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Transcript of 02 David SAP at Ranbaxy
Privileged and Confidential
Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 1
Ranbaxy Global InformationTechnology
SAP at Ranbaxy“The Good, The Bad and The Ugly”
SAP SummitMumbai
June 6, 2007David Briskman
VP and CIO
1
Privileged and Confidential
Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 2
• About Ranbaxy• IT at Ranbaxy• The Good, The Bad and The Ugly
– R/3– APO
• Q & A
Agenda
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 3
Ranbaxy Mission Statement
“ To become a Research based InternationalPharmaceutical Company ”
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 4
About Ranbaxy
London,Europe
Gurgaon ,India
SingaporeAsia
Sao Paulo, BrazilSouth America
Princeton NJ,North America
Sales in 125 CountriesOver 12,000 Workforce
India’s Largest pharmaceutical company 2007 Sales ~ US$ 1.6+ bn
Ground Presence in 49 Countries
Privileged and Confidential
Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited
Business Model
Global Reach
• Developed Markets
North America, EU, Japan
• Emerging markets
India, Romania, CIS, Africa
Manufacturing
Product Portfolio
Research & Dev.
• Generics
• Branded Generics
• Branded & OTC
• Dosage Form
• API* - Vertical Integration
• In-house / Outsource
• The India advantage
• New Chemical Entities
• Generics / NDDS*
• Complex / Niche/ FTF*
• The India advantage
* NDDS - Novel Drug Delivery System, API – Active Pharmaceutical Ingredients, FTF – First to File5
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited
Global Presence
6
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 7
Global Manufacturing Presence
China
Malaysia
Ireland
Nigeria
USA
Vietnam
IndiaActive Pharmaceuticals Ingredients (APIs)Facility, Mohali Dosage Forms Facility, Paonta Sahib]
25 Plants in 11 Countries
+South Africa, Japan, Brazil
Romania
• Plants approved by all key regulatory bodies• Ability to manufacture complex molecules• Quality Engineering Cells operational at all locations• High degree of backward integration• Stringent quality control and cost leadership• Successful partnership with vendors for quality compliance
Privileged and Confidential
Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 8
Global Supply Chain of Ranbaxy
MarketsPlantsFormulationAPISuppliers
Direct- to-distributor
API customers
RW(India) C&FA
(India)
Regional Plants(USA/EUROPE)
Global Plants(Dewas, PaontaSahib,Goa, Jejuri)
Own Plants (Mohali,Poanta Sahib,Toansa, Dewas)
API ContractManufacturers
API RM / AdvancedIntermediate suppliers
API suppliers
OtherRM suppliers
PM Suppliers
Stockists
In-country stockingpoints (JAX)
Contract Manufacturer /Third Party / FG Imported
Privileged and Confidential
Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 9
Supply Chain ComplexityMarketsPlants
FormulationAPISuppliers
Direct- to-distributor
API customers
RW(India) C&FA
(India)
Regional Plants(USA/EUROPE)
Global Plants(Dewas, PaontaSahib,Goa, Jejuri)
Own Plants (Mohali,Poanta Sahib,Toansa, Dewas)
API ContractManufacturers
API RM / AdvancedIntermediate suppliers
API suppliers
OtherRM suppliers
PM Suppliers
Stockists
In-country stockingpoints (JAX)
Contract Manufacturer /Third Party / FG Imported
Demand SideComplexity
• Customers in125 countries
• 6 Distributionmodels
• ~7000 SKUs• 3 new product
introductionsper day
Supply SideComplexity
• BackwardIntegrated (21 DF
& API plants)• 40+ ContractManufacturers
• 30+ Third PartySuppliers
• ~ 1000+ RawMaterials• 15000+PackagingMaterials
Privileged and Confidential
Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited
Research & DevelopmentDedicated Facilities for Innovative & Generics Research
> 1400 R&D Personnel ( ~ 250 PhD’s)
8-10 NCE molecules in pipeline
4 NDDS platform technologies
~ $ 100 Mn total spend (6.4% to sales)
Collaboration in DrugDiscovery Research(DDR)
Out-licensingin Novel DrugDelivery Systems
Out-licensingin DDR
R&D I
R&DIII
R&D II
R&D IV
10
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited
Global Sales (2005 - 2008e)
$ MnCAGR* ~ 19%
~ 1900 e
e - estimate
400
800
1200
1600
2000
2005 2006 2007 2008
11781339
1607
* 3 year CAGR on like-to-like basis .i.e. excluding allied businesses divested in 2005 11
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited
Recent Acquisitions & Alliances
Terapia (Romania)
Be-Tabs (South Africa)
Allen (Italy)
Ethimed (Belgium)
Mundogen (Spain)
Derma Brands (BMS)
Zenotech (India)
Krebs (India)
Jupiter Biosciences(Ind.)
