If there are any industries that have experienced extreme pressures as a result of the COVID-19 pandemic, it’s the organizations operating in the life sciences and health care space. While health care organizations continue to hold down the front lines—caring not only for patients with the virus, but also those with other conditions—many life sciences companies are running at peak capacity to deliver tests, therapeutic treatments, and ultimately a COVID-19 vaccine.
Behind the front lines, there are technologists and SAP experts working to make sure the essential technology infrastructure continues to run to support these vital activities. Representatives from the life sciences and health care industries came together to share their stories at ASUG Best Practices: SAP for Industries, our virtual experience on Sept. 21–25. Emcee Kaela Altman of ASUG described our guests as, “the professionals who are on the front lines fighting the virus, whether they are the first responders, the scientists working on treatment plans, or the software architects working to keep SAP systems working at peak efficiency.”
Rethinking the Health Care and Life Sciences Supply Chain
Given the events of 2020 and the shortage of personal protective equipment (PPE) that hit both industries, it’s no surprise that the supply chain was a major topic of discussion. Several presenters described how fragmented the supply chain can be in these industries. By the time the pandemic made its way from China, to Europe, and then to the Americas, China had already restricted the export of the PPE it produced, forcing health care and life sciences organizations to find other sources—even manufacture it themselves, as we heard from a customer firsthand.
Here are the top three themes that surfaced through our life sciences and health care sessions:
1. Agility and Resilience Are Key for Life Sciences and Health Care Organizations
These industries are no strangers to persistence. As he was sharing some common pain points that organizations experience, Damon Braly, director of health care solutions at Pure Storage, reminded the audience that only 12% of drug discovery programs succeed. Yet the recent economic and market pressures have dialed up the need for organizations to become more agile.
SAP sees itself as a key partner in delivering technology to help these customers achieve this, as we heard in the opening keynote with Geoff Scott, ASUG CEO. Lloyd Adams, SVP and managing director for the east region of SAP, described how excited SAP is to be able to bring to life an end-to-end portfolio for its life sciences and health care customers. “Now that many of our solutions are cloud-centric, these implementations no longer have to look like they did in the past,” Adams said. “You have the ability to sprint and bring quicker time to value through a road map that is unique to your company. There is no one-size-fits-all. You can really start anywhere and go anywhere.”
Why Time Isn’t on Your Side
Mandar Paralkar, head of life sciences industry at SAP, echoed the inherent challenges these businesses face and why speed is so important to the technologies they use. Drugs take a long time to manufacture and market. By the time they are safe for use, companies need to rely on data and software to manufacture and distribute them. Paralkar mentioned that he is seeing an unusual amount of collaboration happening among pharmaceutical companies in order to get these important medications to the patients who need them.
Despite the challenges they are experiencing, Adams cautioned those companies that are leaning toward slowing down or pausing in this market. “This whole notion of sitting on the sidelines—in any industry, but in particular, life sciences—does not equate to resilience whatsoever,” Adams said. He reinforced that the pandemic has exposed operational and supply chain weaknesses for many companies. But he sees their work to address these issues and strengthen themselves for the next global crisis as a silver lining. He advised customers, “Where you see pockets of this at your organization, expose it. Spend time thinking about what you and other leaders at your organization can do to be more prepared for the next macroeconomic environment.”
2. You Can Innovate Without a Big-Bang Transformation
Two customers shared their journeys to SAP S/4HANA—Bristol-Meyers Squibb and Varian. Bristol-Meyers Squibb decided on a brownfield conversion to SAP S/4HANA from SAP ECC 6.0 while migrating multiple workloads to Amazon Web Services. Varian, on the other hand, described how it built a business case and the landscape architecture to move from SAP S/4HANA 1709 to 1909. In both cases, the customers benefitted from their projects without having to invest endless time and money to make these into bigger transformation projects.
Varian, a global leader in radiation oncology, aimed to increase customer and employee engagement, as well as its ability to serve more customers by streamlining its ERP system. The main drivers for the business case were to simplify business processes, reduce TCO, improve the user experience, and take advantage of the embedded analytics in the newer release to support predictive features. It also was looking to automate more processes. “We were looking for a three-fold productivity increase,” said Naga Nallaiah, SAP technology manager at Varian. The total business downtime for the project, including validation, was 24 hours. The project began in early March 2020 and was complete by mid-May. Nallaiah’s advice to other customers? “Be resilient and ready to adapt.”
