Novartis: Centralised manufacturing unit will harness tech, not reduce network

By Dan Stanton

- Last updated on GMT

Novartis's centralised Technical Operations (TechOps) organisation will be in operation from July. Image: iStock/f9photos
Novartis's centralised Technical Operations (TechOps) organisation will be in operation from July. Image: iStock/f9photos

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Plans to centralise its manufacturing operations will optimise use of new technologies across Novartis’s divisions without resulting in any additional facility closures, the firm says.

Swiss Pharma Giant Novartis reported its full year 2016 financials yesterday and announced plans to centralise its manufacturing operations across all of its divisions through a single technical operations unit.

“As of July 1, 2016, we will establish a fully integrated Technical Operations (TechOps) organisation within Novartis Operations,”​ a spokesman for the firm told “This newly integrated Novartis TechOps organization will be organised along technology platforms with global functions supporting them.”

Speaking on a conference call yesterday, CEO Joe Jimenez said that currently the firm has separate manufacturing organisations across its divisions, which “leads sometimes to suboptimal capacity planning.”

He continued, saying moving to a centralisation strategy would enable the firm to improve capacity planning and quickly adopt new technologies across all units.

“We are going to organise by technology, so solids, aseptics, biologics, etc, and this is going to help us lower our total costs and improve our quality.”

Network restructure

But while the new unit “will be designed to leverage cross-divisional capabilities to improve operational efficiency,”​ we were told no activities or ongoing projects and programmes across the firms’ manufacturing sites will be affected “at this stage.”

All sites will continue to operate and to supply as usual. Current programs and projects will continue as planned.”

According to Novartis’ end of year report, the firm has been reviewing its manufacturing footprint since 2010 and, with the divestment of a French Alcon facility​ to CDMO Recipharm recently approved, the total number of production sites that have been - or are in the process of being -restructured, closed or divested is 25.

In January 2015​, Novartis told this publication it had roughly 100 manufacturing sites across its divisions, following the trading of assets with GSK which closed last year.

For the full year, Novartis reported sales of $49.4bn and a core operating income of $13.8bn, both down around 5% on 2014.

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