Business Process Flow Modeling & Quality Management in Project SHAPE at Sandoz Private Limited

Submitted by: Anjali Verma PGDITM IV Roll no.6

Project Report on Business process flow modelling and Quality Management

as a part of Project

Conducted at

Sandoz Private Limited

By Anjali Verma
PGDITM IV

NITIE, Mumbai Under the guidance of:

Project Guide: Mr. Thomas Brandacher, Shape ERP Project Manager Sandoz Private Limited

Faculty Guide: Prof A. D. Raoot Professor, NITIE, Mumbai

National Institute of Industrial Engineering

CERTIFICATE
This is to certify that Anjali Verma has successfully completed the project Business process flow modelling and quality management in SHAPE project during her summer internship at Sandoz Private Limited, a Novartis company, from 12th April to 4th June, 2010 in the partial fulfillment of Post-Graduate Diploma in Information Technology Management" at NITIE.

I wish her a bright and prosperous future.

Prof. A. D. Raoot Professor, NITIE, Mumbai

ACKNOWLEDGEMENT

First and foremost Id like to thank Sandoz Private Limited, for providing me an excellent learning opportunity and Ms. Michelle Coutinho, Head HR Tech Ops, Asia Region and Mr. Thomas Brandacher, Shape ERP Project Manager for organizing such a wonderful training program in ERP. The association with SHAPE Project has indeed expanded my horizons and given me deep insights into the nuances of the Pharmaceutical related process and SAPs ECC 6.0 modules.

Also I would like to sincerely thank my faculty guide Prof. A.D. Raoot, for giving valuable inputs and timely feedback to execute my project in an optimized way and help me complete it. I would also like to thank Project Quality Management teams Mr. Arjun Guha Thakurta and Mr. Omer Cimen, for their constant support throughout the project. Also I owe sincere thanks to the SCM, Operations, Finance and Controlling team leads Mr. Rajkumar Raut, Mr. Karthikeyan Ramanathan and Mr. George Daskalakis and their team members for their constant cooperation.

I would also like to express my heartfelt gratitude towards Ms. Kashmiri Choudhury and all those who have directly or indirectly helped in the completion of this Project.

Table of Contents
1. EXECUTIVE SUMMARY .................................................................................................... 7 1.1 1.2 1.3 1.4 1.5 2. 2.1 2.2 3. 3.1 3.2 3.3 3.4 3.5 3.6 3.7 4. 4.1 4.2 4.3 4.4 5. 6. 7. Company Background ...................................................................................................... 7 Project Objectives and Business Need ............................................................................. 7 Key Deliverables .............................................................................................................. 7 Scope ................................................................................................................................ 8 Limitations ....................................................................................................................... 8 Company History ............................................................................................................. 9 Healthcare portfolio.......................................................................................................... 9 Company Overview........................................................................................................ 12 Vision ............................................................................................................................. 12 Quality generics.............................................................................................................. 13 Leading the way in biosimilars ...................................................................................... 14 Difficult-to-make medicines - making a difference in generics ..................................... 15 Biosimilars a major future market ............................................................................... 16 Anti-infectives ................................................................................................................ 17 Need of SHAPE ............................................................................................................. 19 Management expectations: ............................................................................................. 19 Project Objectives .......................................................................................................... 20 Project Scope: ................................................................................................................. 21

ABOUT NOVARTIS.............................................................................................................. 9

ABOUT SANDOZ................................................................................................................ 12

Project SHAPE...................................................................................................................... 18

NEED FOR THE PROJECT ................................................................................................ 22 OBJECTIVES ....................................................................................................................... 23 METHODOLOGY ............................................................................................................... 24 7.1 7.2 7.3 7.4 Phase I: Gap analysis between Sandozs core and Indias processes ............................ 24 Phase II: Designing process flows with Microsoft Visio ............................................... 24 Phase III: Creating follow up lists for specifying linkages ............................................ 25 Quality management methodology ................................................................................ 26

8. 9. 10. 11.

MODELING ......................................................................................................................... 27 FUTURE SCOPE.................................................................................................................. 36 LIMITATIONS .................................................................................................................. 37 ACADEMIC CONTRIBUTION ....................................................................................... 37 Enterprise Resource Planning:.................................................................................... 37 SAP Implementation process...................................................................................... 39 SAP Blueprinting ........................................................................................................ 40 Pharmaceutical Business Processes * ......................................................................... 42

11.1 11.2 11.3 11.4 12.

REFERENCES/ BIBLIOGRAPHY................................................................................... 46

1. EXECUTIVE SUMMARY
1.1 Company Background

Sandoz, a Division of the Novartis group, is a global leader in the field of generic pharmaceuticals, offering a wide array of high-quality, affordable products that are no longer protected by patents. Sandoz has a portfolio of approximately 1000 compounds and sells its products in more than 130 countries. Key product groups include antibiotics, treatments for central nervous system disorders, gastrointestinal medicines, cardiovascular treatments and hormone therapies. Sandoz develops, produces and markets these medicines along with pharmaceutical and biotechnological active substances and anti-infective.

1.2

Project Objectives and Business Need

The project Business Process Flow Modeling and Quality Management was under Project SHAPE of Sandoz, India. SHAPE (Sandoz Harmonized Processes in ERP) is the global program within Sandoz that aims to implement SAP in 28 countries from April 2006 to the end of 2010, involving about 8,500 users. Involved business processes are Finance, Production, Quality Management, Supply Chain Management, Sales & Distribution and Procurement. The blueprint phase of SHAPE was in progress during the internship period. Blueprint phase will propose the business processes and structures in order to build them into new system. The phase involves workshops for gap analysis to design the business and user requirements and further devise the business guidelines, process flows, business scenarios, functional specifications, detailed designs. The key deliverables for the functional teams are FIT/ GAP analysis, workshops with solutions for GAPs, BPML/ URL, Business improvement list, Development and reporting lists, Process / System documentation, Business Guidelines, Process Flows, Functions, and Business Scenarios. Quality Management needs to have process documentation approved and uploaded in DocNavigator.

