Armanino Blog

What ERP Manufacturing and Inventory Capabilities Do Life Science Companies Need as They Grow?

April 04, 2017

Updated February 09, 2022

Most life science companies in the pharmaceutical or medical device space will require some enterprise resource planning (ERP) system functionality for inventory and manufacturing to accommodate their specific industry needs. These inventory and manufacturing demands generally broaden through the product life cycle.

To help you plan for these ERP needs as your company grows, we’ve outlined the typical scenarios we see when working with life science firms:

  • Startup – You need general ledger, payables management and simple financial reports to maintain basic financial controls and reporting.
  • R&D – You need core financial functionality and basic inventory functionality to identify items used in research and development (R&D), control purchasing and use of items, and report financial results to the general ledger. You may use bill of material functionality, at least from an engineering perspective.
  • Prototype Development – You need basic inventory to organize items, assign suppliers and properly value associated costs. You may use bills of material and assembly transactions to generate finished goods and sub-assemblies from component inventory.
  • Pre-commercialization – You need inventory and manufacturing functionality to track operations related to procurement and manufacturing. You also may use it to track owned inventory located at and controlled by third parties and to control the transfer of inventory used for product testing and sales sample purposes.
  • Product roll-out – You need integrated purchasing, inventory, manufacturing and sales functionality. You may require MRP and sales forecasting functionality to plan for long-lead items and processes.
  • Full commercialization – You need a fully integrated ERP system that can scale to meet volume and geographical expansion.

Look for a Scalable Solution

Ideally, a single ERP solution can take you all the way through your product life cycles. Starting with a solution that requires a smaller investment and has simple ease-of-use, but that can incrementally scale to support your expanding requirements, is typically the best option for growing companies.

For example, Microsoft Dynamics has two scalable cloud ERP solutions, Microsoft Dynamics 365 Business Central and Microsoft Dynamics 365 Finance & Supply Chain (formerly Finance & Operations), that many life science companies use. You can start with basic core financial functions and financial reporting and add functionality as you need it, via re-implementation or changes to your system configurations.

To learn more about how to select and implement the right ERP to support your life science company’s growth, contact our life science experts.

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