SAP lands $2m skincare deal

The software aims to increase the production and supply capacity of the business and meet growing local and export demand for its range of pharmaceutical skin care products. 

The Melbourne-based manufacturer of brands including QV, Aqium and SunSense will invest over $2 million in software and systems to move the company from its existing Pick-based system and reduce the application landscape from eight to one.

Growing markets in the Middle East, UK and Asia are providing additional warehouse, supply chain and financial challenges.

Alan Oppenheim managing director Ego Pharmaceuticals said one of the key challenges for the business relates to the management of warehouse space.

"Because we produce pharmaceutical products, we get audited by the Therapeutic Goods Administration (TGA) to ensure we comply with product quarantine standards on finished goods," he said.

"The new software will allow us to quarantine electronically instead of the current physical quarantining methods, meaning we can optimise the warehouse space that is allocated for quarantined goods."

Implementation will start immediately with SAP services and business partner, Clarity Consulting Group Australia.

Working with SAP Value Engineering, Clarity was able to quantify total monthly benefits of over $100,000 a month from improved inventory control and warehouse management.

The first phase of the roll-out will focus on Financials, Controlling, Asset Accounting, Sales & Distribution, Inventory Management, Procurement, Warehouse Management and Production Planning software.

"The new software will enable us to use better forecasting and production planning tools, which we expect will reduce stock-out occurrences significantly," said Oppenheim.

He said it selected Clarity because it identified a need in its business to rationalise its internally developed IT systems, spreadsheets and manual processes

"We chose SAP software because SAP has the ability to scale with the demands of our growing business, their substantial investment in R&D means we will continue to benefit from our investment, they work with over 1,500 pharmaceutical companies worldwide and have a good reputation in the mid-market," he said.

Ego has become the largest Australian-owned pharmaceutical business specialising in the research, manufacture and marketing of skincare products.

It employs 240 people in 23 cities in nine countries. International sales have almost doubled in the last four years to $16 million across 24 nations.

Exports are expected to account for one third of the Ego Pharmaceutical business revenue this year.