1.3

Key Deliverables
To design various business process flows as per the Business Process Master List (BPML) which accommodates changes that will be a part of process of harmonization of Sandoz India processes with the global ones. As a part of the project quality management team, review process flows and business guidelines as per best practices followed by Sandoz

1.4

Scope

The process flows to be designed were for the following modules of SAP ECC 6.0: Financial Accounting Controlling Indirect Purchase/SRM SCM Planning SCM Execution Commercial Operations Inventory/ Warehouse Management Purchasing Manufacturing Planning Manufacturing Execution Quality and Batch Management Plant Maintenance

1.5

Limitations

Due to the vast project scope, process flows were collectively modeled with help of team members. For the process flows which were entirely done by other members only, complete review was done to prevent any non-conformance.

2. ABOUT NOVARTIS
Novartis International AG is a multinational pharmaceutical company based in Basel, Switzerland, ranking number three in sales.

2.1

Company History

Novartis was created in 1996 through the merger of Ciba-Geigy and Sandoz, two companies with a rich and diverse corporate history. Throughout the years, Novartis and its predecessor companies have discovered and developed many innovative products for patients and consumers worldwide.

2.2

Healthcare portfolio

Its portfolio best meets the varied and often complex needs of patients and societies. Novartis is positioned to lead in innovation, partner with others and offer solutions to patients across a broad healthcare spectrum. In addition, a diverse portfolio reduces financial risk, bringing greater value to those who invest in our company. Its portfolio, focused on broad areas of healthcare, aims to best meet the evolving needs of patients and societies worldwide. Novartis is the only company with leading positions in four key areas: Pharmaceuticals: Innovative patent-protected medicines The Pharmaceuticals Division of Novartis is recognized worldwide for the innovative medicines we provide to patients, physicians and healthcare organizations. This growing business develops and markets patent-protected prescription drugs for important health needs. Our products are concentrated in major therapeutic areas including: Cardiovascular and Metabolism Oncology (including Hematology Neuroscience and Ophthalmic Respiratory Immunology and Infectious Diseases The current product portfolio includes more than 50 key marketed products, many of which are leaders in their respective therapeutic areas. In 2009, Novartis received a total of 25 positive regulatory decisions in the United States, Europe and Japan. The product development pipeline has 135 projects in various stages of clinical development, including potential new products as well as potential new indications or formulations for existing products. Vaccines and Diagnostics: The Novartis Vaccines and Diagnostics Division provides more than 20 vaccines to prevent viral and bacterial diseases, as well as sophisticated instruments, assays and software to protect the blood supply from the

spread of infections. The division consists of two businesses - Novartis Vaccines and Novartis Diagnostics, the blood testing business. Novartis Vaccines is dedicated to delivering on the promise of prevention through the research, development and production of innovative, safe and effective vaccines. At the heart of everything we do is our commitment to preventing the spread of life-threatening diseases, protecting vulnerable populations, and keeping healthy people healthy. By focusing on disease prevention, Novartis Vaccines plays a key role in the company's core mission: keeping people healthy, alleviating suffering and enhancing quality of life. The current vaccine portfolio includes vaccines to prevent: Influenza Meningitis Rabies Japanese encephalitis Tick-borne encephalitis Homophiles Influenzae type B (Hib) Polio Diphtheria Tetanus Pertussis (whooping cough) Novartis Diagnostics: the blood testing business Building on more than a decade of dedication to blood safety, Novartis Diagnostics is developing a future of innovative solutions for preventive screening and the prediction of health outcomes. Novartis Diagnostics products are used to test millions of blood donations around the world each year for pathogens such as HIV (the AIDS virus), hepatitis B and hepatitis C, and West Nile virus. More than 80 percent of the US blood supply is tested on Novartis diagnostics systems to ensure safety for transfusion or use in other blood products. Sandoz: Affordable, high-quality generic medicines and biosimilars Novartis is the only pharmaceutical company with a global leadership position in both patented prescription and generic pharmaceuticals. Sandoz plays a critical role in the Novartis strategy of offering a range of treatment options to patients, physicians and healthcare providers worldwide. This broad portfolio helps to make affordable, high-quality medicines available to patients around the world and stabilize healthcare systems. Two main elements empower the Sandoz business strategy: Global reach and reputation: In addition to its unique position within Novartis, Sandoz benefits from a strong global presence and powerful brand recognition worldwide. Unique expertise: Sandoz distinguishes itself primarily through its ability to develop and produce differentiated medicines. Sandoz is the pioneer of biosimilars follow-on versions of biopharmaceuticals following patent expiry with the first three approved and marketed

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products in the EU (human growth hormone Omnitrope, anemia medicine Binocrit / epoetin alfa Hexal, and oncology medicine Zarzio / Filgrastim Hexal). Sandoz difficult-to-make medicines add value by making life easier for patients. The portfolio ranges from complex oral solids through injectables, high-tech patches and state-of-the-art inhalers to biosimilars. Consumer Health: Strong, trustworthy brands for increasingly knowledgeable consumers: OTC (Over-the-Counter), Animal Health and CIBA Vision The Consumer Health Division creates, develops and manufactures a wide range of products designed to restore, maintain or improve the health and well-being of our customers. The division focuses on three business units: Over-the-Counter Novartis Consumer Health, Inc. is a world leader in consumer healthcare, providing self-medication products for the treatment and prevention of common illness and conditions, and the enhancement of overall health and well being. Animal Health Novartis Animal Health focuses on the well-being of companion animals and on the health and productivity of livestock, including cultivated fish. CIBA Vision CIBA Vision is a global leader in the research, development and manufacturing of contact lenses and lens care products. Since Novartis was created in 1996 - when only 45% of net sales came from healthcare the company has shifted focus to fast-growing areas of healthcare. Its strategy is to provide healthcare solutions that address the evolving needs of patients and societies worldwide. Mission It wants to discover, develop and successfully market innovative products to prevent and cure diseases, to ease suffering and to enhance the quality of life. It also wants to provide a shareholder return that reflects outstanding performance and to adequately reward those who invest ideas and work in the company.

