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MAXLife ERP | White Paper

1 Managing Quality and Compliance: Life Sciences ERP Software

Managing Quality and Compliance:

Life Sciences ERP Software




TABLE OF CONTENTS

Background ………………………………………………………………………………………………………………………….. 3

Key Life Sciences ERP Features …………………………………………………………………………………………….. 4

Electronic Batch Records / Electronic Device History Records ……………………………………….. 4

Quality Document Management Portal ………………………………………………………………………….. 5

Corrective and Preventive Action (CAPA) ……………………………………………………………………….. 5

Material Control and Traceability …………………………………………………………………………………… 6

Training and Certification Management ………………………………………………………………………… 7

Cost of Quality Management …………………………………………………………………………………………. 8

Audit Trials and Electronic Signatures ……………………………………………………………………………. 9

Software Validation ………………………………………………………………………………………………………... 9

Conclusion ...………………………………………………………………………………………………………………………... 10

About Us ……………..……………………………………………………………………………………………………………... 11



BACKGROUND

The Life Sciences industry is often considered a leader when it

comes to the utilization of new, innovative technology to drive

major advancements in R&D. However, we have found that when it

comes to inventory, manufacturing, and supply chain management

business processes – many Life Sciences companies still find them-

selves buried in paper or using 20 year old technology.

While regulatory reporting and compliance requirements historical-

ly drove these organizations to work manually with paper, there

have been many advancements in software technology that should

be too compelling to ignore. Unfortunately, once manual, paper -

based, and legacy systems are in place, executives tend to stay with

these systems in order to stick with their “tried and true” ways of

working. And once they are awash in paper, these companies are so

consumed in managing paper trails that they cease to see how crip-

pled their operations really are.

By maintaining the status quo, these companies are ignoring the

significant cost savings, efficiencies, and competitive advantages

that new, innovative Life Sciences ERP systems can provide.

The obvious challenges with historical paper-based processes and

systems are that they take a great deal of time, effort, and space to

manage and maintain. Then take into consideration the added risk

of human errors, overlooked requirements, and forgotten process-

es. And don’t forget about the raw materials and finished products

sitting in the warehouse waiting for manual and paper-based pro-

cesses to be completed. This represents tied up working capital and

fewer inventory turns.



All of this adds up to higher costs and lost profits.

KEY LIFE SCIENCES ERP FEATURES

Executives who recognize these challenges are using Life Sciences

ERP Software to achieve compliance, eliminate costly paperwork

errors, speed up information distribution and collaboration, and

enable strategies for improving product quality and process effi-

ciency.

Electronic Batch Records (EBR) / Electronic Device

History Records (EDHR)

Many Life Sciences companies today still rely on paper-based pro-

cesses to document every step in production to comply with GMP

or FDA regulations. There are many disadvantages to this ap-

proach, including: increased operating costs, higher corporate risks,

slower and inefficient manufacturing processes, and limited data

visibility.

Electronic Batch Records and Electronic Device History Records

provide Life Sciences companies with an electronic way to efficient-

ly document any procedure, process, transaction, journal, COA, for-

mula or recipe in a way that is compliant with 21 CFR Part 11 Reg-

ulations.

EBR / EDHR systems should have built-in full document lifecycle

capabilities, complete with automated workflows, audit trails, elec-

tronic signatures, approvals, versioning, and archiving. When imple-

mented properly, EBR / EDHR systems can do all of this without

paper printouts.

Up to 30%

Productivity increase

by removing manual,

paper-based

processes

- Nucleus Research, 2010

In January 2010, Nucleus

Research found that users

moving from disparate and paper

-based systems could expect user

productivity to increase by up to

30% simply by moving to

Microsoft Dynamics AX.

MAXLife can amplify this

increase for life sciences

companies by also removing

paper-based processes around

quality control, compliance, and

electronic document

management.



