Optimizing Inventory Management in Pharma and Biotech

January 18, 2024

In this four-part blog series, we’ll explore how Merit for Life Science optimizes critical business processes for pharmaceutical and biotech companies. See our other blogs on inventory splitting and sub-batching, weighing and dispensing, and controlling storage conditions (coming).  

Controlling inventory management processes is important in any industry but critical for pharmaceutical and biotech organizations. Using an enterprise resource planning (ERP) platform helps these organizations optimize costs, investments, and product safety.   

Merit for Life Science is a cloud-first ERP system that was purpose-built for pharma, biotech, and medical device manufacturers.

Built on the Microsoft Dynamics 365 platform, Merit for Life Science provides tools that these companies can use to monitor and optimize product batch statuses, controlled release processes, sub-batching, track and trace capabilities, retesting, and stability testing. 

Let’s dig in and see how Merit for Life Science helps bring clarity and control to each one of these processes. We’ll cover:

Inventory Management: Managing Pharma and Biotech Material Batch Status

To improve controls, traceability, and quality throughout manufacturing and operational processes, manufacturers must tightly oversee pharmaceutical and biotech materials in batches, sometimes referred to as lots.  

This process involves managing materials, identifying individual batches of materials, and tracking balances, uses, and applications of these materials throughout the product lifecycle. 

One foundational capability that every life science company needs to optimize batch management is ensuring that every batch has a status. System controls use status information to determine what to do with baches.  

For example, you should not ship batches labeled “on hold” to customers. Similarly, you should not use a batch with an “investigation status” in the production process until the QA department clears it and changes its status to usable.

As these two examples indicate, being able to control batch status and dynamically update them when conditions change is critical to ensuring successful inventory management and manufacturing execution. 

Merit for Life Science gives you significant flexibility with managing batch status. You can define individual status types to control different situations that occur as materials travel throughout the supply chain.

Learn more about Merit for Life Science’s Batch Control capabilities:

Ensuring an Effective Controlled Release Process

Some life science organizations use a process for managing material produced in a facility, presumed to be good but not officially released for the market. This is known as the controlled release process.

Operations groups can use material with a controlled release status in production activities.

At the same time, a controlled release process requires additional steps before material can leave a production facility or go to a customer. Production teams must complete testing on materials with a controlled release status, perform a QA review, and provide an official final release to ensure the safety of batch materials. 

This controlled release process presents a hurdle for some ERP systems because of their limited ability to control and assign statuses to batches and applied controls. 

Merit for Life Science has support for the controlled release process built into its system. Users can tailor the controls and the rules around each disposition of the batch to meet their unique operational requirements.  

Sub-Batching Materials

We have been talking about controlling batches and materials, but another critical capability that every manufacturer and inventory management organization needs to have is the ability to sub-batch the material. In plain language, this means dividing a parent batch into smaller sub-batches. The sub-batch status identifies the overall batch that the material came from and distinguishes which inventory components belong uniquely to that sub-batch. 

In the pharmaceutical and biotech industry, the ability to sub-batch materials is useful in many situations. ​Company teams may want to create products at varying strengths to serve more customers and capture more demand. They may want to customize products for specific organizations or customer segments. Alternatively, they may aim to increase product turnover to minimize the risk of medications expiring before use.

Merit for Life Science functionality is built into both the warehouse management module and the handheld operations flows for the warehouse workers. As a result, warehouse teams can use Merit for Life Science and a handheld device to scan and track the movement of materials, whether workers are out in the racks or on the dock. In addition, production operators can use tablets or scanners to effectively manage the materials within the production workspace.  

Merit for Life Science provides functionality for both use cases that let users identify instances where they need to take a portion of a material batch and assign it a sub-batch number. They can then treat the sub-batch differently from the rest of the material in the parent batch, apply a unique batch status to this new material, and direct it for use in a particular application. 

Bookmark this page and come back to read more about sub-batches and batch splitting in an upcoming blog: “The Power of Simplified Inventory Splitting and Sub-Batching.”

