Skip to content

Don’t run a Pharmaceutical Manufacturing business without implementing an ERP Solution

Table of Contents
Reading Time: 6 minutes

Summary: The advent of Industry 4.0 solutions is creating significant tremors in the pharmaceutical industry. Procuring, manufacturing, tracing, serialization, and formula management require the use of sophisticated tools that can reduce manual effort and eliminate human errors that lead to delivery issues, stock-outs, and Product recalls. Pharmaceutical companies also need to ensure that product quality meets managerial standards and is compliant with government norms and regulatory requirements. Thus, pharma companies need to implement state-of-the-art ERP software that can take care of all business needs and helps them transform into an industry leader.


“One of the biggest challenges to medicine is the incorporation of information technology in our practices.”
– Samuel Wilson

Why are companies looking forward to implementing an ERP system?

Today, technology is changing the way business is done. Companies across industries are automating their business functions to increase profits, decrease operational expenses, schedule workflows, and streamline workforce efforts towards mission-critical tasks. The same holds for the pharmaceutical industry that requires autonomous software to solve challenges such as changing consumer dynamics, increasing process complexity, healthcare reforms, analyzing information regarding hundreds of patients in a minute, and adhering to healthcare norms dictated by the government. 

ERP in pharmaceutical industry leverages industry 4.0 technologies like artificial intelligence, machine learning, data analytics, big data, and cloud to provide a solid IT infrastructure. But pharmaceutical companies shouldn’t consider an ERP system as some panacea. 

A recent report by Gartner tells that by 2021, the labor rates for ERP cloud enterprise applications will rise by 60% because of high demand and a lack of skilled resources. 

This statistic shows that, like other sectors, the pharmaceutical industry will also have to streamline resources to upgrade their employees’ skills and recruit ERP software experts for smooth implementation. 

After getting a comprehensive understanding of why ERP software has become the backbone of every industry. We must see how ERP solution for the pharmaceutical industry can help medical institutions and companies outperform:

1. Pharma ERP system manages product costs effectively.

Managing product costs is one of the most significant functions in the pharmaceutical industry. There are numerous government institutes, international watchdogs, and self-regulatory bodies that oversee the product costs. For example, the National Pharmaceutical Pricing Authority (NPPA) in India, Medicines and Healthcare Products Regulatory Agency (MHRA) in the U.K., and the Food and Drug Administration (FDA) in the U.S. Apart from adhering to government norms, pharma manufacturing companies have to manage various other factors like:

Pharma ERP system manages product costs effectively

1. Procurement costs

2. Supply chain costs

3. Inventory management costs

4. Vendor costs

5. Clinical trial costs

6. R&D costs

7. Insurance costs

Delays in sharing critical business information are intangible costs that the pharma companies unknowingly pay. Traditional enterprises have information silos that restrict the to and fro of essential data from one department to another. It causes data loss and information delays that affect the whole business. 

On the other hand, ERP solution for the pharma industry provides a centralized platform that can be accessed by authorized business stakeholders, including frontline executives, C-suite managers, scientists, vendors, suppliers, and distributors at any time and from anywhere. This platform keeps everyone on the same page by capturing and sharing critical information in real-time. It helps define product costs efficiently and enables the finance and accounting team to accommodate those changes appropriately. 

2. Pharma ERP software improves the supply chain.

Managing the supply chain efficiently is a must for companies belonging to any industry. But for a pharmaceutical company, the importance is even higher. 


Firstly, if the medical drugs get damaged while being transported to other countries, they might be rejected or disposed of.

Secondly, traceability is an essential feature for pharmaceutical companies. Lack of tracking can lead to government penalties or introduce expired medicines in the system that can severely impact patients’ health.

Here are some of the most important reasons to choose ERP solution for pharmaceutical manufacturing to streamline supply chain activities.

Pharma ERP systems streamline supply chain activities

1. ERP solution keeps track of the movement of goods from the procurement stage to the final delivery stage. It maintains a trail of units that appear in small quantities as well as in bulk. 

