Implementation of SAP in Getz Pharma

Implementation of SAP in Getz Pharma

Submitted by: Moniza Aslam (56325) M Bilal Sheikh (56426) M Shahzad Meo (56127) Program: BBA-ERP Course: INTO TO MIS ERP Sir MAQSOOD RAZI

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Implementation of SAP in Getz Pharma

Contents
Acknowledgement ........................................................................................................................................ 4 Company profile ........................................................................................................................................... 5 Mission: ........................................................................................................................................................ 6 Values: .......................................................................................................................................................... 6 Getz Pharma Enterprise Management on SAP: ............................................................................................ 6 Enterprise Resource Planning (ERP): ........................................................................................................... 7 Advantages of ERP: .................................................................................................................................. 7 Disadvantages of ERP: ............................................................................................................................. 7 Introduction to SAP ERP: ......................................................................................................................... 7 Introduction to SAP AG: .......................................................................................................................... 7 Implementation: ........................................................................................................................................ 8 Deployment and Maintenance Cost: ............................................................................................................. 8 SAP MODULES: .......................................................................................................................................... 8 SAP Financial Module: ................................................................................................................................. 8 SAP Controlling:....................................................................................................................................... 9 Cost Element Accounting: ........................................................................................................................ 9 Cost Center Accounting: ........................................................................................................................... 9 Internal Orders: ......................................................................................................................................... 9 Activity Based Costing: ............................................................................................................................ 9 Product Cost Controlling: ......................................................................................................................... 9 Profitability Analysis: ............................................................................................................................... 9 Profit Center Accounting: ......................................................................................................................... 9 SAP Human Capital Management: ......................................................................................................... 10 SAP Sales and Distribution Module: .......................................................................................................... 10 SAP Material Management Module (MM):................................................................................................ 10 SAP Quality Management: ..................................................................................................................... 11 SAP Production Planning: .......................................................................................................................... 11 HOW ERP IMPLEMENT Questionnaire .................................................................................................. 12 Cost Benefit Analysis: ................................................................................................................................ 15 Page 2

Implementation of SAP in Getz Pharma

Recommendations: ...................................................................................................................................... 15 References:.................................................................................................................................................. 15

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Implementation of SAP in Getz Pharma

Acknowledgement

First of all Thanks to Almighty Allah who gave me strength to study.It is an honor for me to prepare this report on Implementation of SAP in Getz Pharma. This was assigned to us by our respected teacher SIR. MAQOOS RAZI. I have really gained much knowledge from this subject of Management Information System and ERP and the most important point is the methodology of teaching of our teacher who makes the difficult topics very easy for us in a much efficient and prcised way. May Allah bestow His blessings upon him to serve the young generation in the same way forever. Sincerely,

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Implementation of SAP in Getz Pharma Company profile

Getz Pharma is the fifth leading pharmaceutical company of Pakistan and is the most important pharmaceutical exporter from Pakistan.Getz pharma had been awarded best performance award in pharmaceuticals from FPCCI for last five successive years for the being uppermost exporter in pharmaceuticals. Getz Pharma is the second highest investor and taxpayer in Pharmaceutical sector of Pakistan that is the good commercial citizenship and governance.Getz Pharma is also the second largest contributor to Ministry of Health Central Research Fund (CRF).The company provide work for 2,500 people in Pakistan. Getz Pharma assembles the products that meet and go beyond the standards of international markets.Getz Pharma is marketing its products to Philippines, Malaysia, Vietnam, Hong Kong, Afghanistan, Kenya and central Asian States. The fact that their products are globally accepted and demanded is the assurance b y the medical community and patients globally.Getz Pharma has a well-entrenched leadership position with major shares in hepatology, gastroenterology, diabetology.cardiology and infertility, as well as strong presence in following therapeutic areas: Pulmonolgy, Orthopedics, Rheumatology, Infectious diseases, Pediatrics, ENT. Brands of Getz Pharma holds market leadership in their respective classes including Uniferon and Risek which are the 13th and 20th largest brands of entire pharma industry of Pakistan.