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3. ABOUT SANDOZ
3.1 Company Overview
Sandoz - a healthy decision Sandoz is a Novartis company with a reputation for quality going back to its roots in the 19th century (foundation of Sandoz by Edouard Sandoz in 1886). It is a global generic leader.

3.2

Vision

Sandoz is the main provider of high quality, affordable medicines helping secure long-term access to healthcare for people around the world. Worldwide, several factors - including an aging population and changing lifestyle patterns - are converging to put increasing strain on its already-beleaguered healthcare systems. This steady growth in patient needs leads in turn to ever-increasing cost pressures a kind of perfect storm. This trend offers opportunities for the generics industry, which can provide significant savings both for patients and for healthcare systems. Using generics frees up funds for new and innovative medicines. However, some companies will fare better than others. At Sandoz, it is well positioned to be the global number one, thanks to its high quality standards, its global presence, its broad development pipeline and its technological expertise. It goes beyond traditional generic products and brings innovative technologies and delivery systems to market, making a world of difference in generics. Delivering a full range of traditional generic medicines is the core business of every company in the industry. It goes a step further, constantly seeking new ways to improve patients quality of life. Its decades of experience, combined with our global development and production network, enable it to develop and manufacture the difficult-to-make generics that many other companies cannot or do not make. It is at the forefront of bringing biosimilars to patients worldwide following the precedent-setting market launches of human growth hormone Omnitrope and anemia medicine Binocrit. It leads the industry, outperforming the market. With its broad portfolio and leading positions in key markets, it is one of the two largest generics companies in the world. It aims for cost leadership across the board by optimally designing its operations and building on synergies in its global development and production networks. Its associates are empowered to act on their own initiative and actively seek opportunities to leverage savings.

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 It brings the care and passion our employees have for their work to its customers, patients and communities. It is a global generics leader, develops, produces and markets medicines that are no longer protected by patents, along with pharmaceutical and biotechnological active substances. It offers patients approximately 1.000 molecules worldwide. The medicines are available to about 90% of the worlds population. It produces far more than just traditional off-patent products. It differentiates itself from other companies by developing and producing differentiated products that require an exceptionally high degree of expertise and knowledge and often involve complex hightech delivery systems. These range from oral solids and inhalers through patch technologies to state-of-the-art biosimilars approved versions of biopharmaceutical medicines. Sandoz has eight major global development centers and a worldwide network of production sites and technology centers of excellence. It reported generic pharmaceutical sales of USD 7.5 billion in 2009 and employs more than 23,000 associates in 130 countries. The global headquarters are based in Holzkirchen, Germany, just south of Munich.

3.3

Quality generics

Its core business is the development, production and distribution of high-quality, cost-effective generic medicines. Generics contain the same active substance as reference medicines and are therapeutically equivalent to the brand name versions. The only real difference is that they do not incur the same initial R&D costs, so they can be sold for a lower price. As a global generics leader, Sandoz therefore helps to improve access to essential medicines worldwide. Sandoz delivers high quality products that meet not only external regulatory requirements, but our own rigorous internal standards. Indeed, they produce far more than just standard generics. Its difficult-to-make products, including transdermal patches, inhalers and state-of-the-art biosimilars, have few rivals in the industry. They also have an unrivalled position in the production of generic versions of essential anti-infective medicines (e.g. antibiotics). Its decades of experience in developing and producing such medicines have enabled us to establish a pioneering position in many of the therapeutic areas of the future. Its global network of development and production sites plays a key role in helping us to maintain this leading position. Sandoz develops, produces and markets medicines that are no longer protected by patents, along with pharmaceutical and biotechnological active substances. This gives them a broad range of products, within which the cardiovascular system and anti-infectives are particular areas of focus. Sandoz offers more than 950 generic compounds in over 5,000 forms worldwide. It develops and manufactures off-patent medicines into finished dosage forms and sells them to wholesalers, pharmacies, hospitals and other healthcare outlets. Separate business units focus on antiinfectives and biopharmaceuticals respectively.

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Sandoz differentiates itself by its ability to develop and produce difficult-to-make generics. The broad portfolio ranges from advanced application forms such as oral solids, through complex technologies such as inhalers or injectables to transdermal patches, implants and biopharmaceutical follow-ons (biosimilars). Therapeutic areas The portfolio covers both blockbusters and niche products for all major therapeutic areas, in particular: Systemic anti-infectives Cardiovascular system Central nervous system Gastrointestinal system Muscle and skeletal system Hormone therapy Respiratory system Particular strength in anti-infectives The high level of Sandoz know-how in anti-infectives is based on decades of experience, particularly in producing intermediates. The wide range of products covers the various stages of the production process, from basic molecules to finished medicines.

