by Kelsey H | Sep 7, 2022 | Planning & Scheduling, Process Improvement
There are many ways to meaningfully expand a manufacturing business. We’ve discussed in the past how building a new plant or onshoring your supply chain can be strategic choices that offer increased control and customization. However, those methods can take months or years to accomplish. To expand more quickly, some companies choose to acquire existing manufacturing sites instead.
Companies have used acquisition as an expansion strategy for decades, but it’s become a higher priority for growing businesses in recent years. According to Deloitte, 53% of US executives planned to increase their merger and acquisition investment in 2021.
Advantages of Acquisition
First and foremost, the most obvious advantage of acquiring an existing site is that it’s already a fully functioning building. You don’t need to devote additional upfront costs into creating the plant’s framework or spend the significant time it takes to get a large manufacturing site up and running. According to an expert from JHP Pharmaceuticals, it typically takes two to three years to finish construction on a new plant. Any money or time you invest into the site after acquisition can be focused on making improvements or upgrades from the existing foundation.
Additionally, as an existing business, the site may potentially come with an existing customer base, if the previous owner manufactured similar products. Acquiring a site that’s already within your industry and market can give your business quick access to a pool of customers that you can begin working with from the start. You’ll spend less time and effort on business development than if you had to build an audience from nothing. Instead, your team can focus on how to improve profitability and improve the already established sales process.
…And the Disadvantages
Unfortunately, there are unique challenges that will accompany an existing site, as well. When you inherit the site’s infrastructure and customer base, you also inherit all the issues that led the previous company to sell. The plant may be underperforming financially or have limits on production and storage capacity. Instead of building a new facility to your exact specifications, you must learn to work with the current framework and quickly identify where investments should be made to make improvements. Though your business did purchase the physical plant, you’re really paying for the potential of what the site could soon become.
How a Virtual Model Helps from the Start
To begin improving on that potential as soon as possible, many experts recommend creating a virtual model that captures all the processes within the plant as soon as you’ve made the decision to acquire it. The practice of creating the model will create an opportunity to unlock existing data from the plant and reveal major pain points. Loading the virtual model with information will make the data accessible to many people or groups, rather than the handful of operators who remember how things were set up when the plant opened years ago.
One of the clearest benefits of a virtual model is how it combines a plant’s entire process with current orders and forecasts to sort through every possible schedule for production. If you begin using this tool as soon as possible, you can limit the amount of time wasted due to unoptimized processes. For example, a schedule based on a virtual model can decrease idle time or craft sequences in a way that minimizes time-consuming transitions between products. Virtual models can also further connect with other plant systems to increase coordination and save time when making schedule changes.
In addition to improving the schedule based on current conditions, a virtual model can also help your team understand all potential configurations of the plant. At any time, you can test the outcome of adding different investments to the site, such as additional lines to increase capacity or increased product storage. You can then compare the results of the various options and decide which investment will produce the highest financial return. For companies who acquire a site that is potentially outdated or in need of repairs, this feature can become a huge asset, as it limits risk and makes it easier to predict future production.
Several large manufacturers have successfully used our virtual modeling, planning, and scheduling tool, VirtECS®, to improve operations after acquiring a new site. When one of our specialty chemical clients purchased an existing yet unprofitable site, they immediately turned to our experts to transform their planning and scheduling processes. “Once we created a model of the plant within VirtECS®, our client’s planning and scheduling process became much more robust. Rather than using a manual process that required people to exchange calls and track down data, it became a seamless process that multiple people could access,” said Steve Harding, President of APCI. To learn more about how virtual modeling transformed this chemical manufacturing site, you can check out our recent case study.
by Kelsey H | Jun 8, 2022 | Process Improvement
Those who work in the biotechnology industry already know that capital projects at manufacturing facilities tend to fall short of their targeted capacity levels. According to McKinsey, pharmaceutical manufacturers utilize less than 35% of existing capacity, compared to 85% capacity utilization for consumer products manufacturers. If plants could boost utilization to 60%, only one third of existing facilities would be needed to produce the same output.
It begs the questions: why are so many plants still missing out on potential revenue or cost savings? In many cases, organizations aren’t even aware they have been minimizing their own throughput, or they assume there isn’t any way to avoid it. Below, we discuss some of the areas we’ve seen plants struggle with and discuss possible solutions to increase capacity utilization for biotechnology facilities.
Back-of-the-Napkin Assessments
Despite the many exciting innovations that come from the pharmaceutical and biotechnology industries, these companies still traditionally take an informal approach to capacity calculations. In fact, some of the largest plants in the world still base capacity usage on vague estimates and group consensus, rather than precise data. Others consider the capacity of similar plants and assume their facility is performing exactly the same, without accounting for any differences in design.