Gaining Track and Trace Capabilities

To meet regulatory and legal requirements, life science organizations must fully track and trace every action performed with material, batches, and sub-batches. If questions arise later about a certain material or process, teams that use Merit for Life Science can access a complete and robust audit trail behind the individual transactions and uses of materials. They can also use Merit for Life Science to perform a full track and trace inquiry to ensure product safety. 

Users can begin anywhere in the chain and use that starting point to pull up a complete and total list of all the related transactions and related batches. After selecting a raw material batch with just one click, Merit for Life Science lets users immediately see critical information.

This information should comprise the list of finished good batches produced, including any part of that material, the relationship between the finished goods and the raw material batch, a list of customers who received that material, and the current status of the material, whether on-hand or still in the warehouse.  

With finished goods, users can begin anywhere in the chain and choose a specific finished good batch number they may have some concern about. With a couple clicks, Merit for Life Science will display a list of all raw material batches used in producing that finished good batch. Users can identify the vendors who supplied the raw material, track the purchase orders associated with them, note the receipt dates, check if any remaining raw material batch is on hand, and access other critical information.

As a result, with Merit for Life Science, teams gain easy access to track-and-trace functionality and information. This capability provides customers with security, safety, and the peace of mind that comes with having a full audit trail and traceability for all activities that occur throughout their operations and supply chain. 

Learn more about Merit for Life Science Inventory Controls.

Retesting Materials

Being able to retest materials is another key capability that pharma and biotech companies require, and that Merit for Life Science provides. When acquiring new batches of material from a vendor or producing them within a facility, teams assign each batch a traceable expiration date and a retest date. The expiration date marks the day after which teams should no longer use the batch, and the retest date sets the anticipated day for retesting the material.

Life science organizations must have established retest programs that provide guidance and controls. They must be able to perform certain tests on an existing material batch to determine if it has been stored in compliance with relevant requirements.  

If testing requirements are satisfied, pharma and biotech companies can extend the expiration date to delay the expiration trigger on that batch of material. This gives them the opportunity to make and verify claims, such as that material has been stored in full sub-zero temperatures for the entirety of its life in a facility and that retests and analysis can establish that fact.  

Furthermore, retests can create a possibility to extend the expiration date. For example, when users assign expiration dates to materials, they may not be sure that they will be able to keep these materials in sub-zero temperatures the entire time.

Retesting easily allows for the potential extension of material lifespan and minimizes the amount that needs disposal due to expiration. Some of Merit Solutions’ life science customers realize immediate cost and safety benefits from using this capability. They leverage Merit for Life Science to provide controls for a robust retest process, retest materials, and extend expiration dates to avoid unnecessary write-offs due to unmanaged material expirations. 

Learn more about Merit for Life Science’s retest capabilities:

Ensuring Effective Stability Testing

Life science organizations typically have an ongoing process for monitoring the stability of active pharmaceutical ingredients (APIs). The U.S. Food and Drug Administration and other regulatory bodies have specific requirements for managing these stability programs. 

Organizations producing batch control products must establish a process where they set up a series of scheduled evaluations to analyze how products are holding up over time. This is not as important with materials that are received. However, if materials are being produced, these organizations need to be able to verify that the efficacy, the effectiveness, and the integrity of the product are holding up over time. So being able to set up recurring tests based on stability schedules is important from both a quality and safety standpoint. 

Merit for Life Science enables users to create schedules that dictate the testing intervals required to monitor the stability characteristics of APIs. The system automatically creates stability testing quality orders based on a pre-set schedule, with pre-determined testing sample quantities and stability tests. Quality orders are included in the quality planning process to improve visibility, enable easier tracking, and streamline quality resource planning and coordinating. 

With Merit for Life Science, manufacturers gain additional capabilities to manage and monitor the stability of API (Active Pharmaceutical Ingredients) materials, streamlined planning of testing and quality resources required to ensure compliance with regulations. 

Want to improve inventory management and product safety for your life science organization? 

See how Merit for Life Science can help streamline inventory and warehousing processes and bring clarity and control to your manufacturing processes visit Merit for Life Science Inventory and Warehousing.