract Organizations
Wholesalers
Patients
MembersPhysicians
Distributors
The World Without SAP …
Lack of integrated Manufacturing, Quality and Compliance in a singlesolution impacts ability to consistently deliver quality products,compliant with GxP**….
The VP of Manufacturing is challenged with consistently delivering high quality products tocustomers while complying with GxP** requirements, at the lowest cost of operations,
compliance and ownership (TCO)
ContractManufacturers
Implications:• Very high TCO - less than 2% of Pharma
Manufacturers have integrated plant-to-enterprise business processes
Pain: Disconnect between and acrossthe Plant Floor and the Enterprise
Implications:• Warning letters from the FDA, high penalties, fines and
unplanned shutdowns - very high cost of compliance (10-30%)
Pain: Inability to document, validate and complywith GxP requirements, at the lowest cost
Implications:• Low order fill rates and missed
shipments (5-25%)• Excessive fire-fighting and
expedites• Higher rejects, re-work etc. and
higher cost of Quality (5-15%)
Pain: Production Personnel cannot deliver qualityproducts consistently to customers, and meetperformance targets
** GxP = Good Manufacturing/ Clinical/ Lab Practices
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Compliant Manufacturing in Life SciencesIndustry
Packaging& Filling
Bulk Production &API and Formulations
Compliant ManufacturingCustomers
Suppliers
ProcessManufacturing(In-house Mfg)
SAP Capabilities :Master Recipe,Process Order,Operator Sheet,
EBR
LeanManufacturing =Flow + Repetitive(with Six Sigma)
SAP Capabilities :Rhythm Wheel-APO,Line Design-Balance,
Kanban Orders
ContractManufacturing(Outsource Mfg)
SAP Capabilities :Inter-company Stock
transfer orders,Subcontracting
Purchase orders
Planning /
Procurement
(by Parent)
Manufacturing
(at Contractor)
Business Operations drive selection of typeof Manufacturing Capabilities in the regulated environment
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Compliant Manufacturing OperationsKey Stakeholders & Objectives
Compliant Manufacturing Operations can help you deliver quality productsto customers consistently with GxP compliance at the lowest possible cost
Plant-Level Operations Manufacturing ExecutionEnterprise Planning andControl
Chief Operating Officer
Production SupervisorPlant ManagerVP of Manufacturing
How can we deliverquality products whileensuring compliancewith GxP*?
How do we bridge thedisconnect between the plantand the enterprise?
How do I deliver high qualityproducts to customersconsistently, at the lowestcost of operations?
How do I ensure compliancewith quality and safetystandards like GxP*?
On-Time Delivery
Manufacturing budgetattainment
Throughput
Profit Margin
Customer Satisfaction
Quality and EH&SCompliance
OEE
Quality Conformance (RightFirst Time)
Operating and InventoryCosts
Scheduling Execution /Adherence and Attainment
EH&S and TraceabilityCompliance
Unplanned Downtime
Fines and penalties
* GxP = Good Manufacturing/ Clinical/ Lab Practices
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Compliant Manufacturing OperationsEnd to End Process
Plant-Level Operations Manufacturing ExecutionEnterprise Planningand Control
Plant ManagerVP of Manufacturing
Chief Operating Officer
Compliant Manufacturing Operations connects Enterprise Planning and Control, Plant-Level Operations and Manufacturing Execution to bridge the chasm between the shop floorand the enterprise
Capacity &InventoryPlanning
Manufacturing
Plant
Production
Quality
Demand &Inventory
Management
ProductionPlanning
QualityPlanning
ProductionScheduling
Supply/DemandExceptions
InventoryControl
WorkInstructions
MonitorManufacturing
Operations
Cross PlantPerformance
Views
ScheduleExecution and
ProductionControl
SupplierCollaboration
MonitorQuality Data
VP of Manufacturing
Plant Manager
Production Manager
Quality Manager
Sampling &Inspections
CustomerOrder/Demand
ExceptionManagement
ProductionConfirmation
ReplenishProduction
MonitorEquipment
Performance
Monitor EH&SCompliance
Production Supervisor
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Level 3 :Shop floorlevelManufacturingOperations
Level 4 :EnterpriseBusinessProcess
No SAP focusSAP platform focusManufacturing solution space (SAP focus)
SAP NetWeaver Manufacturing Platform
