Orchid Pharmaceuticals, with a strong presence in the global antibiotic market, has gone in for SAP implementation to increase its operational efficiencies.

The Chennai-based company develops bulk drugs, formulations and focuses on drug discovery. Since Orchid was transitioning from a high-volume, low-value pharmaceutical segment to a company selling high-volume and high-value products, it needed to infuse considerable efficiency and therefore opted for SAP.

"We faced high communication costs and loss of productivity and needed a solution to improve transactional efficiency, to become a global company, this is where SAP proved its mettle," stated NC Raghu Ram, vice- president-IT, Orchid Pharmaceuticals.

Prior to SAP implementation, the company utilized an outdated in-house developed solution which was incompatible on a wide area network and high maintenance cost. In order to improve transactional efficiency and provide a platform to measure and monitor performance in all business units and functions, it installed an enterprise wide solution prescribed by WHO Good Manufacturing Processes (GMP) for pharmaceutical companies. After extensive evaluation of several major ERP solutions, SAP India's mySAP fitted the bill, he added.

The SAP solution is a totally integrated. It is already being used by a majority of pharmaceutical companies, both in India and abroad. It has a pre-configured best practices solution based on the specific needs of pharmaceutical firms.

Among the notable benefits for Orchid after implementing the SAP solution included integration of operations. Its capacity utilization increased to 93 per cent from 85 per cent while idle time due to raw material shortage fell from 8 per cent before implementation to 5 per cent after implementation. The company is now able to respond to customers within one day, compared to 10 days in the past.

Other tangible benefits of the implementation included seamless information access to the right person at the right time and in the right place. As a result, Orchid Pharmaceuticals has witnessed an improvement in transactional and communications efficiencies.

When Orchid Pharmaceuticals decided to go in for SAP, it targeted key performance indicators like profitability of sales, capacity utilization, inventory turnover ratio, reduction in procurement costs and reduction in transaction time. The results exceeded the company's expectations in several KPI areas, such as SBU level performance, higher capacity utilization and inventory turnover ratio. According to the company, the achievement levels have ranged from 50 per cent of envisaged benefits to more than 100 per cent, in the case of a few KPIs.

It took only six-and-a-half months for Orchid Pharmaceuticals to go live with SAP. Various modules of the SAP solution were implemented under the pre-configured best practices solution which covered financials, materials management, product management and human resources.

Now, it is considering to go in for extended solutions like Customer Relationship Management (CRM) and Supply Chain Management (SCM). For Orchid Pharmaceuticals, the payback from implementation of Best Practices from mySAP Pharmaceuticals has been sizable, added Ram.