When you think about how complex and advanced most biotechnology facilities are today, you can see why it’s a problem to rely on approximations – especially when each batch of product results in thousands or even millions in revenue. Facilities that don’t use a more deliberate, data-based approach will unknowingly overlook potential performance constraints, and as a result, fail to achieve targeted capacity levels.
Underestimating Existing Opportunities
Similarly, some plants underestimate their true total capacity, and make utilization calculations based only on existing conditions. For example, a facility that is running two full shifts per day during the work week may think they have used 100% of their capacity, because they’re producing as much output as they always have. Realistically, though, they may have an opportunity to add a third shift or expand production during the weekend.
Underestimating current plant utilization often has costly consequences. Manufacturers who haven’t calculated the true maximum capacity of their current facility may choose to expand the space or build a new plant in order to increase output, which can cost many millions of dollars. On the other hand, tapping into unused capacity only requires additional labor and materials – which a new facility would also require anyway.
Inefficient Production Methods
While miscalculations play a major role in capacity utilization issues, part of the problem has historically been out of pharmaceutical plants’ control. For years, batch manufacturing has been the definitive production method for biotech and pharmaceutical facilities, and it’s still the most common approach used today. Batch manufacturing requires a multi-step production process with lengthy hold times and equipment setup in between. Naturally, this process tends to be less efficient than other production methods adopted by different industries.
However, this obstacle may be changing soon, as more pharmaceutical plants shift to a continuous production model as recommended by the FDA. Continuous manufacturing minimizes hold times, which allows operators to produce more output in the same amount of time. Thus, plants are able to increase efficiency and increased their total capacity usage.
As for the other capacity issues plants face, capacity analysis software is a key tool to begin performing more precise calculations and identifying constraints. An advanced capacity planning tool, such as VirtECS®, uses your plant’s unique specs to evaluate bottlenecks and pinpoint opportunities for increased throughput. Additionally, manufacturers can use the capacity analysis tool to measure the impact of potential capacity investments in the future. For more information on how VirtECS® increased capacity utilization for a major pharmaceutical client, please see our article published by Biopharm International. https://www.pharmtech.com/view/using-simulation-address-capacity-limitations-0
by Kelsey H | May 24, 2022 | Process Improvement
In recent years, leading biopharmaceutical manufacturers have started testing the use of small batches to produce highly custom pharmaceuticals developed from research on genetic variations. It’s an important advancement in the medical field, as customized products can help healthcare professionals provide more targeted and personalized care to their patients. As such, it’s become a high-priority area for pharmaceutical companies, and according to the FDA, more than 40 new products utilizing gene therapies may be approved by the end of 2022.
However, customized products are often much more complicated to produce than standard mass market pharmaceuticals. Production can become more time-consuming, and products must be tested and tracked rigorously. When batches have even slight differences, any issue with quality control can have disastrous consequences. Plus, it may be difficult or even impossible to track long-term market demand for high-precision products.
To improve their operational efficiency, there are a few areas small batch manufacturers should focus on. With these strategies, plants can help create the valuable, customized products our healthcare system needs without impeding their internal processes.
Gather Extensive Data
When looking for ways to improve efficiency, the best tool manufacturers can give themselves is data. For biologics manufacturers working with small batch precision medicine, advanced technology is a necessity to gather ample production data and gain a complete understanding of their operational capabilities. This data can help point to inefficiencies, bottlenecks, and opportunities within the plant.
To gather a more comprehensive set of data, plants will need to begin integrating a variety of tools and software. Devices such as smart sensors can be added to existing equipment to provide real-time insights on their performance. Even if your organization can’t invest in sensors for the entire plant upfront, gradually implementing them over time will still provide helpful additional data.
Some manufacturers have also utilized blockchains to track products through their life cycle and ensure each batch is safe from contamination or other damage. In addition to providing added security, using blockchain can also provide companies with valuable data throughout their entire supply chain. However, only about one in four pharmaceutical manufacturers have implemented blockchain technology, according to research from the Association for Packaging and Processing Technologies.
Implement Flexible Tools
In the process of gathering data, many manufacturers discover they have the capacity to produce more small batches of custom pharmaceuticals, but their current processes and schedules aren’t properly aligned to achieve their goals. Organizations in this situation can significantly benefit from processes that support increased flexibility during production. When manufacturing schedules can be quickly adjusted as needed, it gives plants the ability to respond to changes in demand in real time.
To give themselves more flexibility, some pharmaceutical plants have shifted away from batch manufacturing and instead use continuous production to reduce hold times that can cause longer delays. In recent years, continuous production has emerged as an optimal strategy to fit the needs of small batch precision pharmaceutical manufacturing. The FDA and other experts have also recommended pharma plants switch to continuous production models.