Level 2 :Automation &ConnectivityLevel 1 :Shop floor Process Control
How does SAP MII fit withinSAP’s Compliant Manufacturing Architecture (based on S95 standards)
RFIDSensors
EnvironmentalBldg Mgmt Sys
PLC / DCS /SCADA
InspectionEquip/Testers
Plant Data Collection Sub-System
ManufacturingPerformance
Analysis
ProductionTrend
Analysis
SAP BISCOR
ManufacturingDashboard
SAP EP
SAPERP
Finance /Costing
Sales /Service
Purchasing /EH&S
Warehouse/Inv Mgmt
Prod Planning /Det Scheduling
PLM /GLM
SAP MDMMasterData
SAP CompliantManufacturing
Shop-floorCommunication
Incidence
Reporting
Electronic
Logbook
Lot
Genealogy
Room / Eqpt
Qualification
Process
ManagementYield, Rework
Scrap Analysis
Operator
QualificationSample
Mgmt
Real time QM
Labour, WIP
Weigh &
Dispense
Process StepEnforcement
Recipe/Spec
Management
ShopfloorData
(OPC)
Regulatory
Reporting
EBR
Checklist
Document
Mgmt System
Operator Interface
Data HistorianAdaptive DeviceIntegration
WeighScales
AnalyticsServices
VisualizationServices
SAP MIIManufacturingIntegration &Intelligence
S95 (B2MML) :
Prod Plan, Performance,Maintenance & Quality
Adaptersfor
CollaborativeManufacturing
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
PAS-X (Weigh-Dispense, MBR & EBR) by Werum
PAS-ECMI
SolutionEnd-to-End Solution :- Integrated solution to reduce integrationchallenges- Provides complete functional coverageOpen architecture :- Supports industry standards- Adheres to compliance and validation
PAS-X extends the compliant manufacturing capabilities of SAP ERP. With thehelp of PAS-X solution integrated with ERP leveraging MII , offices can beconnected to the factories, weigh-dispense can be managed with bettervisibility to SAP Manufacturing for global sites.
Business BenefitsBetter manage the business growth by gainingcontrol and visibility over global mfg to optimizeperformance.Reduce overall manufacturing cost by loweringcost of ownership and improve product quality.Ensure Compliance by adhering to regulations.
Interface MES / DCS, SCADA
Interface ERP / MES
Enterprise level
Plantlevel
Fieldlevel
MES
ERP
PLS
SAP Manufacturing M
I
I
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
SAP ERP 6.0
Life Sciences Manufacturing Best Practices Roadmap
ERP for BusinessInfrastructure
Support
OperationalExcellence with SAP MII
Enforce Compliancewithin Manufacturing
Today’s burning issue:Built into the Manufacturing Process
Tremendous cost andcompetitive
opportunities
Manufacturing Process and Technology Maturity
Valu
e R
ealiz
atio
n
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Benefits of Contract Manufacturing SolutionHow to provide visibility and control in a flat world …
Control costs of outsourced manufacturing in your backend
Increase customer service by more accurate ATP dates
React to demand changes (by knowing your supply options)
Quickly react on shifts in supply situation, reduce liabilities
EnhancedControl and
Orchestration
Improve supplier relationship by providing more accurate data
Improve collaboration on Engineering Changes
Minimize disruptions through proactive alerting
Collaborate on quantity confirmations (instead of dictating)
Increasedcollaborationwith partners
Identify material events for SOX
Complete visibility also for multi-tiered supply chain
Get visibility into production progress thru work order
Leverage accurate information on inventory & purchase orders
Improvedvisibility
into supplychain
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
What do Pharma Manufacturers need for OperationalExcellence with Compliant Manufacturing?
Pharma Companies need capabilities for:
Manufacturing operations: A comprehensive ERPsolution for managing Manufacturing Operationscompliant with CFR Part 11
Manufacturing integration: A manufacturingintegration platform to connect manufacturing processeswith enterprise processes
Manufacturing intelligence : real-time actionableanalytics and decision support to production personnelso they can deliver on their performance goals
Manufacturing innovation: a web-services basedrapid design and development framework for compositebusiness processes, application and metrics
Enterprise
Factory
Performance
Responsiveness
Visibility
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
What do Pharma Manufacturers need for ManufacturingExcellence with Compliant Manufacturing?
