Automated Costing Solution Cuts Time from Days to Hours for Glenmark Life Sciences

Background

Glenmark Life Sciences is a global leader in the development and manufacturing of Active Pharmaceutical Ingredients (APIs). The company supports a portfolio of 142 APIs, supplying them to over 700 pharmaceutical companies. In addition to its research-driven approach, Glenmark offers CDMO services, managing everything from product development to contract manufacturing.

The Problem

The finance department struggled to compute FG costs due to the complexities of Glenmark’s manufacturing processes, which involved 2 to 9 stages per product. Key challenges included:

Manufacturing processes were batch-wise, while costing was conducted at a monthly level.
Each manufacturing stage (ranging from 2 to 9 stages) consumed materials, including outputs from previous stages and sometimes even from future stages.
Some stages had non-standard methods for quantity calculations.
Historical data, spanning up to 12 months, was required for accurate stage-level costing.
Costing was calculated both at the individual stage level and at the finished goods level, for both monthly and year-to-date (YTD) results.

The manual costing process was not only time-consuming, taking up to 4-5 days, but it also left room for human error, delays and a lack of clarity in financial reporting.

Solution Offered

Easemylife (EML) implemented an automated system that streamlined Glenmark’s entire costing process. The solution utilized standard reports from Glenmark’s SAP ERP and generated customized costing sheets for each FG product. Key features of the solution included:

Simplified Workflow: The costing complexity was broken down into clear, sequential steps, making the process easy for users to follow.
Master Data Creation: A master table was created, linking FG codes to corresponding stage codes for streamlined data processing.
Data Filtering: Irrelevant process orders were filtered out, focusing only on active FG codes and their respective production stages.
Automated Calculations: The system performed cost calculations for rates and cost-per-kilogram, factoring in all constraints and requirements given

Customized Reporting: The solution provided FG cost sheets and management reports in formats tailored to Glenmark’s specific needs.

Implementation Process

The EML team addressed several challenges during implementation:

Validation Format: Users initially struggled to validate costing results since they appeared in a different format from the manual process. EML quickly resolved this by adjusting the reports to the familiar format.
Dynamic Master Data: The team discovered that some master data previously assumed to be static was dynamic. EML adapted the system to accommodate these changes with minimal cost impact.
Scaling to New Sites: When Glenmark wanted to expand the system to a larger site with more data, EML readily adjusted the system to handle the increased workload. All programs in the system were optimized to do computations in under 1 minute.
Handling Exceptions: A series of exceptions arose where general costing rules did not apply. EML created specialized sections and masters to address these.
Budget File Conversion: Glenmark’s budget files were initially in an unusable format, prompting EML to automate a file conversion process.
Error Checking: To minimize manual error checks, EML incorporated control checks throughout the process, ensuring that data issues were easily identified and corrected by users.

Results and Benefits

The impact of EML’s automated costing solution on Glenmark’s finance function was substantial:

Time Savings: What previously took 4 to 5 days was reduced to just 1 hour.
Elimination of Errors: Automation eliminated all manual errors, providing highly reliable output.
Ease of Use: The system’s simple workflow allowed any finance team member to operate it effectively.
Transparency: A transparent process flow made it easy to identify and fix data issues, improving overall accuracy.
Enhanced Engagement: The automation transformed the once tedious costing exercise into a straightforward and even enjoyable task for the finance team.

EML’s automated system significantly improved efficiency, accuracy, and transparency, enabling Glenmark’s finance team to focus on higher-value tasks. This success highlights the power of automation in solving complex business challenges.