MFG/PRO Delivers Quick Release Success For ALZA Corp.

Even within the highly specialized pharmaceutical industry, ALZA Corp. is a specialist, developing sophisticated controlled-release technology for drug delivery systems. In many cases, this technology improves the therapeutic value of medications while minimizing possible side effects. Many of ALZA's products are well known in the consumer marketplace, including Nicoderm skin patches (prescribed for persons who want to stop smoking), Efidac 24 (a controlled-release cold tablet), Procardia XL (a very popular heart medication distributed by Pfizer Corp.) and Duragesic for the management of chronic pain.

The 27-year-old company, whose revenues reached $350 million in 1995, has its headquarters as well as manufacturing and research facilities in California. A small research facility is located in Minnesota.

The Challenge

For its first 20 years, ALZA concentrated primarily on research, but the popularity of Nicoderm, Procardia XL, and several other products in the early 1990s quickly drove the company into full-scale production. In a short period of time, ALZA was faced with all the demands of a major manufacturer in one of the world's most complex—and tightly regulated markets.

ALZA's management recognized the need for significant changes, and the entire planning, scheduling and manufacturing operation came under scrutiny. "Basically, what we wanted to do was to get a system in place that would allow us to plan and control our manufacturing," says Tom Flosi, Director of Manufacturing, Planning and Control Systems at Alza. Functionality and integration were key objectives, as well as FDA validation capability.

While ALZA acknowledged the need for enterprise-wide information, the organization foresaw significant obstacles in three areas: integration with existing systems, overcoming some technical challenges with its existing network and preparing its work force for a whole new approach to planning and manufacturing.

ALZA worked with Expert Buying Systems (the makers of a PC-based software selection program) and Advanced Manufacturing Research (AMR) to identify possible vendors and compiled a short list of four software companies, including QAD. QAD's MFG/PRO quickly emerged as the best choice for ALZA.

MFG/PRO provided the integrated functionality the company required, would work in ALZA's Windows (GUI) environment and had proven it could handle the information requirements of large organizations. In addition, QAD's network of experienced business partners ensured ongoing access to any training or technical expertise ALZA might require.

Another key consideration was QAD's commit-ment to the unique needs of the medical and pharmaceutical industry. At the time the selection was made, QAD was working with a business partner, AM&G, on development of a validation module, which would be available by the time ALZA's implementation was completed.

Results

QAD's time-to-benefit methodology paid off quickly when three of ALZA's four sites were up and running on MFG/PRO within nine months of installation.

Looking back, ALZA's planners comment that they once had to guess at the amount of inventory they needed, and the only way to track orders was to obtain copies of requisitions. Today, MFG/PRO provides timely and effective visibility into critical planning and scheduling activity.

MFG/PRO incorporates key ingredients for manufacturers...

... by synchronizing supply chain management

ALZA expects that increased knowledge and better scheduling will mean reductions in overtime, an approximate 20% reduction in inventory, as well as significant increases in productivity in the warehouse/shipping/receiving and planning groups, all of which will increase profitability. Flosi adds, "If we are looking at an inventory reduction of $6 million to $9 million, even at the cost of capital at 10 to 11%, we're looking at a pretty significant savings per year. So we're talking about a fairly quick return."

One of the first signs of improvement came on the staffing side. According to Tom Flosi, "We had four people in the cycle counting group, and within two weeks of using MFG/PRO and the bar code system, two of them had nothing to do. It was so much faster and more accurate than our old system, so we moved two of those people into other functions.

Teamwork

From the beginning, ALZA realized the project would require the participation of internal and external team members. Representatives from ALZA's management, production planning, manufacturing, warehouse, purchasing, cost accounting, quality assurance, and information services were asked for their input. Tailoring the system to ALZA's requirements was also a team effort between QAD and its alliance partners:

• AM&G, working with QAD, provided a now-deployed validation module, consisting of a series of protocols that test the system and produce documented results
• Eagle Consulting provided a barcode collection system to improve the speed and accuracy of data entry
• Strategic Information Group developed ALZA-specific modifications to MFG/PRO
• Ernst and Young provided ALZA's project team with training on the GUI portion of MFG/PRO

Says Flosi, "Overall, my impression is that the organizations that work with QAD have been very good and know how to work as part of a team."

Summary

As for the future, ALZA has now purchased QAD's quality management module, which it expects to use in meeting cGMP compliance goals. In addition, the company looks forward to the release of Version 8.5 and the 8.5C of the compliance module.

Adds Flosi, "My overall impression of QAD is very positive. They wanted ALZA to be a success, and helped make it happen. We want to get as much use as we can from the software and move forward with it as it continues to evolve."

For more information: Greg Cathcart, VP, Medical Products, QAD, 6450 Via Real, Carpinteria, CA 93013. Tel: 805-684-6614.