Manufacturing Operation

Managing label serialization

How a Pharma CDMO can manage the Serialization Challenge

How a Pharma CDMO can manage the Serialization Challenge 1920 1080 shahid.anis

At a Glance

  • Today, serialization has moved past the point of being a nice-to-have option to becoming a necessity.
  • Pharmaceutical companies are tying up with CDMOs to develop sustainable serialization solutions for maintaining drug quality and avoiding supply chain glitches.
  • CDMOs face various challenges when it comes to implementing a robust serialization mechanism to allow for better distribution.

The advancement of Industry 4.0 and digitization has introduced another level of complexity when it comes to pharmaceutical serialization track and trace in the supply chain. The industry is constantly looking to improve its tracking systems while devising new ways to mitigate genuine concerns like counterfeiting, theft, packaging and storage mishaps, and drug adulterations. Pharmaceutical companies have long been outsourcing to CDMOs for the purpose of better manufacturing practices, and serialization of the supply chain is an imperative part of the process.

30-40%of all medicines circulated in the developing countries are counterfeit.

5-7%of all medicines circulated in the developed countries are falsified.

Source: WHO Report

These statistics pose a serious threat to the public’s health and challenges the authenticity of the pharmaceutical industry on a global scale. CDMOs worldwide face challenges either when implementing a robust pharma serialization solution or attempting to streamline manufacturing and distribution processes while understanding the unique serialization requirements of their clients.

Below are some of the challenges a CDMO faces while implementing pharmaceutical serialization track and trace and some interesting ways they can be addressed.

Serialization Challenges Faced by CDMO

  • Seamless Serialization for Multiple Clients CDMOs typically prefer to operate at a global level, providing comprehensive drug manufacturing and supply services to various pharmaceutical companies. Catering to a diverse base of clients has its own unique set of challenges, especially when it comes to the serialization of individual drugs. CDMOs need to equip themselves with the right technology to be able to modify their production or manufacturing lines in order to seamlessly serialize multiple drugs from or for different clients all at the same time.
  • Compliance Across Various Regions Within the United States of America, every state has different laws and rules in place, and across these states, many US-based pharmaceutical companies export their drugs to other countries. This can require a powerful pharma serialization mechanism in order to remain in compliance with varying global and local standards, rules, and regulations. CDMOs are expected to take part in ownership and responsibility when it comes to the quality of drugs and compliance with various government rules. This process can be a challenging area for CDMOs, especially true when you consider the vast databases and maintenance required to remain compliant.

FIGURE 1: Key Serialization Challenges Faced by CDMOs

  • Picking the Right Labelling Solution When it comes to the serialization of drugs, there should never be a one-size-fits-all approach to labeling solutions. From label materials to the hardware used including, Thermal Inkjet Technology, Thermal Transfer Technology, Laser Printers, Digital Printers, etc., CDMOs have a lot of decisions to make. Label layout, orientation, barcode design, compliance adherence, and validation, and these labels need to be manufactured in a stipulated amount of time for maintaining the continuity of the drug’s supply chain. This all comes down to making the right choice when it comes to coding and labeling technology.
  • Understanding Market Requirements While larger pharmaceutical manufacturing companies may have an in-house team of analytics and marketing specialists; mid-size and virtual companies often still rely on CDMOs for market intelligence.When it comes to serializing drugs of their clients, CDMOs need to understand the different markets and their requirements. Based on market analysis, CDMOs make a decision as to how many drugs need to be serialized for a particular market, including whether they’re choosing to use randomized or centralized serializations.

Different ways CDMOs can overcome Pharma Serialization Challenges

As every case is different, it’s unknown which factors may be bigger issues than others. To be able to address these challenges as they come, CDMOs should evaluate the following points

  • In order to set a robust pharma serialization system in place, CDMOs should equip their task force with the technical knowledge and details of serialization hardware and software beforehand.
  • Making use of advanced technological applications like Big Data, Cloud, Internet of Things (IoT), advanced analytics, or enterprise-level software, like Microsoft’s Dynamics 365 line will help CDMOs in maintaining and monitoring their database for various clients. They should have no problems managing multiple production lines while serializing drugs for different clients.
  • Investing in the right partner, with experts that understand and cater to diverse global and local pharmaceutical rules and regulations will prove hugely beneficial for CDMOs in their pharmaceutical serialization track & trace journey.
  • As a vendor, it’s important for CDMOs to maintain two-way communication with all parties involved, including the pharmaceutical companies, dealers, wholesalers, packagers, transporters, etc. This will help them maintain transparency at every level of serialization and aid in avoiding recalls or stock-outs.
  • CDMOs can benefit greatly by developing flexible templates for their serialization solutions. These templates would serve as a blueprint for any pharmaceutical client, while the flexibility in the template would allow a CDMO to make tweaks in the process to meet the client’s requirements. This saves time, effort, and cost.

Final Thoughts

While drug serialization can create a number of different challenges for CDMOs, it’s also an opportunity for an organization to display technological dominance. Regardless, with the right team and solution in place, CDMOs should have no problems managing any challenge they come against.

Microsoft’s Dynamics 365 suite of solutions offers Pharmaceutical companies a powerful solution, and a means to track serialization along with handling customer onboarding, lot traceability, and toll manufacturing processes, from start to finish.

  • As pharmaceutical companies are required to strictly follow serialization regulations to combat counterfeiting, theft, and more, these companies are partnering with CDMOs for better serialization and to establish a more efficient supply chain.
  • Serialization requirements for pharmaceuticals pose many technical and skill-based challenges and CDMOs worldwide are constantly looking for more efficient ways to handle these challenges, investing in the right partner can make a big difference.
  • With the help of cutting-edge applications, a skilled team, and a systematic approach towards serialization, CDMOs can establish themselves as leading end-to-end manufacturing and distribution partners for leading pharmaceutical companies.

