Getting it Right

Tushar Burman, NC-India,
August 10, 2004

What Pillai recounts is a home-grown success story. After Ranbaxy's relationship with Speciality was cemented, the new entity - SRL Ranbaxy, was provided with systems infrastructure by Speciality. This was between 1996 and 1999. While successful to an extent, these systems remained focused on lab operations (SRL Ranbaxy is one of India's largest clinical research labs), while the rest of the business remained under-optimized. "Our business depends on the market, so other parts of the business needed to be integrated. This was not possible in the old systems," explains Pillai. It became evident that a new, integrated IT system was required.

Several international products were considered, but nothing quite matched up to Pillai's demanding specifications. While the lab is the core of SRL's business, it is by no means all-important. Samples come into SRL's Mumbai labs for testing in droves -- some 3000 a day -- each requiring multiple tests. Managing the logistics of the operation is no mean task. Thirteen office and lab locations and innumerable customer labs feed SRL with a steady supply of work to be processed and reported on. SRL has over 150 doctors and PhDs on their rolls overseeing these daily tasks. Naturally, keeping this torrent of work manageable, while delivering on time is quite a challenge. "We need to know efficiencies and productivity of our operations," Pillai explains.

Self-Help
Today, SRL Ranbaxy runs an ERP system custom-built for their business, designed and maintained mostly in-house. Apart from exceeding expectations and improving efficiencies, the purpose-built system was also the only correct solution for SRL's business. Explains Pillai, "The billing aspects of international products have a bias towards insurance processing. This is different from the way things are done in India". The concept of third-party pathological labs does not exist in the west, but is an integral part of the healthcare business in India. These key issues needed to be considered when building an integrated business system.

The core of SRL's ERP system is called the LMS (Lab Management System). SRL has succeeded in implementing what is most often seen in the manufacturing sector -- shop-floor automation. They own a battery of sophisticated testing equipment, all of which is configured to automatically test samples and update their back-end database with the results. "With manual operations, officers are required to program the test, as well as key in the results into the database," says Pillai. "The new system is totally automatic." Test samples, which are uniquely bar-coded, enter an instrument on one end, and leave from the other, with no manual intervention.

Of course, it's a lot more complicated than it sounds. SRL employs 32 different testing instruments, each of which have their own protocols to communicate with external computer systems. Centralizing the storage of resultant data required SRL to understand and interface with each individual instrumentation system, for which they have developed their own middle-ware layer. This layer isolates the complexities of multiple instruments into a single place, and allows SRL to deal with result data in a standardized way. The middle-ware layer translates and validates the data before pushing it into the back-end RDBMS.

While the cost for maintaining instrumentation is fixed, SRL, by way of increased output, has been able to significantly improve efficiency, and thus, profitability.

Being Digital
A product or service is nothing without delivery, and with faster output has come faster delivery, for SRL Ranbaxy. For their line of business, third-party collection centers are the 'distributors' in the value chain, and SRL deals with about 125 of them across the nation. All of them are linked to the LMS via what Pillai calls 'CCNet', which is SRL's in-house SCM (Supply Chain Management) application. CCNet extends the automation of SRL's labs down to the very last link in the chain -- where patient samples are collected. Explains Pillai, "CCNet can also be used in hospitals. In the USA, there is no concept of a collection center. Hospitals themselves collect samples for testing."

CCNet is the first system that a patient sample encounters in SRL's ERP. Patient samples are collected and details fed into CCNet, which updates the central database at Mumbai. Samples are barcoded uniquely at the collection centers and then dispatched to the labs. Once received at the lab, all that needs to be done is to scan the barcode of the sample, which is automatically referenced with data already present in the database. From then on, it's hands-off, and the machines take over. Pillai showed us the inbound sample sorting department, in which a small team of people were deftly sorting samples, thanks to the quick data-capture provided by the bar codes.

