Michael W. Cislo04.02.08
Achieving Agility in Contract Manufacturing
Criteria for thriving in the new era
By Michael W. Cislo
Photo courtesy of HCM - Hyaluron Contract Manufacturing |
The life sciences industry -- including pharmaceuticals, biotech, and medical devices -- is undergoing a period of incredible transformation due to patent expirations, rapid changes in the global demand for drugs, and continued mergers and acquisitions. To effectively navigate these market dynamics, companies across the life sciences chain are realizing they need to rapidly deliver into the global market new products -- or innovations to existing ones -- to solidify their leadership positions in a variety of therapeutic areas. Additionally, they are realizing they must have agility in their manufacturing processes to keep their supply chains aligned with significant shifts in global product demand. By adopting leading practices that support the rapid technical transfer of products from R&D to commercial manufacturing, and from plant to plant to contract manufacturing, life sciences organizations can more effectively maintain their synergy with the changing demands of the global marketplace to continue to deliver on their legacy of success.
Specifically, this article will examine the market drivers for agile manufacturing, the capabilities that support it, leading practices for integrating agile manufacturing with contract manufacturing, and how to effectively navigate fluctuations in product demand, overcome pressures for more product innovation, and work within the regulatory mandates impacting agile and contract manufacturing.
Industry Factors Driving Manufacturing Agility
Despite the changing conditions in the marketplace, life sciences companies are continuing to battle what many experts have called the "perfect storm." This is driven by three critical issues: large fluctuations in product demand, higher expectations for product innovation, and new guidance from regulatory agencies. Companies with traditional supply chains probably will survive this storm, but they will suffer in the process. Many experts compare these traditional supply chains to ocean liners. Both are large, high-volume, and reliable, but difficult to start up, slow down, and turn. To avoid this label, a more agile supply chain is required -- one that can rapidly adapt to, and manage, the elements of the perfect storm. Consider the following factors driving agility into the life sciences supply chain.
Major Changes in Demand
Issues such as patent expirations, the introduction of new therapies, drug trials, off-label use, and actions by regulatory agencies are creating large fluctuations in product demand. Consider the following industry examples:
Generics -- Major pharmas today are cutting costs and expanding into new markets such as China to maintain demand for blockbuster drugs compared to generics. They understand as soon as generic alternatives are available, demand will shift from patented products to less expensive generic products. To retain market share, manufacturers for patented products will have to find -- and rapidly implement -- more cost-effective manufacturing.
Off-label uses -- Certain drugs may secure Federal Drug Administration (FDA) approval for the treatment of one condition -- say colon or lung cancer. However, in off-label use, these same drugs may be very effective in treating other types of cancers. From this, it is evident certain drugs may achieve a demand level that greatly exceeds planning estimates due to off-label use. In these situations, the manufacturers of these products will need to find additional production capacity to meet this excessive demand; a solution for this is contract manufacturing.
Recalls -- Whether for drugs or medical devices, FDA warnings or a recalls can have a devastating impact on the demand for these products.
Pressure to Launch Products Globally
Life sciences companies are facing an increased burden to release products globally, as opposed to regionally or within certain markets. Also, all countries and markets that have heightened medical needs for new products are demanding them immediately. This affects how clinical trials are conducted (multi-region, multi-market) and the number of production facilities that must be used for these trials and product launches.
Expected Synergies from Mergers and Acquisitions
Mergers and acquisitions can also greatly impact product demand from a supply chain perspective. Mergers and acquisitions will drive supply chain rationalization, which is the alignment of the supply chain with the demands for the merged product portfolio. To take advantage of supply chain synergies, the combined companies will rationalize the supply chain and transfer the manufacturing of products to plants with the following characteristics:
- Newer process technology;
- Location in tax advantaged countries;
- Location near the markets they serve;
- A focus on a specific type of manufacturing like packaging; and,
- The benefits of excess capacity.
Needless to say, pressure to rationalize the supply chain brings with it the daunting challenge of completing the technical transfer for many products in a short period of time.