VirtECS®, our advanced planning and scheduling tool, is an ideal tool to analyze how plants can implement their own continuous production plan. VirtECS® is backed by decades of research and has helped numerous pharmaceutical manufacturers optimize their facilities across the world. Additionally, in the process of creating optimized schedules, VirtECS® also captures valuable data that can be used to further improve internal processes. To find out more about continuous manufacturing and the role we can play in optimizing production, check out our other articles here.
by Kelsey H | May 10, 2022 | Process Improvement
For many manufacturing plants, the constant miscommunication between systems and departments is a scenario that is all too familiar. With so many moving parts within the facility, it’s inevitable that someone will miss an update and be misaligned on the latest plans.
To ensure a smooth and accurate production process, it’s critical for all systems within a complex manufacturing plant to work together. In the most efficient cases, each program routinely and automatically shares information with other key tools in the facility.
This kind of high-level collaboration can save your team valuable time and keep all data current across the organization. There are many specific benefits to using a shared system of programs, but perhaps most importantly, digital collaboration can boost overall productivity at manufacturing plants by up to 30%, according to research from McKinsey.
Data Sharing Leads to Faster Problem Identification
For decades, manufacturing has been changing and becoming increasingly technology focused. As a result, plants are incorporating many kinds of advanced software into their daily operations, and these tools are gathering more data than ever. Many facilities today use various software for every aspect of manufacturing, from inventory management to resource planning. When used over time, these tools can offer a wealth of information about the current state of the plant. The data collected can help employees identify inefficiencies and weak spots much earlier, as long as the information is harnessed effectively.
Unfortunately, raw data isn’t always insightful when presented on its own. For example, from one set of data, you may learn that a machine in your process experienced lower throughput. If you can’t connect those statistics to the total production time or the amount of labor on hand that day, the information lacks important context. However, if you can access all the available tools and review multiple data points simultaneously, it can give your team a full picture of the plant’s current strengths and weaknesses.
Collaboration Encourages Smart Decision-Making
Once you have a better idea of the pain points your plant is experiencing, your team can use those insights to make better, more informed decisions across the organization. Before seeing the full, data-integrated picture, your leadership may have incorrectly assumed which investment would benefit the plant most – say, a new production line. In reality, the collaborative data may reveal that updating current machinery or hiring more employees would provide a bigger boost in productivity and increase revenue. Without that valuable information, the business would not have invested optimally or received the highest return possible.
How to Create a Collaborative Framework
Though there are many benefits to sharing information across each tool in the plant, it’s not always a simple process. Many plants have already ingrained themselves within existing systems that may not support collaboration. As a first step, we recommend implementing a scheduling tool that syncs with all existing systems and gathers information on internal processes. It’s especially helpful if the tool facilitates real-time communication with employees, so everyone in the plant can quickly access any changes to plant operations. From there, your organization can ensure any other new software acquired over time will work with your existing data hub to create a fully integrated system of information.
Our advanced planning and scheduling tool, VirtECS®, can integrate with many other manufacturing programs to provide a data-rich, seamless experience for our users. While spreadsheet-based models of scheduling often become cumbersome and accessible only to their creators, VirtECS® can be shared and used across entire organizations. Our web-based module, VirtECS® Symphony, helps distribute the finished and optimized schedule throughout the plant in real time to keep all employees up to date. For more information on VirtECS® and VirtECS® Symphony, explore our overview guide.
by Kelsey H | Apr 5, 2022 | Process Improvement
If your manufacturing organization is striving to become more efficient (and let’s be honest, who isn’t?), one measurement you’ll need to know is each product’s lot cycle time. This term refers to the total time is takes to manufacture one batch of product at the plant. Taking a calculated and responsible approach to reducing lot cycle time has many benefits, including improved productivity, increased output, and fewer resourced used. It also improves on-time delivery for customers, which is key to running a successful long-term business.
Ultimately, shortening the lot cycle time comes down to one primary goal: eliminating opportunities for disruption or variability throughout production. Achieving both objectives is no small task, but by implementing strategic procedures, your plant can reduce cycle time and significantly improve its overall efficiency.
Revamp the Maintenance Program
When your manufacturing plant relies on multiple pieces of equipment to complete production, any unexpected malfunction or breakdown can cause extended delays and increased lot cycle times. Investing in consistent and preventive maintenance of crucial equipment can help the plant avoid hours or days spent waiting for surprise repairs. To build your list of preventive maintenance needs, consult each machine’s manufacturer for the specific activities involved in equipment upkeep and the recommended frequency of maintenance checks. You can then block out time to complete maintenance on a consistent basis, ideally when each machine is already on downtime to lower lot cycle time most dramatically.