Cardinal Drugs (India)
Orchid Pharma (India)
Auto-injector Tech.(USA)
12
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 13
IT Top Priorities
• PeopleRetention, Development and Recruitment
• Accelerate Product to Market Time• Enable Supply Chain Excellence• Deliver Business Intelligence
Privileged and Confidential
Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited
IT Overview at RanbaxyMix of enterprise applications like SAP R/3, APO, BW,
Pharma-co-vigilance, Document Management, Sales Force
Automation and host of local applications including
workflows based applications and a strong web presence
A highly scalable and fault-tolerant Infrastructure across the
globe – MS Exchange as global communication platform
Major thrust on Information Security
Business Continuity Plans for key systems
Disaster Recovery setup for SAP R/3 environment.
14
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 15
Global Infrastructure Foot print
11-Jun-08
Cambodia
Vietnam
Singapore
Thailand
China
KazakhstanItaly
Peru
US
RussiaLithuani
a
UkrainePortugal
UK
Germany
Brazil
PolandFrance
SouthAfrica
India
Locations With RPC \ Httpfrom Corporate - 12
Overseas Locations withExchange Server - 10
Ireland
Spain
Malaysia
Australia
Nigeria
Japan
Romania
Myanmar
Morocco
Sweden
Senegal
Uganda
UAE
Zimbabwe
Namibia
Mexico
Mauritius
Latvia
Kenya
Austria
Bulgaria
Cameroon
Egypt
Ranbaxy Locations - 49
Belarus
Belgium
IvoryCoast
Hungary
Guatemala
Canada
Nepal
SriLanka
SAP R3 Locations - 19
Privileged and Confidential
Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 16
2007 Operating Statistics –“Keeping the Lights On”
IT HelpdeskHandles Approx
110, 000 callsannually and
resolve 99% withinSLA period
Global Data Centershaving > 425 Serversacross enterprise with
averaged uptime 99.5% -Keeping the Business
Connected
10000 Userid’s &Mailboxes managed
globally
Typical month has 15 millionexternal attacks and 3500 VirusAttacks – IT Firewall Protects
the business
2000 SAP users doing > 3,000,000transactions in SAP annually
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 17
Some Certifications
Focus on ITSecurity &Processes
First majorPharmaorganization inIndia to getcertification
17
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 18
Some Certifications
Focus on SAP SupportProcesses andDocumentation
First company in Asia pacificto get certified by SOCAroute
First company in India to getrecertified 3rd time
SAP CCC
18
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 19
SAP R/3 is our Transactional Backbone
• ~ 75% of global turnover and more than 100 sites world-wide run SAP
• One System - Global Single Instance
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 20
RANBAXY: SAP Overview
SAP R/3 FootprintAll the modules of SAP R/3 are implemented and used.Single R/3 instance used globally.17 Company Codes and 12 Representative Offices12 Manufacturing Plants; Various C&F and WarehousingLocations and Logistics Partners
SAP R/3 System Metrics2.3 TB in a single central R/3 database.Live in > 100 locations across globe with 1900+ users.8,50,000+ dialog steps / day0.8 seconds average dialog response time.99.9% Uptime.
