ERP Quality Assurance white paper from Tectura

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ERP Quality Assurance white paper from Tectura

  1. 1. CHEMICAL INDUSTRY WHITE PAPER: HOW TO ACHIEVE QUALITY ASSURANCE AND REGULATORY COMPLIANCE GOALS WITH ERP TECTURA WHITE PAPER PUBLICATION DATE: MARCH, 2009
  2. 2. TECTURA WHITE PAPER PAGE 2 HOW TO ACHIEVE QUALITY ASSURANCE AND REGULATORY COMPLIANCE GOALS WITH ERP EXECUTIVE SUMMARY company’s ability to produce better products than its rivals, while regulatory This paper examines how a fully functional compliance is a requirement for doing ERP system can address the quality business today and essential to survival. and regulatory challenges facing today’s Though very distinct, both are critical chemical manufacturers. Companies that considerations in this era of global adopt these systems can automate key manufacturing and heightened security. processes and gain end-to-end visibility throughout the supply chain. As a result, Ensuring quality and meeting safety they can deliver safe, high-quality products standards are top priorities for these and maximise their business performance. companies, yet many still entrust their BUSINESS CHALLENGES inventory control, production control, and FACING TODAY’S CHEMICAL quality control to manual or non-integrated MANUFACTURERS systems. Such systems often are error Process manufacturers in the chemical prone, difficult to update as regulations industry play an important role in the change, and incredibly inefficient. They world’s economy, with $500 billion also can cost companies millions of pounds generated in the United States alone each year in recalls and regulatory fines. (First Research, October 2008). They also Process manufacturers can optimise their play a critical role in people’s everyday systems to better meet safety and quality lives, providing the core components for goals. With innovative ERP solutions pharmaceuticals, plastics, snack foods, tailored for their industry, these companies and many other items that are used or can gain the functionality needed to consumed by millions of people each improve control and efficiency across day. With their products serving as the the supply chain, while enhancing their building blocks to countless other products, business performance. these companies must take care to avoid mistakes within their complex supply INVENTORY CONTROL— chains. EFFECTIVELY TRACKING INVENTORY THROUGHOUT THE SUPPLY CHAIN Quality assurance and regulatory compliance are among the leading For process manufacturers, lot traceability business challenges facing process is critical to quality control and an area manufacturers. Quality defines a that many companies struggle with. All
  3. 3. TECTURA WHITE PAPER PAGE 3 HOW TO ACHIEVE QUALITY ASSURANCE AND REGULATORY COMPLIANCE GOALS WITH ERP products that go into the creation of a can record all of this information in a WHY CURRENT ERP SYSTEMS chemical compound and the end products single, centralised database. They then OFTEN FALL SHORT coming out of the production process can access and view this information for Process manufacturers must deal must be tracked and traced, and this any raw materials in their inventory, at with variability across their entire information easily extracted into a report. production, or that have been used in supply chain. For this reason, This traceability must be maintained products shipped to customers. Managers they need ERP functionality that can help them control, track, and throughout the life of the product for simply key in one number and the ERP streamline these unique business regulatory and litigation purposes. Perhaps system lists every place that lot was processes. Yet often process most important, chemical manufacturers distributed, the production orders, and companies implement basic, out-of- need to be able to check that the quality other pertinent information. With bi- the box ERP systems that lack the functionality they need, including has been tested on each individual product directional traceability, they can start at the ability to store inventory going into a production environment to either end of the supply chain, tracing raw records, control recipes, do odd lots ensure it meets customer specifications materials to the end product or tracing at production, and track inventory at and regulatory requirements, and to avoid the end product to the raw materials. a granular level. possibly tainting other products. This capability is critical for effective lot Many companies try to do these management and ensuring product quality Although chemical manufacturers do tasks manually, usually with and safety throughout the supply chain. spreadsheets. Others cobble record lots, many rely on spreadsheets, together homegrown systems, which can prove time-consuming and By having lot genealogy information at their hoping to gain the functionality they costly in the event of a recall. Someone fingertips, chemical companies can quickly need. This often results in disparate must manually review every production determine which batches need to be systems that cannot communicate with one another; lack robust order and match it to a sales order and a recalled and avoid imposing a much wider integrating mechanisms, such as shipping document to determine where recall. This can be the difference between sales orders, production orders, and those products went. With an ERP system thousands and millions of dollars. purchase orders; and provide only built for process manufacturing, companies limited visibility into manufacturing Chemical manufacturers also must store processes. can automate lot number procedures Material Safety and Data Sheets (MSDSs), and achieve end-to-end, bi-directional By not being able to reliably monitor of which there are approximately 1.3 traceability of inventory, components, and lot status, track every aspect of million for the entire industry, with more recipe materials. production, and quickly access generated daily. The MSDS is part of the critical information, companies risk When process manufacturers receive record-keeping fiduciary responsibility of large-scale recalls, regulatory fines, products from suppliers, they also receive the manufacturer and supplies information and lost business opportunities. specification sheets and certifications. about storage, boiling points, toxicity, first Using a fully functional ERP system, they aid, as well as other safety information.
