Novartis Aims to Become Pharma’s Toyota by 2010

A Novartis executive told attendees of a recent SAP user group conference how leveraged ERP and a “service-oriented architecture” approach to IT is enabling the company to improve its quality and manufacturing agility.

By Agnes Shanley, Editor in Chief

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At the SAP Sapphire User Conference in April, manufacturing executives from a number of drug companies, including Wyeth and Novartis, described how they are leveraging ERP and integrating it with MES to improve manufacturing agility. Perhaps the most dramatic example was that of Novartis, whose head of global tech operations IT, Ralf Haefli, discussed the company’s Lean, Operational Excellence and Supply Chain Optimization strategies, and how leveraged ERP and a “service-oriented architecture” approach to IT would enable Novartis to improve in both areas.

The company’s management has set new operational excellence guidelines in an ambitious “Target 2010” program focused not only on improving compliance and quality and reducing cost, but also on making the company’s technical operations faster and more flexible. Novartis’ role model is Toyota, Haefli said, and the company plans to reduce cycle times 75% from 2005 levels by 2010.

“You can always benchmark within your own sector and feel quite okay if you’re amongst leading companies,” he said, “but if you look outside that industry, you’ll find ways to improve.” Novartis found ideas about Lean and set its new targets, and the ways to reach them by looking at the automotive industry. Lean will address the need for speed, Haefli said, but improving flexibility will involve changing the organization from a departmental to a process-oriented structure. From an IT perspective, the company’s professed goal is to move to a harmonized landscape, simplifying functions such as maintenance and reducing costs.

Data Are There, Accessibility’s the Key

“We’ve seen a number of situations where business asked for a new IT solution, usually a new database, when what they really wanted was better and more specific, context-oriented access to information,” Haefli said. “It’s not that the data aren’t there, but they haven’t always been accessible, quickly and in a relevant form, by different people.”

Table 1

In the area of logistics and quality, the company is using SAP’s R/3, ERP and SCM products. On the information management side, it is using business warehouse, XMii and Netweaver. The company also uses Werum’s MES platform. Werum’s partnership with SAP has meant that its MES platform is compatible with Netweaver. Werum spokesman Volker Mensing told attendees at Interphex last month that this connection, along with a methodical implementation approach, can help speed up and reduce the risk of global pharma MES installation projects (see Table above and Figure below). Just as it did with Lean and Process Analytical Technologies (PAT), Novartis piloted MES at one plant and assessed the results before rolling it out globally.

Figure 1

The company has developed Lean Link, an SAP suite for supply chain management, which Haefli said was built on a basic Lean manufacturing foundation. The goal is an adaptive supply chain (for more on this model from AMR analyst Hussain Mooraj, see "The Demand-Driven Supply Chain"). “We’ve coordinated production planning across various locations, and are extending the connection with our suppliers and customers.” Vendors can now be integrated into Novartis’ business processes, with the possibility of using EMI and automatic replenishments.

Meanwhile, on the plant floor, Novartis has moved to a multi-functional, product-focused team model, which has made a transparent and user-friendly interface critical. Operators now see data on running and setup time and the amount of product they need to produce. “Data now drive their behavior,” Haefli says, adding that the company is already seeing results from its process-oriented approach to IT. Yet, he emphasized that this approach was driven by business needs rather than technology. “Information is not about generating more systems and more data, but leveraging what you already have,” Haefli said.

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