3.4

Leading the way in biosimilars

Sandoz has long been a biotechnological competence center within Novartis, and is now playing a pioneer role in the emerging biosimilars market. Following the precedent-setting launch of human growth hormone Omnitrope, Sandoz in 2007 launched the first complex biosimilar (anemia medicine epoetin alfa / Binocrit) in the EU. Every stage covered The activities cover every stage of the pharmaceutical production process, from compound synthesis through to enhancement of preparations, production and distribution. They combine the highest standards with a strong customer focus. Low prices, united with top quality, are not a contradiction in terms; they are the key to our success as a company. Top 10 products worldwide Amoxicillin / clavulanic acid Omeprazole Amlodipine / benazepril Fentanyl Simvastatin Metoprolol Acetylcystein Amoxicillin Tacrolimus Amlodipine

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3.5

Difficult-to-make medicines - making a difference in generics

At Sandoz, there are other products manufactured along with traditional off-patent ones. They stand out from the crowd thanks to our ability, honed through decades of experience, to add value for patients by producing new and difficult-to-make generic medicines. The broad portfolio of difficult-to-make generics ranges from advanced application forms such as oral solids, through progressively more complex technologies such as inhalers or injectables to transdermal patches and implants. At the top of the technological pyramid is their pioneering position in the rapidly emerging market for biosimilars (authorized versions of existing biopharmaceuticals). The graphic below gives an idea of the scope of our difficult-to-make portfolio. The Sandoz centers of excellence are currently working on 900 further development projects, including many in the field of biotechnology. Difficult-to-make - how we make a difference Biosimilars Leading the way with Omnitrope and EPO Collaboration with Momenta Leading experience in fermentation technologies Patches Fentanyl top position in US and Germany Adding strengths and markets Using technology for at least six other products Inhalers Top position in Germany with budesonide Collaboration synergies in dry powder inhalers Expanding manufacturing capacities Oral solids Strong in modified release forms, e.g. MUPS1 Specialized know-how and dedicated equipment Metoprolol succinate launch

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3.6

Biosimilars a major future market

By 2010, it is estimated that more than 50% of newly approved medicines will be biopharmaceuticals. The period beginning in 2010 will also see an increasing number of major biotechnology-based medicines coming off patent and facing generic competition. Biosimilars, or follow-on proteins, are new versions of existing biopharmaceuticals whose patents have expired. They are produced using the same core genetic material and are approved on the basis that they are equal to the reference product in terms of both safety and efficacy. Biosimilars are large, complex molecules produced by living organisms, which are sensitive to manufacturing changes; generics are small molecules, produced by chemical synthesis, which are usually very stable. Biosimilars is an official term used by the European medical authorities; the US terminology is follow-on protein products (FOPPs). At Sandoz, we are playing a pioneer role in the development of this exciting new field, which offers major savings to patients and healthcare systems and promises to become a major future market for companies like Sandoz. With decades of experience in biotechnology, a global development and production network and an unrivalled reputation for quality, Sandoz is ideally placed to capture the biosimilars opportunity. Indeed, we are already at the forefront of bringing affordable high-quality biosimilars to patients once patents expire. Following the precedent-setting launch of human growth hormone Omnitrope in both the EU and the US, we have now also marketed the first truly complex biosimilar (anemia medicine epoetin alfa) in the EU. How are biosimilars different?

Small molecule generics Biosimilars

Product characteristics

Small molecules Often very stable Mostly without a device Produced synthesis by chemical

Large, complex molecules Stability requires special handling Device is often a key differentiator Produced in living organisms Highly sensitive to manufacturing changes Often comparatively high costs

Production

Development

Very limited clinical Significant R&D (i.e. cell lines) trials (often only Phase I Extensive clinical trials, including Phase I PK/PD studies) and Phase III studies Abbreviated registration Regulatory pathway now defined by procedures in Europe and EMEA US "Comparability" status Usually enjoy No pathway yet in US under BLA

Regulation

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"substitutability" status No or limited detailing to physicians Key role of wholesalers and payers Market substitution in pharmacies High price discounts Detailing to (specialist) physicians required Pharmacists may not substitute Price discounts smaller; price sensitivity is product specific

Marketing

3.7

Anti-infectives

Leading the fight against infectious diseases Sandoz is the global leader in generic anti-infective medicines. Our high level of know-how in the field is based on decades of experience, particularly in producing intermediates. The wide range of products covers the various stages of the production process, from basic molecules to finished medicines. Penicillin V (Phenoxymethylpenicillin) Penicillin G (Benzylpenicillin) Semisynthetic Penicillins Cephalosporins -Lactamase Inhibitor and Blends Macrolides -Lactam Intermediates Sandoz, the specialist for -Lactam Intermediates - in particular for Cephalosporins - offers long term production expertise combined with patented know-how for all types of advanced Cephalosporin Intermediates. Tailor-made 3-substituted Cephalosporin Intermediates Enzymes/Hormones/Others Sandoz has traditionally been among the leading specialists in microbial fermentation of classic and recombinant microorganisms. Its comprehensive know-how is based on more than five decades of experience in the field of classical microbial products and more than two decades in recombinant microbial production at commercial scale. In 2004 we have successfully extended our production technology into the field of mammalian cell culture. Today, Sandoz is a fully integrated manufacturer of recombinant products and is providing solutions for all steps in the value chain of a project from development to production and fill and finish to customers. This combination of long lasting experience and solutions for all steps is making us an ideal partner for production cooperation.

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4. Project SHAPE
SHAPE (Sandoz Harmonized Processes in ERP) is the name of the global program within Sandoz that aims to implement SAP in 28 countries from April 2006 to the end of 2010, involving about 8,500 users. SHAPE is a joint initiative between business functions and IT. It will change the way of working and improves and harmonizes key business processes in Finance, Supply Chain, Purchasing and Reporting (Compliance). The program name emphasizes the aim to support business processes the ambition to create a harmonized business and system framework which also contributes to the integration of the former companies the opportunity to actively build a common Sandoz system environment SHAPE supports Sandoz vision being an innovative global leader in generics, a trusted partner to its customers and a performance-driven organization

Sandoz India is implementing SHAPE in 2010 according to the global roadmap, in order to change-over and Go-Live per January 2011. Project implementation is aligned and compliant with global SHAPE Program governance and is strictly managed according to the SHAPE Methodology. The SHAPE project team consists of a carefully considered combination of selected business representatives and internal/external ERP experts

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4.1

Need of SHAPE

Currently, Sandozs system landscape is fragmented (11 Sandoz SAP R/3 systems and more than 15 non SAP ERP systems). The ambition is to create a harmonized business and system framework.