2020
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 21
Current Ranbaxy Locations usingSAP R/3
• Company Codes (21)India(1), USA(6), UK(1), Ireland(1), France(2), Germany(1), Russia(1),Malaysia(1), Canada (1), Belgium(1) Sweden (1) China (1), SouthAfrica (3)
• Representative Offices (12)Asia(3), Africa(3), CIS(6)
• Manufacturing Plants (14)India(8), US(2), Ireland(1), Malaysia(1) China (1), South Africa (1)
• C&F Locations (44)India (C&F 39, RWH 3, IDWH 2)
• Logistics Partners
Germany (caremaxx), UK (CPD
Logistics)
France (CSP - batch process)
• Subcontractors & Loan Licensees
India(4)
59 LLs and 25 Subcontractors
through Back Office
• Shared Service for Accounts
Payable
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited
SAP Components – Used / UnderImplementation
R/3 4.6c
MS Windows
2003
MS SQL 2000
~ 1900 Users
~ 100 Locations
~ All Modules
SCM 4.0
HP-UX /
Oracle
~ SNP
~ PPDS
~ DP
BW 7.0
CRM 4.0
XI – 3.0
EP – 7.0
SEM – 6.0
HR – 4.6c
SolutionManager – 4.0
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 23
SAP R/3 Journey in RanbaxyRussia, Romania, Poland, Brazil - 2009
ECC Upgrade & Rollouts - 2008,South Africa – 2008
Belgium, Sweden, China- 2007Malaysia – 2006
Germany, Rep Offices– 2005France, Russia (Front Office) – 2004
Ireland, UK, LLs / CMs in India – 20034.6.c Upgrade – 2002
Complete India – 2001US– 2000
First go-live in India – April 1999Project Start – April 1998
DONE
TOTALAROUND100 SITES
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited
SAP R/3 System Statistics
Number of HR Records 20900
Number of User Exits 103
Number of Z-Programs 3071
Number of Transactions steps per day 920000- 930000
Number of Unique transactions per day 2200- 2300
Number of Sales related Orders Per day 3200
Number Purchase related Orders per day 355
Number of Goods Receipts per day 1350
Number of Material Movements per day 6630
Number of Process Orders per day 580
Number of Plant Maintenance orders per day 200 – 250
Number of Inspection Lots per day 872
24
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 25
SAP Resourcing
• One global team (CoE) under single head withpeople in India, US and EU (primarily India)
• Day-to-Day Support is “offshored” in India• All Implementations done with internal team• APO – Internal Team with partner for support• New Age Products – Internal Team with spot
expertise• External expertise is used to augment internal
team only when required
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 26
SAP R/3 at Ranbaxy
It is good to knowwhich is which
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited
• CCC – 3 consecutive times and SAP ACE 2007• System enablement of Shared Services: 2006-07• Electronic Banking and EDI (charge backs etc)• Streamlining and uniformity of processes across
organization• Faster integration with new entities / M&A• Online analysis of Supply Chain performance based on
several Key Performance Indicators• Online reporting of inventory, sales and receivables
resulting into enhanced productivity• Successful handling of Multi Lingual SAP settings• Successful management of Statutory and regulatory
checks and audits by having systematic processes in place
R/3 – “The Good”
27
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited
R/3 – “The Good”• Digitization of approval process - use of workflows
• Centralized database for masters and transactional dataresulting into Enhanced visibility and control on Global Spend
• Electronic Banking is used in most of the locations usingautomatic payments
• System based Audits
• Enables selling in regulated markets
• Overall SAP has led to increase in sales, reduction ininventory, increase in productivity etc.
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited
ROI estimated at 200%
Quantified Savings in Many Areas:
1. Increase in Sales
In US due to integration with customers
In India due to integration with CFAs
2. Reduction in receivables
3. Reduction in inventory
4. Savings due to productivity
SAP Returns – Macro Level
29
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R/3 – “The Bad”
• R/3 is still cumbersome to use• Perception of value still requires effort• Data rich but information poor• For small sites it is digging a small hole with a
back hoe
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited
R/3 – “The Ugly”Master Data
Material Codes 235,700
Vendor Codes 77860
Customer Numbers 116960
Total Number of Recipes 59871
User Roles 9000
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SAP R/3 at Ranbaxy – Next Steps
• Complete ECC 6.0 Upgrade• Complete BW & SEM Implementations
– Financial Consolidation– Common and Market Specific KPI Dashboards– Business Planning and Simulation
• Complete R/3 Roll-outs to top markets• Clean-up Master Data• Application consolidation of minor systems• Plan HR ESS Deployment
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Commencement of APO
• Key driver for implementing an APO at Ranbaxywas the increasing complexity of the SupplyChain due to rapid business growth.– FG SKUs: >7000 Active– RM+PM SKUs: >20000 Active– Countries: >100– Manufacturing plants: 16 own DF plants, 5 own API