  4. 4. TECTURA WHITE PAPER PAGE 4 HOW TO ACHIEVE QUALITY ASSURANCE AND REGULATORY COMPLIANCE GOALS WITH ERP An ERP system designed for process of this information is housed in the ERP MEETING QUALITY, SAFETY, AND manufacturing allows companies to store system, managers can quickly respond COMPLIANCE REQUIREMENTS and quickly access this information, ensure to governmental requests for reports. In An ERP system designed for the their customers have the most up-to-date addition to reporting on specific shipments, process manufacturing industry helps sheets, and validate that products have they can document which products are companies consistently address the right characteristics based on those being received on a cumulative basis and quality, safety, and compliance specifications. Companies creating new by whom. issues. All standard processes are documented, and all operations chemicals can monitor the characteristics Such ERP systems can alert chemical and results are tracked and logged of products throughout the manufacturing to support detailed reporting companies when it is time to update their process and then leverage that data to requirements. Features such as hazmat documentation and allow them to create accurate safety and certification traceability, lot requirements, instantly access tracking information on documents for customers. Such ERP production statistics reporting, specific truckloads, canisters, or lots. In specification management, and systems also offer online services that change management provide the this way, chemical companies can guard provide automatic updates to MSDSs. control and predictability companies against deficiencies in key safety areas Because safety requirements can change need to detect and address and avoid heavy fines during random without notice, these services help ensure exceptions early, and consistently government inspections. produce the highest quality products. product safety, while reducing costs. By tracking items from cradle to PRODUCTION CONTROL: grave, companies can implement With countries on heightened alert for MAXIMISING INVENTORY AND effective recall procedures with bioterrorism threats, up-to-date, verifiable MATERIALS complete forward and backward information is critical for maintaining traceability of any material. For chemical manufacturers, production regulatory compliance. Chemical control is vital to ensuring efficient use companies must place greater emphasis of inventory and materials. It requires on hazardous materials (hazmat) connecting lot management with customer functionality, and consequently quality specifications, including tolerance levels. control and lot tracking and traceability. Using an ERP system designed for When chemicals come into or out of a process manufacturing, companies can facility, an ERP system can track lots and precisely control how their product is made, assure that all necessary regulations are the input and output quality of the individual properly followed, including that products products, and track potency levels. Based are labeled properly, addressed correctly on this information and their knowledge on the shipping manifest, shipped in the of customer tolerances, they can avoid proper containers, and shipped in the overselling or underselling products, thus proper trucking environment. Because all maximising inventory and profits. Similarly,
  5. 5. TECTURA WHITE PAPER PAGE 5 HOW TO ACHIEVE QUALITY ASSURANCE AND REGULATORY COMPLIANCE GOALS WITH ERP by having a clear measure of potency Shelf-life often relates to customer shelf- for each batch, they can guard against life, which can get complicated in some TACKLING UNENDING mixing products of varying potencies and supply chains. An ERP system can simplify REGULATION efficiently schedule setup and cleaning this process by enabling companies to Each year brings more regulations shifts between batches. track shelf-life and link this information to for chemical companies. Regardless inventory status. They then can ship the of their size or whether they produce Managing leftover lot material is often right product to meet customer expiration commodity or specialty chemicals, challenging, but keeping close tabs on requirements. ERP systems also can these companies must ensure timely customer tolerance can simplify this compliance. For many, the greatest automatically conduct stability testing, to process. Using this information, companies challenge is locating all the information monitor product that has changing quality they need when they need it, such as can determine effective ways to possibly as it sits on the shelf. If the company finds during an audit or a potential recall reuse or remix reagents and