About XcelPros

XcelPros is a Chicago-based company and delivers transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

The Role of an agile & cloud-based ERP in Chemical Manufacturing

The Role of an agile & cloud-based ERP in Chemical Manufacturing

The Role of an agile & cloud-based ERP in Chemical Manufacturing 1920 1080 shahid.anis

Modern Manufacturing

In recent years the chemical industry has witnessed a radical change in production methods. With technology gaining more attention in almost every sector, including manufacturing and distribution, business leaders need to upgrade their technology stack and outdated processes to meet the changing demands of the market. A rapid transformation of the Chemical manufacturing value chain is required to improve efficiency, productivity, quality, precision, pricing, and more.

While “Complexity” serves no good for business, it has been part and parcel of the chemical industry for decades. Many companies suffer from siloed department structures, disparate systems, inefficient data management, and a lack of streamlined processes due to lack of an agile ERP solution. These have all helped create roadblocks that hurt the bottom line of the business. Most companies don’t realize the gravity of the issue until the lack of integration between the floor and functional areas rears its head. As a result, it’s been easy for orders to get lost and product quality to suffer thanks to suboptimal production runs or poor capacity planning.

Chemical manufacturing companies need to take action by redefining their business models and re-evaluating their IT roadmaps. Chemical companies invest in transformation projects such as integrating a cloud-based ERP solution with operations to streamline processes, drive collaboration and efficiency, and offer much more informed decision-making.

Figure 1Agile ERP Solutions in Various Phases of Chemical Manufacturing

Unforeseen Circumstances: COVID-19

The COVID-19 pandemic caused havoc, severely impacting every industry. The functioning of departments such as production and shipping became increasingly challenging. As a result, hundreds of companies had to scale down their manufacturing operations by as much as 40-60%. With such fewer raw materials being supplied, by February, the global production of chemicals had dropped by 2.4%.

The drop in business severely impacted revenue in Chemical companies. On top of that, transportation costs have gone up, and priority has shifted to essentials. This sort of financial pressure has forced companies to downsize the workforce, yet having to continue the business, which now is enforcing rapid technology transformations at an optimal cost.

An Agile ERP in Manufacturing

Unlike many other sectors, businesses in the chemical industry may not be able to stop production and send workers home. On the flip side, many chemical companies are pivoting operations to meet the demand of the market.

Add to this, a unique share of challenges that already exist for the chemical industry, including issues like

  • Fluctuating prices of raw materials and their impact on margins
  • The need for constant product innovation
  • Increasing risks in supply chain & manufacturing
  • Tightening regulations
  • Market uncertainty, budget & controlling costs
  • Difficulty in resource management

To overcome these complexities, companies need to possess a detailed overview of the market to identify the shifting customer dynamics and plan appropriately. Cloud-based ERP systems for manufacturing can help identify market needs, shape the manufacturing processes, and finance a chemical company’s financial business processes.

6 Ways Implementing ERP will Improve Operations in Chemical Manufacturing

01.Improved Visibility

An agile ERP unifies data across departments, increasing the visibility of information across an organization, and eliminates unnecessary infrastructure costs while providing higher data security. Within a chemical company, process automation add-ons to the cloud ERP eases resource overload by optimizing workforce utilization on the shop floor. All departments across the company, including inventory management, purchasing, accounting, human resource management, production, and finance function together with a minimum breakdown and maximum clarity in operations. Agile cloud-based ERP systems for manufacturing can help a chemical company access real-time data on a uniform platform and boost throughput to reduce downtime.

02.Enhanced Flexibility

As market demand fluctuates, there is a growing need for increased adaptability in the manufacturing and supply chain, enabled using the right ERP solutions. A Chemical company can share important updates and revised manufacturing plans/ schedules utilizing the supply chain planning system to plan stock availability. An agile ERP system for chemical manufacturing should follow a tiered approach comprising

  • secure database
  • simple user interface and higher accessibility
  • easy integration with external tools

The Chemical industry has a unique set of functional requirements to accommodate Environment health and safety and OSHA regulations. Cloud ERPs give Chemical companies the flexibility to customize the solution to suit their needs without migrating data or altering the entire piece of software.

03.Better Collaboration and Transparency

Data associated with the right ERP leads to better collaboration across the enterprise. Complex business procedures often are simplified, and simpler processes with no controls are made more stringent due to an ERP implementation project. All modern systems have enough restrictions to enable a disciplined method of functioning, that companies may have missing. A process and rule-based system improves transparency and sets the organization for growth.

04.Better Supply Chain Efficiency

A successful ERP software implementation eases the complexity of supply chain management with better-informed demand and supply management. Data insights collected from a well-designed ERP system for chemical manufacturing can reduce inventory cost, enhance supply chain efficiency, and optimize production processes that, in turn, build a robust supply chain. Building supply chain efficiency has further benefits such as decreasing expenditure on raw materials, increasing profit leading to capital growth for any company.

05.Improved Production

Chemical companies often pay a hefty price if the system they use is lacking functionality. The typical end-to-end chemical production process comprises – scheduling lot production, estimating the cost of the lot produced, recording consumption of raw materials, recording route operations, quality control check on lots, and accurately recording yields. This process exchanges multiple hands and devices. A poorly designed manufacturing execution system can hinder the batches produced, draining resources, and add unplanned costs to the company. All you need is an agile, cloud-based ERP system for chemical manufacturing.