Pharma Companies need capabilities for:
Manufacturing operations: A comprehensive ERPsolution for managing Manufacturing Operations compliantwith CFR Part 11
Manufacturing integration: A manufacturing integrationplatform to connect manufacturing processes with enterpriseprocesses
Manufacturing intelligence : real-time actionableanalytics and decision support to production personnel sothey can deliver on their performance goals
Manufacturing innovation: a web-services based rapiddesign and development framework for composite businessprocesses, application and metrics
Enterprise
Factory
Performance
Responsiveness
Visibility
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
SAP MII
How does SAP MII enable Compliant Manufacturingthru Manufacturing Integration, Intelligence andInnovation?
CompliantManufacturing
Manufacturing OperationsSAP ERP
ManufacturingIntelligence
Reliably produceto target withyear-to-year
process and costimprovement
ManufacturingInnovation
Deploy plant-to-enterprisecompositebusiness
processes,applications and
metrics
ManufacturingIntegration
“A SingleVersion of theTruth” acrossthe Plant andthe Enterprise
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
SAP xMII
How does SAP MII enable Compliant Manufacturingthru Manufacturing Integration, Intelligence andInnovation?
CompliantManufacturing
Manufacturing OperationsSAP ERP
ManufacturingIntelligence
Reliably produceto target withyear-to-year
process and costimprovement
ManufacturingInnovation
Deploy plant-to-enterprisecompositebusiness
processes,applications and
metrics
ManufacturingIntegration
“A SingleVersion of theTruth” acrossthe Plant andthe Enterprise
Only SAP MII delivers Manufacturing Integration (with the Enterprise),Intelligence and Innovation, in weeks per Plant, to enable Superior
Manufacturing Performance at the lowest TCO
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
SAP NETWEAVER
What is the SAP Manufacturing Integration and Intelligence(MII)?
MES – Manufacturing Execution Systems, EMI – Enterprise ManufacturingIntelligence, BW – Business Warehouse (from SAP)SFAC – Shop Floor Automation & Control,
SAP MII
SAP Manufacturing Integration andIntelligence (MII) is a packagedcomposite application that delivers:
Manufacturing Innovation Manufacturing Innovation: Web-servicesand content to rapidly design and deployComposite Business Processes, Applicationsand Metrics
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Manufacturing Intelligence: Real-timeanalytics engine that aggregates and deliversunified visualization of events, alerts, KPIs anddecision support to production personnel thrurole-based dashboards
Manufacturing Intelligence
Manufacturing Integration
Manufacturing Integration: A singleISA-95 compliant layer enabling SAP ERPconnectivity into real-time plant floor apps.(MES, SFA, legacy apps.) to drive plant-to-enterprise business process interoperability
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
How does SAP MII Integrate ManufacturingOperations with the Enterprise?
SAP MII enables real-time transactionalintegration between plant floor andenterprise (SAP ERP) systems out-of-thebox thru:
Universal Connectivity to the data,functionality and processes of existingplant floor systemsBusiness Logic for creating automatedevents, KPIs and alertsWorkflow to synchronize plant andEnterprise business processesBuilt in S95 and B2MML messages andschema to make legacy systemsinteroperable
SAP NETWEAVER
SAP MII
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Key Customer Benefits:Automated synchronization of orders, materials, maintenance and qualitybetween plant and SAP ERP – a “single version of the truth”Real-time detection and automated resolution of manufacturing exceptionsERP integrated to Plant Systems in 2-16 weeks per plant
Bottom Line: Faster time-to-value and lower TCO
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
SAP NETWEAVER
SAP MII
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SAP MII integrates manufacturing operations with theenterprise, and delivers actionable visibility….
• Plan work orders• Check resources• Create mfg plan• Scheduling• Release work order• Close order• Shipping and logistics
Real-time events/alertsOrder statusCharge ratesLife of inventoryYieldsCompletions and usageStart and stop timesQuality and lab dataProcess historyBest practice deviationsEfficiencyDowntime trackingRework scrap rates
Equipment Tracking and Performance Downtime and OEE Reporting
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
How does SAP MII deliver ManufacturingIntelligence?
SAP MII enables production personnelto deliver superior performance thru:
a real-time analytics engine thataggregates data from the plant floor
delivery of right- time actionableintelligence from multiple systems - unifiedreal-time analytics (KPIs, reports etc.) intorole-based dashboards, at a low cost ofinformation delivery
monitoring, drill-downs, analysis, controland improvement of Six-Sigma metrics
asset-to-asset, plant-to-plantcomparisons for sharing best businesspractices
SAP NETWEAVER
SAP MII
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Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
How does SAP MII deliver ManufacturingIntelligence?