byproducts, something that is deteriorating, they can situation. To help ensure regulatory avoiding waste. In addition, an ERP system compliance, chemical companies need sell it immediately, instead of finding out can reassign a new lot number to the an ERP system that can: later when they have no choice but to remaining quantity, further avoiding the dispose of the item. • Centralise and simplify access need to discard leftover material. to information on manufacturing ERP-based lot status systems further processes QUALITY CONTROL: MEETING REGULATORY AND CUSTOMER aid with production and quality control STANDARDS by enabling chemical manufacturers to • Be easily updated and controlled block the usage of material that may have from a single place as regulations In environments where potency is a change expired. In addition, they provide inventory concern, companies need to measure and visibility by function within the corporation, track expiration dates as part of quality • Automatically collect, document, so people in sales and on the production and store the necessary validation control. ERP-based quality control enables floor see the same data when they search information required to prove companies to do shelf-life expiration dating the system and speak with customers. compliance and inline quality checks of products. This helps avoid the costly problem of Being able to track recipe versions can • Easily run a report during a inventory expiring on the shelf. With an further support quality control efforts regulatory audit ERP system, chemical companies also and ensure customer satisfaction. A fully • Link to an online system for can do first expired, first out inventory functional ERP system enables chemical regulatory control management, which not only eliminates companies to manage variability via potentially obsolete inventory, but also recipe version control and effectivity ensures companies consume this inventory dates. Companies for which seasonality in production and get dollar value for it at is a concern can then properly adjust the end of the day. formulations when necessary.
  6. 6. TECTURA WHITE PAPER PAGE 6 HOW TO ACHIEVE QUALITY ASSURANCE AND REGULATORY COMPLIANCE GOALS WITH ERP IMPROVING BUSINESS by making more intelligent decisions about PERFORMANCE production change-overs. BEST PRACTICES With an ERP system designed for process To maximise an ERP system, process A fully integrated ERP system provides manufacturers, chemical companies manufacturing experts recommend manufacturers with greater visibility, so several best practices, including: can do more than meet customer they can see what is coming down the requirements and regulations. They can pipeline and plan for demand. With this • Secure executive management’s improve business performance and gain knowledge, they can increase productivity, commitment to the project. competitive advantage. deliver products faster, and improve • Make sure that some staff By centralising all information related forecasting. This leads to higher customer participates in the implementation, satisfaction and allows them to deliver to manufacturing processes, chemical and that all staff is trained on the companies can improve efficiency across product at a higher margin. system. departments. At any time, this data can be The greater efficiency provided by a • Ensure that the ERP system has moved up into personal productivity tools, sufficient flexibility to support a fully functional ERP system can benefit such as a spreadsheet, and then back changing environment. manufacturers as well as their customers down so that it stays in the ERP system, and suppliers. Process manufacturers can • Regularly update software, user where others can access it. This avoids fill more orders and increase inventory turn interfaces, and ERP systems duplicated effort, redundant data entry, and rates. Similarly, purchasing requirements to take advantage of the latest data cost—from storing the data in multiple functionality. are reduced because chemical companies places. It also enables employees across have more visibility into their supply chain, departments to deliver better customer • Refine lot control practices and which allows them to give suppliers earlier ensure that the ERP system service and make better, more profitable notification when they need product and supports these processes. decisions. avoid the extra costs of booking products A comprehensive ERP system can also on rush orders. contribute to higher margins. For instance, Effective lot tracking and traceability companies can better use their inventory methods are becoming a prerequisite and sell product immediately at the right for doing business in the manufacturing price for the right quality. In addition, they industry. Many industry leaders are can manage production processes more now requiring chemical manufacturers closely and incorporate planning into the to demonstrate this ability before doing system. This can be particularly valuable business with them. An ERP system for companies running on cycles of built for process manufacturing provides product, as they can save time and money chemical companies with the tools they
