Eli Lilly is the tenth largest pharmaceutical company in the world.
Across the globe, Lilly has developed productive alliances and
partnerships that advance its capacity to develop innovative medicines
at lower costs. Eli Lilly’s global employees number approximately 40,000
and their medicines are marketed in 143 countries. Lilly has major
research and development facilities in eight countries and conducts
clinical trials in more than 50 countries. As a mature SAP
Pharmaceuticals installation, challenges with aggressive global growth
led to a search for better ways to manage material planning information.
AT A GLANCE
Industry: Pharmaceuticals
Revenue: US $21.8 billion
Employees: 40,300
Headquarters: Indianapolis, Indiana
Website: www.lilly.com
BOA™ Solutions and Services: cMat™
SAP® Modules Implemented: SAP Pharma, ERP
Implementation Partner(s): None
Growth has its challenges
Key points
Business was good and Lilly grew, doubling revenue between 2002 and 2009. While some growth was due to acquisition, much of that was organic as Lilly has continued to succeed with new drugs coming out of clinical trials. More drugs, however, led to challenges in the migration, in the tracking of product and materials at its plants worldwide.
Local data stewards were looking at things from a functional, not a process perspective. Plants were not well-integrated, and while the local plants took care of their own data, they did not have much input into global data standards or stewardship. Changes to global data values required approval from affected plants via faxed signatures and emails – all processed manually by the Center of Excellence (COE). There were too many manual transactions, and in such a fast-moving, highly regulated environment, that speed of processing just wasn’t good enough.
The process and magnitude of the data integrity problem peaked in early 2007 following Lilly’s SAP global implementation. Material master data was the key to supply chain integrity, and its governance process needed to become more sustainable and reliable, with fewer global stewards. Management knew that a solution needed to be found and quickly implemented.
On time, on value: why BOA was selected
Key points
- Only solution that could manage incoming data governance before hitting production system
- Automated workflow for material master data streamlined process
- Application code could be tailored to meet specific business requirements
- It was clear BOA understood Eli Lilly’s business need
Eli Lilly first encountered BackOffice Associates at SAPPHIRE in 2006. It was clear early on that BOA provided more than just automation – it was a complete solution that would allow Eli Lilly to manage data on the front-end of data entry, and redesign its entire data stewardship process. The data quality team saw the potential and arranged to have BOA come in and demonstrate their solution. They were impressed by the cMat workflow capability and saw the potential to automate much of the manual processes currently in the material master.
“From our first conversation with BOA it was clear they understood our business need – data governance requires effective collaboration; in our case, global collaboration. cMat has been a remarkable fit,” says Jim Long, supply chain consultant for Eli Lilly. Reference checks were conducted and the team was impressed by the stories they heard. With only five months until go-live, both Lilly and BOA knew the timeline was tight but it could be achieved.
The project was divided into two phases. Phase 1 implemented the global data governance process (approximately 100 fields in Lilly’s Material Master are global). Before cMat, each plant would initiate changes through a multi-site approval process which required emails and faxed signatures, resulting in delays and errors. Now changes are submitted directly in cMat and then instantly distributed to the affected local data stewards through workflow. Emails, faxed signatures and manual tracking logs are eliminated, the global data dedicated staffing has dropped from six stewards down to one, and the cycle time for master data completion is improved by more than twothirds over the old process.
Phase 2 streamlines the processing of local supply chain master data. The business shares in ownership enabling data stewards to focus more on the process. Local plants choose which standard business roles to involve in the workflow, which automates the collaboration necessary to maintain master data effectively. With no more spreadsheets or double-data entry, the new workflowprocess results in a minimum efficiency gain of 25 per cent at the local data steward level.
Local data stewards are excited about cMat because they will be able to maintain local control over all ‘Create’ and ‘Extend’ scenarios with site-specific default settings. While processing over 4200 global requests in 2008 in cMat, the number of global data stewards has been reduced from six to one, an 85 per cent reduction in staffing and a savings of almost $750,000 annually. “That’s just the hard dollar benefits, not counting the effect on some of the local data stewards and gains in data quality and compliance we will achieve by the end of phase 2,” says Long. The value of active data governance is being recognised beyond the Material Master. At the request of the quality organisation, additional functionality has been configured within cMat to improve the governance of Country Registration master data, a key regulatory tracking mechanism.
Among the financial and operational benefits achieved were: yyDecreased global data staffing from six to one full-time equivalents yy60 per cent+ cycle time improvement for master data completion yyWent from four to six data-related procedure deviations annually to no deviations post-implementation yyFive-month implementation.
Partnering for continued success
“Based on the results from Phase 1, we can see the potential and are looking at measuring business outcomes for the entire project at the end of the Phase 2 rollout,” says Long. Eli Lilly’s data auditing processes are evolving, and this is high on their list of future initiatives. They have realised that no amount of reports in SAP can show data gaps and the results achieved. In order to better measure their data already in their master data systems of product, vendor and customer, Lilly continues to explore other BOA tools and services. Next steps include a cMat Phase 3 for automating BOM and Routing master data, and implementing an integrated data audit process, and leveraging their investment and experience with cApps™ into other business functions beyond supply chain.
This case study is sponsored by BackOffice Associates, LLC.
This article was first published in Inside SAP Yearbook 2012 (published in September 2011).