plants and > 40 Contract Manufacturers and LoanLicensees
– 4 New Products introduced everyday
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Project Objectives and Expectations
“Transform the supply chain to substantially improve customer service levels in theshort term whilst maintaining optimal inventory levels”
Immediate Objectives
Medium Term Objectives
“Build Ranbaxy’s supply chain capability to be a source of competitive advantagethe global generics market”
Supply chain Planning for Enhancing Customer service To Ranbaxy’s Universal Markets
•Provide End to end Supply Chain Visibility
•Increase flexibility and responsiveness ofsupply chain
•Support Ranbaxy’s vision and growth plan
Spectrum
APO
Implem
entation
•Provide integrated planning capability
•Improve analytical capabilities such asWhat-If analysis
•Provide automation of planning tasks
•Sustain/enhance Spectrum benefits
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Global ITGlobal IT “We Deliver Value Everyday”© Copyright 2008 – Ranbaxy Laboratories Limited 35
SPECTRUM+ : Implementation of APO
• Project Spectrum+ started in April 2004 to implementSAP APO at 5 markets and six manufacturing plants tocover:– Forecasting– Distribution Requirement Planning– Deployment Planning– Production Planning and Detailed Scheduling
• APO Modules to be implemented:– DP (Demand Planning)– SNP (Supply Network Planning)– PPDS (Production Planning and Detailed Scheduling)
• Overall project duration– Spectrum : 12 months (starting April 2003)– Spectrum+ : 30 months (starting April 2004)
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Transaction System Non R\3Transaction System
Integration Layer
BW
SAP-SCM(APO)DemandPlanning
ProductionPlanning/
Detailed Sch.Scheduling
SupplyNetworkPlanning
AvailableTo
PromiseTransportation
Planning
APO (Advanced Planner and Optimizer) is an integrated suite of modules covering all keyfunctional areas within Supply Chain Planning area.
Source: SAP
Overview of APO Architecture at Ranbaxy
36
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Current APO Planning Statistics
Demand Planning• Product Locations Planned: >90000• Locations Planned: >150• SKUs Planned: >10000• Number of Jobs run – >500 pm
Supply Planning• FG SKUs Planned: > 7000• RM SKUs Planned: > 20000• Work Centers Planned: >1500
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APO at Ranbaxy - “The Good”
• First Market rollout took place in March 2005.• Rollouts happened at the following markets and
plants till December 2006:– Markets: India, US, UK Germany, Russia &
CIS– Plants: DF – Dewas; API – Mohali, Dewas,
Toansa• Measurable results being realized in Forecast
Accuracy and Improved Customer Service• Project continues to deliver results as it is
deployed to more markets
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APO at Ranbaxy - “The Bad”
• Project has taken much longer than expected• Significant issues with maintaining both internal
and external expertise base• Early “customizations” causing on-going support
requirements• After 2 years, project team lost focus
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APO at Ranbaxy – “The Ugly”
• Original Implementation Partner Fall-Out• Project got “Lost” for 12 months• PPDS was over-engineered to solve everything
and did not deliver workable schedules• Steering Teams focused on technical issues• Project was perceived as failure
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“For a Few Dollars More”…..
• Called in SAP Value Engineering
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API Mfg.RM & PKGSuppliers DF Mfg. BSR Logistics
Reg’l W/HCFA’s
Reg’l Office/Customers
SupplyChain
Process
KPI’s &Org.
Demand ForecastNDR –GlobalNDR-Plant
DF Schedule
NDR - API
BSRInvent.
GIT Reg’lInvent.
Mfg. Commits
DIFOTF’castAccuracy
FG InventoryTurns
Requirement Vs.Commit
Commit Vs.Actual
InventoryTurns
MarketsMarketingSCSCSC/MFG
Mat’lsInvent.
RM/PKG – Purch.WIP - MFG
1. Improve visibility and velocity of information on a singleplatform for a flexible and responsive SCM system.
2. Increase type and detail of data needed for exceptionmgmt (e.g. opport.. demand) and prioritization (e.g. MTO)
3. Early S&OP process to minimize surprises and achievemore efficient supply-demand mismatch
4. Longer/detailed planning horizon to improve optimizationopportunities (e.g. Mode mix, mode selection, procurement)
1. Standard process across the enterprise for improvedaccountability/ownership, structured/timely planning, andcoordination/communication across the supply chain
2. Cross functional SC organization for processmanagement, monitoring and KPI reporting
3. S&OP Process to resolve as many discrepancies andmismatches as possible early in planning
4. Initial improvements and business benefits, but systemwide benefits not fully realized
Opportunities for Improvement in Spectrum+Benefits from Spectrum1. Improve visibility and velocity of information on a single
platform for a flexible and responsive SCM system.
