Intelligent digitalization can maximize manufacturing ROI: ACG
By putting the ‘smart’ in smart manufacturing, pharmaceutical operations stand to reap a number of benefits. Advanced technologies like artificial intelligence (AI), machine learning (ML), and the internet of things (IoT) are transforming the industry for the better, and the pandemic has served to accelerate the adoption of such technologies.
John Carey, vice president of sales with ACG Engineering, spoke with Outsourcing-Pharma about a shifted perspective on return on investment (ROI), and how smart manufacturing can improve operations as well as organizational culture.
OSP: Could you please share some perspective on how pharma firms have traditionally thought of ROI when it comes to manufacturing? Please feel free to talk about the various factors, and how they have been valued.
JC: The decisions are made using a cost-benefit analysis. However, to truly arrive at the right decision, costs are extended to the total cost of ownership (TCO), and the benefits are evaluated from an overall equipment effectiveness (OEE) perspective.
While traditionally, the cost of the equipment influenced the decision almost completely, today a more mature decision-making format includes the TCO. This encompasses all costs incurred that are due to the machine which includes the initial investment in its purchase, utility consumption, the cost of downtime, sub-optimal functioning, and other more subtle costs such as training, overages, and wastages, and any upgrades required. Full TCO exposes the hidden costs of a decision, ensuring a more informed one can be made.
Similarly, to fully comprehend the effectiveness of a machine the OEE considers the availability, its performance, and its quality. This ensures that along with the efficiency of the machine, the downtime and the wastages are encompassed in order to fully account for the effectiveness.
OSP: What have been some of the issues or challenges with that conventional approach?
JC: The traditional approach of considering the initial purchase price of the machine as its cost, did not factor in the potential hidden costs. This led to a strain on the operational efficiency and efficacy of the purchase decisions. Indeed, these costs can be hard to compute due to the complexity involved in gathering data from various sources.
Computational errors also creep in due to biases of one cost over the other. The strongest challenge to these comes in the form of a lack of data, which can accurately predict the costs due to unplanned downtime or breakdowns, and efficiency losses due to error.
OSP: How has the COVID-19 impacted manufacturing, priorities of operation leaders, etc.?
JC: As a result of the pandemic, pharma manufacturing has been impacted. Primarily, this has been a loss of production time due to lockdowns and other measures imposed to prevent the spread of the COVID-19 virus.
Due to this loss, operations are more focused than ever to drive optimization – with a real drive around efficiency enhancement measures. They are looking for ways to ramp up the productivity of existing and new equipment, to make up for the loss in productivity, but also as a result of the increased demand for life-saving medicine. Measures adopted for this include the use of OEM-approved parts, virtual discussions and analysis with experts, and opting for high-capacity, low-footprint machines.
Almost as immediately as the Covid-19 pandemic struck, pharma companies rose to the challenge of developing and producing medicine that would save the millions of people affected by the illness, as well as preventing billions of others from contracting it. This has - in effect - increased the focus on reducing time to file and time to market of the newly developed drugs. Indeed, with the aid of well-managed data, thorough research analytics and optimized development mechanisms this has been made possible.
Another effect that is being seen is the strain on the economy and consequently the financing of development and the production of pharma products. As a solution, agile and smart pharma manufacturers are turning towards more cost-effective and expertise-driven manufacturing solutions and OEMs from countries like India (known as ‘the pharmacy of the world’).
OSP: Could you tell us how digitalization has impacted pharma manufacturing? What are some of the new (or perhaps underutilized) manufacturing technologies and techniques that have emerged/increased since the pandemic’s arrival?
JC: The most prominent use of digitalization has been centered around communication – primarily relating to troubleshooting and offering remote support also.
Part of this has been related to training, which is vital when it comes to enhancing the productivity of the equipment and ensuring its optimal use. Virtual training can be accessed from anywhere and can be held for multiple locations at the same time.
Virtual reality (VR) and animation tools also enable us to better explore the internal workings of the equipment. The virtual environment has also given rise to a cross-pollination of great ideas and best practices across plants and customer locations, which has been hugely beneficial.
Pharma manufacturers are not able to save a tremendous amount of time and money by conducting factory acceptance tests and formulation trials virtually has provided them pharma manufacturers access to OEMs and experts in all corners of the globe - truly unlocking the potential of collaboration across geographies and cultures.
Going forward, further digitalization will yield higher control, improved optimization, balanced production, and efficient processes through data and analysis of trends.
OSP: Now, please tell us about smart manufacturing, and how pharma leaders can implement such tech/practices intelligently.
JC: Smart manufacturing is a technology-driven approach that utilizes internet-connected machinery to monitor the production process. The goal of smart manufacturing is to identify opportunities for automating operations and use data analytics to improve manufacturing performance. The three key steps to implementation of smart manufacturing include:
- Creating a digital mindset
- Identifying the uses cases and the roadmap ahead
- Selecting the right partner to support you on this journey
At ACG, our recently launched ACG Smart Connected (ASC) product will bring a new era of condition monitoring and performance optimization of pharmaceutical manufacturing equipment. Encompassing a wide variety of new service offerings, such as predictive analytics and guided maintenance by our subject matter experts, ASC will provide a whole new level of optimized pharma manufacturing.
OSP: How can pharma operation leaders best work to ensure smart manufacturing, operations, and company culture are all in harmony?
JC: By following the four-step plan, which includes: defining the vision, the metrics, implementation of systems, and training. To effectively implement smart manufacturing practices, pharma leaders will:
- Transform the core: digitize and integrate all their departments such as engineering and production.
- Focus on experiences and outcomes: create hyper-personalized value to differentiate and lead in the market.
- Re-architect the new ecosystem: assemble and refresh the right partners to drive innovation and new capabilities.
- Innovate new business models: invent new revenue streams for new sources of value.
- Build the workforce: source, enable, up-skill, and protect the next generation of talent.
In summary, they will need to demonstrate a real commitment to smart manufacturing.
OSP: Specifically, what about outdated pharma mindsets should be altered to bring about the more ‘holistic’ mindset you mention?
JC: Our industry is quickly adapting to the reality of living in a digital world. With technologies including track-and-trace, PAT and SCADA controls having led the way for decades now, the industry is quickly becoming one with technologies in the Industrial IOT domain and it has risen to the challenge of adoption.
Aligning with market demands and using big data and AI to unlock undiscovered business potential, pharma leaders are quickly leading the digital transformation on all fronts. Reliance on archaic business models and manufacturing patterns is being seen as an accelerator towards this transformation.
The after-effects of the pandemic are motivating the industry in the direction of digitization, and with the adoption of better and more current techniques, the industry needs to continue the momentum to bring about the holistic mindset.
OSP: What additional advice would you offer any pharma leaders looking to bring their ops and culture into the 21st century?
JC: Pharma leaders looking to adopt the ‘digital revolution’ and develop a more robust setup for the 21st century will need to:
- Embrace new digital strategies and business models
- Invest in technology and digitalization
- Use data for greater online experience
- Think about their teams
- Build the right capabilities
- Focus on the future