After waiting cautiously for the right solutions in the market, Lupin has decided to go in for a big bang approach that will see the company undertake a slew of initiatives in the space of ERP, CRM and SCM.
"By effective use of information, we can analyse business information and identify under- performing areas"
"Organisations must view BI investments holistically, with appropriate budget and staffing for system and user management"
In today’s business scenario where monopolies are almost non-existent, undoubtedly ‘Information Technology’ is a weapon, which has become an absolute necessity in a company’s arsenal. While IT has permeated almost every industry domain, it is perhaps more strategic as a tool in the pharmaceutical industry. IT has brought an innovative approach to the marketing strategy of pharmaceutical companies. No longer is the doctor the focal point of the marketing plans of pharmaceutical companies. Pharmaceutical companies have realised that the key to success in a highly competitive market, lies in its ability to not only efficiently manage the drug inventories, but also to forecast trends and identify weaknesses in the supply chain. It is no surprise therefore that a few organisations that were earlier adopting a cautious approach to enterprise solutions such as ERP, have now decided to reassess their approach to IT as a whole.
A case in point is the Rs 957 crore pharmaceutical major, Lupin, known the world over as the largest producer of anti-tuberculosis drugs. While the financial year ending March 2002 was a momentous year for Lupinas it posted the highest ever cash flow in its historyit was also the year which saw Lupin embark on its ambitious IT plan. Instead of the traditional approach, where companies implement one module at a time, Lupin’s ERP roadmap will see it implement all SAP modules at the same time. The company will spend close to Rs 15 crore in the first phase of the plan, which will go live from April 2003.
The need Currently, Lupin has a Foxpro-based system. As more and more applications were developed, the company realised that there was a huge problem of integrating the applications and analysing the data. Explains Adi Shroff, chief information officer, Lupin, “In a highly competitive industry such as pharmaceuticals, there is a need for accurate information based on which the company can forecast trends in the market. Our current system, which is based on Foxpro does not allow us to do that. Even today, we get our market reports from the field in the form of floppies. As data is then pooled in at a central location, there is a huge time gap in making decisions, as information required for decision-making is not accurate or adequate. The end result is that we can only analyse data on a monthly basis and not on a real-time basis. Our big bang approach of implementing all SAP modules at the same time will address these issues and make us a more competitive player.”
For the implementation, Lupin has decided to go in for SAP’s latest version, 4.6 C. Additionally, the company will implement highly customised modules which SAP has developed specifically for the pharma industry. In line with the vision, the company has already connected all its contact points through VSATs provided by Hughes Escorts Communications. VSATs were chosen simply because of their ability to address issues of last mile connectivity and connect remote locations. The WAN network will connect all of Lupin’s 28 depots and five manufacturing facilities across India, the head office in Mumbai, and the Pune-based research centre. What makes this project unique is the fact that all SAP modulesat all the locationswill go live at the same time, probably the first time in the history of an Indian company. While there are considerable challenges in embarking on such a project, Shroff is confident of pulling it off. Says he, “We have checked the minutest of details to ensure that the SAP implementation goes live from April 2003. Moreover, we are aided by our SAP implementation partners, PwC who have their own methodology called Ascendant to ensure that the implementation goes off without a hitch.” In addition to the ERP solution from SAP, Lupin will also implement datawarehousing solutions from the same vendor.
RoadmapThe first phase will see Lupin implement all the modules of SAP including finance, treasury and asset management, procurement, sales and distribution, logistics, production planning, quality control, business intelligence, payroll, HR and export/import. Since Lupin is following a big bang approach, the benefits will be immediately visible as soon as the modules go live. As data will be pooled in at a central location on a real-time basis, the management can take faster decisions and reduce a product’s time to market. For example, a doctor will simply stop prescribing tablets of a particular company if stocks are not available when required. And when that happens, he will simply prescribe a tablet of a rival company. The need of the hour is to therefore identify crucial points in a supply chain and forecast demand. Currently, the sales forecasting team at Lupin works closely with its raw material and distribution teams to co-ordinate distribution of its products across India. The objective being, to ensure that Lupin’s products are continuously replenished at retail outlets. This is where the real benefits of an integrated system will come across. An integrated system will not only give the team a reduction in lead-time to reach the targeted market but also forecast region-specific demand patterns, says Shroff.
Benefits Besides giving the management an integrated view of the enterprise, the ERP implementation can lead to a significant reduction in inventory levels. Moreover, as raw material is tracked right from the time of receipt to consumption, wastage if any can be detected immediately. Additionally, there will be a considerable reduction in production hold-ups, which occur due to non-availability of materials. Also, as data is not spread over different points but consolidated at a central location, information will be available to each and every personultimately leading to lesser dependence on the IT department and smoother workflow between different teams.