2. ERP solution keeps an audit trail, a set of records that provides documentary evidence of all the financial transactions to relevant business stakeholders. Blockchain-enabled pharma ERP allows the auditor to trace the financial data of each transaction from the general ledger to its source document. 

3. Product recalls in pharma companies can happen due to deficiencies in safety, quality, and efficacy. They can be initiated by a regulatory body or voluntarily by pharma companies. Having a high product recall ratio can be dangerous in the pharmaceutical industry as it can invite severe government penalties and lower your customer satisfaction score. An ERP solution helps reduce this complexity of the pharma industry by responding to Product recalls in a few minutes instead of days. 

Also Read: ERP for Pharmaceutical Industry

3. Pharma ERP software keeps track of different units of measures.

Finding an ERP for pharmaceutical manufacturers is challenging as they need a solution that helps track different measures. It’s a common practice in the pharma industry to purchase raw materials in one unit of measure, keep them in the inventory in another, transform them into finished products in one more, and finally, use the fourth unit of measurement while selling it to customers. A pharma ERP should be able to play between weighing systems instantly, allowing the manufacturers to examine costs based on parameters, such as:

Pharma ERP software keeps track of different units of measures

1. Potency

2. Weight

3. Size

4. Solid percentage

The best part is that ERP systems for pharmaceutical industries also consider product variations. This is specially useful for processes where materials in the solid phase convert into the liquid phase and then into the gaseous phase. An ERP solution captures data such as area, volume, potency, size, and other characteristic changes in real-time. It maps varying Units of Measure (UOM) along with their costs across the entire manufacturing schema. 

4. ERP solution lowers the degree of variation.

The significant variations in the manufacturing process affect the consistency and quality of finished products. ERP for pharma companies can substantially reduce the variability quotient by handling several industry-specific and company-specific parameters, such as:

ERP solution lowers the degree of variation

1. Temperature

2. Pressure

3. pH

4. Expiry data

5. Moisture content

The variability process starts with the checking of raw materials against a predetermined set of tolerances. If the material falls within the prescribed limit, it’s accepted. Otherwise, it’s disposed of the system. Then these accepted raw materials are designated batch/lot numbers by the ERP software that helps tracking them across the entire manufacturing chain. 

An ERP software for pharmaceutical manufacturers also helps manufacture products as per the customers’ requirements. Do you know that the accepted needle size for a healthy adult is 1.5″ while for an infant is only 0.625″? The ERP system takes care of this small nitty-gritty and systematically ensures each function is being carried out as per the predetermined guidelines

Also Read: 5 Common Pharmaceutical Manufacturing Challenges that can be resolved by an ERP Software

Now, let’s take a quick look at the critical questions you should ask before purchasing an ERP system.

1. Can the ERP avoid manufacturing an unrequired intermediate product?

2. Is the ERP able to stick to the specifications given by the customer?

3. Can the ERP update the product traits based on quality control values?

4. ERP for a pharma company must accept globally recognized UOMs (Units of Measures). Are you getting this feature in the ERP software?

5. Can the ERP for the pharma company make changes in the formula based on values like moisture content or potency?

6. Does the ERP for the pharma company have e-signature capabilities?

7. Can ERP differentiate between “distribution days” and “shelf-life”?

8. Can ERP estimate the cost of the finished product?

9. Does the ERP support e-pedigree?

10. Does the ERP check whether the final product conforms to the product characteristics given by the customer? If yes, then to what degree?


An ERP solution will help you become the leader of the pharma industry. It will allow you to manage all your business functions from the office and remote locations conveniently. You can lower your manufacturing cost, ensure top-notch customer service, improve scalability, and strictly adhere to government policies. 

At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. You can also write to us at

If you liked this article, don’t forget to share the link with your friends. Also, follow us on:




Disclaimer: All the information, views, and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views, or objectives of Sage Software Solutions (P) Ltd.



Found this article interesting? Share it on