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Implementation of SAP in Getz Pharma

Mission:
Mission of Getz pharma is to increase and manufacture and market safe and quality and health care products that will improve health and quality of life.Getz pharma is also providing the highest toll manufacturing services to other ethical marketers of health care products.

Values:
Respect for People: Principles, employees, suppliers are the quality and services basis of Getz Pharma which are responsible for quality management, marketing and reputation so each share is treated with dignity and fairness. Respect for Business Associates and Clients: Getz pharma is trying to build and sustain longterm and visible relationship with its business partners it will penetrate the production with reliability and trust. Focus on Safe Technology: Getz Pharma is a socially responsible pharmaceutical company it is using the technology that adds value to its products and services without causing harm to the environment.

Getz Pharma Enterprise Management on SAP:

Getz Pharma being a leading pharmaceutical company is constantly investing in the state of technology, people and system to implement SAP.Getz Pharma implemented SAP in 2008, now every function in Getz Pharma is running on SAP, by using SAP entire business model was decoded on to SAP. Getz Pharma uses following modules: Sales & Distribution Material Management (MM) Production Planning Plant Maintenance Quality Assurance / Control Financials Controlling Human Capital Management (SD) (PP) (PM) (QM) (FI) (CO) (HCM)

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Implementation of SAP in Getz Pharma Enterprise Resource Planning (ERP):

Enterprise resource Planning is used to manage and control the information of different functional areas in an organization, which includes finance,manufacturing,customer relationship management, supply chain management, sales and Distribution. It not only controls the internal flow of information but also manages the external information.

Advantages of ERP:
Build well-organized working environment for employees. Reduces possibility of redundancy and mistakes. Provides genuine information. Need to be updated once when implemented. vendors have best past knowledge to deal and take advantage from the system Provides global assimilation.

Disadvantages of ERP:
May cause project failure if not properly implemented Inflexibility Expensive Take too long to generate ROI (Return On Investment).

Introduction to SAP ERP:

SAP ERP is manufactured by SAP AG used by midsize and large business organizations in all sectors it is integrated Enterprise resource Planning software that allows communication between all functions of the company.

Introduction to SAP AG:

Five former employees of IBM founded SAP AG in 1972 to create and develop a real time business data system.SAP is based on modules programs that are purchased, run and installed individually but extract data from the common database.SAP AG has launched its upgraded its Enterprise resource planning in 2005 as SAP ERP Central Component (ECC) 6.0.The purpose to upgrade the ECC was to build and create an environment where all the functions works upon the foundation of central component. SAP modules support several functional areas which include:
SAP ERP financials SAP ERP Operations SAP ERP Human Capital Management Page 7

Implementation of SAP in Getz Pharma

Implementation:
Implementation cost of SAP ERP is very high even then many organizations fail to implement SAP ERP properly they experience several problems .SAP ERP combines and collects data from several modules in order to provide organizations with Enterprise Resource Planning. It consists of several modules like product design and development, human resource management, utilities of marketing and sales inventory control and finance and accounting.

Deployment and Maintenance Cost:

Estimated cost of implementing SAP ERP for large companies including hardware, software and consulting cost can easily go above$100 million (around $50 million to $500 million) and many `large firms also spend $50 to $100 million on up gradation of its SAP ERP, small companies dont need to apply SAP ERP until and unless they have possibility of being a mid siz ed firm.Mid sized firms spend approximately $10 to $20 dollars on implementation of SAP ERP,cost of implementing SAP ERP depends on the size of an organization greater the size higher will be the implementation cost.

SAP MODULES:
Most widely used SAP modules are Human Resource, Financial and Controlling (FICO), Sales and Distribution (SD), Material Management and Product Planning, Quality Management (QM) and Plant Management. Each module is integrated to the other one but perform its own business task.