New Guidance from Regulatory Agencies
As evidenced by the focus on drug-eluting stents in 2007, concerns about the safety and effectiveness of life sciences products will remain top of mind with regulators, legislators, and consumers this year. In addition to the increased focus on safety, the FDA is promoting new guidance that will require life sciences companies to develop and maintain a much more rigorous understanding of the manufacturing process and the controls critical to the quality and integrity of products. These processes, which include Quality by Design (QbD) and process analytical technology (PAT), are seen by the FDA as initiatives that will allow manufacturers to innovate more rapidly with less scrutiny from regulators. Product quality-focused initiatives are intended to provide all parties with the confidence they need to make changes to the manufacturing process without adversely affecting the product.
Increased Use of Contract Manufacturing
More than ever before, life sciences companies are looking to contract manufacturing to enable them to rapidly adjust production capacities to meet demand challenges, and to provide access to new process technology that may not exist within internal manufacturing. To make this happen, life sciences companies must rapidly integrate their contract manufacturing with their technical transfer, participate in the engineering change process, and the non-conformance management and Corrective and Preventive Action (CAPA) processes.
Challenges of Sustained Innovation
Innovation has always been at the forefront of the life sciences industry, helping to drive its strong performance over time. This has been the hallmark for medical device makers who rely upon product innovation to provide new therapies, fill their pipelines, and deliver new sources of revenue.
In the future, innovation will likely be fueled by the integration of drugs and devices, which is becoming a highly promising area for R&D. Beyond life sciences, the convergence of information technologies, telecommunications, and scientific advances also will help to sustain long-term innovation. Convergence, in particular, will blur the traditional lines of competition, as new competitors from outside of life sciences will emerge. As these competitors gain momentum, life sciences companies will face continued regulatory, intellectual property, operational, financial, and organization challenges associated with establishing new business models to support the delivery of new technologies and products.
Capabilities that Enable Agile Manufacturing
To implement a new business model like agile manufacturing, which will accelerate the delivery of new products into the global marketplace, life sciences companies must establish standards that define products and the manufacturing process, integrate design with manufacturing, close the loop with quality for continuous improvement, and implement mechanisms to monitor and continuously improve supply chain agility. Following are several specific ways to accomplish this.
Standardize Product and Process Definitions
Truly agile manufacturing companies will be capable of rapidly launching new products, as well as efficiently implementing engineering changes to the product and process. Agile life sciences companies must also make sure that product launch and engineering change activities are compliant with health agency guidelines and regulations.
The foundation for Agile Manufacturing is a well-defined specification for the product and its manufacturing process. This foundational knowledge must be expressed in a form that is clearly understood by the design, regulatory affairs, and commercial manufacturing organizations, as well as the contract manufacturing organizations. Here, the use of standards to define product and process specifications is critical, since those standards define a common language and terminology that can be understood by all stakeholder organizations. Examples of standards that are applicable include the Electronic Common Technical Document (eCTD), Structured Product Labeling, ISA-88 standard for Recipe Definition, and the ISA-95 standard for product and process definition.
To facilitate the implementation of an Agile Manufacturing environment, the definition of manufacturing process should not only be expressed in standard terms, but should also be harmonized across manufacturing plants. The idea is to develop a "library of standard process actions" that can be used as building blocks to define the manufacturing processes for all products. For each process action included in the library, a define plant or manufacturing line specific instance must be developed so that a corporate-level specification of the manufacturing process can be rapidly converted into a plant or manufacturing line-specific process definition. The use of a standard library of process actions has been shown to have a dramatic impact on technology transfer cycle time, especially for the transfer of products between plants, and for implementation of engineering changes.
Integrate Design with Manufacturing
Life Sciences companies should make use of the standard Product and Process definition to facilitate the exchange of information between design and manufacturing. To achieve the strongest results from this exchange of information, companies should transition to a paperless manufacturing environment -- one that defines the use of the standard process definition for how products are made, and also, what the record of production (e.g., batch record and device history record) must include. In addition, life sciences companies should encourage collaboration between design and manufacturing, so that manufacturing has the capability to encourage the design organization to specify manufacturing processes that can perform well and be rapidly implemented.
