Lean and validated ERP implementation at

Geistlich Pharma

Dr. Renzo Salzmann

Geistlich Pharma AG

Daniel Kuhn

Swisscom IT Services AG

SAP Forum Basel

May 20, 2014

Agenda

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Agenda

Introduction 1

Project Requirements 2

Challenges 3

Project Approach 4

Key Success Factors 5

Conclusion 6

Benefits 7

2

1. Introduction Who is Geistlich Pharma AG?

Company Overview

Who is Geistlich Pharma?

• World market leader in regenerative dentistry

• International leader in biological bone, cartilage and soft tissue regeneration (dental

and orthopedics)

• Global player with eight subsidiaries and a distribution

network in more than 50 countries

• Producer and supplier of pharmaceuticals

and medical devices.

• 450 employees, 250 in Switzerland

• Located in Wolhusen & Root (LU)

• Family owned

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1. Introduction Geistlich Pharma as a global Player

Company Overview

Global presence and distribution network 20.0

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• Headquarters

• Subsidiary

• Distributor

1. Introduction Dental indication

Company Overview

• Treatment with Geistlich Bio-Oss® and Geistlich Bio-Gide®

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1. Introduction Orthopedic indication

Company Overview

• Orthoss® – ideally suited for bone regeneration

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1 prosthesis revisions (e.g. hip and knee)

in treatment of benign tumors and bone cysts 2

absence of healing of a fracture or osteotomy 3

fusion of the spinal column 4

ideal carrier material for bone marrow cell concentrate 5

1. Introduction Geistlich Pharma as a global Player

Everything under one roof

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R &

D

Pro

ducti

on

Mark

eti

ng &

Sale

s D

istr

ibuti

on

2. Project Requirements What lead to the Tiger Project?

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Project Requirements

Why a new ERP system?

• Old legacy systems no longer supported, no interfaces to crucial systems (e.g. LIMS)

• No efficient handling of increasing complexity (products, markets)

• Lack of transparency and real-time data

• Computer System Validation (CSV) issue

Conclusion:

• Starting Project Tiger (Targeted Implementation of Geistlich Enterprise Resources)

2. Project Requirements Goals to be achieved?

Objectives

What needs to be achieved

• Implementation of a fully integrated SAP ERP System

• Using SAP Best Practices for Chemicals as a standard

• Interfaces to all critical sub-systems

• Full conformity with all compliance requirements (EU, FDA)

• Scalable system to support future growth and competitiveness

• Enhance grade of automation and highest possible efficiency in handling transactions

• Targeted implementation within a very short time and within budget - severe

restrictions in Change requests and strict cost controlling

• Build Up an early SAP Competence Center to establish internal project and operation

support

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2. Project Requirements Scope

Scope

• Project scope: SAP ERP, SAP Solution Manager, SAP GRC, OpenText Archive

• Process coverage: Production and Planning, Purchasing, Warehouse Management,

Sales & Distribution, Quality Management, Finance, Controlling,

HR, Workflow for Purchase Orders and Invoices, Mobile Scanning

Devices and several Interfaces

• Rollout scope: Switzerland (the implemented processes are designed for later

international rollouts to Geistlich Pharma AG subsidiaries)

• Method: SAP Best Practices for Chemicals, SITS Project Methodology,

Validation Guidelines ISPE GAMP5 (V-Model), SAP Solution

Manager, ASAP Roadmap

• Implementation

partner: Swisscom IT Services AG (SITS)

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2. Project Requirements Scope

Scope

• Project duration: 10 months

• Go-live date(s): 01-July-2013

• # of users

implemented: 120

• Additional users

planned: 40 (for international rollout)

• Project effort: 3’500 person days

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3. Challenges

Challenges

Major project challenges

• Fulfilling CSV (Computer System Validation) requirements by:

• engaging SAP DE CSV experts to bring in a CSV Best Practices method

• use of SAP Solution Manager as DMS for the complete process and system

documentation incl. electronic sign-off procedures (e-signature) and progress

control.