06.Enhanced Customer Service

With the right suite of ERP and CRM solutions, it is possible to fulfill the customer-centric objectives such as understanding the customers’ needs, improving service levels, and enhancing customer experience. An agile ERP that supports companies to attend to their customers’ needs and resolve issues faster ultimately drives customer retention.

Final Thoughts

A Chemical manufacturing company holds its share of challenges. Be it specialty chemicals, bulk chemicals, private-label, co-pack, or a contract manufacturer, having the right cloud-based ERP systems for manufacturing helps to build operational efficiency, bring products to market faster, reduce the cost of operations, be more agile, and responsive to market changes.

About XcelPros

XcelPros is a Chicago-based company and delivers transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

Enhance Supply Chain Planning within Pharmaceutical operations

Enhance Supply Chain Planning within Pharmaceutical operations 1600 1000 Xcelpros Team

Introduction

The COVID-19 pandemic has created significant changes in market dynamics, forever changing the face of the global economy. Along with the pandemic’s impact on our daily lives, there has been a ripple effect in the day-to-day operations of Pharmaceutical manufacturing. As industries around the world continue to adjust to changes, Pharmaceutical manufacturers in specific, are noticing technology, process, and infrastructure gaps that are impeding growth and sustainability. Additionally, businesses that were forced to slowdown production during the initial stages of COVID-19 and are now getting back to full momentum, are finding it difficult to manage end-to-end operations.

Pharmaceutical companies cater to a customer base that is dependent on their products to manage patient health. This requires additional efficiency in everything they do, especially for planning supply-demand. The primary objective is to not halt manufacturing, as the dependencies can impact the entire Pharma value chain. Since pharma companies are quality controlled, there is an additional time factor that comes into the picture while determining the right deadlines to produce finished product and deliver to end customers. The entire process from drug discovery to packaging for delivery is a series of collaborations within the supply chain before the final product reaches the end customer.

Roughly 66% of the surveyed were concerned that COVID-19 could result in a possible supply chain disruption for pharmaceutical products. The statistic illustrates concern levels on possible drug supply chain disruptions due to the COVID-19 pandemic as of April 7, 2020. Matej Mikulic | Statista

The Planner’s Panorama

Due to the rapid changes in the global supply chains, production planners at pharmaceutical manufacturing are now tasked with surveying inventory and operations with a new set of eyes. Organizations need to be more watchful of new safety standards related to inventory storage, retrieval, usage of material, and equipment maintenance. Tools like Visual Gantt Charts are becoming invaluable for planning and managing inventory. The ability to depict a weekly schedule of operations for different production jobs and a clear picture of resource capacity is a core requirement for any good production planner. The production planner’s prime focus is to ensure there are enough raw materials and resources (equipment or human resources) to ensure a near-to-perfect supply-demand ratio. An additional element that supports a planner is to have inventory visibility within their current warehouse and plan transfers of inventory from overflow warehouses.

Simple visual planning methods are no longer adequate to correctly manage all inventory-supply-demand processes and ensure proper movement of transactions across the company’s supply chain.

What planners need is a robust system that can track supply – demand by including a complex set of parameters such as lead times, working calendars, the capacity of equipment and capability of vendors to ship materials on a timely manner. Planners also need the ability to alert different departments of the next steps based on plans made for upcoming weeks or months. Any modern system should be able to offer required insights including the current state of batches manufactured and available equipment for future work orders.

A production planner often prefers handling the supply chain proactively rather than reactively by responding to the demands. The planner needs visibility of when the finished product will be ready, tested, and released for shipment. This type of planning helps overcome downtime and shortages in raw materials, which is a common issue in most companies. Responding quickly to changing inventory is one way for planners to be more proactive.

Even today, many small and medium-sized pharmaceutical companies continue to use a combination of excel sheets, inventory reports, and some old school methods when managing their supply chain. As industries continue to face changes related to the COVID-19 pandemic, only companies that have thought ahead and have invested in an automated AI-based planning system that can assess and predict future demand as well projected resource plans will be best equipped to handle their product delivery on time and in full. Companies now need a quicker and more streamlined process to take their products to market.

The Role of a Master Planning and Scheduling System

01. MPS Driven by Demand

The goal of a Master Planning and Scheduling (MPS) system is to provide suggestions to meet material requirements. If set up correctly, MPS systems respond to demand and plan supply accordingly. Demand usually comes from sales orders recorded in the Order Management system. Master planning ties Planned orders for Production or Procurement to corresponding sales orders. The supply requirements are then calculated based on settings for each item that is included in the Finished Goods Bill Of Material(BOM). The coverage settings of an item show precisely how and when to send feedback with a view of current stock levels or foreseen changes in stock levels from existing planned orders in place.

02. Planned Supply

MPS systems use algorithms for tracking the demand from sales orders, customer forecasts, safety stock levels, and calculating net-requirements for purchase and manufacturing. MPS also pulls together independent or groups of demands that trace back to the production of intermediate and raw materials to be consumed in different Manufacturing and Packout processes.

Determining the quantities required would depend on the inventory quantity setup of any single item. The requirement could be specific for a static batch size or dynamic quantities based on the demand needs. MPS systems provide planners the capability to either consolidate supplies across multiple demand orders, offering a comprehensive supply and demand management experience, or consider only the net change from the start of a full production run.

03. Lead Times

The ability to define lead times is critical to a master scheduling system. For instance, if a user enters a purchase lead time the system should account for the time it takes to receive raw materials after placing a purchase order.