4.2

Management expectations:

Implement business processes based on proven SHAPE templates Implement globally aligned business processes designed during CORE and proven by implementation in Slovenia, Italy and all following countries Align and harmonize local processes with global Sandoz / Novartis requirements in areas like SCM, logistics execution, finance, manufacturing Deliver a system that supports overall GxP, SOX and InControl compliance SHAPE should bring more transparency into the supply chain leading to Increased service levels Reduced inventory levels and thus working capital Less inventory write-offs And overall an easier management of complex supply chain Harmonized Costing across all sites

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Three benefits will be delivered.

The program name emphasizes the aim to support business processes. ERP is not an IT project, but a joint initiative between business and IT. the ambition to create a harmonized business and system framework which also contributes to the integration of the former companies. the opportunity to actively build something, i.e. shaping the future. Right by design, Business continuity and operational excellence are the 3 key things to be kept into mind throughout the project. SHAPE Values: Speed and simplicity Customer and quality focus Trust and mutual respect

4.3

Project Objectives
Implement SHAPE for Sandoz India in TechOps, ComOps and Finance areas

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Implementation of SHAPE in India, replacing existing SAP, Pharmanet, and MMR. 2 legal entities Sandoz India and Novartis India (Generics Business) Covering all relevant business processes in finance, manufacturing, SCM, ComOps, and reporting. Covering locations in Kalwe, Turbhe, Mahad, Kanjurmarg

Implement business processes based on proven template Implement globally aligned business processes designed during CORE, and proven during pilot projects in Slovenia & Italy Align and harmonise local processes with global Sandoz / Novartis requirements - in areas like SCM, logistic execution, finance, and manufacturing. Deliver a system that supports overall GxP, SOX and InControl compliance.

4.4

Project Scope:

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5. NEED FOR THE PROJECT

The SHAPE, India project kick off was on 13th April 2010. During my allocation to the project it was under the blueprint phase. The blueprint phase will propose the business processes and structures in order to build them into new system. The phase involves workshops for gap analysis to design the business and user requirements and further devise the business guidelines, process flows, business scenarios, functional specifications, detailed designs.

The business guidelines and process flow modeling required a lot of brainstorming and discussions with the cross functional teams to come to a common point of process designing while considering the user requirement lists (URL) and Business Process Master List (BPML). Also, the business guidelines and process flows required a stringent check on the quality to align them with best practices of Sandoz at international level.

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6. OBJECTIVES

Objective. To design various business process flows as per the Business Process Master List (BPML) that will accommodates changes that are part of process of harmonization of Sandoz India processes with the global ones. Business Process Flows are a part of traceability and serve as basis for Integration/User Acceptance Test. They are devised on the basis of the URLs and Business guidelines. Objectives and deliverables of the project / assignment As a part of the project quality management team, review process flows and business guidelines as per best practices followed by Sandoz at international level Deliverables. 1. Working with the teams of Manufacturing execution, Manufacturing planning, Plant Maintenance, Quality and batch management, Finance, Controlling, Indirect purchasing, commercial operations, inventory

management, purchasing, SCM planning to discuss about the various processes. 2. Assist team members of various modules to design business process flows with the help of Microsoft Visio 3. Initial review and rectification of Ready for Approval documents namely Process flows and Business

guidelines for all the modules.

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7. METHODOLOGY
Towards fulfillment of the modeling of process flows, the following methodology was adopted. Broadly, the steps taken can be divided into three phases:

7.1

Phase I: Gap analysis between Sandozs core and Indias processes

In the first phase of the project, brainstorming sessions with the Sandoz business representatives were conducted with the purpose of understanding the different flow of the process and comparing them with the core and other countries processes at Sandoz Private Limited. This gave result to a gap which was analyzed with the help of discussions. The process flows then formulated to a flowchart as per the above discussion.

7.2

Phase II: Designing process flows with Microsoft Visio

The resulting flowcharts were then documented using Microsoft Visio. Designed for line-ofbusiness professionals, Visio enables users to create diagrams of a business process by arranging, ordering, labeling, and linking various symbols that represent activities, events, decisions, flow, and transactions. Microsoft office Visio is the diagramming tool of choice for business and technical professionals who need to quickly and easily visualize, explore, and communicate information. With Office Visio, creating a wide range of diagrams such as business process diagrams, value stream maps, TQM diagrams, work flow diagrams, and cause and effect diagrams is a snap. With Office Visio, easily diagram complex processes that conform to particular standards such as Lean or Six Sigma. Office Visio includes a variety of business process shapes so your diagrams look exactly the way that is required. Business processes are dependant and ordered activities that result in predictable and repeatable outcomes. Consisting of an organizations operating procedures, institutional working knowledge, and information resources, business processes are designed to satisfy defined business objectives in an efficient and timely manner. Business Process Management (BPM) tools are designed to provide for such agility by facilitating the creation and execution of highly transparent and modular process-oriented workflows that meet the operational performance standards IT organizations demand. Automated business processes developed and executed within such an environment are characterized by the following attributes:

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 Visibility of end-to-end process activities Process components and functionality that is exposed and self-describing Ability to integrate disparate information source and application functionality into a process Information flow and event notification that can be automated and monitored throughout a process Workflow participation that makes the most of desktop productivity and communication tools Service level agreements that can be specified, monitored, and enforced for activities in a process Ability to add, removes, or reconfigures any process activity or component, without disrupting the process Processes that can be monitored in real time or near real time Process designs that can accommodate any exception handling requirement Processes that can be easily replicated, extended, and scaled To take advantage of a business process paradigm that is exposed, loosely coupled, and document-driven, development tools and methodologies that incorporate these concepts are required. Microsoft Visio is the ideal tool for the business processes modeling. Microsoft Visio turns the visual overview into information portal. The process flows could be mapped using any of the business process templates supplied with Visio, but Sandoz uses a particular standard template for same.