• Short implementation timeframe by:

• using best business experts as well as best external consultants and have

dedicated times they can work for this project.

• proper project management, controlling and risk management.

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3. Challenges

Challenges

• Managing project complexity and various partners, implementing different SAP

systems, interfacing external systems and approval workflow by:

• Swisscom project manager as SPOC for communication, resource availability.

• Project management enforcing project governance to all involved parties and

resources.

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3. Challenges Put the Tiger in your tank

Put the tiger in your tank

Clearly a big challenge… 20.0

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3. Challenges Key question

Key question

Key question

Is a lean and validated SAP ERP implementation

in a pharmaceutical SME possible?

Swisscom/Geistlich Pharma Reference Film

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4. Project Approach How to proof the key question…

Proof the key question

In the following we are going to prove that it is possible if…

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4. Project Approach Timeline, Organization, Scope, Method

Project Approach

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Swisscom

GEISTLICH SwisscomGEISTLICH

Project Management

CO Consultant SD Consultant PP-PI Consultant

Sub-project Validation

Team

Sw

issc

om

Steering Committee

QM Consultant

Sub-project

Sales & Distribution

Sub-project

Production

Sub-project

QM

Sub-project

Finance

Team

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tlic

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harm

a

Swisscom

Quality Assurance

RICEF, SAP Infrastrukture and SAP Basis Services

MM/WM Consultant

Sub-projectMaterials Mgt.,

Procurement, WM

GEISTLICH

HR Consultant

Sub-project

HRM

Sub-project Validation

Sub-project

Controlling

Rapid Decision Board

Swisscom

GEISTLICH

i2S

FI Consultant

Integrationsmanagement

RICEF, SAP CC, SAP Infrastructure and SAP Basis Services

Change Management

GEISTLICH

Prozessliste / Process List

Prozess Name / Process Name

Scop

e De

finiti

on

GMPx

rele

vant

?

SAP

ERP

Mod

ul /

SAP

ERP

Mod

ule

SAP

Base

line

Szen

ario

/

SAP

Base

line

Scen

ario

FICO Enterprise Management & Support / Finanzen & Controlling In Scope NO

VERK Sales & Marketing / Verkauf In Scope YES

EINK Supplier Collaboration / Einkauf In Scope YES

YES EINK_002 Procurement Contract / Kontrakte In Scope NO MM 133

YES EINK_003 Consumable Purchasing / Beschaffung nicht lagerhaltige

Artikel (Verbrauchsmaterial)In Scope YES MM

129

YES EINK_004 Procurement without QM / Beschaffung ohne QM

Procurement of batch managed stock materials / Beschaffung

chargenpflichtiger Lagermaterialien

Procurement of warehouse managed stock materials /

Beschaffung WM-verwalteter Lagermaterialien

In Scope YES MM

130

NO EINK_007 Procurement of pipeline materials Out of Scope Yes 903

TBD EINK_008 Procurement of external Services

In Scope No

904

YES EINK_012 Rebate Agreements / Lieferantenrückvergütung In Scope NO MM

YES EINK_100 Master Data / Stammdaten In Scope YES

YES EINK_200 Reports / Berichte In Scope NO

MAWI Supply Chain Planning & Execution / Materialwirtschaft In Scope YES

PROD Manufacturing / Produktion In Scope YES

ENTW Innovation Management / Produktentwicklung Out of Scope YES

QUAL Quality Management & Compliance / QM In Scope YES

PERS Human Capital Management / Personalwesen In Scope NO

INST Plant Maintenance / Instandhaltung Out of Scope YES

ifax Zahlungsbedingungen

Timeline Organization

Scope Method

Project Management / Integration Management

Realization Phase

04/12 05/12 06/12 07/12 08/12 09/12 10/12 11/12 12/12 01/13 02/13 03/13 04/13 05/13 06/13 07/13 08/13 09/13 10/13