When Time Is Money and Technical Debt
For Bristol-Meyers Squibb, the goal also was to keep its systems as up to date as possible—though it was the financial penalty that came from waiting that drove this project. Michael Di Novi, head of digital capability management, ERP, said, “It was a matter of when and not if we would move to SAP S/4HANA. We took a look at the costs of waiting and doing it right away. But we found by waiting longer, the technical debt we would create would be considerable and substantial and we’d have to redo that work again when we eventually moved to SAP S/4HANA. The financial profile was considerably better to do it sooner rather than later.” This IT-led project was a brownfield conversion from SAP ECC 6.0 to SAP S/4HANA 1809. The company was able to complete the project on time, in under two years.
3. Creative Thinking and Collaboration Make Things Happen
Two of the presenters featured stories that were a direct example of why creativity and collaboration are needed to succeed in this space today. Brooks Olphin of Johnson & Johnson shared his experiences when introducing a new process mining program across the enterprise. According to Olphin, a process and task mining manager who works in the company’s center of excellence, this was a significant change-management exercise that ultimately required the company to adjust its mindset about process improvement projects.
The year-and-a-half-long project at Johnson & Johnson began as a proof of concept using the Celonis platform to analyze the order to cash system for points of friction and inefficiency. “Our journey began with us acting as a small startup,” Olphin said. “We then realized we needed to put some guiderails in place for different teams as we brought more users into the system. Now we follow a crawl, walk, run methodology where we’re able to start users small with some analysis and visualizations to gradually grow their skill sets.” The goal was to help users at Johnson & Johnson understand process mining conceptually, as well as how to use the tools available to do this for the processes they owned.
From a Piece of the Puzzle to the Holistic Process
Olphin recognized that Johnson & Johnson’s long commitment to different quality programs and methodologies would be both helpful and a challenge. That was, in part, why his team established a center of excellence around process mining. “One of the biggest challenges and the biggest benefits of process mining is that it brings people together and changes their mindset from, ‘this is my piece of the puzzle and that’s all I care about’ to be able to see upstream and downstream how your choices impact an overall process,” he said.
“We discovered that process mining should not be just a one-and-done project,” Olphin said. “That has led us to create multiple templates that we’re able to connect with various SAP systems that have prebuilt user personas, user stories, and drivers of how the business should be moving forward.” Johnson & Johnson continues to find tangible ROI from its process mining program—for example, reducing the order-entry-to-shipping cycle time from 13 days to four days while offering more visibility to the stakeholders in the process.
DIY Personal Protective Equipment
Creative thinking and collaboration also helped Johns Hopkins Health Services (JHHS) solve the critical challenge of a lack of PPE. In his presentation, “More than a Mask,” Supply Chain Inventory Lead Max Mendez explained how the hospital network made the decision to manufacture its own PPE. The organization’s path to that decision involved a little bit of good fortune and a lot of resourcefulness.
The good fortune came from the fact that the hospital network had an 165,000 square-foot distribution center based in the Baltimore area near five of its six hospitals. That facility made it possible to assemble PPE and distribute it both locally and to ship to its sixth location in Florida. JHHS began by creating prototypes of its own face shields. Once the design was approved by leadership and the clinical teams, it began to mass-produce these.
JHHS continued to innovate by reaching out to local manufacturers like Under Armour, which it teamed up with to create what it calls an “origami mask.” JHHS created training videos to teach volunteers how to fold these into masks for the medical professionals treating patients on the front lines. By chance, a JHHS employee heard from a relative about how Ford Motor Company had begun manufacturing reusable gowns from airbag material. The team reached out to the company for samples, which it then sent to its clinical teams for approval. That led JHHS to be able to deliver 60,000 gowns in one month, which were found through testing to protect medical professionals from contamination far better than disposable gowns.
Mendez explained that flexibility and innovation were both critical to the success of this initiative. “We needed to move quickly to keep these operations running,” he said. “See what partnerships you can make locally.” JHHS not only collaborated with Under Armour and Ford, but also with local vendors and hospital networks. JHHS may have been new to manufacturing, but it remained laser-focused on product quality. “Even though we were manufacturing these in-house, we always made sure the clinical materials stayed safe so that our friends on the front lines were feeling safe.”
Watch all of the life sciences and health care sessions on demand, along with the rest of ASUG Best Practices: SAP for Industries.