  7. 7. TECTURA WHITE PAPER PAGE 7 HOW TO ACHIEVE QUALITY ASSURANCE AND REGULATORY COMPLIANCE GOALS WITH ERP need to produce quality products on time, achieve regulatory compliance, and gain the confidence of prospective customers or suppliers. As a result, they can better position themselves for new and more profitable business opportunities. ACHIEVING QUALITY AND COMPLIANCE GOALS WITH ERP Process manufacturers in the chemical industry must manage complex supply chains, while meeting strict quality and compliance objectives. ERP systems created for this industry help automate key processes and provide end-to-end visibility. Companies can then increase efficiency, track products from cradle to grave, and plan for demand. More importantly, they can deliver safe, high-quality products to their customers.
  8. 8. TECTURA WHITE PAPER PAGE 8 HOW TO ACHIEVE QUALITY ASSURANCE AND REGULATORY COMPLIANCE GOALS WITH ERP ABOUT TECTURA Tectura is a worldwide provider of business consulting services delivering exceptional service and sustainable value through consulting, software and IT implementation. Our diverse clientele includes mid-sized companies and divisions of larger enterprises in the aerospace, life sciences, manufacturing and distribution, retail and service industries. With more than 1,800 team members in 20+ countries, Tectura applies its industry knowledge and best practices philosophy to provide Microsoft Dynamics® ERP, CRM and technology solutions throughout the Americas, EMEA, and Asia Pacific. A Microsoft Gold Certified Partner, we maximise our vast technology resources and deep Microsoft expertise to deliver increased efficiency, project acceleration and a competitive edge. Tectura delivers solutions for chemical manufacturers built on advanced Microsoft Dynamics® ERP platform, in compliance with all the requirements of process manufacturing companies. Tectura can help you: • Effectively manage formulation, packaging and pricing • Improve quality management throughout your processes • Comply with industry and government regulations • Track batches from points of origin to the consumer • Gain better control over production and quality DISCLAIMER This White Paper is for information purposes only. Tectura makes no warranties, express, implied, or statutory, as to the information in this document. Date of Document March 2009 The information contained in this document represents the current view of Tectura Corporation on the issues discussed as of the date of publication. Because Tectura must respond to changing market conditions, this document should not be interpreted to be a commitment on the part of Tectura, and Tectura cannot guarantee the accuracy of any information presented after the date of publication. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in, or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Tectura Corporation. Special Note Regarding Forward-Looking Statements This document may contain “forward-looking statements” relating to, without limitation, future economic performance, plans, and objectives of Tectura Corporation for future operations and projections of revenue and other financial items that are based on the beliefs of, assumptions made by, and information currently available to Tectura Corporation. The words “expect,” “estimate,” “anticipate,” “believe,” “intend,” “plan” and similar expressions and variations thereof are intended to identify forward-looking statements. The cautionary statements in this press release and the assumptions used in the preparation of the forward-looking statements identify and involve important factors with respect to such forward-looking statements, including certain risks and uncertainties, which could cause actual results or the benefits that Tectura Corporation might derive to differ materially from those expressed in or implied by such forward-looking statements. FOR MORE INFORMATION Phone: 0845 084 0152 Email: uk.info@tectura.co.uk Web: www.tectura.co.uk © 2009 Tectura Corporation. All rights reserved. Tectura is a registered trademark of Tectura Corporation. All other company, brand, and product names are marks of their respective holders. WP_ERPQualityAssurance_UK_020902

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