ERP Implementation In Medical Device Manufacturing: A Case Study Of Mobile Health Electronics In Australia

Importance of ERP in Medical Device Manufacturing

Question:

Discuss about the Enterprise System for Australian Healthcare Industry.

Every healthcare facility must deploy policies and courses on asset management and equipment control. Equipment control and asset management requires the administration of medical devices within a facility and they areassisted by independent information systems among which the main is Enterprise Resource System (ERP). In this context, the following report is designed to provide a useful insight into the informed decisions regarding the adoption and implementation of ERP system in Mobile Health Electronics which is a medical manufacturer in Australia. The report analyses the current situation of the company and offers a proper software selection process to the management. Also, the report discusses the foundations for business value and digital transformation through digital commotion.

The scope of this report is wide as it evaluates the need of ERP system in one of the most vital and demanded field that is, medical devices manufacturing. The Australian Healthcare industry is expanding quickly not only in terms of revenue but also in terms of employment. One of the major diversof the healthcare sector in Australia is the increased consciousness of people regarding their health(Almajali et al., 2016). Also, due to increase in the average income of people, they now want proper and quick health solutions. Thus, ERP becomes necessary in this sector.

This report targets the whole healthcare devices manufacturing companies of Australia through MHE.

In today’s competitive environment, attempts to improve medical facilities have risen all over the world. The role of IT is extended to search out the relevant solutions for different challenges faced by the healthcare organizations.The purpose of this project is to study how the ERP systems are usefulin the medical sector for enhancing the quality of healthcare services. Since the Information Technology now involves all the industries which are presently experiencing significant change management, it has been found that the deployment of ERP systems in medical equipment manufacturing companies has not been reported on a large level (Poba-Nzaou et al., 2014) M. This made the researcher to analyze the importance and need of Enterprise Resource System in improving the quality of medical services to the patients and access to the integration of services facility for the management.

Moreover, this report would be helpful in identifying the ways in which the installation of ERP systems is profitable for the organizations in running their activities. It assess the significant changes which can be brought by ERP systems in various fields such as human resource, finance, admission resources, and increasing capacity as well as revenue (Garg, and Agarwal, 2014). Since there is a lack of an in-depth research in this sector, this report is designed to investigate the usage of ERPs in medical sector.

Benefits of using a New ERP system

Benefits of using a New ERP system

• An effective transparency of all necessary procedures throughout different divisions of the company, particularly for the senior management
• Independent and comprehensible workflow from one division to another so as to maintain a flawless transfer and fast accomplishment of the processes (Habidin et al., 2016)
• Effective inter-divisional operations and ensuring that none of these is skipped
• Access to the integrated and single reporting structure for evaluating the status across the different departments, such as real time
• No need of maintaining a separate software system(Parthasarathy, andDaneva, 2014)
• ERP also contains BI functionalities which provide understanding of business processes andpotential areas for improvements
• Availability of a range of modules in an ERP system such as HR, Finance, Marketing, sales, supply chain, CRM, and production
• An effective secure,and centralized storage system for all enterprise data
• Better collaboration among all the functions of the organization
• Integration of other systems to the ERP via Application Programming Interface
• Useful for managers to control operations which are globally discrete

Any project begins far before the actual implementation of software if the business requirements for the new ERP are not identified and possible suppliers are not evaluated properly. Moreover, it could be very time consuming for the new ERP to go from, evaluation to implementation (Branger, and Pang, 2015).After the system execution, the new ERP replacement project may disturb and create delays in other projects. It may also take more time for the users to learn the skills and adjust with the new technology.

Installation of the new ERP can be expensive for the company as a replace and rip can cost around 15 million dollar or even more. The company can also experience a revenue decline when the system is executed because the IT members adjust to the new process.

Implementation of new ERP can change everything within the ERP process. The third party software may find it difficult to integrate effectively with the new ERP. Moreover, the transactional as well as master data may need to be changed to the new ERP. Apart from, this, there is no surety that the new system will actually work and meet all the business needs.

Following is the list of MHE’s business requirements and business drivers:

Mobile Health Electronics is required to develop and ability to determine if the inspection is approved or not. The company needs to look for the quality plan which can enable the users to create particular measures in the inspection.

HME requires its ERP system to further than its basic level and identify if the user is eligible for a specific function or inspection based on training, experience or testing (Mucheleka, and Halonen, 2015).