I. Purchase Lead Times

Purchase lead times for a supplier can be set up based on different factors including

  • Pricing agreements
  • Time in days that a supplier can accommodate
  • Transportation time, and
  • Any other unforeseen coverage settings

Within Dynamics 365 Finance and Supply Chain, a purchase lead time found for a specific supplier and item combinations takes precedence over general settings of an item. This applies when (1) no vendor is assigned to the item, and (2) the Find trade agreements checkbox is selected via Master planning parameters form > Planned orders tab.

II. Production Lead Times

Production lead times are the details that can be configured in coverage settings; however, these values are disregarded when items are produced via routes. Routes, defined in the modern Production control modules, consider available resources (people or equipment) and their working schedule. In this situation, production lead times needed to create finished goods do not have to be specified by a user, as they are calculated automatically.

Planning for the Unknown

There are still unknowns within pharmaceutical production and operations. Without the right system, planners will struggle to retrieve the data needed to better streamline the manufacturing process. To help with this, Production Planners can benefit from valuable information like –

  • Batch production history and patterns of user behavior that show actual production lead times
  • Quality standards of work-in-process production run based on raw materials that are procured from specific suppliers
  • Quantity yields of past batches, actual scrap percentages based on changes in production routes and resources
  • Accurate actual batch costings in comparison with estimates

These additional details provide supplementary insights to help improve production, downtime planning, maintenance, and most importantly, promise dates to customers. Production planners need to be equipped with a system that presents elaborate sets of insights and actionable suggestions on how to plan/schedule production operations. A well reliable tool empowers a company to drive efficiency and growth.

An AI-ML & Analytics Centric Approach

Eventually, and soon, a standard planning system will no longer be capable for the Pharmaceutical supply chain to operate efficiently. Systems that reduce human effort, learn from history, and improve daily operations will become necessary to overcome inefficiencies. At the same time reporting possible issues and roadblocks that impact orders as well as deliveries, improves the overall plan vs actual picture. Production planners are proving to be more efficient when they have real-time and historical analytics available during the planning process to make better decisions while managing inventory and orders. A guided method of operating and reporting through actionable data can make your company a powerhouse within the industry. An intelligent and optimized planning system can help eliminate guesswork for the production planners in build a competitive edge in the market.

Final Thoughts

The supply chain within a pharmaceutical company is only as efficient as the ability of a planner to proactively coordinate supply, demand, and inventory. A robust planning system with an emphasis on analytics and guided user behavior can play a key role in building efficiency and moving shipments out the door, along with meeting the required quality standards.

Xcelpros has designed Microsoft’s offerings to enhance planning for Pharmaceutical, Chemical, or Biotech industries. For more information on Production planning and Scheduling tools within Microsoft – Contact us!

About XcelPros

XcelPros is a Chicago-based company and delivers transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

PHARMACEUTICAL QUALITY CONTROL

Pharmaceutical Quality Control – Improving Methods & Systems

Pharmaceutical Quality Control – Improving Methods & Systems 1920 1080 Xcelpros Team

At a Glance

  • The definition of quality has evolved with changing business dynamics, particularly in regulated industries such as pharmaceutical, chemical, and food & beverage.
  • The Pharmaceutical & Drug industry witnessed a 168% increase in drug approval by the FDA in 2018 compared to 2016, testifying the growing quality adherence among manufacturers.
  • Compliance to quality guidelines is only getting more stringent with time. Pharmaceutical & Drug industry also saw high rejection (73) through 2018 including Recalls, Market Withdrawals, & Safety Alerts, highlighting the importance of quality standards set by the industry watchdog.
  • While quality is increasingly becoming an integral part of modern-manufacturing practices, our research revealed that some organizations continue to devalue the importance of quality to a mere afterthought.

Introduction

Quality plays a pivotal role in the success of a business and is no longer considered an impediment to a successful business. It’s often that the release of a product for shipment is delayed due to standards not being met, causing stress on the customer service reps working closely with Customers.

Saying yes to sub-standard ‘products to the market’, however, could be catastrophic, with damages that could at times be irreparable. Today, modern-day Quality Management is supporting technology initiatives to ensure the right systems are in place to allow the product to pass all quality checks proactively.

This article highlights just a small section of Quality Management related to processes and systems. The intent is to help businesses understand how technology has evolved with the changing business landscape and how manufacturers (in any highly regulated industry) can leverage technology such as the One-Microsoft ecosystem to stay relevant, and ahead of the competition. In this part of the series we will discuss Quality Management holistically, and follow it up with the finer aspects of Quality Management in the subsequent posts.

FIGURE 1 Supply chain within manufacturing with the ability to pivot operations

The Evolution of Quality Management

Quality management has evolved from being an afterthought to becoming a rigorous self-discipline that most modern-day manufacturing companies have taken onto themselves. What used to be quality control in the 1960s has evolved to become “total quality control” in its present form. The US FDA is tightening its norms to ensure higher quality standards, and companies are responding to such challenges by increasing their quality standards. The below timeline depicts how the definition of quality has evolved over time since the 70s.

FIGURE 2 Supply chain within manufacturing with the ability to pivot operations

Process Improvements in Quality Control

Improvements always start by first understanding the issues that reside in a department. Typical activities in the Quality control department of a Pharmaceutical company would be to

  • Manage Quality control tests
  • Manage Quality control specialists and their workload
  • Allocate and calibrate test instruments
  • Establish appropriate test methods
  • Document test specifications
  • Perform tests in the order of priority and
  • Accurately record test results.

Trending and analysis, as well as stability studies, would be a follow up of quality data that is captured for understanding the reliability of the batches being produced. This is just a quick and simplified view; in reality, all of the activities listed above have many details involved. Making sure that all processes and procedures are handled with precision ultimately reflects on how well you are able to maintain the quality standards in a Pharmaceutical company.