SAP Financial Module:

One of the most essential modules in SAP is SAP financial module it is designed to deal with finance and accounting needs of an organization and is used to integrate activities within an organization and provide updated information of finance which is useful to make strategic decisions in an organization. More than 30,000 best-businesses in 120 countries are running SAP for their financial activities. Flexibility of financial modules can tackle any economic condition. SAP Finance module has following sub modules:
General Ledger Account Receivables Asset Accounting Account Payable Travel Management Bank Accounting.

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Implementation of SAP in Getz Pharma

SAP Controlling:
The SAP CO module works closely with financial module of SAP and it takes data from internal management and provides them review of cost so that management can analyze profitability with the help of that data.

Cost Element Accounting:

This module deals with the cost accounting it enable the user cost of each account and works with FI module to provide all information related to revenue and cost within the organization.

Cost Center Accounting:

This module provides information related to the cost incurred by an organization, it works closely with both functional and business areas of the organization. Cost centers handle finance, support, legal, marketing, human resource.

Internal Orders:
This module is used to collect business transaction information and internal order review for decision making.

Activity Based Costing:

It enhances Cost Center Accounting and provides cross-factional view of Cost center Accounting it is used with Product Costing and Profitability Analysis.

Product Cost Controlling:

Determine manufacturing expenditure and variation.

Profitability Analysis:
Provide report by product line, distribution and internal measurement.

Profit Center Accounting:

Provide sales and profit report from the market segments and customers.

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Implementation of SAP in Getz Pharma SAP Human Capital Management:

SAP HCM is most popular and important module of SAP, it help organizations to manage and integrate information about people working in an organization contain all data from hiring, firing till retirement. It manages and controls all the information of employees like absences, training of employees. It helps an organization to manage information of your most valuable assets your people. It consists of following sub modules: Organizational management Payroll Personnel Management Development and Training Event Management Personnel Administration Time Management

SAP Sales and Distribution Module:

SD module of SAP deals with the sales and billing orders of consumers, logistics, shipping and invoice creation works along with Material Management and Product planning modules of SAP.SAP works with these modules because when an invoice is generated it triggers the availability and demand of product which automatically impacts the PP module unavailability of product may impact MM module by making order for the availability of product from vendors to overcome the unavailability.SD module provide overall information of demand and supply of the product, it support Supply Chain Management (SCM),Supplier Relationship Management(SRM),Business Information warehouse(BIW). Sales and distribution have following sub-modules:

Output Management Pricing conditions record Material Master Credit Management Customer master

SAP Material Management Module (MM):

This module deals with logistics and its management.SAP MM module issues a requisition for purchase of material than purchase order is issued for the authorized vendor than SAP MM module generate a receipt for the goods requested from the vendor. It manages all the vendor information, suppliers information,purchases,scheduling agreements, replenishment of stock and inventory management are all controlled by this module.SAP MM module issues requisition for purchases of material.
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Implementation of SAP in Getz Pharma SAP Quality Management:

This module of SAP controls and manages the quality issues. It provides assurance that the product meets the standards of company product terms. It uses components like Quality Planning, inspection, notifications and certificates and test equipments. It supports product planning, supply chain management and quality of assets to make it efficient and effective.

SAP Production Planning:

It controls master data regarding production in MRP (Material Requirement Planning) it manages information about stock replacement, stock requirement and correct extent is available on time. Production planning deals with the demand and production, billing and requisitions of material, long term production planning, quantity required.

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Implementation of SAP in Getz Pharma HOW ERP IMPLEMENT Questionnaire

1. What was the basic motivation in going for an ERP system?

Real time transaction posting. To have a controlled and well integrated system. Implementation of Best Practices. Paperless environment. 2. What were the problems that you faced with the earlier system or process? The product was not matured. Unable to cover all organizational critical business processes. Flexible and detailed reporting was not available. Not many features were available, and some features were not fulfilling our requirement.

3. What kind of planning was done before implementation? Preparation of as-Is business processes. Choosing the best people for the entire project. Selecting the right implementation methodology. Choosing experienced implementation partner.

