Pharmaceutical skincare company Ego Pharmaceuticals has signed an agreement to roll out SAP Business All-in-One software.
The Melbourne-based manufacturer of brands including QV, Aqium and SunSense will invest just 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.
The Ego Pharmaceuticals implementation will get underway 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.
“Clarity clearly articulated the business case for change,” said Ego Pharmaceuticals managing director, Alan Oppenheim.
“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.
“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.”
Other benefits include improved forecasting and supply chain management, which will ensure timely product supply to retailers and avoid ‘stock-outs’, where retail orders outstrip Ego’s ability to supply goods immediately. 
“Stock-outs have been a significant issue for our business, as most retail outlets, especially in our export markets, simply won’t accept backorders – that is, they won’t wait until the product is in supply. 
“Insufficient product quantity in stock leads directly to the loss of sales and disappointed consumers. The new software will enable us to use better forecasting and production planning tools, which we expect will reduce stock-out occurrences significantly,” added Oppenheim.
The new software system is also expected to save Ego Pharmaceuticals on labour costs, as multiple data entry and manual reconciliation of data between systems will be eliminated.