SAP MII enables production personnel todeliver superior performance thru:
a real-time analytics engine that aggregatesdata from the plant floor
delivery of right- time actionable intelligencefrom multiple systems - unified real-timeanalytics (KPIs, reports etc.) into role-baseddashboards, at a low cost of information delivery
monitoring, drill-downs, analysis, control andimprovement of Six-Sigma metrics
asset-to-asset, plant-to-plant comparisons forsharing best business practices
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SAP MII
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Manufacturing Integration
Manufacturing IntelligenceKey Customer Benefits:Real-time performance management – provides actionable measurements ofasset performance to speed goal attainmentContinuous Improvement – links production metrics to improvement and causalanalysis to accelerate process improvement
Bottom Line: Production Personnel can monitor, measure, analyze andcontrol KPIs and variances thereof, to improve their performance,
productivity and quality of work life
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
How does SAP MII enable Manufacturing Intelligence?Analytics: Long Execution Time of Manufacturing orders
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
How does SAP MII enable Manufacturing Intelligence?Analytics: Long Execution Time of Manufacturing orders
SAP ERP
Process Historian via SAP MII
Control system via SAP MII
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
How does SAP MII enable Manufacturing Intelligence?Analytics: WIP Orders – Analytics with Work center KPIs
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
How does SAP MII enable Manufacturing Intelligence?Analytics: WIP Orders – Analytics with Work center KPIs
SAP ERP
SAP MIICalculated
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
How does SAP MII enable Manufacturing Innovation?
SAP MII enables design and deploymentof innovative plant-to-enterprise businessprocesses, applications and metrics byproviding:
Data and Event Servicesprovide unified and secure access of
data and events to all of the otherplatform services and functions
Analytic ServicesMetrics/KPIsSPCData transformation
Manufacturing Process ManagementService-enablement of plant
applicationsComposite service-compositionManufacturing process orchestration
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SAP MII
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N.B. This is not a complete listing of SAP xMII web-services available today
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
How does SAP MII enable Manufacturing Innovation?
SAP MII enables design and deploymentof innovative plant-to-enterprise businessprocesses, applications and metrics byproviding:
Data and Event Servicesprovide unified and secure access of
data and events to all of the otherplatform services and functions
Analytic ServicesMetrics/KPIsSPCData transformation
Manufacturing Process ManagementService-enablement of plant
applicationsComposite service-compositionManufacturing process orchestration
SAP NETWEAVER
SAP MII
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Manufacturing Integration
Manufacturing Intelligence
Manufacturing Innovation
N.B. This is not a complete listing of SAP xMII web-services available today
Key Customer Benefits:Rapid and cost-effective design of plant-to-enterprise business processes andapplications not delivered by packaged apps., in days and weeksDeploy composite metrics like OEE, Right First Time etc. to sustain your Lean andSix-Sigma initiativesApplications and KPIs can be delivered by Plant IT without external support
Bottom Line: Innovation and Superior Performance, at a far lower cost ofdevelopment
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Illustrative example of a Composite Metricdeveloped using SAP MII: OEE Availability
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Consistently deliver high quality products to customers whilecomplying with GxP**requirements, at the lowest cost…
The World With SAP …
ContractManufacturers
VARIABILITY
MANUFACTURINGPLANT
MANUFACTURINGPLANT
MANUFACTURINGPLANT
Plant Manager
Plant Manager
VP of Manufacturing
Field Sales
SAP
CustomerService
Plant Manager
Payers
$Contract Organizations
Wholesalers
Patients
MembersPhysicians
Distributors
** GxP = Good Manufacturing/ Clinical/ Lab Practices
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Consistently deliver high quality products to customers whilecomplying with GxP**requirements, at the lowest cost…
The World With SAP …Benefit• Consistently deliver high quality products to customers at the lowest cost of
quality and operations (increase efficiency 5 - 25%)
Solution: Deploy a comprehensive solution for manufacturing, qualityand compliance, globally, across multiple plants