MS60

Go-live

MS10

MS100 MS140

PHAS

E I

MS10: Contract sign.off

MS20: End of project preparat ion phase

MS30: SAP basic training completed

MS40: Validat ion plan and templates approved

MS50: SolMan setup incl. BPML, BP documents and templates

MS60: FIT/ GAP Analysis, Blueprint, Prototype approved

MS70: Final Blueprint in SolMan

MS80: Sign-off URS, FS, DS and RA

MS90: Sign-off TS and Data Migrat ion Plan

MS100: SAP ERP system configured and tested

MS110: IQ, OQ & PQ successfully completed & signe-off

MS120: Go-live @ Geist lich Pharma AG, Switzerland

MS130: Sign-off Validat ion Report

MS140: Project Closure

Final

Preparation

PHAS

E II

Project PreparationFIT/ GAP Analysis,

Blueprint & Prototype

Go-live & Support

Stabilization

Change Management

Create Validation Plan &

Templates Valid

atio

nSo

lMan

Project Preparation Design Operations Setup OperationsHandover to

OperationsOperation & Optimization

Contract

Sign-off

Training

MS20 MS30

Kick-off

MS120

MS50 MS70

MS40 MS90 MS110 MS130

Create Validation

ReportIQ, OQ & PQ

Create & Review TS &

Data Migration Plan

Create & Review URS, FS, DS

RA

MS80

Project Management / Integration Management

Realization Phase

04/12 05/12 06/12 07/12 08/12 09/12 10/12 11/12 12/12 01/13 02/13 03/13 04/13 05/13 06/13 07/13 08/13 09/13 10/13

MS60

Go-live

MS10

MS100 MS140

PHAS

E I

MS10: Contract sign.off

MS20: End of project preparat ion phase

MS30: SAP basic training completed

MS40: Validat ion plan and templates approved

MS50: SolMan setup incl. BPML, BP documents and templates

MS60: FIT/ GAP Analysis, Blueprint, Prototype approved

MS70: Final Blueprint in SolMan

MS80: Sign-off URS, FS, DS and RA

MS90: Sign-off TS and Data Migrat ion Plan

MS100: SAP ERP system configured and tested

MS110: IQ, OQ & PQ successfully completed & signe-off

MS120: Go-live @ Geist lich Pharma AG, Switzerland

MS130: Sign-off Validat ion Report

MS140: Project Closure

Final

Preparation

PHAS

E II

Project PreparationFIT/ GAP Analysis,

Blueprint & Prototype

Go-live & Support

Stabilization

Change Management

Create Validation Plan &

Templates Valid

atio

nSo

lMan

Project Preparation Design Operations Setup OperationsHandover to

OperationsOperation & Optimization

Contract

Sign-off

Training

MS20 MS30

Kick-off

MS120

MS50 MS70

MS40 MS90 MS110 MS130

Create Validation

ReportIQ, OQ & PQ

Create & Review TS &

Data Migration Plan

Create & Review URS, FS, DS

RA

MS80

4. Project Approach Timeline, Organization, Scope, Method

Project Approach

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Swisscom

GEISTLICH SwisscomGEISTLICH

Project Management

CO Consultant SD Consultant PP-PI Consultant

Sub-project Validation

Team

Sw

issc

om

Steering Committee

QM Consultant

Sub-project

Sales & Distribution

Sub-project

Production

Sub-project

QM

Sub-project

Finance

Team

Geis

tlic

h P

harm

a

Swisscom

Quality Assurance

RICEF, SAP Infrastrukture and SAP Basis Services

MM/WM Consultant

Sub-projectMaterials Mgt.,

Procurement, WM

GEISTLICH

HR Consultant

Sub-project

HRM

Sub-project Validation

Sub-project

Controlling

Rapid Decision Board

Swisscom

GEISTLICH

i2S

FI Consultant

Integrationsmanagement

RICEF, SAP CC, SAP Infrastructure and SAP Basis Services

Change Management

GEISTLICH

Prozessliste / Process List

Prozess Name / Process Name

Scop

e De

finiti

on

GMPx

rele

vant

?