2. Increase type and detail of data needed for exceptionmgmt (e.g. opport.. demand) and prioritization (e.g. MTO)
3. Early S&OP process to minimize surprises and achievemore efficient supply-demand mismatch
4. Longer/detailed planning horizon to improve optimizationopportunities (e.g. Mode mix, mode selection, procurement)
1. Standard process across the enterprise for improvedaccountability/ownership, structured/timely planning, andcoordination/communication across the supply chain
2. Cross functional SC organization for processmanagement, monitoring and KPI reporting
3. S&OP Process to resolve as many discrepancies andmismatches as possible early in planning
4. Initial improvements and business benefits, but systemwide benefits not fully realized
Opportunities for Improvement in Spectrum+Benefits from Spectrum
PurchaseOrders
PurchaseOrders
DF API - SCAPI FG – MKTG/MFG
What did Value Engineering Find
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VE Recommendations for Spectrum+:Summary
Area Issues & Concerns Recommendation
SAP APOPPDS
• Functionality gaps and productusage issues
• SAP to assess architecture and recommendresolution to key PPDS issues
ProjectObjectives &Ownership
• Implementation objectives
• Sr. Executive ownership
• Revise objectives from “Spectrum Automation” to“Single SC Platform Across Ranbaxy”
• Senior Ranbaxy Executive to own and driveSpectrum+ implementation and roll out
SAP Support • SAP Executive support
• Subj. Matter Expertise
• SAP Executive support in issue resolution
• Committed project team of SMEs and productexperts for PPDS and SCM
ChangeManagement
• Ranbaxy end user & usage ofsystem
• Adoption across enterprise andcontinuous improvement
• Ensure stakeholder ownership and participationduring development, roll-out and adoption
• Address training requirements and put in place anon-going APO support organization
Implementation Scope &Focus
• Focus within business functions
• Vertical Integration
• Focus on integrating the solution components andthen increasing depth
• Focus on key markets and DF manufacturing
FutureCapabilities
• Order Promising
• Supplier Relationship Management
• Improved order promising and fulfillment
• Manage supplier base and DM purchasing
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Spectrum+ and APO
• At key decision point– Re-invest or Divest
• Critical Issues– Ranbaxy Senior Executive Ownership– SAP Support and APO Capability– Change Management and Project Team Burnout
• Value Engineering Study Conducted– Significant Value Exists– Recommended SAP Proof of Concept with Waldorf
Supply Chain Center of Excellence
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The Cavalry Arrived….
• Engaged the SAP Supply Chain CoE• Evaluated requirements, model, configuration
and results• In 10 weeks, delivered re-engineered model and
configuration changes• Implemented in 2 planning cycles
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Dewas Performance –Post APO PPDS Re-launch in May 07
• Improved C Vs A: Dewas has consistently delivered C (Commits) Vs A(Actual) of above 90% since May 2007
• Increase in Throughput: Number of SKUs delivered by Block B used toaverage between 250-275. Since May, this has gone up to 280-300 with amaximum of 306 in May 2007.
• Reduction in PM Inventory: There has been a reduction in PM inventory inDewas to the tune of Rs. 2.4 Cr over May-July 2007. This can primarily beattributed to APO based planning.
May: 94% June: 90%
July: 90% August: Expected tobe >=90%
Dewas is still in stabilization stage. Results shallimprove further.
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Addressing the Key Issues
• PPDS Functionality / Capability– Proof of Concept with SAP CoE delivered results
• Sponsorship– COO engaged actively to spearhead project
• Change Management– Project Management changed– Once there were demonstrable results, people
wanted to be associated with success– Moved key project team members into operations
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APO – Key Learnings
• Do Not Get Off-Track – “Do Not Boil the Ocean”• When in doubt – Get SAP Involved• Value Engineering should be engaged• Recognize the “White Elephant” in the room• As with all SCM Projects – There is no black box
magic solution, have realistic expectations• Fix R/3 First Where Possible - GIGO• You do not need R/3 implemented everywhere
to roll-out APO and deliver results
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Next Steps with APO
• DP/SNP deployment completion to Rest ofWorld by End 08
• PPDS Deployment to existing Dosage Formfacilities – 1 done, 1 in process
• Upgrade to SCM 7.0 and reduce originalcustomizations in 2008
• Reduce planning cycle time and frequency• Continue to quantify business results
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As in the movie….
• Work with the Ugly• Overcome the Bad• Keep focused on the gold• And you will be the Good
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Ranbaxy Global InformationTechnology
“We Deliver Value Everyday!”Questions ?
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Ranbaxy Global InformationTechnology
“We Deliver Value Everyday!”Thank You!
Interested in Joining our Winning TeamE-mail: [email protected]
52
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