It is another important area where HME needs a little more from its ERP system.The company also needs to obtain government approval to get a faster and reliable support (Shen et al., 2016). Furthermore, the MHE does not have a special type of manufacturing in utilizing its core competencies.

Vendor selection and ERP platform:

MobileHealth Electronics has requirements much like any manufacturer but with particular focus on aother domains whichmay be less relevantfor another business.

Identified Items	Product data guidelines	Product traceability	Customer management framework
Business Driver/business requirement	Governmental and industry standards	Strategic partnership	Innovative techniques
Business processes	FDA compliance	Value chain mapping	Quality management
Required data	All aspects of product’s lifecycle	Patients’ outcomes	wide range of knowledge of medical equipmentmeeting the needs of the customer
ERP  functionalities	Revision change control	Epicor Mobile Access	Customer Relationship Management

Information and assumptions required for recommending the best ERP solution to MHE

The MobileHealth Electronics has manyvital macro drivers connected with it. One of the key factors influencing the company is government guidelines. It most significantly affects the pharmaceutical and biotechnology organisations (O’Sullivan, et al., 2014). Thus, HME requires numerous trials and tests for any drug to be considered for approval by the government.

Business Requirements and Business Drivers of Mobile Health Electronics

Anothersignificant factor which impacts the healthcare sector is the Affordable Care Act. This act influencesalmost every companyprovidingmedical care and is beneficial for some while burden for others. For instance, the MHECompanymay be required to pay a 2.3% tax on all sales of equipment which can hurt the company’s revenue.

Like many other companies, MHE has a life cycle with four stages; an early stage, innovation stage, maturity stage and decline phase(O’Sullivan, et al., 2014). The MHE organizationis at the maturity stage. At the maturity stage, companies become perfects on their key product and become successful in getting economies of scale. Also, smaller companies are forced to exitfrom the market by putting barriers to the entry.

SAP Business Suite 4 SAP HANA (a.k.a SAP S/4HANA)

This system is especially designed for themost advanced in memory phase and on the modern design rules with SAP Fiori user experience (UX). It brings in business revolution by creating huge network of people, and devices in the real time for supporting the development of new business principles. The system is also helpful in associating the on-ramp to Big data and internet of things (Awa et al., 2016). It enables the clients to redesign their IT so as to reduce the costs and provide efficiency.

This ERP package assists the management in integrating the day to day business process in an effective way (O’Sullivan, et al., 2014). It also unifies the operations from lines of businesses and industry solutions to integrate the elements of SAP products like SAP SRM, SAP SCM, and SAP CRM. SAP HANA system is useful in saving a company throughout the software, labour cost and hardware as well.

It is one of the latest developed versions of SAP’s enterprise system. It generally offers end to end software assistance for the organizations. The term ‘end to end’ implies HR, manufacturing, project management, Customer relationship management, and sales and distribution(O’Sullivan, et al., 2014). However, it acts an alternative for the companies to install from scratch-one software each depending on the requirements of specific business activity.

Although this ERP can be cheaper for the organizations yet in the long run, the advantages will be restricted and integration of all the data can become a tough task for the management. Moreover, this system enables access to various types of modules in different suits (Budgett, et al., 2017). Using this, the company becomes able to emphasise on the details of every aspect in business processes. It can be said that this ERP acts as an umbrella which covers the whole series of conventional computerised planning software. 

Vendor Selection and ERP platform

Sage X3 is an exceptional ERP system which is designed to offer unique business solutionsthe healthcare manufacturing companies come to know and imagine. This technology has been evolvingoutside the conventional ERP confines and,flawlesslyand readily improves the level of productivity in the distribution, production, and services sector(Almajali et al.,201. This ERP package ismobile responsive, web based, and ready to use software which supports a number of languages, currencies, and legislations. It also helps the management in controlling multi-site and multi-company functions. The system is comprised of effectively integrated BI along with graphical business courses and work flow abilities.

The above discussions show that installation of a suitable ERP package is significant for the healthcare device manufacturing companies in order to improve and enhance its dataflow and communication (Islam et al., 2016). In this view, SAGE X3 ERP is the best business solution to MHE to address these factors and make the operations simpler for the management as well as patients.

