Aladdin Mandishah- Global Life Sciences Industry Solutions Manager, SAP
The soul-searching began soon after reports emerged this fall linking the tragic deaths of 70 children in the West African nation of Gambia to cough syrups produced in India. How could incidents like this be prevented from happening again?
Finding an answer to that question could very well depend on making strides on two fronts. The first is strengthening regulatory oversight of manufacturers in certain jurisdictions, a difficult proposition given the complex political, market and stakeholder dynamics in play. The second is improving batch release processes and practices, so contaminated or substandard medical products never make it out of the production facility and onto the shelves. That could be a more straightforward undertaking, for a variety of reasons. First, of course, is the desire to avoid tragic outcomes like what occurred in Gambia. As infrequent as incidents like this are, the damage they inflict in terms of human life is immeasurable. What’s more, they undermine consumer confidence and extract a huge cost on the individual companies and brands involved.
These aren’t the only compelling reasons for pharmaceutical manufacturers to take steps internally to streamline and strengthen the practices and processes behind batch release. Among the others:
Meeting carbon footprint, sustainability and ESG (environmental, social and governance) goals, priorities and requirements — and in doing so, potentially gaining a competitive advantage. Pharmaceutical companies are feeling pressure on multiple fronts to behave more sustainably. Using integrated, automated and standardized batch release processes instead of the siloed, manual processes that are common today can lead to substantial reductions in carbon footprint by facilitating faster supply chains, reducing inventory levels, reinforcing right-first-time releases and reducing product recalls.
Avoiding the potentially large costs associated with recalling and disposing of a substandard or contaminated batch. According to estimates from McKinsey, a single warranty or recall process can cost a medical manufacturer up to $600 million (exclusive of recall-related costs like lawsuits).
Reducing cycle time to bring products to market faster. Based on our internal analysis at SAP, streamlining and digitizing batch release processes can reduce overall batch review cycle time by more than 90%, enabling companies to bring more products to patients, faster, with shorter order fulfillment lead times. At one large manufacturer, for example, batch review processes that used to take a quality assurance team of five people 40 hours now take a single person just one minute using intelligent digital tools.
Reducing production and inventory carrying and scrappage costs. The big efficiency gains that come from accelerating the batch release cycle time can significantly reduce operating costs by lowering the cost of meeting quality standards. We calculate that a 5% reduction in quality costs for a company with operating expenses of $80 - $100 million can result in an average of $5 million in sustainable cost savings. What’s more, shorter order fulfillment lead times also can translate into as much as 25% reductions in inventory carrying costs.
As compelling as benefits like these are, for pharmaceutical companies to capture them they have to find ways to fix the well-documented shortcomings of current batch release approaches. Here’s a look at how they might go about doing so:
1. Boosting automation and standardization.To understand just how labor-intensive and error-prone the batch release process is, consider that today close to half — 48% — of life sciences companies use manual processes for batch release and 35% check data in multiple siloed systems during the batch release process, according to our internal research. Here’s where intelligent, machine-learning- and AI-driven automation tools can overcome those obstacles, giving quality assurance teams the ability to quickly collect data from disparate sources: downtime logs, line clearance logs, equipment and room cleaning logs, calibration labels, environmental monitoring data, deviations, serialization, etc. They then can draw insight from that data, evaluate exceptions and facilitate faster, more informed decisions. With a greater reliance on automation, manufacturers can shift to a review-by-exception approach to evaluating batches.
There’s also an opportunity for manufacturers to bring much needed standardization within and across quality teams and departments, as well as along the supply chain (including contract manufacturers and suppliers) by integrating a variety of automated checkpoints into the process to ensure adherence to a set of common practices, processes, systems and functions. This in turn reinforces thresholds, parameters, workflows, etc., that lead to faster, more compliant batch outcomes.
2. Improving visibility internally and across the supply chain. Perhaps the most critical missing piece for more efficient and compliant batch release is a central hub from which quality assurance teams can view and make sense of all the data they’re getting from disparate sources internally and across the supply chain. From this centralized hub, manufacturers can rapidly analyze the data to make faster, better-informed decisions not only about the release of finished products to market, but also about validating the quality of externally sourced goods and internally manufactured bulk or finished products. Through the hub, quality assurance teams can more readily detect deviations early in the process, and identify erroneous batches, then track the source of error.
3. Quality by Design. “Quality by design is produced, not checked” should be the mantra that guides a manufacturer’s approach to batch release. The U.S. Food & Drug Administration endorsed moving from a “quality after design” approach to a risk-based approach to pharmaceutical quality 15 years ago. Automation and standardization are critical to (re)designing products and processes for quality.
4. Strengthening carbon footprint tracking and reporting capabilities. How does producing a batch right the first time or a substandard batch impact the company’s carbon footprint? How do suppliers and sub-suppliers compare in terms of their carbon footprint? What steps could your company take to minimize the resources — energy, paper and packaging, transportation, etc. — associated with each and every product? With so much emphasis being placed on sustainability, ESG and carbon-reduction, it’s vital that pharmaceutical companies arm themselves with tools to answer these kinds of questions. They must be able to collect and track the make-up, and prove the origin, of the materials and equipment they use, as well as the energy their operations consume and the emissions they produce, and they also need to embed KPIs related to these factors across the business, so they can make decisions accordingly.
Incidents like the tragedy in West Africa provide a powerful reminder of just how much is at stake for pharmaceutical companies to improve their batch release processes. Now, with the advent of new approaches that promise big gains in efficiency and significant reductions in cost, they have the means and the incentive to do so.
About the Author
Aladdin Mandishah has 15-years experience in the life sciences industry in continuous improvement roles in operational excellence and business transformation to help companies become more resilient, productive and effective. At SAP he works as a trusted advisor to customers worldwide. He shares industry best practices which companies can use to transform into Intelligent Enterprises. Ultimately, it allows them to provide better experiences for their customers and be more resilient to evolving industry trends and market conditions.
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