Excellence in operations ensures a quality supply to patients at the lowest cost.
The typical pharmaceutical business is far more complex today than in the industry’s blockbuster era, when a few breakthrough products, stable demand, and high margins were the norm. Changes in these market dynamics, as well as the associated rise of biologics and other new technologies, have sparked many new opportunities for biopharma companies. But those same advances make efficient operations both more complex to achieve and more important to the bottom line.
Biopharma is better able to target niche diseases and narrow patient populations effectively than ever before. But it takes skill and strategy to profit from smaller manufacturing volumes and more volatile demand. The operations team is being called on to provide effective supply chain solutions to more specialized pharmacy channels. It must also address the opportunities and challenges associated with globalized supply chains and rapidly growing emerging markets, across multiple production technologies and distribution models.
These dynamics present operations managers with a host of decisions to make in an environment in which corporate and commercial strategies evolve quickly—often more quickly than traditional operational strategies are designed to match. With no time to waste getting to market and no room for slack in the budget, operations have to be robust and flexible, right from launch—not just to meet the demands of patients but also those of regulators.
To thrive in this environment, leading companies are shifting to scenario-based adaptive approaches and operations strategies that allow for conservation of capital and modular capacity expansions. In addition, the goal for many companies is a programmatic approach to building capabilities and driving value, across both internal manufacturing and important strategic partners, that balances impact across agility, cost, quality, delivery schedules, robustness, and other important metrics. Operations teams are also sharpening collaboration with other parts of the organization—with the R&D team for joint management of product launches to ensure they get to market as quickly as possible with sufficiently robust manufacturing support; and with commercial to implement end-to-end design and management of supply chains to achieve robust commercial results.
Mounting regulatory scrutiny worldwide and cost pressures stemming from a wave of blockbuster patent expirations have put the spotlight on operations excellence in the biopharma industry. But despite significant investment in quality processes and systems, progress on improving outcomes has been limited.
The reason: too often the increased focus on quality has involved putting out fires as problems surface. In such cases, increased investment in areas such as quality personnel or software typically helps in the short term—but the effects are rarely sustained, or in line with the higher spending.
It doesn’t have to be this way. Companies can achieve both increased quality and efficiency if they implement a comprehensive program that boosts quality across the entire supply chain, from material provided by important vendors to production, packaging, and distribution. Here are three necessary stages of a successful quality improvement program:
Companies typically overlook the importance of clearly defining the goals of an operations excellence program. Organizations need to tailor the deployment of centrally created tools and methodologies to individual sites and plants. They must also ensure that the objectives of the initiative are clearly spelled out, and that all functions across the company have a stake in meeting those goals.
To ensure the program is implemented effectively, data must be tracked in a way that is actionable and can drive the proper corrective actions. In addition, the quality program needs to be integrated with the entire supply chain, including manufacturing, scheduling, and IT. Companies must dispel the perception that efficient quality operations come at the expense of robust and accurate quality processes.
This step includes tracking appropriate metrics, which focus on measures of quality outcomes—such as the rate at which products that don’t meet specifications are being manufactured—rather than statistics on inputs such as training sessions held or number of Six Sigma Black Belts. A culture of quality must be established that gives people transparency about how their actions contribute to quality.