SAP

ERP

Mod

ul /

SAP

ERP

Mod

ule

SAP

Base

line

Szen

ario

/

SAP

Base

line

Scen

ario

FICO Enterprise Management & Support / Finanzen & Controlling In Scope NO

VERK Sales & Marketing / Verkauf In Scope YES

EINK Supplier Collaboration / Einkauf In Scope YES

YES EINK_002 Procurement Contract / Kontrakte In Scope NO MM 133

YES EINK_003 Consumable Purchasing / Beschaffung nicht lagerhaltige

Artikel (Verbrauchsmaterial)In Scope YES MM

129

YES EINK_004 Procurement without QM / Beschaffung ohne QM

Procurement of batch managed stock materials / Beschaffung

chargenpflichtiger Lagermaterialien

Procurement of warehouse managed stock materials /

Beschaffung WM-verwalteter Lagermaterialien

In Scope YES MM

130

NO EINK_007 Procurement of pipeline materials Out of Scope Yes 903

TBD EINK_008 Procurement of external Services

In Scope No

904

YES EINK_012 Rebate Agreements / Lieferantenrückvergütung In Scope NO MM

YES EINK_100 Master Data / Stammdaten In Scope YES

YES EINK_200 Reports / Berichte In Scope NO

MAWI Supply Chain Planning & Execution / Materialwirtschaft In Scope YES

PROD Manufacturing / Produktion In Scope YES

ENTW Innovation Management / Produktentwicklung Out of Scope YES

QUAL Quality Management & Compliance / QM In Scope YES

PERS Human Capital Management / Personalwesen In Scope NO

INST Plant Maintenance / Instandhaltung Out of Scope YES

ifax Zahlungsbedingungen

Timeline Organization

Scope Method

4. Project Approach Systems

Systems

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Project

Preparation

Blueprint &

Prototype

Realization Final

Preparation

Go-live &

Support

CSV of

SolMan (e-signature)

Training

Project

Team

DMS for

Blueprint

Build Prototype

GRC

Evalua-

tion

DMS for

Development

& Testing

Customizing

Development

Testing

Setup

Access

Control

DMS for

Data

Migration

Data

Migration &

Enduser

Training

Go.-live

Access

Control

Incident

Manage-

ment

Go-live &

Bug-fixing

Constant

use of

GRC

SAP

Solution

Manager

SAP

ERP

SAP

GRC

4. Project Approach Systems Overview

System Overview

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SAP GRCas central system access and

authorization mangement system

SAP Solution Manageras Document Management System (DMS)

for process & systems documents

SAP ERP

HR/WF

SD

PP/QM

MM/WM

FI/CO

LIMS

e-Trans (DHL)

Faxserver / Mailserver

KABApresento.pro

Time & attendance data

SAP GRC

OpenText

SAP SolMan

CRM (MS Dynamics)

Document

Scanner

Barcode

Scanner

Various Interfaces

4. Project Approach Systems Overview

System Overview

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SAP GRCas central system access and

authorization mangement system

SAP Solution Manageras Document Management System (DMS)

for process & systems documents

SAP ERP

HR/WF

SD

PP/QM

MM/WM

FI/CO

LIMS

e-Trans (DHL)

Faxserver / Mailserver

KABApresento.pro

Time & attendance data

SAP GRC

OpenText

SAP SolMan

CRM (MS Dynamics)

Document

Scanner

Barcode

Scanner

Incident/Change

Solution/Change

4. Project Approach Systems Overview

System Overview

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SAP GRCas central system access and

authorization mangement system

SAP Solution Manageras Document Management System (DMS)

for process & systems documents

SAP ERP

HR/WF

SD

PP/QM

MM/WM

FI/CO

LIMS

e-Trans (DHL)

Faxserver / Mailserver

KABApresento.pro

Time & attendance data

SAP GRC

OpenText

SAP SolMan

CRM (MS Dynamics)

Document

Scanner

Barcode

Scanner

Authorization

Authorization

Request

5. Key Success Factors

Key Success Factors

• Clearly defined scope in terms of business processes as well as interfaces and

developments (BPML, RICEF list)