Processes in the Quality Department

A typical day in the life of a Quality control department could start with lab analysis and paper requests to perform quality tests on a sample size of a batch. At times it could be multiple batches for different products that are either produced in-house or received from 3rd party manufacturers. The department prepares the test instruments for each test and accurately records the test results along with any digitally signs-off on the work. If we were to take a quick view of what could be involved in ‘getting it right’, the understanding towards all essential requirements of an optimal quality process could change.

Use cases with digitization and automation have demonstrated a more than 65% reduction in deviations and over 90% faster closure times.” The Future of Quality Control, PharmaManufacturing

It involves having all the SOPs opened up in front of you to perform a test with precision and not allowing any deviation in method unless the ‘method to deviate’ is clearly spelled out. It could often be challenging to hold the people in your department compliant to the process unless there is a stringent system in place. If the system is paper-based, you are adding laborious tasks with corrections and piled up paperwork. Every time an audit occurs, it would require digging through so many stacks of paper to bring out the right answers.

FIGURE 3 Supply chain within manufacturing with the ability to pivot operations

Quality Control Systems

Pharmaceutical companies that are implementing an electronic system need to decide how tightly the system has to be built. The process could add discomfort to users due to various systemic restrictions, or an uneasiness around user errors.

People could start feeling anxious about making mistakes, as every change would have a digital stamp tied back to the person modifying the data. It could also get a bit cumbersome to fix errors after the fact in a controlled system that is validated and is 21 CFR part 11 compliant.

The idea is not to add discomfort but to build the right kind of habits in users. Ideally business users need to be given enough information about how the overall system works. A well-planned training can help the users move from discomfort to being champions promoting the process in the organization.

Anyone with a basic understanding of compliance would prefer an electronic system instead of a paper-based process, for the strength and ability to capture data as is. It then requires a change in the mindset of ‘ continuously fix errors’ to ‘proactively do it right in the first place’. At the end of the day you want to foster this efficiency in your whole organization. This can be achieved by evaluating a reliable process that could be leveraged by the Quality Control department.

Elimination of up to 80% of manual documentation work will improve productivity. The Future of Quality Control, PharmaManufacturing

Quality Management Challenges – What Does a Plant Manager Look for?

A Plant Manager would have a specific view of the business as their purview is not restricted to one department but to the overall operations of the plant. Some key concerns that typically need to be addressed by a Plant Manager or a General Manager of Plant are:

  • Quality Management
  • Compliance with evolving regulatory standards
    • Take control of your Documentation such as COA
  • Safety
    • Corrective and Preventative Actions management (CAPA)
    • Location directives
    • Raise flags when two reactive chemicals are placed in proximity
  • User Adaptability and training to conform to the new Quality standards

These concerns are typically addressed by:

  • Efficient Document Management – allows you to centralize documents into a secure repository that is seamlessly accessible. This ensures quicker decision making and effective change management. It also helps in ensuring visibility of your documents, enhances traceability by tracking amendments, and document safety with revision control features.
  • Addressing Non conformance – can be done through a unified platform to log non conformance, quality of incoming raw materials, complaints, delay, etc. This helps in addressing compliance at an early stage, paving the way for course correction and registering the same in the system.
  • Corrective & Preventive Action – a method with advanced analytical features built in to help you learn and unlearn from records of the past. As discussed, registering a non-conformance incident into the system initiates a workflow for corrective measures. This system learns from past incidents and recommends preventive action to control similar incidents from recurrence.
  • Implementing the right kind of tools and technology can help with Process automation and reduce data entry errors along with tracking process efficiency.

Identifying the right system to help make the most impact will be the first essential step to move in the right direction. Once that hurdle is crossed, it is important to build a ‘to be’ mindset instead of worrying why the system doesn’t do what your workforce is used to. Evaluate how stringent you want your process to be, based on your company’s needs and accommodate a well-defined method that is native to the application.

Key Takeaways

  • Quality management is no longer an afterthought and has evolved to become a discipline in most prosperous manufacturing organizations. Quality management which was once considered as a business function that hindered speed to market and product launch, is now embracing modern technologies to fuel innovation, bring in efficiency, eliminate the scope of incidents within a plant, and offer better predictions for the future.
  • Pharmaceutical companies that have evolved to modern, automated quality control systems are able to empower their workforce to rapidly adopt process improvements and optimize all the functions in the department.
  • The adoption of better tools in one department typically sets the standard for the entire ecosystem, including functions such as regulatory compliance, procurement, demand management, research & development, inventory and warehouse management, etc.

About XcelPros

XcelPros is a Chicago-based company and delivers transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

how manufacturing companies are pivoting operations

The new world reality post Covid 19 – How manufacturing companies are pivoting operations?

The new world reality post Covid 19 – How manufacturing companies are pivoting operations? 1920 1080 Xcelpros Team

Introduction

Process Manufacturing companies are adapting to the sudden changes in the economic landscape due to COVID-19. Dependency on China for raw material and supplies has hindered the local US market forcing manufacturing companies to pivot operations and meet consumer needs. Starting late January, China’s industrial production came to a standstill as companies suspended their operations completely amid the lockdown. Though China is getting back on its feet now, the whole world had to take its heat as the event disrupted the global supply chain massively. In 2020, China contributes nearly 20% to the global GDP. You can now imagine the losses businesses will suffer all over the world and how long it will take to recover and ramp up operations fully.

A survey by the German company Kloepfel Consulting states that every third company has Chinese customers in a higher number, and on top of it nearly 81% of them are dependent on Chinese suppliers to run their operations.