Quality Document Management Portal

Two of the biggest operational risks for Life Sciences companies

are compliance with 21 CFR Part 11 and Part 820 regulations. Fail-

ing to adhere to these regulations can hinder shareholder confi-

dence, erode your bottom line, and cause irreparable damage to

brand equity. As a result, many regulated companies seek to imple-

ment enterprise-wide compliance and quality document manage-

ment solutions that can quickly address customer and regulatory

issues consistent with worldwide requirements, while simultaneous-

ly being leveraged to automate and enhance business processes.

Although many solutions claim 21 CFR Part 11 compliance sup-

port, the cost of these systems is often prohibitive for all but the

largest Life Sciences organizations. At the same time, many solu-

tions are difficult to deploy and even harder to use, which further

limits their ability to create compliant-environments quickly and

effectively.

Life Sciences companies need an integrated quality document man-

agement solution with full document management lifecycle capabili-

ties, including automated workflows, audit trails, and full versioning

support. The document management solution needs to help compa-

nies address the regulatory requirements of FDA 21 CFR Part 11

and Part 820, as well as SOP management, clinical document man-

agement and a range of quality functions including CAPA, audits

management, non-conformance and complaint management!

Corrective and Preventive Action (CAPA)

Life Sciences companies are required to detect and react to inci-

dents and non-conformances and ensure that appropriate actions

$3,085,000

Total potential

annual savings of

document

management

- Aberdeen Group, Jan 2012

Cost of document capture:

19 cents per document x 1.5M

documents = ($285,000 per year)

vs.

8 cents per doc and $120,000 per

year

Savings of $135,000 per year!

Error Remediation:

22 errors per 1000 x $3 to fix an

error = $990,000 per year

vs.

10 errors per 1000 equals

$450,000 per year

Savings of $450,000 per year

Time spent on Document

Capture:

4.1 mins per document x 102,500

man hours x 51 FTE = $3M in

salary / benefits

vs.

45 second per document x 18,750

man hours x 9.4 FTE = $564,000

in salary / benefits

Savings of $2.5M per year



are taken to correct current and prevent future occurrences. Still,

more than half of the FDA Form 483 observations and warning let-

ters cite Corrective Action / Preventive Action (CAPA) incident

management deficiencies.

Every Life Sciences company needs to have an effective CAPA sys-

tem in place to minimize risk and ensure compliance with regula-

tions, but maintaining an effective CAPA process can be challeng-

ing. Challenges can occur at every step of the CAPA process and it

requires vigilance to ensure that they don't derail the process and

expose the company to unnecessary or excessive risk.

The biggest challenge Life Sciences companies find themselves

caught with is a silo’d CAPA system (or multiple CAPA systems) in

which the data in the CAPA system(s) cannot be effectively shared

across the company or cross-referenced with other data. This makes

it hard for companies to link related problems – and even harder to

generate metrics and perform trend analysis on elements like prod-

ucts, problem types, root causes, costs, and more. These companies

need to break down their CAPA silos to achieve a single, managed,

integrated and complete view of the process - and enable a common

way for them to do trending and put preventive action in place

across the company.

Material Control & Lot Traceability

Life Sciences product recalls are not predictable - they can happen

at the best of times, or the worst of times. At any given moment,

companies must be able to quickly and effectively recall products

that have been deemed unsafe for the market. How a company re-

sponds to these situations is critical: failure to handle a recall suc-

2012 FDA Statistics:

9,469 recalled products

4,075 recall events

4,882 warning

letters

17 injunctions

8 seizures

20 debarments

FDA Warning Letters:

Recalled Products:

Source: U.S. Food and Drug

Administration, 2012

http://www.fda.gov/downloads/ICECI/EnforcementActions/UCM346964.pdf

http://www.fda.gov/downloads/ICECI/EnforcementActions/UCM346964.pdf



cessfully (either voluntary or mandatory) can have serious economic

and legal consequences. With the ever increasing levels of press and

public backlash associated with consumer safety and product re-

calls, it is becoming even more important for FDA-regulated com-

panies to have preventative tools and controls in place to monitor

quality, measure the potential impact of any quality incidents, and

quickly and effectively perform investigations.

