The annual procurement savings achieved was 3–7%.
Times are tough for biopharma manufacturers. They face a host of mounting economic pressures, including decreasing margins due to losses of patented products and increased competition from generic players and developing-world competitors. At the same time, they struggle to keep up with increasingly complex manufacturing technologies and strict regulatory oversight.
To address these challenges, BCG has worked with top biopharma companies to transform their manufacturing and supply chain organizations to make them leaner, more nimble, and more responsive to market challenges and opportunities.
BCG assisted in several comprehensive, multiyear transformation efforts for biopharma clients. This work was a true collaboration between the clients and BCG experts. The transformation efforts were driven by the companies’ global manufacturing leadership teams, which addressed plant network, supply chain, and operational efficiency. The projects also focused on a number of support functions, such as IT strategy, cross-functional processes, and training.
BCG looked closely at global manufacturing footprint and low-cost sourcing, fixed assets, labor costs, utilities, and the move to a more variable cost structure. The teams also studied procurement and contract manufacturing strategies to develop more efficient global supply chains and plant operations that result in greater productivity at lower cost.
Working closely with clients, BCG developed a comprehensive set of recommendations and initiatives for transforming their approach to manufacturing. They included:
BCG’s biopharma clients substantially transformed their manufacturing capabilities and achieved their goals of increased efficiency and effectiveness. We helped them streamline their overall organization structure, with clearly defined roles and responsibilities.
In addition to generating immediate results, these improvements continue to deliver significant ongoing savings. In procurement, one biopharma client doubled its annual savings in the first three years—moving from 3-5% achieved savings to about 7% annual savings. In manufacturing, clients realized significant process improvements, resulting in improved profitability. In plant network, they saw a 15% savings from optimizing scale, reducing complexity, and clearly defining site roles.
In partnership with BCG, these biopharma companies were able to transform their global manufacturing and supply chains, making their operations smarter, leaner, and more efficient.