From the above facts it can be anticipated that a major supply chain restructuring is coming on your way. Now, more than ever, integrated technology is imperative to streamline and automate the lines of business, people and processes.

FIGURE 1 Industry-wise Projected Covid-19 Impact from Minor to Severe

1=Minor impact

2=Moderate

3=Significant

4=Major

5=Severe

Source : Statista

What is the new world reality in manufacturing?

The World Health Organization (WHO) has declared COVID-19 a public health emergency which led to a seismic shift in the life of manufacturing and distribution companies. The industry is now experiencing a new reality in running operations while they continue to produce finished goods to meet customer demand. Of course, remote tools and collaboration softwares are helping certain departments within these companies to manage work remotely. However, full quarantine is not a viable alternative for certain sections of the industry that require an actively engaged workforce in manufacturing and supply chain operations.

Honeywell now plans to start making over 20 million face masks a month to help healthcare workers battle the coronavirus.

Honeywell’s move of ‘coming to aid’ at this time is commendable and is paving the path to other enterprises from the same industry. Current day consumers’ needs have shifted to safety and hygiene which in turn has become one of their business objectives.

Companies that have always been historically change-averse are now forced into a new way of working.

Conventional manufacturing and distribution organizations have always been apprehensive in making any process or technology advancements. With the sudden change in market dynamics, these businesses are realizing the need for an enhanced technology they wished they had adapted earlier. This thought process has created a forced awareness which is now their ‘new reality’ and there is no going back after that.

So, how are companies pivoting operations?

Manufacturing facilities that are already suitable to create products requiring batch processing, are taking a leap into newer areas of production in an agile mode. These companies have the facilities to accommodate materials and processes. They are familiar with proper quality testing standards and potency detection methods for batches. Quite a few companies have already pivoted to help out in every way possible. But only companies that are well automated, are the ones that can move quickly in such emergencies.

Corona Virus Pandemic is hurting the bottom line of Manufacturing Industry globally. You need to find an effective alternative sourcing strategy to survive through this massive supply-chain disruption.

FIGURE 2 Supply chain within manufacturing with the ability to pivot operations

In this ‘new normal’, companies that can pivot quickly to accommodate consumer needs will become the front runners and market leaders of the future.

Business users adapt quickly ‘only’ if they are ahead in process automation and optimization. The benefit is leveraged by using the right kind of technology that can effectively handle various processes and procedures. New-age technology is instrumental in simplifying work and transforming business users into advanced users, especially to streamline HR processes that enable users to be ready for any changes. With newer skills, users can easily adapt to sudden changes and disruptions caused due to a pandemic like COVID-19.

What do operators need to adjust to the change?

54%

of respondents believe that coronavirus could have a significant impact on their business operations.

-A PWC Survey of CFOs

A well-streamlined workflow can help the workforce fall into the rhythm. Especially workforce with native knowledge of their regular operations, need to rapidly adapt to the change in functioning. It is not always easy to handle the new set of production lines that are abruptly put in place. Operators would require a detailed understanding of the new product batch records in order to adapt to the change.

Workflow for warehouse operators should be streamlined to –

  • Guide them while using mobile devices
  • Help them progress through each step
  • Hand hold them during unknown situations
  • Allow them to record inline deviations

If companies are unprepared, they may go through a chaos during manufacturing execution. Production managers and supervisors who have also been used to familiar batch records with specific yield expectations, are now adapting to the ‘new thing’ that they need to produce. Alerts on each operation would immensely help them be aware of how the overall production job is progressing.

FIGURE 3 Supply chain within manufacturing with the ability to pivot operations

When it comes to the regular production operations, Production supervisors or Plant managers are used to seeing both the norms and deviations in the process. Without an internal view of the new product history, they will need to be extra aware of test results and yield quantities of each production job to quickly analyze and extrapolate how to adjust batch formulas, and rapidly incorporate the learnings of each production run. A rule-based algorithm that can look at the last ‘n’ batch runs and automatically suggest changes for ‘approval and instant adoption’ will be crucial to keep the process optimized in an agile manufacturing environment.

Companies that are taking up these initiatives are also required to understand how the end consumer is reacting to the new products released in the market. An easy way would be to label their products with proper QR codes that can be scanned to quickly send an end-user survey back to the manufacturer about their new product. These quick surveys help the manufacturers understand consumer feedback about the product. The feedback can be incorporated into their testing methods to make on-the-fly decisions and corrections of their manufacturing execution.

What are the few technological elements companies wished they had within operations during the Covid19 pandemic?

A question that every manufacturing company is asking to understand is how they can simplify and streamline their processes further to keep the momentum in the operations going. A few technical elements are depicted in the picture below.

Companies have asked me how all of this is different from what was recommended in the past year? It isn’t, but the need is more real now and is no more a nice-to-have. These technological advancements have become an ‘essential-to-must-have’ if businesses want to survive the current condition.

How do we get the required automation?

Unless we see what the business is at its core, it may not be possible to provide a specific view of what all changes would be needed. However, going by some assumptions there are a few business solutions that can be drawn out to help businesses to become more agile in their operations.

FIGURE 4 Batch Manufacturing Facility Agile And Optimized

All of the different ways to speed up, simplify and automate overall operations can propel companies to function a lot more efficiently and be agile to changes that are thrown at them while they are still dealing with a limited workforce.