7.3

Phase III: Creating follow up lists for specifying linkages

Follow up lists were created in excel to indicate all linkages between the Process Flows (PF) and Functional Specifications (FS) and also between the PFs along with their description and roles. It also specified where the particular user requirement as per the FS is a part of SAP transaction, SAP function, Manual or Interface function.

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7.4

Quality management methodology

Considering the wide scope of designing process flows for each module, not all were personally drawn by me. For remaining PF and all Business Guidelines, review was conducted against the standards set by Sandoz for each of the documents. They were also examined for the logical errors, Functional Specification and Process flow linkages as per Business Process Master Lists (BPML). It was a part of initial review for the documents in Ready for approval uploaded in Team space in Lotus Notes. After this, another round of review and finalization had the documents in approved status. These approved Business Guidelines and Process Flows are input to design Functional Specifications which will be later used in realization phase by Technical consultants to code extra functionalities as desired by the Users. Also, Process Flows are a part of traceability and used in testing phase to confirm to the user requirements. The realization phase, testing and training phase, data migration and Go live will progress based on this Blueprint phase.

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8. MODELING
The Business process flow modeling was done with help of Microsoft Visio and the flow charts were drawn as per the standard template used by Sandoz. Modeling of the process flows(PF) was a repetitive procedure as the same basics routine were required for the different processes in the Sandoz generic product manufacturing, sales, supply chain and finance. Approximately 130 of them were to be designed for processes under following modules of SAP ECC 6.0: Financial Accounting Controlling Indirect Purchase/SRM SCM Planning SCM Execution Commercial Operations Inventory/ Warehouse Management Purchasing Manufacturing Planning Manufacturing Execution Quality and Batch Management Plant Maintenance Data Migration

PFs are based on User requirement lists and Business Guidelines. SHAPE Project maintains one User Requirement List (URL) that lists all project relevant User Requirements (UR). User Requirements are linked to one or more Functional Specifications (FS). Vice-versa all FS need to have a link to a UR.

Business Guidelines are high level papers that describe general concepts for various business areas (e.g. Batch Management, Product Costing, and Toll Manufacturing) Core Business Guidelines describe mandatory as well as best practice solutions

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Local Business Guidelines and BG Addendum describe the local concept

Business Guidelines describes significant variation from SAP standard.

Business Process Flows are graphical process description (e.g. Purchase Materials/Services). They are only created for processes in scope of the SHAPE SAP systems. Steps in a Process Flow resemble system and non-system related functions System functions: SAP Transactions (e.g. VA01), SAP System Functions (e.g. ATP check should be possible) and Interfaces Non-system functions: Manual activities and Functions in external system Process Flows serve as basis for Integration/User Acceptance Test and are part of traceability.

*A schematic of Process Flow is given as follows:

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Following diagrams represent the sample cover page, main page format, Icons for FS Type and general icons that are allowed to be used for designing PFs.

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Main Process Flow page format:

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Icons for FS type:

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General Icons:

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The Business Guidelines, Process Flows, Functional specifications should synchronize with the Business Process Master List (BPML).

The BPML is a project support document and managed by Integration Management and Quality Management team. As stated, it lists all Business Guidelines, Business Process Flows, Functional Specification and Detail Design Documents that are in scope. It is not part of traceability, but with the BPML traceability will be between documents/metadata need to be established: FS UR FS which are indicated in the boxes of the flows PF FS Function FS Transaction FS (Data Flow Description) FS (Interface Overview) Development DD FS DMOW Data Migration FS Customizing DD FS (rational: Risk assessment) All PF and FS BG (rational: Ownership) established. The following links

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The review or validation process of each document being made in Blueprint phase (and further) is based on the following strategy:

The Process Flows and User requirement lists will be validated in testing stage of Accelerated SAP through User Acceptance test. The initial checks are done in blueprint stage through the Validation plan so that these process flows represent the actual Sandoz Pharmaceutical Practices.

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9. FUTURE SCOPE
The Blueprint phase of SHAPE (Sandoz Harmonized Processes in ERP) forms a part of global integration of key business processes in Finance, Supply Chain, Purchasing and Reporting (Compliance). The key deliverables Business Guidelines and Process Flows are input to design Functional Specifications which will be later used in realization phase by Technical consultants to code extra functionalities as desired by the Users. Also, Process Flows are a part of traceability and used in testing phase to confirm to the user requirements. The realization phase, testing and training phase, data migration and Go live will progress based on this Blueprint phase.

Review as part of Project Quality Management The Sandoz SAP Systems will support, control, monitor, and supervise many functions in various pharmaceutical processes, e.g. Purchasing (starting material specifications) Warehousing (managing material status, temperature) Production execution (material reconciliation) Quality control (certificates of analysis) Sales and distribution (recall process) Therefore, the SHAPE SAP Systems can influence our processes and may have an impact on the quality of Sandoz products. Thus, each and every component being modeled has a significant role in future product. So each process in the SAP ECC 6.0 requires a thorough validation. The future scope of the project is: Improved operating efficiency (More robust processes, better understanding of the processes) Reduced risk of system failure Reduced risk of failure during the program/projects From GxP perspective validation is simply a must No second chance for a prospective validation of SAP High likelihood that the SAP systems will be subject to inspections Validation provides knowledge of all aspects of the SAP processes/system Enables reasonable knowledge transfer (e.g. when people are leaving the project)

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10. LIMITATIONS
Considering the vast scope of project in terms of number of process flows (133 approx.) to be modeled, it was structured so that priority was given to the teams facing problem. The areas of SCM Planning, Commercial Operations, Inventory Management, Purchasing and Plant Maintenance were mainly considered for designing of process flows. Other modules were covered in the review portion.