This is not to say that all Life Sciences companies must have end -to

-end Life Sciences ERP or recall management systems. In fact,

there are more companies running on spreadsheets and manual pa-

per processes than on industry-specific ERP. However, as these

companies grow, as their business processes and supply chains be-

come more complex, as customers become more demanding, and as

regulatory compliance becomes increasingly stringent - it will be-

come more difficult for these companies to manage the two key re-

quirements for a good recall process: recall accuracy and response

time.

Recalls are expensive - both in terms of product cost and brand /

reputation damage. Having the right systems and processes can ena-

ble companies to minimize the costs of a recall, and prevent further

damage. Unfortunately, many companies today do not have ade-

quate systems in place and are putting their company at unnecessary

risk.

Training and Certification Management

Constantly changing government regulations force Life Sciences

companies to employ and continually train highly skilled and quali-

fied team members in order to maintain compliance and ensure

$30,000,000

Estimated financial

impact of a recall in

the past 5 years, as

identified by 77% of

respondents

- Ernst & Young, 2011

In the report, E&Y found that a

recall, particularly a “Class I,” or

health and safety recall, is usually

a significant event for a consumer

products company. For

companies that have faced a

recall in the past five years, 77%

of respondents estimated the

financial impact to be up to $30

million dollars; 23% reported

even higher costs.



product safety. This requirement for a skilled workforce creates

higher costs in salaries and benefits - and also is a contributing fac-

tor to the turnover rates Life Sciences companies experience.

Technology platforms can play a critical role in reducing a Life Sci-

ences company’s training costs while streamlining and speeding the

employee onboarding process. Training and Certification Manage-

ment systems make it easier to track employee training and pro-

gress, maintain employee certifications, perform training assign-

ments while tracking and archiving results, and implement employ-

ee quizzes and surveys.

Life Sciences companies that rethink their learning, training, and

onboarding strategies and put in place systems and processes to

drive continuous learning will develop and maintain a competitive

advantage.

Cost of Quality Management

Most executives believe that their company's Cost of Poor Quality

is less than 5% of gross sales, or just do not know what it is. In re-

ality, experts estimate that the COPQ can amount to 30% of gross

sales for Life Sciences manufacturers. Independent studies also re-

veal that COPQ is costing companies millions of dollars each year

and its reduction can transform marginally successful companies

into highly profitable ones.

We believe that a company can significantly reduce the total cost of

quality by as much as 50% simply by implementing software that

automates quality management and regulatory compliance process-

es, and tracks the costs of quality tests, investigations and correc-

tive and preventative action steps associated with quality incidents.

$130 Billion

Global corporate

spending costs for

training last year—up

9.5% from 2011

- Bersin by Deloitte, 2012



This feature provides companies real-time visibility into their com-

plete product costs, including important quality processes, enabling

them to make better decisions timelier.

Audit Trails and Electronic Signatures

Life Sciences companies must have very tight control over data in-

tegrity and security. Although corporate governance has largely

been portrayed as an issue of compliance, analysts and business

leaders increasingly are seeing good governance as good business.

Sound corporate governance can reduce market volatility, encour-

age investment and promote sustainable productivity and growth.

The push today is toward putting into place a combination of inter-

nal controls, explicit businesses processes and risk management

systems for corporate governance that can also build business

value.

An Audit Trail system provides tracking, tracing, and reporting ac-

countability capabilities that enables Life Sciences organizations to

capture and archive changes to all electronic data and documents

required for maintaining regulatory compliance. Electronic Signa-

tures help organizations improve security and enhance data valida-

tion with preventative controls that can be activated at any place in

the system where data is changed. Before they can change data,

Electronic Signatures presents employees with a window that re-

quires authorized user identity information.

Software Validation

The FDA defines validation as “a process of demonstrating,

through documented evidence, that <software applications> will

consistently produce the results that meets predetermined specifi-

Second

Reducing Cost of

Quality was identified

as the second most

important pressure

facing executives.

- Aberdeen, 2008



cations and quality attributes.” Although the principle of software

validation is simplistic, the application of these principles in real

life tends to be daunting, time-consuming, and expensive.

