Nomeco digitalizes its HealthCare Logistics business

Healthcare logistics specialist Nomeco’s new Site ONE central warehouse is one of the largest and most automated warehouses of its kind in Northern Europe. Opened in 2020, the site is operated by the company’s HealthCare Logistics (HCL) business and was built on the three pillars of efficiency (fastest time to market), quality (safeguarding patient safety, product quality and data integrity), and security (full risk mitigation).

While the warehouse’s opening set a company precedent for innovation and potential, it was still dependent on a legacy core ERP system that was becoming challenging to maintain. A new platform was needed to meet the company’s future ambition for growth and ensure it was both secure and compliant, while enabling scaling and the easy integration of new customers. The company launched a project to replace the legacy system with a modern SAP S/4HANA solution.

“The warehouse investment was the result of tremendous growth in our markets, and we recognized that we needed a new, modern facility and platform to continue to grow and run our business. Besides expected performance outcomes, our ability to use data was a key business focus for us,” explains Søren Vesti Esbensen, Nomeco HCL Director.

Green field implementation

Recognizing that such a new platform would require extensive expertise and needed to be tightly integrated with warehouse operations for end-to-end supply chain efficiency, Nomeco partnered with Capgemini to undertake its business and technology transformation. Capgemini is a global leader in SAP transformations and implementation services with more than 800 S/4HANA projects in Europe alone.

Beyond SAP technology expertise, it was important to have a solid understanding of the pharmaceutical industry and its compliance needs. For example, the solution would need to conform with Good Distribution Practices (GDP) for ensuring the quality and integrity of pharmaceutical products being distributed throughout the supply chain. Nomeco also sought a partner with an understanding of and experience in the end-to-end business process, along with specific knowledge in 3^rd party logistics operations. All of which Capgemini brought to the table – and more.

“This was a green field implementation for us, and we had to draw on Capgemini’s expertise to help us gain the experience we needed for success,” explains Michael Skånstrøm, Nomeco CIO.

Although this transformation was focused largely on modernizing Nomeco HCL’s application landscape, parent company PHOENIX group also stipulated that the Danish business should be a pilot for the eventual rollout of a new S/4HANA Global Finance Template across its global entities. As a result, this became a full-scale SAP S/4HANA implementation, from Finance to the company’s suite of enterprise resource planning (ERP) business software.

One Team philosophy underpins success

Throughout the process, Capgemini’s One Team philosophy ensured that its team members and Nomeco stakeholders worked as a single entity and lived shared values, from project scoping all the way to delivery.

Michael Skånstrøm comments: “You only achieve results when the chemistry is right. During the past two years, we have come together as a single team, so much so that at times you wouldn’t be able to tell who was working for Nomeco HCL and who was working for Capgemini.”

Two projects deliver overarching transformation

The SAP S/4HANA implementation was delivered as two distinct projects within the overarching transformation. First to go live was the Global Finance Template being piloted in Denmark on behalf of PHOENIX group. Two months later, this was followed by the successful deployment of the S/4HANA ERP solution for HCL.

“From a technical architecture point of view, it made really good sense to run the Finance pilot in parallel with HCL’s S/4HANA ERP implementation,” says Michael Skånstrøm. “By adding the SAP S/4HANA Finance solution to our project scope, we could avoid building a complex interim interface to the old Finance solution.”

In collaboration with Nomeco, the existing tools from iCAPTIVATE were utilized and fine-tuned for this specific implementation. The iCAPTIVATE model, a Capgemini project execution methodology, included kicking off the design with value stream mapping workshops for the main mega processes, such as Order2Cash, Procure2Pay and Finance2Manage, with the purpose of capturing value drivers and opportunities for improvements, as well laying the foundation for the solution design. Capgemini’s global delivery approach ensured the optimal cultural fit and local technical alignment, while offering sourcing flexibility, industrialization, and cost efficiency.

Moving ahead with SAP S/4HANA

The success of both the Finance pilot project and Nomeco HCL’s local logistics transformation is a pivotal step in the company’s ongoing transformation and PHOENIX group’s wider strategy for its global application landscape.

As Michael Skånstrøm explains: “We now have a great foundation for scaling the success of Nomeco HCL’s SAP S/4HANA transformation to other parts of our business, creating an appetite to move ahead with the next S/4HANA implementation.”

Looking ahead, Nomeco’s Søren Vesti Esbensen anticipates a continuing development of their SAP S/4HANA solution: “After successfully onboarding all our clients to the new system, our focus will be to get the most out of it, harvesting the data we capture and, importantly, thinking about how we can build new digital solutions on top of and around it.”