11. ACADEMIC CONTRIBUTION

This summer internship project gave me insight into following aspects: Enterprise Resource Planning (ERP) SAP Implementation overview SAP Blueprint phase Pharmaceutical Business Process (Sandoz)

11.1 Enterprise Resource Planning:

ERP is a Business Software system that enables an organization to effectively and efficiently manage its resources including material, people, plant and equipment across the entire enterprise. It is intended to facilitate information sharing, business planning, and decision making on an enterprise-wide basis. An enterprise processes is a companywide process that cuts across functional areas, business units, geographic regions and product lines. ERP software can be used to: o Manage product planning o Parts purchasing o Inventories Interacting with suppliers o Providing customer service

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o Tracking orders ERP also include applications modules for the finance and human resource aspects of a business. It allows data sharing b/w different systems (modules) and joint execution of business processes among different systems (modules). APICS Standard ERP Flowchart:

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11.2 SAP Implementation process

ASAP implementation methodology is being adopted in SHAPE Project. ASAP stands for Accelerated Systems Application and Products in Data Processing. All implementation projects have the following phases: Scoping - What is to be implemented i.e. which sub-modules are to be implemented some clients may not require credit management for example. Project scope document is carefully observed to know what sub-modules in SAP are prepared for. Usually the sales people along with project manager do it. As is - Here existing business processes of the client are understood. Business Process Owner(BPO) collect all the ISO-documentation (if client is ISO certified), reports and forms at this stage and analyze how and when the reports/forms are generated, where the data is coming from. Once this is over BPO can start learning with the consultants help more about SAP. This is crucial because if any transactions are missed out the BPO may forget about some of his Business processes which may come up later. It is a good practice to ask the BPO to make flow charts to explain business processes. To-Be - These processes are to be mapped to SAP. Processes are not sure of as to whether they are present in SAP or not, a configuration of those processes should be done, and along with the BPO. BPO involvement is required as he may be able to tell his requirements better. Once the business modeling is done, there will be awareness of the gaps between as-is and to-be, here decisions have to be made as to whether an ABAP development/system modification is required or not and so on. Business blueprint - Here the as-is and to-be and gap analysis is explained. This is the document that will be used to do configuration in the realization phase. Realization phase - Here configuration is done in the development server (there are three clients -development, quality, and production). Also, decision made on the master data format, so that BPO can go collect the master data. ABAP specifications for forms, reports etc, system modifications etc are given. Unit testing - The BPOs and a few key users sit down and test the configuration in each module only. Integration testing - Once all modules unit testing is over then the configuration is transported to the Quality server, where testing for all the modules is done by BPOs and end user, this is to check if any problems are there in integration between various modules. Once all is okay from the QA server configuration is transported to the production server.

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 Go live preparation - Data uploading: The collected master data is checked and the uploaded into production server. Now it is ready for go live i.e. users can now use the production server. ASAP methodology is standard process for implementation of SAP; it consists of 5 phases as also discussed above: 1. Project preparation - consists of identifying team members and developing strategy as how to go. 2. Business Blue print - consists of identifying the client current process, requirement and how SAP provides solution. It consists of detailed documentation. 3. Realization -The purpose of this phase is to implement all the business and process requirements based on the Business Blueprint. 4. Final Preparation - The purpose of this phase is to complete testing, end-user training, 5. Go Live and Support All the functional consultants need good rapport with ABAP coders right from uploading of legacy data, developing customized reports, BDC's, Forms etc, here functional consultants need to give guidance as to get the required data for reports.

11.3 SAP Blueprinting

The "Blueprint" refers to all the activities, which are necessary for the reproduction and description of the customer's business operations in an ERP System. These activities commence before the ERP project itself. This activity is to complete the Blueprint, which is one of the main deliverable. The Blueprint serves as the master plan, and becomes a detailed written document. This document shows the business requirements in detail, and serves as the basis for organization, configuration and, if necessary, development activities. Before any transactions can be reproduced in the system, the total business extent involved must first be defined. This is done by writing down the essential business processes that are to be supported by the ERP System. Once the framework has been defined (overall implementation plan), the individual business operations can be systematically analyzed in greater detail, documented ("scripted") and reproduced ("prototyped"). The activities stretching from the conceptual design to the documented prototype thus lead to the detailed solution. The Blueprinting phase is made up of seven major sections. 1. Project Management: The purpose is to establish a proper cycle of project management activities to ensure that the implementation project is on target. It determines all project planning, controlling and updating activities. It also identifies where changes in the relationship between business processes and the organizational structure need to be managed, in consultation with departmental management. Activities: Conduct project team status meetings Conduct steering committee meetings General project management.

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2. Change Management: The change management section addresses the organizational and human resource factors that impact the ERP implementation, ensuring the timely success of the implementation. This includes a series of change processes that allow the change team to manage organizational risk, accelerate the implementation, and optimize organizational processes. These change management processes ensure that the change team understands and manages the organizations perceptions of and responses to the changes that will occur as a result of implementing the ERP system. Activities: Create a Business Impact Map Complete the leadership risk assessment Develop sponsorship strategy Complete the baseline project team risk assessment Complete the baseline organizational risk assessment Establish the change communications framework Establish management structure for skills development process Establish management structure for knowledge transfer process 3. Project Team Training: The purpose is to train the project team to implement the system efficiently. Training should reflect the scope of the implementation, and the needs of the individual team members. 4. Develop System Environment: The purpose is to install and technically configure the technical sandbox client and development systems. Quality assurance system administration procedures are developed and checked for the development system. Activities: Create technical design Set up development environment Install setup of system landscape Systems administration Initialize implementation table settings 5. Business Organization Structure: The purpose is to define the enterprise organizational structure using organizational units, such as company codes and sales organizations. In conducting the organization structure workshop, several topics are discussed, including what enterprise process areas and business processes will be used in the ERP system setup or configuration? What organizational units within the company will be affected by the implementation? This will be the creation and definition of the organizational structure. 6. Business Process Definition: The purpose is to define the company requirements based on ERP business processes, to provide the required functions. Organizational structure is first defined. The business process definitions create your Business Blueprint. Activities: Prepare for business process workshops Conduct global requirements workshop Conduct business process workshops Conduct detailed requirements workshops Prepare end user training plan Complete Business Blueprint 41

 Business Blueprint review and sign off 7. Business Blueprint Quality Check: The purpose is final verification of all deliverables from this phase. It is critical that quality checks be performed throughout the phase, as tasks are completed. The Business Blueprint ensures that everybody has an accurate understanding of the final scope of the project regarding business processes, organizational structure, and system environment. In addition, this includes project team member training, project standards, and strategies in the technical area. Perform quality check and obtain a signed approval. The Business Blueprint is one of the main deliverables. It results in Documented and approved project goals and objectives. A well-grounded and detail implementation plan. Overall project schedule and implementation sequence Business process definition and organization structure A coordinated, cost-effective, and organizationally effective rollout plan. A successful ERP implementation.

