Process Manufacturing Solution for Cosmetics and Pharmaceuticals

Dynamics AX customization case study

Company

Manufacturing and distributing of pharmaceutical, natural cosmetics, and dietary products worldwide.

Business situation

Being cosmetics and pharmaceuticals manufacturer, the Company has to meet the quality standards and comply with regulations set by European and American federal agencies, such as FDA(Food and Drug Administration in the USA) and BfR (Federal Institute for Risk Assessment in Germany).

As a global locations company with warehouses, production plants and distribution offices in over 20 countries, the Company has to efficiently manage its procurement and logistics. The Company was using Axapta 3.0, which out-of-the-box functionality couldn’t address its growing needs in managing procurement, manufacturing, and logistics.

Challenges

The Company needed a Dynamics AX process manufacturing solution to address the complex compliance and regulation requirements, recipe management, quality control, and other daily tasks of the pharmaceuticals manufacturers.

Axiopea had extensively customized Axapta 3.0 to meet these requirements. When the Company has decided to upgrade to latest available ERP version, we re-implemented that functionality on the Dynamics AX 2009 platform. Both systems don’t support the process manufacturing principles, as the similar functionality wasn’t introduced till the AX 2012 release. Plus, the system needed to be tailored to the Cosmetics and Pharmaceuticals industry needs:

• Support the process manufacturing principles
• Support First Expired/First Out (FEFO) and shelf life inventory management
• Manage quality control
• Meet strict compliance standards
• Handle logistics in the multi-channel environment
• Integrate with 3d party software

Solutions

Axiopea assigned a team of Dynamics AX developers to add the following features to Axapta’s functionality:

• FEFO methods. We modified the Master planning and Inventory management modules to enable the First Expired/First Out inventory management method.
• Quality management and quality control. The quality orders functionality was introduced (lacking in both Axapta 3.0 and Dynamics AX 2009). A quality control based on predefined criteria can be initiated at any stage of the manufacturing process.
• Compliance and regulations management. Axapta was integrated with FDA’s and BfR’s document management systems to provide compliance reports that ensure its products’ quality and safety in the form acceptable to these organizations.
• Process manufacturing approach. We’ve tailored the Production module to the needs of the Cosmetics and Pharmaceuticals industry. The solution can now handle orders, recipes, reports, by-products, BOMs and other items in accordance with the process manufacturing standards.
• Logistics management. The features were added to Inventory management and Accounts payable allowing for special properties in each warehouse. The information about size, location, best routes and transportation costs is used for transfer orders planning. It helps solving the so-called Travelling salesman problem, thus lowering the transportation costs.
• Integration with 3d party software. The system now supports the data exchange between Microsoft Dynamics AX and SAP enabling integration of the Company’s accounting department into a single ERP environment.

Results

The Company received a comprehensive ERP solution to address the needs of Pharmaceuticals and Cosmetics manufacturing. The Company is now able to

• Eliminate the idle time
• Reduce the loss of perishable ingredients
• Enhance quality management and control
• Ensure compliance with changing regulations
• Cut the logistics costs

The Company is well-known for creating high quality products from natural components and its sales volume experiences stable growth in both Europe and USA.

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