Key Takeaways

  • There is never an individual contribution that can move a huge ship forward during difficult times. It is always the collaboration and synchrony of an entire workforce that really pushes the throttle. The trick is in how well you are able to keep your people aligned with all the technologies you invest in.
  • Technology centric Manufacturing organizations are already ahead of the market curve and when sudden changes occur, a well defined HR department of a company that has agile training plans in place helps with the changes that are thrown at them.
  • Finally, it is important to understand that even though temporarily it may feel as though companies need to bear the cost of advancement and changes, in a bigger schema a good technology stack like Microsoft is essential for the overall success of any organization.

Recommendation to the reader: Evaluate Microsoft suite of tools to help your business and stay agile in this volatile market.

Xcelpros is a direct Microsoft Cloud Solutions Provider and can help you with your business continuity and make you nimble during these times. We are currently offering various discounts on multiple Microsoft products and Transformation packages. Contact us right away!

About XcelPros

XcelPros is a Chicago-based company and delivers transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

standard costing in pharmaceutical manufacturing

Standard Costing in Pharmaceutical Manufacturing Industry Challenges & Solutions

Standard Costing in Pharmaceutical Manufacturing Industry Challenges & Solutions 1024 600 Xcelpros Team

At a Glance

  • Business objectives typically involve current state of cost accounting and profitability in current day mid-market pharmaceutical manufacturing.
  • The C-level cares about impact of people and incorrect processes on costs/bottom-line and are continuously looking for ways to improve overall productivity.
  • Improper habits of recording data can be a major culprit in building hidden sunk costs. 30% of costs go undetected due to poor business practices and the inability to accurately report them.

Where Is the Pharmaceutical Industry Heading?

Mid-market pharmaceutical companies based in the United States will only see a rise in opportunity in the coming years. The projected increase in the industry calls for more streamlined processes within Pharmaceutical Manufacturing and Contract Development and Manufacturing Organizations (CMOs & CDMOs).

Rising R&D costs have been accompanied by more stringent testing requirements. The number of new chemical or biological entities (NCEs and NBEs) launched on the world market increased to 226 in the 2011-2015 period compared with 146 a decade earlier. (IFPMA facts).

R&D costs are on the rise due to stringent regulatory requirements. Tariffs and changing political climate has a huge impact on the dynamics of the pharmaceutical manufacturing industry.

If the pharmaceutical manufacturing companies need to adopt to these changing market dynamics, it is imperative to build sophistication in their methods of costing, profitability analysis and production variance calculation & reporting. Most companies are constantly watching their bottom line to measure profitability and production variance analysis.

This article lays the foundation for standard costing, best practices and its optimization within a Pharmaceutical Batch Manufacturing company. In the subsequent blogs, we will cover best practices within other aspects of costing – weighted average, ABC costing etc.

The Never-Ending Challenges of C-Level Reporting

So, what is my overall profitability for a Product?

This is a major concern for a C-Level executive when there are fast moving raw materials, labor, overheads and other indirect costs involved in identifying the actual cost of a batch in the pharmaceutical manufacturing industry.

As a pharmaceutical company, one of your prime objectives is to comply with the processes set forth in your Standard Operating Procedures (SOPs) to ensure compliance reporting with FDA. In many cases, the focus has been to stay compliant while losing sight of key indicators that drive profitability and organizational goals.

In continuous production and batch manufacturing processes, the multitude of activities involved brings about a need for costing that ties to each activity. There are always many moving parts in identifying the right cost breakdown structure. When there is a need to provide key analytics for stakeholder reporting, it is imperative to measure true costs.

What matters to the CFO?

A CFO, however, is not just looking at this unilaterally. Instead, a broader view is what matters which includes the details in determining the actual cost and how the variance came about. In reality, the manufacturing process is heavily intertwined with product costing and therefore the need to highlight many different elements that aid in standard cost determination and variance reporting. Production variance reporting is however just a subset of the overall cost breakdown structure in bottom-line reporting.

Depending on the reporting structure, there may be a preference of backflush costing methods to delay costing until an item is manufactured. It could be a reporting nightmare if a proper method is not leveraged in deriving analytics and production performance metrics. Many times, people resort to traditional means to analyze these costs and variances using excel spreadsheets. Analyzing costs can be extremely challenging if your system does not keep a track of perpetual costs until the completion of a production job.

Does an extremely complicated cost excel sheet with COMPLEX macros and v-lookups ring a bell?

Data Capture Discipline & Lost Visibility

Certain processes in longer production campaigns, specifically in continuous processing, can span across days, weeks or sometimes even months. Recording actual numbers based on material and resource consumption to report standards vs actuals can get very tedious. Enforcing process discipline can alleviate some of these pains.

In real life, this can take hours of data crunching to gain clarity. Now, add to it a statistic of rework batches or lots which adds significant complexity to the overall calculation. What is not easily visible is the additional cost of starting material, line clearance, labor and machine hours that get compounded to the original batch cost.

This statistic makes you wonder where your company ranks in performance. Human capital, machine or work center hours need to be planned across multiple production jobs to better understand how to source and schedule labor as well as allocate machines to each production run. As material is being processed, it becomes essential to understand the cost of each operation in process that would further feed numbers into each production job.

People & Processes in Pharmaceutical Production – Impact on Costs & Bottom-Line

A large amount of time and resources are spent in an attempt to recover from inefficiencies caused due to improper procedures followed in day-to-day operations. This could be due to lack of proper KPIs, processes or even methods to track efficiencies.