Close the Loop with Quality for Continuous Improvement:
Life sciences companies also should consider using an Integrated Quality Management System to monitor the performance of the product, the manufacturing process, the materials, resources and equipment, and to determine relationships, and identify the root causes for performance problems. Specifically, the type of information the quality management system should monitor for this analysis includes:
Product and Process Specifications: a standards-based definition of the product characteristics and the manufacturing process employed for the product;
As-built Records: a record of production for a batch [Electronic Batch Record (EBR) or a device (Device History Record (DHR)];
Material Inspection Records: a record of the testing and lot qualification performed on incoming materials;
Resource Maintenance Records: a historical record and status for all required resources needed to support the manufacturing process including production equipment, technicians, and facilities (e.g., water, air quality, etc.);
Product Complaints: complaints and reportable adverse events that describe a performance failure for the product; and,
Engineering Changes: a record of product and manufacturing process changes or improvements normally defined in an engineering change order (ECO).
Measure Manufacturing Agility
To become more agile and to verify that efforts to improve agility are yielding the desired effect, life sciences companies need to measure and report on their manufacturing agility -- the ability to match manufacturing output to customer demand. If the industry as a whole is experiencing highly variable demand, then the capability to rapidly change the product output is critical. Some sample measures for manufacturing agility include:
Cycle Time for Tech Transfer: The time it takes to transfer a product from design to manufacturing or from one manufacturing facility to another;
Rate of Engineering Changes: The number of product and process changes (think innovations or improvements) that can be implemented in a given time period; and,
Cycle Time for Engineering Changes: The time it takes for an engineering change to be implemented -- from the time the engineering change request is made to the time the engineering change order is implemented.
How Contract Manufacturing is Integrated
Once standards are in place to define products and the manufacturing process, it is critical to integrate with contract manufacturing partners. Still, doing this without compromising intellectual property is no easy task, since it is unlikely that contract manufacturers have the same application platforms or business processes.
However, because these manufacturers are providing a contracted service, the first step in working with them is to understand and specify what "services" are required as part of the contract manufacturing agreement. Some of the services that will best help contract manufacturers to support the agile manufacturing environment include the following:
The Use of Standard Product and Process Definitions. Before engaging with a contract manufacturing organization (CMO), it is vital to select one that will accept standard product and process definitions. In addition, as part of this evaluation process, it is critical to collaborate with partners to define process actions or work instructions that are derived from the standard process definition. This will support the rapid transfer of the manufacturing process to the contractor in the same way it supports inter-plant product transfers. It is also important to be capable of interpreting the standard product definition to understand all critical-to-quality characteristics for materials.
Participating in the Engineering Change Process. CMOs must actively participate in the Engineering Change Process of the life sciences company so that product and process changes are implemented in a timely and compliant fashion. To do this effectively, companies can leverage product lifecycle management (PLM) tools to promote collaboration with suppliers for the processing of engineering changes and items manufactured by the supplier. Today, many contract manufacturers are willing to participate in the engineering change process to review and approve changes, and to submit engineering change requests when they originate at the contract manufacturer.
Supply the As-Built Data Required for Quality Management. To successfully integrate with contract manufacturing, life sciences companies must also be able to exchange "as-built" data. This "as-built" record of production includes information that describes the process that was executed and the resources (equipment, materials, technicians) used during the execution of the process. Lastly, both parties should include a Certificate of Analysis or Lot Inspection Data with manufactured items. The primary purpose for this requirement is to facilitate the quality release process for the manufactured product. The quality organization for the life sciences company is ultimately responsible for certification that the product was manufactured per approved specifications. In addition, the "as-built" records provide critical input to the integrated quality management system and support investigations into the root cause of product or process non-conformance.
Navigating the "Perfect Storm"
To avoid the uncertainty and pitfalls associated with the perfect storm, life sciences companies need a more agile supply chain that enables rapid product transfer, a higher rate for engineering changes, better investment return on continuous product and process improvement, and a synergistic supply with variable demand and reduced risk of noncompliance.
By implementing best practices for agile and contract manufacturing, life sciences organizations can overcome the inherent challenges they face on a global scale to improve their forecasts for continued success.