ContractManufacturers
VARIABILITY
MANUFACTURINGPLANT
MANUFACTURINGPLANT
MANUFACTURINGPLANT
Plant Manager
Plant Manager
VP of Manufacturing
Field Sales
SAP
CustomerService
Plant Manager
Benefit• Lower TCO 2-5 X on plant- to- enterprise
integration; minimize fire fighting thrureal-time visibility
Solution: Integrate SAP ERP toreal-time plant floor systems, in2-16 weeks per plant
Payers
$Contract Organizations
Wholesalers
Patients
MembersPhysicians
DistributorsBenefit• Manage GxP compliance by exception –
lower cost of compliance (and risks) 10-30%
Solution: Deploy ElectronicBatch Records (EBRs) for GxPcompliance across people,equipment and processes
** GxP = Good Manufacturing/ Clinical/ Lab Practices
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Consistently deliver high quality products to customers whilecomplying with GxP**requirements, at the lowest cost…
The World With SAP …Benefit• Consistently deliver high quality products to customers at the lowest cost of
quality and operations (increase efficiency 5 - 25%)
Solution: Deploy a comprehensive solution for manufacturing, qualityand compliance, globally, across multiple plants
ContractManufacturers
VARIABILITY
MANUFACTURINGPLANT
MANUFACTURINGPLANT
MANUFACTURINGPLANT
Plant Manager
Plant Manager
VP of Manufacturing
Field Sales
SAP
CustomerService
Plant Manager
Benefit• Lower TCO 2-5 X on plant- to- enterprise
integration; minimize fire fighting thrureal-time visibility
Solution: Integrate SAP ERP toreal-time plant floor systems, in2-16 weeks per plant
Payers
$Contract Organizations
Wholesalers
Patients
MembersPhysicians
DistributorsBenefit• Manage GxP compliance by exception –
lower cost of compliance (and risks) 10-30%
Solution: Deploy ElectronicBatch Records (EBRs) for GxPcompliance across people,equipment and processes
** GxP = Good Manufacturing/ Clinical/ Lab PracticesSAP enables the VP of Manufacturing to consistently deliver quality products to customers,while complying with GxP** requirements, at the lowest cost of operations, compliance and
ownership (TCO)
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Invitation to the Perfect Plant Center of Excellence(COE) from SAP and Tata Consultancy Services (TCS)
Jointly developed by SAP and TCS
Capture a true day-in-the-life of ManufacturingOperations
Model various best practices within ProcessManufacturing
Profile end-to-end cross-functional businessprocesses
Showcase an integrated manufacturing solutionforLife Sciences, including those from SAP’spartners
Mitigate risk of adoption for SAP’s customers
Customers and Prospects are invited tovisit the Perfect Plant Center ofExcellence (COE) at the SAP facilities inNewtown Square, PA, USA and Walldorf,GermanyWhite Paper on the Perfect Plant COE for
Life Sciences available on demand
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
Partial Listing of SAP ERP and SAP MII LighthouseCustomers in Life-Sciences
Wyeth Pharma – Manufacturing PerformanceManagement
Roche Pharma – connecting SAP ERP to the plantfloor
Novartis Pharma – operational excellence (SCM andmanufacturing)
Merck - facilities management, performancemanagement / reporting
Eli Lilly - production management – batch reporting
Amgen – manufacturing analytics
Genentech – KPI management
Johnson and Johnson
Allergan
Bristol Myers Squibb
Glaxo Smithkline
Daiichi
Purdue Pharma
Helvoet Pharma
St. Jude Medical
Respironics
SAP MII CustomersCore Manufacturing Customers(SAP ERP)
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
WHY SAP SOLUTION (SAP MII) AND TCS WAS SELECTEDTransactional integration between SAP ERP, MES, LIMS and DocumentMgmt Systems enabled in Weeks per Plant, at lower TCO
Rich, unified visualization of manufacturing data, metrics, exceptions andperformance delivered in real-time via role based dashboards using DART(Data Analysis and Reporting Tool) delivered by TCS
KEY BENEFITSReal-time data retrieval (metrics, exceptions, reports and performance),analysis and visualization, and fact-based GMP decision makingcapabilities enabled thru role based dashboards for managers andproduction personnel.
Measurable ROI from labor reduction, exception based management ofelectronic batch records (EBR), quality improvements and significantlyreduced cycle times and compliance exceptions
PROJECT OBJECTIVEInstitutionalize Operational Excellence across the enterpriseEnsure consistent and sustainable complianceStandard KPIs for ROI measurement – “a single version of the truth”Improve quality, reduce costs and increase utilization of assets
Wyeth Pharma is a leader in thediscovery, development,manufacturing and marketing ofpharmaceuticals, vaccines,biotechnology products and non-prescription medicines. Majordivisions are WyethPharmaceuticals, Wyeth ConsumerHealthcare and Fort Dodge AnimalHealth.