Since HME is the part of Healthcare sector, it is obligatory for it to comply effectively with all the government regulations of Australia and should meet all the accounting policies of the country. Sage X3 serves as a strong ERP system which can help the company to safely manage the business operations and meet customer requirements at the same time for ensuring the needs of both federal as well as local agencies of Australia(Kang et al., 2017). This package is also helpful in assisting MHE in becoming more effective in controlling the data through advanced functionality, strong reporting system and independence. Other benefits of adopting Sage X3 for HME are as follows:

Improved patient care: Sage X3 will offer improved visibility of patient details to the organization and the management will be able to providebetter and timely care to the patients (Das, and Dayal, 2016).

Better integration: Sage X3 ERP for healthcaresector comes with better integration capabilities with other enterprise management systems such as CRM and payroll (Amani et al., 2016).

Business Intelligence: One of the vital aspects of this ERP package for healthcare industry is BI. It will assists MHEin monitoring operational efficiency for a hospital by providingrequired metrics associated to costing and critical patient and treatment analytics(Kang et al., 2017). It would also facilitate the right care to the right patient at the right time.

Minimized operational cost: SAGE X3 ERP will be helpful for MHE as it will be able to integrate all critical business processes such as HR inventory, supplies, billing, finance, and thus decreases operational cost (Hussain et al., 2016).

Information and assumptions required for recommending the best ERP solution to MHE

Independence: This functionality of Sage X3 for the company will make it easy for the management to track appointments, check and appraise patient/prescription and details.

Synchronization: Sage X3will provide MHE with anincorporated platform for all critical data, and pulling out of crucial report will become simple.

Digital disruption refers to the transformation that occurs due to the effect ofdigital know-how and business techniques on value preposition of current products and services.Since MHE is a manufacturer of medical devices and contributes significantly in the healthcare sector of Australia, it possesses a crucial relationship with technologiesand innovative modelsChoi, S., (Kang et al., 2017).Technology makes it efficient for the management to carry out critical processes and enables to manufacture stronger equipment and reduce errors at the same time.

From the above case study, it is analysed that digital disruption in MHE is important in performing clinical operations and maintaining the records of electronic medical. The role of medical care requires extended scope of healthcareto make the patients able to use health devices easily.

Following are the Advantages of digital disruption for MHE

For MHE, digital disruption provides areas for improvement in patient interaction. It helps the customers to stay updated regarding the diagnosis, appointments, treatment selection, and doctor visit (France, and Wilson, 2016).

The idea of the custom-made care and improved diagnostics is important factor anticipated by science fiction. Since the wearable medical devicesintroduced in the market, the concept of constant measurement has appearedmore real (Eid et al., 2017). Thus, digital platform gives the MHE a prospect of easy access to patient details in the real world. 

Being a private healthcare manufacturer or supplier, MHE must fulfillnumerous reps from the same pharmacompany. Digital disruption provides the expertise required and more flexible solution within each specialism from a customer perspectivedemandingeffective healthcare services.

It can be seen that Digital platforms have disrupted the markets largely.Most of the companies invest more on digital platforms rather than physical assets. Also, theyexploitdata and relationships, and technology of their networks to yieldmore value than asimilar organization (Ram et al., 2015). This ‘network effect’ results in the rise of new business and mental models. Being in the medical care sector, MHE is not resistant to these new business models. It can beaffected by disruption due to the minutiae of navigating opaque billing processes, the exaltation of doctors, andrulesdestroying competition.

In order to get maximum benefit from digital platforms, MHE is required to learn to consider it not as an ‘object’ but as a ‘way to operate and a way of thinking to run the business’.  The company should use the broad range of technologies and applications to develop more efficient automation, improved decision making, and effective connectivity with the customers as well as other external stakeholders (Gamme, and Berg, 2016). Using these business process designs MHE canmake a new way of working which can fundamentally transform the organization. Digital should be put by the management at the top of their strategic priorities while the CEO should proactively monitor the digital transformations. 

SAP Business Suite 4 SAP HANA

Conclusion

On the basis of the above report, it can be concluded that in healthcare device manufacturing companies, installation of ERP is very important. The main benefits which MHE canget from the formulations ofSAGE X3 ERP package is the flexibility and speed when reacting to unforeseen changes in business processes or at the organizational level.Sincemost of the applications possess a moderately loose connection, it will be quite easy to replace them when it seems necessary. In addition to this, on the basis of above analysis, it is revealed that MHE can choosethosebusiness solutions which are most suited for their ERP demands. However, the disadvantage of these ERPs is that they canresult in an increased number of software suppliers that companies can find difficult to manage and can face challenges for the central IT. 

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