• Process driven (based on BPML) requirement definitions, system configuration

(customizing), developments, documentation, testing and training

• Business team project manager sub-project leader key user

best people for best results

• Business priorities have been adjusted to focus on the Tiger project as a major

business initiative of the organization

• Project governance (project handbook) set into place (timeline, escalation,

communication, reporting, controlling, templates, etc.) and communicated to the

entire team (Kick-off)

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5. Key Success Factors

Miscellaneous

• Commitment of top management at all times

• Focus on SAP Best Practices scenarios to keep development effort as low as possible

• Build-up SAP CC and use of Incident Management to capture issues during testing

phase, go-live and daily operation thereafter

• Intensive testing cycles (functional testing, authorization tests, end-to-end

integration testing)

• Dedicated project space enabling and integrated project environment with short

decision path

• External coaching and advising i2s SAP DE PWC SITS QA to review critical

milestones as well as to benchmark, execute a project audit and a Part11 assessment

• High transparency of project risks and fast deployment of risk mitigating actions

approved by the Rapid Decision Board (RDB)

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6. Conclusion The six golden rules

Conclusion

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External consultants with profound SAP, process

understanding and industry experience within a CSV

environment.

Committment to SAP Best Practices kept as strict project

guideline throughout the project to keep developments and

scope creep at minimum level.

Detailed and extensive project preparation to set the right

foundation for the project.

Is a lean and validated SAP ERP implementation in a pharmaceutical SME possible?

Yes, if the following six (6) requirements are fulfilled:

6. Conclusion The six golden rules

Conclusion

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It has to be a business-driven project and empowerment at

all levels.

Comprehensive documentation of all process definitions,

system settings, developments, testing, data migration and

training activities throughout the entire project lifecycle.

Use of SAP Solution Manager as central process and system

DMS with electronic review and sign-off procedure

complete controlling of deliverables.

SAP

Solution

Manager

PQ

OQDQ

URS

FS

DS Unit Testing

FunctionalTesting

Integration & Acceptance

TestingGxP

Assessment

RiskAnalysis

IQ

BC-SetTechnical

Documentation

7. Benefits Time, Quality, Cost

Conclusion

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QUALITY:

• Fully validated processes and

systems

• Full traceability

• Product distribution in

compliance with market

registration

• Rigid user authorization

control

• Real stock transparency no

out of stock situations

• Fully integrated process

ROFO S&OP MRP

Production Distribution

TIME

COST QUALITY

COST:

• Stock reduced by 20 % on SKU

level freeing 20 % storage

capacity avoiding warehouse

expansion (cost savings of

CHF 1.0 Mio)

• Stock value reduction by CHF

1.5 Mio

• Coverage differences at

month-end has been reduced

by 75 % due to accurate

product cost calculation and

cost allocations

TIME:

• Overall month-end closing time reduced by 30 %

• Vendor invoice approval time reduced by 50 % 100 % cash discounts benefits

• Purchase order approval process time reduced by 50 %

7. Benefits Time, Quality, Cost

Conclusion

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TIME

COST QUALITY

CONCLUSION:

Even though Geistlich Pharma AG is using SAP ERP less than one (1) year significant

benefits of the SAP ERP implementation have been realized and further are expected.

Therefore the overall project return on investment will be between 2 - 3 years.

7. Benefits Outlook

Outlook

Future business benefits planned

• Rollout to subsidiaries in order to fully integrate intercompany processes.

• Rollout to other legal entities

• Planning accuracy by implementing concurrent planning, VMI-process incl. interfaces

to external warehouses.

• BI/BO to support sales and financial controlling and to optimize the sales & operation

processes.

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Questions?

Thank you for your attention!

© 2012 SAP AG. All rights reserved. 31

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Contact

Contact

Geistlich Pharma AG

• Dr. Renzo Salzmann

• Director Technical Operations

• renzo.salzmann@geistlich.ch

• +41 (79) 709 61 34

Swisscom IT Services AG

• Daniel P. Kuhn

• Senior Project Manager

• daniel.kuhn1@swisscom.com

• +41 (79) 620 44 74

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