To further enhance maintenance efficiency, consider cross training all technicians at your plant so each employee can work on multiples pieces of equipment. No matter who’s on the clock on a given day, they’ll be able to complete all maintenance needs and quickly address any last-minute repairs that still happen to appear.
Reduce Over-Reliance
Variability and disruptions can also emerge when plants are completely dependent on a single piece of equipment. For example, if every product batch must eventually run through one individual machine, any problem or stoppage with the equipment will bring production screeching to a halt. If you’re running a large batch of product at once, there’s an increased chance of encountering even a small interruption. Once that singular machine is thrown off schedule, the total lot cycle time will only grow longer.
If possible, consider allocating funds to add a second (or third or fourth) machine into the process. When both machines are functional, you’ll be able to produce more product in the same amount of time, and if one of them must go under repair, you can still continue production in some capacity. If adding machines isn’t an option, look instead at your existing tools to see if processes could be adjusted to temporarily use alternative equipment in emergency cases. Even if it’s less efficient than the typical machine, slow production is better than no production.
Optimize the Schedule
Once you’ve decided to implement preventive maintenance and reduce reliance on singular machines, it’s time to effectively put those plans into action with an optimized production schedule. An advanced planning and scheduling tool can identify the best times to fit in activities like maintenance while causing as little disruption to regular production tasks as possible. These tools can also seamlessly add in additional plant equipment or shift the schedule to a backup plan, providing an updated and re-optimized plan of attack.
Our scheduling tool, VirtECS®, has been utilized effectively by numerous manufacturers to lower lot cycle times. In fact, VirtECS® improved lot cycle time of a complex global biologics company by 5.9% and reduced their cycle time variability by 22%. If you’re interested in achieving those kinds of result for your plant, you can get in contact with a VirtECS® expert here.
by Kelsey H | Feb 8, 2022 | Industry News, Process Improvement
For the better part of a century, pharmaceutical companies have produced their products through batch manufacturing, a process that typically follows a series of steps separated by hold times, off-site quality checks and complex equipment setup. Because batch manufacturing is a natural evolution from bench size manufacturing and government regulations called for strict product integrity, it became standard practice across pharmaceutical companies.
However, in recent years, experts have started recommending that pharma manufacturers shift to a continuous production model. In many other industries, continuous schedules have already been implemented with impressive results, helping plants increase output and respond quickly when the market changes, among other benefits. It makes sense, then, that the FDA and other government agencies have encouraged pharma plants to consider switching to a continuous approach as well.
A More Efficient Method
Perhaps the most significant advantage of a continuous production model is its increased efficiency. Unlike batch manufacturing, continuous processes don’t require hold times between production steps. Hold times range in length, but for some manufacturers, they involve moving product to other facilities and performing multiple tests to ensure quality. Consistently stopping and starting production also adds more time-consuming steps to the process, which are common sources of delays and human errors. By eliminating or minimizing hold times, continuous manufacturing can cut hours, days, or even weeks from total production time without sacrificing product quality.
It’s worth noting that the transition to continuous production can be logistically challenging, costly, and time-consuming. For certain pharmaceutical processes, there’s also still equipment or technology missing from continuous models that would be needed to complete production. However, the total time savings and revenue increases associated with switching to continuous production has already proven its worth to a number of pharmaceutical companies, including Pfizer and Eli Lilly, who have implemented continuous production at plants in recent years.
Increased Productivity and Flexibility
As is evident in its name, continuous manufacturing naturally allows your plant to produce more product in the same amount of time. There are a multitude of benefits associated with increased output, including more product to sell and distribute, increased availability of the pharmaceuticals, and less chance of a shortage. As the current pandemic has clearly illustrated, it’s critical for patients’ health to have pharmaceuticals widely and quickly available as soon as they’re needed.
Continuous manufacturing also allows for more flexibility within pharmaceutical manufacturing. By building around steady-state processes, many of the variables of traditional batch manufacturing, such as titer, are more tightly controlled. This consistency creates the opportunity for improvements in process efficiency and automation, increasing overall asset utilization and process throughout.
If your organization is considering making the switch to continuous manufacturing, an optimization tool like VirtECS is a key instrument in analyzing the opportunity and impact of switching to a continuous production schedule. If there are potential roadblocks standing in the way, VirtECS will uncover them and help you find the most efficient path forward when creating schedules within this new paradigm. VirtECS has been and continues to be used by several pharmaceutical manufacturers, and over the years, our team has developed a deep understanding of the unique challenges these plants face when optimizing production. If you’re interested in learning more about using VirtECS at your pharmaceutical plant, one of our experts would be happy to chat with you.