11.4 Pharmaceutical Business Processes *

The different processes covered under SHAPE are as follows: Finance: Process and Validate Invoices Manage Outgoing Payments Perform Manual Postings Manage Collection Process Manage Asset Master Data Manage Asset Acquisition Manage Assets Under Construction Manage Asset Adjustments Manage Asset Sales/Disposals Manage period end closing (Asset Management) Maintain master data (Chart of Accounts) Manage Journal Processing Manage period end closing (General Ledger) Credit Management Controlling: Create Master Data (Controlling) Plan Overhead Costs Manage Period-end Closing (Overhead Controlling) Calculate Standard Product Cost Cost Object Controlling Manage Period-end Closing (PC) Manufacturing Planning Integration

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Manage Operational Budgeting Manage Project Structuring and Master Data Manage Project Status Management Manage period end closing (Project Controlling) Manage investment program Budget Control Maintain Investment Program Manage Period-end Closing Inventory

Indirect Purchasing: Manage Contracts Manage Stock Material Manage Supplier Supplier & Catalogs Manage Organization & User Requisition to Goods Receipt Inventory Management Receive and Put Away Product received into warehouse Receive and Put Away Product from in house production Material Staging for Production Manage Inventory Counting Pick Pack and Ship from Warehouse Stock Transfer Plant to Plant Transfer Postings Material Disposal and Miscellaneous Consumption Put away Product in Warehouse Pick Product in Warehouse Manage Transfers in Warehouse Physical Inventory in Warehouse Packing process for Outbound Receive and Put Away Product received into warehouse from Subcontracting and components consumption Net Requirement Transmission Commercial operations Commercial sales order generation Manage commercial sales backorders Manage commercial sales order deliveries Commercial invoice generation Maintain 3rd party customer Manage commercial sales master data Manage commercial sales returns and recalls Manage commercial credit & debit requests Consignment Sales Manage scraps and recyclables sales 43

Purchasing Manage Subcontractor Manufacturing Direct Purchasing Manage Supplier Returns Maintain info records and source lists Manage Outline Agreements Third Party Vendor Master Data Maintenance - Direct Purchasing SCM Planning Manage intra-company deliveries Net Requirement Planning (FDF Heuristic) Maintain SCM Planning Master Data Inter-company sales order generation Manage inter-company deliveries Load building and shipment execution for inter-company deliveries Inter-company invoice generation Inter-company purchase order generation Inter-company info flow error monitoring Manage inter-company purchase order changes Manage inter-company sales order changes Intercompany invoice verification Manage inter-company returns and credit & debit notes Manage inter-company returns to vendor Maintain inter-company sales master data Maintain inter-company purchase master data Maintain supply price database Data Preparation Forecast Creation Forecast Review and Release Direct Shipment from Vendor Manufacturing execution and Planning MRP for production and direct purchasing Schedule Bulk Production Execute Production Maintain BoM and Master Recipe Maintain Resources Rework & Repackaging Execute Production API MRP for production and direct purchasing API Rework & Repackaging API Schedule Production API Manage Loan License Manufacturing Manage Reject Production w/o output Manage Solvent Recovery Process 44

Plant Maintenance Overview - Create site structure for Maintenance & Calibration Maintain Functional Location Maintain Equipment Maintain Reference instrument as equipment Maintain Work Center Maintain Task List Maintain Maintenance Plan Schedule Maintenance Plan Work Order Corrective Maintenance Preventive Maintenance Planned Calibration Unplanned Calibration Maintenance Reporting Calibration Reporting Quality and Batch Management Perform Quality Inspection for externally procured goods Perform Quality Inspection for in-house produced goods Perform batch recalls Perform quality inspection for stock transfers Perform quality inspection for customer returns Deadline monitoring of batches (SLED, Re-Inspection) Batch Status Labels Procedures SLIM Maintenance of inspection plan SLIM Inspection Lot Processing SLIM Stability Management SLIM Master Data Maintenance SLIM Inspection lot processing in case of samples received directly in the Lab Capacity Evaluation MPS for Global Products GMP GMPs are rules for the manufacture of human and veterinary pharmaceutical and biological products GMP = Good Manufacturing Practices Good manufacturing practice (GMP) is a system for ensuring that products are consistently produced and controlled according to predefined quality standards. It is designed to minimize the risks involved in any pharmaceutical production that cannot be eliminated through testing the final product.

* - The standard processes are property of Sandoz and should not be reproduced. Thank you. 45

12. REFERENCES/ BIBLIOGRAPHY

Books/Magazines/Paper: ERP Executive Summary, CIO Magazine. Davenport, T. H. Putting the Enterprise into Enterprise Systems, Harvard Business\ APICS guidelines for ERP The Enterprise Resource Planning Decade: Lessons Learned and Issues for the Future Idea group Publishing ERP Demystified by Alexis Leon Website: www.sandoz.com www.novartis.com http://www.erp.com/component/content/article/3-general/4070-the-erp-systemsblueprint-where-it-all-begins.html www.sapfans.com/sapfans/asap/be_01_e.htm http://help.sap.com/saphelp_47x200/helpdata/en/48/623972d55a11d2bbf700105a 5e5b3c/content.htm

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