While the ERP system will enable the organisation a top-view of the enterprise, the datawarehousing solution will give it the intelligence to analyse the data. Explains Shroff, “Data warehousing tools will make our organisation proactive rather than reactive to market trends. By effective use of information, we can analyse business information and identify areas, which are under-performing. Region-wise market trends can be predicted, and production and distribution facilities can be synchronised accordingly.”
The first phase will cover implementation of SAP, while the second phase will see Lupin embark on putting up a comprehensive SCM solution which would help the company in material planning based on sales and production plans. The third phase is the most interesting one, wherein Lupin plans to implement CRM solutions. This phase will try to enable automation of the sales force. For example, Lupin derives over 40 percent of its revenue from the retail market. Realising that medical representatives (MR) of the company if armed with the latest information can bring in more sales, Lupin is harbouring plans of arming its medical representatives with PDAs. These PDAs will have information and applications detailing Lupin’s various products. Simply put, a better informed MR will have more chance of convincing a doctor for prescribing Lupin’s products. Also, sales data at the end of the day can be keyed in to the PDA and directly sent to the main database, thus reducing the time for collating information.
Knowledge management initiativesIn addition to the ERP initiatives, Lupin is also simultaneously undertaking a knowledge management initiative which will help the company capture the learnings of the organisation as it evolves over the years. Shroff believes the knowledge management initiative will be immensely useful in areas such as R&D where past experience stored in the form of knowledge repositories can speed up research work. For the knowledge management initiatives, Lupin has zeroed in on Lotus Notes. Besides knowledge management, the scope of this application will also involve features like Tax Helpline which will enable employees to calculate their tax liabilities. Additionally, basic features like travel requisition, conference room booking, salary advance, medical, leave facilities, will also be available at the click of a button.
Also on the anvil are online initiatives that will help Lupin’s customers track the status of their order. For instance, Lupin supplies products for big pharmaceutical companies in large volumes. Once the online initiatives are fully implemented, a customer abroad can simply log into Lupin’s website and check the status of his order. While it remains to be seen if the company can pull off the implementation as per the challenging time schedule, one thing clearly stands outthe rapidly changing role of Information Technology in today’s business environment. IT has emerged from being a supporting player, to being an enabler and even a driver of growth strategy.
This article first appeared in Express Computer
- In the first phase Lupin will implement all the modules of SAP
- The second phase will see it embark on setting up a comprehensive SCM solution
- In the third phase Lupin plans to implement CRM solutions
"By effective use of information, we can analyse business information and identify under- performing areas"
"Organisations must view BI investments holistically, with appropriate budget and staffing for system and user management"
In today’s business scenario where monopolies are almost non-existent, undoubtedly ‘Information Technology’ is a weapon, which has become an absolute necessity in a company’s arsenal. While IT has permeated almost every industry domain, it is perhaps more strategic as a tool in the pharmaceutical industry. IT has brought an innovative approach to the marketing strategy of pharmaceutical companies. No longer is the doctor the focal point of the marketing plans of pharmaceutical companies. Pharmaceutical companies have realised that the key to success in a highly competitive market, lies in its ability to not only efficiently manage the drug inventories, but also to forecast trends and identify weaknesses in the supply chain. It is no surprise therefore that a few organisations that were earlier adopting a cautious approach to enterprise solutions such as ERP, have now decided to reassess their approach to IT as a whole.
A case in point is the Rs 957 crore pharmaceutical major, Lupin, known the world over as the largest producer of anti-tuberculosis drugs. While the financial year ending March 2002 was a momentous year for Lupinas it posted the highest ever cash flow in its historyit was also the year which saw Lupin embark on its ambitious IT plan. Instead of the traditional approach, where companies implement one module at a time, Lupin’s ERP roadmap will see it implement all SAP modules at the same time. The company will spend close to Rs 15 crore in the first phase of the plan, which will go live from April 2003.The need Currently, Lupin has a Foxpro-based system. As more and more applications were developed, the company realised that there was a huge problem of integrating the applications and analysing the data. Explains Adi Shroff, chief information officer, Lupin, “In a highly competitive industry such as pharmaceuticals, there is a need for accurate information based on which the company can forecast trends in the market. Our current system, which is based on Foxpro does not allow us to do that. Even today, we get our market reports from the field in the form of floppies. As data is then pooled in at a central location, there is a huge time gap in making decisions, as information required for decision-making is not accurate or adequate. The end result is that we can only analyse data on a monthly basis and not on a real-time basis. Our big bang approach of implementing all SAP modules at the same time will address these issues and make us a more competitive player.”