  • The Production planner cares less about cost and more about possible capacity roadblocks with additional material and resource requirements that could in-turn lead to unplanned variances.
  • Warehouse operators need to record consumption based on feedback from Quality Control (QC) on when to proceed with the job, how much to consume on the batch and how many hours were already recorded. But do the operators have systems and processes in place to capture critical data real-time?
  • For the sake of convenience, operators tend not to record data during operations and instead wait till the end of the production run. It would be ideal to capture this data in real-time, directly in the ERP system. If not, recording on paper would do.
  • Based on a proper set of batch instructions and results of WIP testing performed by Quality Control (QC) personnel, the production manager is always looking for ways to substitute materials to meet timelines, quality standards, batch potency and capture relevant batch information accurately.
  • Understanding how expensive the total batch record is going to be helps proactively plan for all the operational costs involved in producing a batch mainly for your ‘A’ items.

Improper habits of recording data is a major culprit in the accumulation of hidden sunk costs

Batch Manufacturing – An Example from Real Life

In long running batch manufacturing processes, there may sometimes be a need to test the PH value of the mixture / API every hour. Depending on the PH values and WIP tests, operators add additional compounds to achieve the desired PH. These additions are often not captured in the system nor on paper. These compounds / chemicals are consumed from Inventory without even tracking their use. Considering that Inventory is now out of sync and inaccurate, the controller may have to categorize these as overheads thereby losing sight of costs when they occur. Most of us have experienced such processes in real-life.

Now, what are a few practical solutions to minimize such practices?

  • Having an industrial grade tablet or mobile device on the shopfloor to aid in data capture real-time is one possibility,
  • IoT is very relevant for today’s markets to track start, stop and inputs within each operation
  • Mobile supply chain gun or a handheld scanner is another input method that can aid in capturing data on the shopfloor
  • Putting systems in place that are easy to follow and not over complicated is another one
  • An ERP system that will flag the deviation when it occurs and not after the fact
  • Checks & balances involving electronic signatures that can help stop incorrect practices and the list goes on

High-Level Production Process

Standard Cost Calculation

In a sophisticated mixed mode manufacturing ERP system, where both process manufacturing and discrete processes occur within the same operation facility, the standard cost is derived from standards set on the Formula or BOM depending on a combination of the following:

  • Batch being manufactured
  • What is packaged into containers
  • Hours spent on each operation
  • Standard resource costs per unit price

Calculated cost on a Formula or a BOM is derived from ‘individual raw material / intermediate costs’ just as the cost of operations are derived from ‘resources and machines’ assigned to the Route.

It is important to set the standards correctly based on past history to proactively manage production runs and keep a close tab on production costing.

For any C-level who is tracking profitability or for a Plant Manager whose bonus depends on higher margins, a better gauge of where they are headed from a numbers standpoint helps them proactively fix redundant spend resulting from operational and resource inefficiencies.

Estimation of Production – What Should Happen?

  • First step is to plan the size of the batch that needs to be produced. Your ERP system should automatically scale from the standard batch size and identify standard cost.
  • This information already provides an insight on subsequent decisions to be made about the batch such as ‘identifying the right margin’ and ‘set an appropriate selling price’ on customer quotes / sales orders.
  • As production jobs are released to the production floor, operators allocate all appropriate raw materials for consumption marking those specific raw material lots as unavailable for other batches.
  • Allocating raw material lots / resources correctly and recording data in a modern Pharmaceutical ERP software can control unnecessary mistakes and coverups providing a true picture of product costs.

The standard cost rollup for a manufactured product comprises of Direct Material, Direct Labor, Overheads and Indirect costs.

Following actual raw material consumption, there is a tendency of not wanting to record point-in-time information due to a fear of making mistakes or to better state it – wanting a flexibility of making mistakes and not keeping a track of what was altered from standards, making variances a bit of an enigma.

Consumption Process

  • During raw material consumption, physical inventory is relieved by directly booking material costs to Work-In-Process (WIP). If we were to assume that the only changes on a production run is to the overall labor and machine time on operations, then all standards relieved from WIP would book production and quantity variances based on standard cost when the lot is closed out.

Multi-Tier Formula / BOM

  • A much complicated scenario occurs when there is a multi-tier formula where intermediates are produced and consumed into the next tier with additional flavor of substituting raw materials and continuing until the final finished product is produced. There may be times where yields are properly known before they move on to the next step and in some cases the shop floor goes by standards and records adjustments to material and operation after the final finished lot is yielded and finally closing out all tiers in the multi-tiered BOM/ Formula.
  • It could easily become a complicated cost calculation with all tiers involved – their costs, variances and the costs being fed into the final finished product along with the final set of variances.

Key Takeaways – Move Forward Plan

  • With proper methods and good industry standards it is possible to streamline operations to control these variances from being unpredictable.
  • The first step would be to stop and understand what your current manufacturing practices are and what the downstream impact is on costing.
  • It is imperative to identify what competitors with an outlook of outperforming the market are doing to create operational efficiencies.
  • Once that is established, it would be important to properly identify the correct methodology to implement changes in business practices which bring about a noticeable change in productivity and worker efficiency.
  • Sophisticated ERP systems made for the process industry offer deep functionality that provides different types of production cost buckets including quantity, substitution and lot variances.
  • You will benefit from a sophisticated analytics and business intelligence tool embedded within your Finance, Operations and Sales productivity systems with necessary insights to grow and stay ahead of the market.

This article was written by Bindu Chunduru, Head of Delivery & Solutions Architect at XcelPros. She has extensive hands-on experience in Finance, Costing and Manufacturing functions in conjunction with industry leading ERP systems like SAP, Microsoft Dynamics and building industry specific products. She has been an advocate of transformation through technology and a change agent helping companies grow by improving business processes & practices. If you have any questions or need help in anyway, you can reach out to the author at bindu@xcelpros.com.

About XcelPros

XcelPros is a Chicago-based company and delivers transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com