4. What were the steps in implementing the process?

It depends on the methodology you have selected for the implementation. We had selected ASAP methodology and Big-bang approach. Following are the steps involved in the entire project. Project Preparation. Business Blueprint. Realization. Final Preparation. Go-Live & Support.

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Implementation of SAP in Getz Pharma

5. How you selected the ERP and Modules? We had approached the top companies around the world in our business domain We had reviewed their success stories that how ERP helped them in achieving their goals. We selected ERP with user reviews of people already running that ERP. We selected modules with demo of particular module and our existing scenarios. 6. Evaluation of the current implemented process (Success and problems)? After the implantation of ERP we had gained over 100 % improvement in our processes efficiencies. We had to change some of our existing business processes according to best practices proposed by the ERP. 7. Financial, operational, customer satisfaction and other indicators before and after implementation? After implementing SAP our system and business became more efficient by which not only our internal environment was benefited but it also become beneficial for our external factors.It increased confidence in financial reporting and address changing financial compliance requirement, it reduced our cost and provided our business with business process monitoring, which provides alerts when a process breaks or slows down. If a purchase order is created but not approved within a certain timeframe that will create an alert and potentially save the company money. 8. What is the cost of maintaining and implementing ERP?
The cost is actually very high but if the internal team is capable and trained enough you can control that cost.

9. Did you achieve the outcomes you expected? Yes, we achieved 90% of what we were expecting.

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Implementation of SAP in Getz Pharma

10. What was and what is your employee ratio before and after implementation of this process? This can vary from company to company but job functions and roles of employees are changed after ERP implementation. Employee feel empowered after having working experience of ERP. There might be a possibility that employee turnover may increase if the company does not compensate the employees after ERP implementation.
11. What was the IT Infrastructure?

It depends on the current IT infrastructure of the organization but there is a possibility that you have to invest significantly in the infrastructure. 12. How can businesses use ERP for competitive advantage?
For some organizations it is necessary to implement ERP while other use it as competitive advantage.ERP it self do not create competitive advantage but it provide basis which managers can utilize to outperform competitor.Impotance of Top-level management support ERP and data warehouses as a bolt on is very beneficial for an enterprise.

13. Why is it so difficult to implement ERP?

Because people dont want to change themselves. Companies hesitate in huge investments. ERP enforce you to change yourself. Expertises are very limited.

14. How many modules are there in SAP/ORACLE/MICROSOFT DYNAMICS?

ERP covers almost every functional area of any enterprise. Some of the major modules of ERP are listed below. Financial / Controlling

15. How many are implemented and why?

We have implemented all from above list except. Warehouse Management. Advance Planning and Optimization. Those which are not implemented and why? Right now these are not required.

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Implementation of SAP in Getz Pharma

16.What are the benefits?
There are numerous of benefits. Integrated environment. Centrally maintained information. Easy access on information. Properly secured data. Paperless environment.

17.Time period (for how long is ERP implemented)?

It depends on the scope of the project but it should not take more than 1.5 years to implement.We had implemented in six months

Cost Benefit Analysis:

From the above information the cost or investment in the project of implementing SAP is high but its benefits are higher than the investment made, Company has achieved its corporate objectives and had improved operational efficiency and productivity and has solve complex business challenges.SAP has also increased profitability, financial controls and managed risk. By implementing SAP in Getz Pharma new ways are provided to employees in order to access the enterprise information required for their daily activities which had increased the efficiency and accessibility.

Recommendations:
In order to make business process more effectively and get more benefits from imlpemnetd system following things should be considered:
Update the system to get more benefits. Train their employees about updated changes so that employees become more familiar to the system. Evaluate business process needs in order to make improvements.

References:
http://www.getzpharma.com/default.php http://www.erpexecutive.com/2011/03/deliver-more-benefits-at-lower-cost-with-sap-applicationlifecyle-management/ http://www.springerlink.com/content/ru65767m114x1213

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