For the implementation, Lupin has decided to go in for SAP’s latest version, 4.6 C. Additionally, the company will implement highly customised modules which SAP has developed specifically for the pharma industry. In line with the vision, the company has already connected all its contact points through VSATs provided by Hughes Escorts Communications. VSATs were chosen simply because of their ability to address issues of last mile connectivity and connect remote locations. The WAN network will connect all of Lupin’s 28 depots and five manufacturing facilities across India, the head office in Mumbai, and the Pune-based research centre. What makes this project unique is the fact that all SAP modulesat all the locationswill go live at the same time, probably the first time in the history of an Indian company. While there are considerable challenges in embarking on such a project, Shroff is confident of pulling it off. Says he, “We have checked the minutest of details to ensure that the SAP implementation goes live from April 2003. Moreover, we are aided by our SAP implementation partners, PwC who have their own methodology called Ascendant to ensure that the implementation goes off without a hitch.” In addition to the ERP solution from SAP, Lupin will also implement datawarehousing solutions from the same vendor.
RoadmapThe first phase will see Lupin implement all the modules of SAP including finance, treasury and asset management, procurement, sales and distribution, logistics, production planning, quality control, business intelligence, payroll, HR and export/import. Since Lupin is following a big bang approach, the benefits will be immediately visible as soon as the modules go live. As data will be pooled in at a central location on a real-time basis, the management can take faster decisions and reduce a product’s time to market. For example, a doctor will simply stop prescribing tablets of a particular company if stocks are not available when required. And when that happens, he will simply prescribe a tablet of a rival company. The need of the hour is to therefore identify crucial points in a supply chain and forecast demand. Currently, the sales forecasting team at Lupin works closely with its raw material and distribution teams to co-ordinate distribution of its products across India. The objective being, to ensure that Lupin’s products are continuously replenished at retail outlets. This is where the real benefits of an integrated system will come across. An integrated system will not only give the team a reduction in lead-time to reach the targeted market but also forecast region-specific demand patterns, says Shroff.
Benefits Besides giving the management an integrated view of the enterprise, the ERP implementation can lead to a significant reduction in inventory levels. Moreover, as raw material is tracked right from the time of receipt to consumption, wastage if any can be detected immediately. Additionally, there will be a considerable reduction in production hold-ups, which occur due to non-availability of materials. Also, as data is not spread over different points but consolidated at a central location, information will be available to each and every personultimately leading to lesser dependence on the IT department and smoother workflow between different teams.
While the ERP system will enable the organisation a top-view of the enterprise, the datawarehousing solution will give it the intelligence to analyse the data. Explains Shroff, “Data warehousing tools will make our organisation proactive rather than reactive to market trends. By effective use of information, we can analyse business information and identify areas, which are under-performing. Region-wise market trends can be predicted, and production and distribution facilities can be synchronised accordingly.”
The first phase will cover implementation of SAP, while the second phase will see Lupin embark on putting up a comprehensive SCM solution which would help the company in material planning based on sales and production plans. The third phase is the most interesting one, wherein Lupin plans to implement CRM solutions. This phase will try to enable automation of the sales force. For example, Lupin derives over 40 percent of its revenue from the retail market. Realising that medical representatives (MR) of the company if armed with the latest information can bring in more sales, Lupin is harbouring plans of arming its medical representatives with PDAs. These PDAs will have information and applications detailing Lupin’s various products. Simply put, a better informed MR will have more chance of convincing a doctor for prescribing Lupin’s products. Also, sales data at the end of the day can be keyed in to the PDA and directly sent to the main database, thus reducing the time for collating information.
Knowledge management initiativesIn addition to the ERP initiatives, Lupin is also simultaneously undertaking a knowledge management initiative which will help the company capture the learnings of the organisation as it evolves over the years. Shroff believes the knowledge management initiative will be immensely useful in areas such as R&D where past experience stored in the form of knowledge repositories can speed up research work. For the knowledge management initiatives, Lupin has zeroed in on Lotus Notes. Besides knowledge management, the scope of this application will also involve features like Tax Helpline which will enable employees to calculate their tax liabilities. Additionally, basic features like travel requisition, conference room booking, salary advance, medical, leave facilities, will also be available at the click of a button.
Also on the anvil are online initiatives that will help Lupin’s customers track the status of their order. For instance, Lupin supplies products for big pharmaceutical companies in large volumes. Once the online initiatives are fully implemented, a customer abroad can simply log into Lupin’s website and check the status of his order. While it remains to be seen if the company can pull off the implementation as per the challenging time schedule, one thing clearly stands outthe rapidly changing role of Information Technology in today’s business environment. IT has emerged from being a supporting player, to being an enabler and even a driver of growth strategy.
This article first appeared in Express Computer
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