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ERP for Pharmaceutical Industry

Optimize inventory management, quality control, and compliance issues using a single software.

ERP Software for Pharmaceutical Industry

Sage X3 ERP for Pharmaceutical Industry is the right ERP solution for monitoring and ensuring that all operations and practices keep running at full speed. It keeps track of different units of measures, helps lower the degree of variation, provides improved traceability, and stimulates new product development process.

A Quick Round-up of Pharmaceutical Industry Challenges

Increased governmental regulations, cut-throat competition, and rigorous compliances are some pain points of pharmaceutical companies worldwide.

Price Fluctuations

Price Fluctuations

Reverse Engineering of Pharmaceutical Products

Reverse Engineering of Pharmaceutical Products

Predatory Pricing

Predatory Pricing

The ever-increasing number of New Players

The ever-increasing number of New Players

Here are the most Important Challenges that the Pharmaceutical Industry is going through

Managing Inventory is Challenging

Inventory plays a significant role in pharmaceutical companies. Sometimes, there is an acute shortage of medicines and other pharma-related products due to unforeseen circumstances like the recent coronavirus pandemic. In those cases, the inventory may fall below the set threshold. As a result, it becomes challenging to identify the exact quantity of products in the stock without automated software. Also, creating & maintaining real-time inventory status reports on a ledger and placing orders manually with the vendor is a time-taking process. Moreover, controlling pilferage is also a significant challenge that cannot be managed manually.

Managing Inventory - ERP for Pharmaceutical Industry
Complying with Govt - ERP for Pharmaceutical Industry

Complying with Government-Mandated Regulations is a Tough Job

Governments worldwide are coming up with stringent regulations to monitor pharmaceutical companies. And if you fail to adhere to compliances, you may attract massive fines or risk shutting down your company. Creating a system of checks and balances, generating and validating bills and receipts, tracking changes in rules and regulations cannot be done without pharma ERP software. Moreover, it also has top-notch analytical tools that help estimate the future. It also allows business stakeholders to collect, retrieve, share and access critical business data from anywhere, anytime, and through any device.

Monitoring Vital Statistics is Hard

Building robust and long-lasting customer relationships is crucial for companies across industries. But for that, pharmaceutical companies require massive data repositories to formulate competitive price quotes. Without a Pharma ERP software, it becomes challenging to collect customer segments based on geographic, demographic, psychographic, and behavioral data. In addition, processing sales orders and managing contacts manually is next to impossible if you have an extensive customer database. 

Monitoring - ERP for Pharmaceutical Industry
Manual Product Traceability -ERP for Pharmaceutical Industry

Manual Product Traceability is Messy

Mandatory government regulations make product traceability essential for pharmaceutical companies. Therefore, pharma companies must maintain a detailed record of all product transactions, including historical purchases. They also need to track the movement of goods — raw materials from the vendor to the company’s inventory and finished products from the warehouse to the end-user. Moreover, creating an audit trail that enables recalling defective products in a short time is also necessary. Unfortunately, manually managing all the tasks mentioned above is next to impossible. Therefore, ERP software has become vital for pharma companies. 

Deciding exact Product Costs is Time-Consuming and Challenging

Tracking operational, material, and manufacturing costs manually are challenging for pharmaceutical companies. On the other hand, ERP software calculates the final product cost by accounting for R&D cost, raw material cost, customer incentives, insurance costs, and much more. In addition, it uses various valuation methods to calculate expenses related to labor, work-in-progress, overheads, and ingredients. Moreover, if any manufacturing process creates a by-product, the ERP software also captures those costs. 

Deciding cost - ERP for Pharmaceutical Industry

Skip generic solutions, go industry-centric to forge more profits

How will Sage X3 help you Solve the Challenges mentioned above?

Sage X3 ERP Software will keep all your Pharmaceutical Industry operations running at full speed. Here’s how:

Sage X3 allows users to create product categories based on the product’s management method — manufactured, purchased, generic, and sub-contracted, with their descriptions. You can define these products at a micro-level based on their unit of measure — Vial, Bottle, Strip, Ampoules. Moreover, users can also enter the dimension, color, expiry flag control, and the supplier’s code. Finally, the admin can establish a conversion coefficient between different units with the help of a “unit of measure” conversion table.

Purchase flow is divided into 3 categories:

General Material Purchase

Department users can raise a material requisition request for the required raw material to the storekeeper. Consequently, the storekeeper will check if the material is available in the warehouse using Sage X3’s inquiry screen. A message will be sent to the department subject to the availability of the material. If the material isn’t available, then the storekeeper will issue a purchase request for the desired material.
The store manager will receive this request and convert it into a purchase order in Sage X3 and submit it for approval. After the approval is sanctioned and the store manager receives the materials, a GRN note will be generated by Sage X3. An essential point to note is that the materials can move to the store only after a successful quality check. Lastly, an invoice is generated and sent to the accounts department for paying against the purchase order.  