For many years, validation engineers struggled with manual, paper

based processes while conducting validation exercises. Today's

technological advances have made it easier and more practical than

ever to implement, validate, and deploy enterprise Life Sciences

ERP systems. Software validation tools can streamline and auto-

mate traditional validation processes, including test script develop-

ment, validation testing and validation reporting.

CONCLUSION

Many Life Sciences companies still find themselves struggling with

disparate systems, legacy applications, paper-based processes, and

redundant data entry. Unfortunately, business processes driven by

manual processes or old ERP become constrictive and hinder most

companies from profitably scaling, growing and expanding, and

efficiently adapting to constantly changing business demands.

In order to maintain quality and profitability in such a competitive

market, Life Sciences companies need to reduce the manual pro-

cesses that hinder productivity and automate and streamline stand-

ard methodologies for quality and compliance processes. Lot trace-

ability, QA testing, product change controls, FDA compliance, and

managing product formulas are all examples of the many challenges

Life Sciences companies face every day in order to run their busi-

ness.

Life Sciences ERP software can help reduce the time and effort

required to maintain FDA compliance and enable companies to fo-

$6.2 Trillion

Worldwide cost of IT

failures - making it

critical to work with

trusted partner.

- Roger Sessions, 2009

Key Validation Deliverables:

Validation Plans

Risk Assessments

Requirements Specifications

Validation Test Plan

Migration Plan

Disaster Recovery Plan

Installation Qualification (IQ)

Test Scripts

Operational Qualification (OQ)

Test Scripts

Performance Qualification (PQ)

Test Scripts

Trace Matrix

Validation Test Script Execution

(IQ/OQ/PQ)

Automated Validation Testing

Validation Summary Document

Other documents as required by

the client



cus more time and effort on producing the highest quality products

and speeding time-to-market. Today’s industry leaders are using

Life Sciences ERP Software to achieve compliance, eliminate costly

paperwork errors, reduce operating costs, speed up information

distribution and collaboration, and enable strategies for improving

product quality and process efficiency.

ABOUT MAXLife ERP

MAXLife is based on Microsoft’s most advanced and feature -rich ERP

system, Microsoft Dynamics AX, and extends the solution to help Life

Sciences companies improve product quality and safety, reduce organiza-

tional risk, and maintain FDA compliance. By utilizing MAXLife ERP,

Life Sciences companies can automate, grow, and transform their busi-

ness with innovative, high quality business process and IT consulting ser-

vices designed specifically for FDA Regulated companies. MAXLife has

passed the Software Solution Test for Microsoft Dynamics AX, which is

a major requirement for Certified for Microsoft Dynamics® (CfMD).

ABOUT MERIT SOLUTIONS

Merit Solutions is a focused-strategy business process consulting and IT

services company with a goal of being the very best at helping clients au-

tomate, grow, and transform their business using enterprise technology

solutions. Our preference has always been to be deep, not wide, in what

we do for clients, and to provide an overwhelming value for cost rela-

tionship that makes it easy for them to use our services repeatedly. Our

clients are medium to global enterprise businesses that want to leverage

Microsoft Dynamics and surrounding technologies to standardize busi-

ness processes and eliminate risk - and then continuously improve their

business. With more than 800 clients representing over a dozen indus-

tries spread worldwide, our longevity and success within the Microsoft

technology is proven.

100%

of customers likely to

recommend and / or

repurchase from

Merit Solutions.

- Microsoft CSAT Scores, 2012

Merit Solutions, Inc.

We know our success is directly

dependent upon the success of

our customers - so we go out of

our way to make sure our

Customers are completely

satisfied with the work we've

done.

Our clients understand the value

of working with a trusted partner.

More importantly, they

understand the potential risks and

costs associated with failed or

drawn out business

transformation projects that are

the result of working with the

wrong business partner.

See our Satisfaction Scores.

Contact us to learn how we

can help transform your Life

Sciences quality and control:

1749 S Naperville Rd., Ste. 200

Wheaton, IL 60189

+1 630-614-7133

[email protected]

www.meritsolutions.com

http://www.meritsolutions.com/company/customer-satisfaction-scores.html

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