The final step of the process of testing samples is the generating of reports, which is possibly the single-most important process in SRL to be automated. "Today, 64 percent of our reports are generated and delivered digitally. Reports to international customers are 100 percent digital," says Pillai. Testing reports often have to be delivered within 24 hours of receiving samples. Taking into account testing time and courier schedules, it is often close to impossible to send out a report by courier, on time. SRL does send out reports the traditional way, but it is their digital reporting -- via the web and email, that has opened new vistas of opportunity for them. While Pillai was not at liberty to disclose SRL's international clients, he assured us that there are some significant developments taking place in their international business.

Digital reporting is enabled via encrypted email, as well as an authenticated web-based system. This allows doctors, hospitals and individuals to access medical reports on-line, and has had a huge impact on SRL's turn-around-time (TAT). "My RoI is recovered only from digital reports," explains Pillai, while the other benefits that the ERP bring are just cream. SRL has three servers co-located with Sify to cater to the demand for digital reporting. We wondered if web-based access to medical reports was more curiosity than value; Pillai lays this to rest, "Our web system is B2B and B2C. It is possible for doctors to login to check patient results. Hospitals also use our web-based system." Pillai goes on to reveal that on average, around 450 doctors visit their website to download patient reports daily.

Leaving no stone unturned, Pillai has made sure that very niche of the reporting process is optimized for speed and low TAT. Wherever required, SRL Ranbaxy sends out traditional, printed test reports via courier quickly, by doing some of the courier's work for it: "We have links with courier systems for generating airway-bill numbers," reveals Pillai. This allows SRL to print their own airway-bills, cutting down processing time when dealing with logistics companies.

Thrifty Technology
Despite successfully pulling of the seemingly gargantuan task of implementing their own ERP system, SRL has done so without breaking the bank. "Turn-around-time is our driving force, and cost-effectiveness is critical," says Pillai, encapsulating his approach to IT systems. By most standards, SRL does not maintain a state-of-the-art WAN, but keeps the data flowing via the web. Making the web interface general-purpose, they've saved on the potential costs of developing custom client-server code. Even Pillai's future expansion plans are cautious and measured. "We spend money intelligently. We cannot spend money on IT like banks or PSUs. However, IT is our backbone, if it fails, everything will halt," he says.

When we first met Pillai, he was busy with his team, coordinating a renovation of his department. His hands-on approach must work, because he manages SRL's all-india operation with a core team of just 22 people, with a single administrator at each remote point of presence. This includes database administrators, network administrators and developers -- a skeletal team by any standard.

Certified
A commendable feature of SRL's systems, and one of which Pillai is obviously proud, is its US FDA 21 CFR Part 11 -- a stringent regulatory requirement that US-based pharma companies need to fulfill. Consequently, the partners of these pharma companies need to comply, in order to effectively do business together. SRL Ranbaxy, with its homegrown ERP system, fits the bill, and the company is reaping rewards in the form of foreign contracts. "We do clinical trials for pharma companies, so strict standards are required," Pillai explains. Every transaction taking place in the system has an audit-trail. Pillai is clearly excited about the new international business that SRL is able to handle, due in no small part to the quick and compliant systems he has built.

Field Trials
Encouraged by the success of his core and SCM systems, Pillai is keen to expand the reach of his homegrow ERP. "We currently have 13 installations in India. Within the next three months, we will integrate them into a centralized system, changing some applications," he says. The next phase of expansion also involves implementing a WAN and adding more points of presence -- between 6 and 13 more, says Pillai. "Connecting of our labs will only happen by next December. We are evaluating leased lines and ISDN links for this," he explains.

As per US guidelines, Pillai also maintains data backups of up to 15 years, and plans to start a small disaster-recovery center elsewhere in India. "Backup is a concern. We plan to have an internal workshop on this issue," he says. Also on the anvil is a corporate messaging system based on MS Exchange. Listening to Pillai speak, we got a sense of an almost fanatical dedication to the core functions of the company -- lab testing and report delivery, with all non-essential systems following.

Perhaps this is an indicator for how he has managed to convert even the most hard-nosed, regimented PhD to being IT-friendly, and an internal evangelist to boot!