Title: Near Term Planning and Biopharmaceuticals: Issues and Challenges
1Near Term Planning and Biopharmaceuticals Issues
and Challenges
- Prasad V Saraph
- 17 FEB 2005
2Outline
- Near Term Planning Paradigm
- Definitions and Terminology
- Special Issues and Characteristics
- Summary
3Near Term Planning Paradigm
- Mission Statement
- Provide right product in right quantity and
right flavor at right time to meet internal and
external customer expectations - Scope
- Raw materials through multiple intermediate
products to finished goods - Goals
- Supply reliability
- Effective inventory management
- Process re-engineering
- Flexibility and automation of information
handling
4Supply Reliability Driven internally or
externally?
- Internal Process Predictability
- Process results are variable, rejections of large
batches are possible - Cycle times for QA are variable, long delays are
possible - External Market Influence
- Demand and Pricing variability
- Life Cycle Management pressures
How do we improve supply reliability?
5Inventory Management Same standards as other
industries?
- Process batches need sufficient and unambiguous
identification to ascertain in what markets they
may be sold - The complexity of the product structure can
quickly get out of hand. Scheduling and routing
batches so as to best match global demands is
non-trivial and dynamic - Lower process predictability as compared to other
industries, due to usage of living organisms, may
necessitate inventory as a business buffer - Complex regulatory approval processes may create
restricted inventory across the supply chain - Significantly long and variable quality cycle
times may necessitate higher inventory to buffer
against shortages downstream
How do we measure the appropriateness of
inventory? What inventory strategy is suitable?
6Process Reengineering Impact on near term
planning
- The business growth has outstripped the growth of
disciplined and efficient management systems - Significant potential for changes and
improvements - Changes can be time consuming and complex
- Changes requiring regulatory submissions, e.g.,
raw materials/cell lines, manufacturing/testing/st
orage processes, equipment/facilities, label
claims, delivery devices and dosage strengths - Changes around business processes might be
constrained by regulatory requirements - For example, data integrity requirements, SOX
(Sarbanes-Oxley Compliance) requirements, Agency
commitments around past observations - Each change can add to planning complexity in the
near term - Restrictions on material usage and processing
- Exploding requirements to track individual
material types arising out of changes - Uncertainty of regulatory approvals (nature and
timing)
What are the key features of near term planning
solutions that would help manage the process
reengineering effectively?
7Information Handling Need for Automation and
Flexibility
- Need for industry focused IT solutions Existing
standard IT solutions may not have appropriate
data structures, processes and performance
measures - Simpler (linear, unidirectional and few stages)
supply chains in Biopharmaceuticals are deceiving
to the eye due to internal complexity and
uncertainty - Potential to focus on wrong planning issues
while using standard IT systems - Need for Automation too much manual transfer of
data - Planning and scheduling efforts need automated
data input and automated data quality management
(error checks for consistency and completeness) - Need for Flexibility ability to change and
expand IT systems at the speed of changes in
business - Open and flexible IT architecture
- Efficient change control processes compliant with
CFR Part 11
What are the key expectations of effective IT
Solutions for Biopharmaceuticals?
8Definitions and Terminology
- Not standardized in the industry, not even
standardized within a company - Process stages (expression, purification,
filling, lyophilization, packaging ) - Process steps within each stage
- External stakeholders in supply chain
- Patient groups, Key Opinion Leaders, regulators
(FDA, SEC, OSHA, Export Control), health
intermediaries (Formularies, Insurers, Hospitals) - Internal stakeholders in supply chain
- Quality Assurance, Marketing and Sales, Quality
Control, Manufacturing, Engineering, Regulatory
Affairs, Project Management, Financial
Controlling, Information Technology, RD
(Clinical and Process Sciences), HESS (Health,
Environment, Safety and Security)
9Special Issues and Characteristics
- Regulatory-induced complexity
- Each change in materials, process or facilities
requires regulatory submissions across multiple
countries or jurisdictions - Approvals are granted at different times,
sometimes approval specs from different
regulators have different parameter ranges - Causes explosion in product-process structure for
planning production - Process variability
- Biological nature of process stages makes
predictability and reliability difficult - QA/QC times for a process stage are significantly
longer and significantly more variable than
manufacturing times
10Special Issues and Characteristics
- Inventory valuation
- As batches move through process stages, they may
be assigned the accumulated cost - But actually they have no market value until they
are proven to meet all approval specs of a region
with demand for it - Fixed cost nature of business
- Raw materials account for perhaps only 25 of
costs. The rest is facilities and the staff to
run them and manage them - Skilled manpower and need for experience
restricts the variable staffing - The facilities need to stay open in order to
retain their licenses. The costs of re-licensing
far exceed the costs of staying open during
periods of low demand
11Planning and Scheduling Cycle
FORECAST
PLAN
EXECUTE/CONTROL
REPORT
3-year rolling demand, production, inventory and
financials plan
Supply Capability Updates
Quarterly Supply Chain Review
QUARTERLY
Marketing/Sales Initiatives
13 week rolling demand, production, inventory and
financials plan
Regional Inventory Status
Projects Plans
Capacity Assumptions
Shutdown Plans
Sales Forecasts
MONTHLY
Aggregate Demand
Monthly Supply Chain Reports
Weekly Production Plan
Plant Inventory Status
Resource Status
Weekly Production Reports
WEEKLY
Daily Production Starts
Material Availability
Legend
Output
Daily Production Reports
Shift Reports, Logs
DAILY
Report
Inputs
12Conclusions The Grand Challenges for Near-term
Planning
- Internal supply chain complexity management
- Controlling growth of complexity
- Efficiently coping with the complexity that must
exist - Coping with the non-robust processes
- Planning with uncertainty and unusually high
variability - Ability to react quickly to the unfolding reality
- Demand planning and inventory planning in this
environment - Characterizing the demand and isolating
variability and uncertainty - Setting the appropriate inventory policy (how
much and where?) - Supply chain configuration (Push-Pull interface)
13Discussion
- Thank you for your attention.
- Questions? Comments? Ideas?