2007 Sales – $22.4 billion50,000 employees worldwide
_______________________________________
Realized ROI - $ 1.3 – 7.4 MM perplant from their DART initiativeusing SAP MII.
12 manufacturing locations inscope for deployment.
Customer Success: Wyeth Pharmaceuticals
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
WHY SAP SOLUTION WAS SELECTEDTransactional integration between SAP ERP and Plant Floor systems (incl.Werum) enabled in Weeks per Plant, at lower TCO
Rich, unified visualization of manufacturing data, metrics, exceptions andperformance delivered in real-time via role based dashboards
Ability to extend manufacturing processes beyond the plant floor (e.g. SupplyChain) and vice-versa
KEY BENEFITS PROJECTEDReal-time data, metrics, exceptions, reports and performance delivered toManagers and Production Personnel
KPI driven exception based management of Lean Manufacturing across thePlants
Protection and leverage of investments in current Plant IT infrastructure andintegration with SAP ERP at lower TCO
PROJECT OBJECTIVEAchieve vision of becoming the “Toyota of the Pharma Industry” whilemaintaining high compliance
Extend Lean from the Supply Chain to the Plant Floor using SAP
Manage Lean Manufacturing by ExceptionNovartis is one of the top 5Pharma manufacturers globally,headquartered in Basel,Switzerland, with over 90,000employees in 140 countries,with 2005 revenues of US $ 32.2Bn
Customer Success: Lean Manufacturing atNovartis
Novartis is well on its way tobecoming the “Toyota of thePharma Industry” using Leanprocesses enabled by SAP’ssolutions.
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
WHY SAP SOLUTION WAS SELECTEDTransactional integration between SAP ERP and Plant Floor systems (incl.Werum) enabled in Weeks per Plant, at lower TCO
Rich, unified visualization of manufacturing data, metrics, exceptions andperformance delivered in real-time via role based dashboards
Ability to extend manufacturing processes beyond the plant floor (e.g. SupplyChain) and vice-versa
KEY BENEFITS PROJECTEDReal-time data, metrics, exceptions, reports and performance delivered toManagers and Production Personnel
KPI driven exception based management of Lean Manufacturing across thePlants
Protection and leverage of investments in current Plant IT infrastructure andintegration with SAP ERP at lower TCO
PROJECT OBJECTIVEAchieve vision of becoming the “Toyota of the Pharma Industry” whilemaintaining high compliance
Extend Lean from the Supply Chain to the Plant Floor using SAP
Manage Lean Manufacturing by ExceptionNovartis is one of the top 5Pharma manufacturers globally,headquartered in Basel,Switzerland, with over 90,000employees in 140 countries,with 2005 revenues of US $ 32.2Bn
Customer Success: Lean Manufacturing atNovartis
Novartis is well on its way tobecoming the “Toyota of thePharma Industry” using Leanprocesses enabled by SAP’ssolutions. SAP MII offers Novartis real-time process status visualization and communication capabilities
as well as the ability to integrate SAP ERP to our legacy and non-SAP plant systems, rapidly,at a lower total-cost-of-owqnership.
Ralph HaefeliHead of Global TechOps IT Systems, Novartis Pharma AG
“
Trends and Key Metrics enablingOperations Performance Management
Summary
Achieving Superior Performance withCompliant Manufacturing in Life Sciences
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
SAP enables Operational Excellence withCompliant Manufacturing in Life Sciences…
Summary of Key Customer Benefits:Consistently deliver high quality products to customers at the
lowest cost of operations
Manage GxP compliance requirements, by exception, at the lowest
cost of compliance
Bridge the disconnect between the Plant Floor and the Enterprise,
with SAP MII, to enable Operational Excellence:
Integrate and extend your ERP Manufacturing Processes into your Plant
Floor at the Lowest TCO
Empower Production Personnel with Actionable Intelligence for Superior
Performance
Design and deliver innovative Composite Processes, Applications and
Metrics for Competitive Advantage
SAP delivers a comprehensive solution for manufacturing qualityproducts, compliant with GxP, at the lowest cost of operations,compliance and ownership
Operational Excellence withCompliant ManufacturingOperations for Pharmaceuticals
Hussain Mooraj and Wayne McDonnellAMR Research
Andy Dé, Senior Director Industry SolutionsSAP for Life Sciences
Operational Excellence with Compliant Manufacturing Operations in Pharmaceuticals -11
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