• John Hannan

How ERP Systems Are Changing Pharmaceutical Companies

Technological advancements have revolutionized how modern companies operate. Current and future innovations continuously shape how businesses in various sectors, including the pharmaceutical industry, work.


Pharmaceutical companies face various challenges, such as evolving client dynamics, complex processes, and healthcare reforms. This industry involves compliance regulations that cover core aspects, like quality assurance, testing, and safety.


Because consumers desire quality products at affordable prices, enterprises must strive to minimize costs and boost efficiency to stay competitive in the market. They must also ensure shorter turnaround times while maintaining quality standards and precise regulatory compliance throughout all manufacturing processes.


Integrating a robust Enterprise Resource Planning (ERP) solution allows pharmaceutical companies to optimize production and maintain compliance with regulations. Their centralized platforms consolidate all data to enhance operational efficiency.


ERP systems connect processes from different departments, enabling organizations to gather real-time data. These solutions ensure the seamless running of operations and increase transparency.


Here's an overview of how ERP systems can benefit pharmaceutical companies.


Formula and Recipe Management

With a continuous need for new drug formulations, recipe and formula management is vital. Managing this critical step in the production process is often challenging without dependable technologies such as an ERP designed for manufacturing companies.

A manufacturing ERP for a pharmaceutical business can successfully handle critical ingredients of drug formulations.


The drug manufacturing process involves the stringent formulation and monitoring raw materials and product yields to produce a batch. The pre-formulation phase involves developing medication production techniques, phases, and quantities.


Pharma businesses may ensure automated management of complex formulations with a comprehensive ERP system, such as the Microsoft Dynamics 365 ERP. A robust ERP eliminates the chance of need manual errors, reducing the need for constant monitoring of production processes.


The best pharmaceutical ERPs should have the following functionalities:

  • New formula development.

  • Formula management.

  • Sample management.

  • Formula costing.

Consult an experienced implementation partner for guidance on which ERP is best for your company.


Regulatory Compliance

The production of pharmaceuticals is a strictly controlled sector. Among the critical concerns for the pharmaceutical industry is ensuring that all operations are in full compliance with applicable regulations. This also includes advisory documents like GAMP 5.


Drugs must be proven valuable and safe before entering the global pharmaceutical market. Because of this, the government implements strict rules for pharmaceuticals and more rigorous approval procedures. While these rules are primarily concerned with keeping people safe, they affect brand recognition and consumer confidence.


A comprehensive system like the Microsoft Dynamics 365 ERP can help your company keep up with the latest safety and healthcare practices, maintaining global standards. With adaptable user interfaces, centralized networking features, and automated solutions, ERPs let pharmaceutical businesses keep up with the ever-evolving regulations. This helps drug producers keep track of crucial metrics and remain compliant.


A pharmaceutical company must also keep electronic records and signatures per CFR 21 Part 11, which mandates documenting the processes and activities involved in manufacturing pharmaceutical products in a system just as would be done with paper records. Modern pharmaceutical ERPs support the FDA-required electronic signature and electronic records.

Effective Costing

Various factors contribute to the final cost of a pharmaceutical product. These aspects include:

  • Raw material management

  • Supply chain tracking.

  • Vendor cost management.

  • Procurement costs.

In legacy systems, these departments operate independently, and changes to data or variables take time to get communicated. An ERP system creates an integrated network between all departments, providing centralized data access. Precise data helps pharmaceutical companies efficiently define product costs.


ERPs offer all department leaders real-time access to data. Employees and stakeholders can use the system to get an accurate picture of the expenses.


Inventory Management

Keeping track of inventory is a primary concern for pharma companies. Inventory management allows enterprises to anticipate and prepare for potential shortages. However, manual inventorying is challenging and inefficient.


Pharmaceutical companies implementing ERP systems can leverage intelligent inventory management tools, which help streamline and automate inventory tracking. These solutions have advanced inventory management tools that help:

  • Cut down expenses

  • Increase inventory-tracking accuracy.

  • Provide better inventory control.

  • Enforcing stricter compliance measures.

Quality Control

Adopting an ERP helps pharma companies optimize production standards to yield high-quality products. These solutions facilitate quality analysis and control of each batch. They also allow the integration of various quality processes like in-progress quality checks (IPQC).


Demand Forecasting

Anticipating consumer needs is crucial to keeping up with the competition and ensuring adequate supply. Pharmaceutical ERP systems deliver real-time and accurate information. Careful analysis of this information helps pharma companies to anticipate consumer interest in a good or service. Through efficient demand forecasting, these enterprises can meet their customer's needs.


Winding Up

The evolving technologies and complexities make it necessary for pharmaceutical companies to invest in an ERP system. When choosing an ERP for a pharma company, select a flexible and upgradable system for the best return on investment.


Do you have any questions or comments about digital transformation methodology for the pharmaceutical industry? I'd love to hear your feedback. Leave a question or comment below.

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