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