Raw Material Purchase

Pharmaceutical products are sensitive. Therefore, you need to follow an appropriate controlled method and adhere to approvals by concerned authorities while purchasing the goods. Here’s how raw material purchase works in Sage X3. First, the planner issues the purchase requisition to the store department for raw materials to begin manufacturing. Consequently, the store department will give the supply to the shop floor. But if it doesn’t have the required stock, it will forward the requisition to the procurement department to generate a purchase order. 

Sage X3 has an MRP module that can automate this process. Once a Purchase Order (PO) is created in the ERP software, it can move across multiple approval levels. The approved PO is forwarded to the vendor as soon as the user approves the PO through signature management in Sage X3. After a few days, the materials arrive in the warehouse. The best part is that users can update batch numbers, expiry dates, manufacturing dates, stockist prices, MRP prices, and trade prices that are essential from the pharmaceutical manufacturer’s point of view. 

The material received in the warehouse undergoes several quality checks and generates appropriate labels (Red, Green, Yellow) to identify the products stored in the inventory quickly. 

Moreover, if a product fails to conform to the set parameters and has to be returned to the vendor, it can be done by generating a return entry in Sage X3.

Promotional Items

Promotional products include diaries, pens, perfumes, etc. Tracking these products is essential because they add up to the inventory cost. With Sage X3 pharma ERP, you can follow which product was issued to which customer. It’s regarded as one of the best ERP software because it also records the quantity of products released by creating dimensions where salespersons can be tagged to handle stock reconciliation in the system adequately.

Sage X3 provides a single platform through which users can manage the whole inventory — from raw materials to finished goods. A request screen contains all the supplier quotations and RFQs. Moreover, the purchase receipt feature allows replenishing the stock from the warehouse. Further, the software also tracks the quality inspection when the goods are received. If the quality of goods is not up to the mark, they are returned to the supplier, and a purchase return requisition is raised in the ERP system.
Sage X3 efficiently manages warehouses by marking them with different codes. It also keeps locations with similar criteria under one group. Users can view items stored inside each warehouse. They can dispatch them to the required distribution center or arrange for a pick-up by wholesalers or retailers. The best part is that each transaction is recorded in the software. Moreover, you can also create various tabs in the dashboard, such as promotional goods, near to expiry, samples, expired material, and many more.

Pharmaceutical products are assigned batch numbers whenever there is an outward or inward material movement. Therefore, inventory valuation is done on an actual basis. Sage X3’s LOT management flag helps you achieve this inventory costing. You can also assign an expiry date to the batches that have been produced through the First Expiry First Out (FEFO) basis. It helps allocate batches to a work order or a sales order automatically. However, users can manually assign batches if they want to change the LOT allocation.

Sage X3’s quality control module allows the user to track the quality of the entire manufacturing process — from the purchase of raw materials to manufacturing finished products. The quality control module in this ERP software is used at two places — Manufacturing receipt and PO receipt. The system has a technical sheet containing the products’ specification that is supplied to the user.
This sheet helps perform quality checks. The best part is that Sage X3 has designated codes for various quality checking stages. For example “A” for Accepted, “R” for rejected, and “Q” for the Quality check-in process. Moreover, the user can also change the product’s current location if it fails to pass the quality test. For example, the rejected product can be sent to the recycling plant from the inventory. On the other hand, the accepted product can be shifted to the warehouse.

Sage X3 also allows updating the testing parameters at every product master. So, you can update different Pharmacopeia, such as the Indian Pharmacopeia, US Pharmacopeia, using Sage X3.

The sales process in Sage X3 begins by creating a sales quotation entry. A Sales order entry follows it. Then, the user can execute stock allocation to order followed by delivery entry in Sage X3 and finally generate a sales invoice. There are several customer categories in the pharmaceutical industry: doctors, stockists, government organizations, and hospitals.

How Sage X3 manages Credit Sales?

The sales order is fed in Sage X3 that is supplemented with a delivery and sales invoice. Also, maintaining appropriate control over the sales of pharmaceutical products is required by drug law authorities. Sage X3 has many features like Drug license expiry date, Drug license number, and credit control that allows checking these statutory records conveniently. This ERP software also has a fail-safe mechanism. It can put an order on hold if the earlier records don’t match the required sales order. The order can be un-hold again once the approval process is complete. Therefore, there is no possibility of a data entry error.

Benefits of Sage X3 for the Pharmaceutical Industry

The right Enterprise Resource Planning (ERP) software will allow your pharmaceutical company to meet the changing regulatory laws and enhance supply chain management activities that drive productivity. With the right ERP implementation , you can improve manufacturing accuracy, ensure product compliance, and optimize business processes. These factors help increase business productivity and profits in the long run.  Sage X3 is an ideal pharmaceutical software because it improves quality control, ensures product traceability, and helps meet regulatory compliances.