Building the Business Case for Automated Rapid Testing: Translating the benefits of rapid automated microbial testing into dollars saved

Transcription

1 Building the Business Case for Automated Rapid Testing: Translating the benefits of rapid automated microbial testing into dollars saved A whitepaper by:

2 Opportunities in Micro Quality Control According to the Gold Sheet, a trade publication on drug quality, the FDA reported over 1700 recalls of prescription and over the counter drugs in 2009, a jump from the 426 in The complexity of the manufacture of pharmaceuticals has increased significantly, creating opportunities to improve the quality and efficiency of drug manufacturing. The success of a new or existing drug can be directly tied to the manufacturing. Issues in the with scrap, extended quarantine time, lost capacity, or brand issues, such as recalls, can directly impact the bottom line for a drug manufacturer. One overlooked area of improvement is Micro quality control. For over 100 years, the traditional culture method has been the accepted technique for routine pharmaceutical and biological quality control testing. The test is inexpensive, but requires time for the culture to grow enough to be seen by the human eye. During this time, product could be waiting in quarantine, or production could be stopped, waiting for a component to pass inspection. This idle time in manufacturing can cost millions of dollars. New technologies in the area of rapid detection in the micro QC lab have played a strategic role to improving the time to results of an inspection, allowing product to pass quality control sooner. Rapid detection alone solves just part of the problem, and still leaves the QC lab to deal with a labor intensive that, because of the human element, is still prone to errors. In addition, highly educated microbiologists in the QC Lab overworked on tactical steps, are unable to perform more value added activities to the business. Automation of the micro QC lab takes rapid detection to the next level, allowing the lab to benefit from automation much like their counterparts in the analytical chemistry QC labs and in manufacturing. Automated rapid detection takes out cumbersome steps in the inspection, allowing the Microbiologist valuable time to work on more valueadded duties. Quantifying the value of an automated, rapid detection solution requires detailed analysis and preparation. Within this whitepaper are key steps to consider when developing the business case. These techniques allow for the creation of a clear value analysis for the stakeholders in the business. The first step in building the business case is to engage those stakeholders. Page 2 of 7

3 Understand the stakeholders and engage them: Many approach a business case for automated rapid detection focused solely on the time benefits associated with a more efficient laboratory, and often miss the impacts that go beyond shortened time. For example, a reduction in detection time can impact holds on inventory, which reduces the time that inventory needs to be held. Take that a step farther by speaking to the inventory manager, and a quantification of what a daily cost of inventory may be, as well as the cost of holding more safety stock, or producing more during a manufacturing run to compensate for the longer hold periods. These types of impacts go far beyond benefits to the lab, and can have impacts all the way to the office of the CFO. To uncover other types of returns, impacted stakeholders must be involved in the. By engaging key stakeholders around Inventory, Manufacturing and Finance, quantifiable numbers can be uncovered to show real results from the ROI. During this internal due diligence, incorporate the functional partners and approvers in the creation of assumptions and plans. Make sure any barriers or objections are known early. Use their guidance to understand how to most smoothly navigate the approvals to get the yes as the end. Understand the approvals Many well designed business cases are rejected or delayed because the approvals was not clearly understood. Once again, meeting with stakeholders early can eliminate any unnecessary steps or delays in building the business case, and streamline the data gathering requirements, ensuring that information is in a format that helps accelerate approvals for the expenditure. Vendors can be an asset Vendor partners can be a valuable member of the ROI team, helping with the creation of the business case. Companies that provide these technologies have to work with a variety of different companies to help justify the value of their technology. These companies have a wealth of expertise, as they do these types of studies every day, and have real world data to help validate any assumptions in the value study. Determining the most appropriate vendor partner for the value study is a determination based on the business being studied. Building a business case focused on automated detection would potentially require a different vendor partner than a business case focused purely on rapid detection. The vendor partner can also provide insight to what can be achieved and in what time-frames. Defining the content of the Business Case The business case should be a full, comprehensive, holistic creation that considers tangible area s of value such as cost savings, improved labor efficiency and inventory management. While usually not as compelling, it is useful to include benefits that may be considered soft or less quantifiable such as improved available warehouse space. Risk represents an area that can not always be quantified, but can be an important aspect of the business case. Every company takes a different philosophy concerning risk tolerance, and knowing that tolerance helps determine the priority given to risk factors in the business case. Page 3 of 7

4 How to start building the business case Creating a compelling business case for automated rapid detection requires an organized approach. The table below illustrates some sample steps that would be involved in building the business case. It is important to note that the early steps in the are focused on understanding the goals and constraints of the, with the later steps driving the data capture and analysis. It is critical to understand main objectives of the. Is the business focused on faster time to market? Is the issue a reduction of scrap? Are there higher, more strategic needs that impact the brand or shareholder equity? Table 1: Sample Steps in Business Case Introduction Initial data gathering On site session On site session Final report Introduce project scope Introduce project objectives Introduce analytical approach Discuss savings areas to be estimated Discuss choice of area to address Discuss data required and likely availability Determine likely timing of subsequent meetings Assemble data set and document Tour the Codify opportunities in identified savings areas Brainstorm any additional savings areas, key concerns of company Discuss approval and contracting Summarize benefits of rapid testing drug manufacturing Describe model calculations and identify gaps, revisions required Review for approval Confirm approval Present findings Discuss next steps in technology assessment, adoption, and implementation If appropriate, initiate approval As mentioned previously, the business case will require input from other stakeholders in the business, so prepare to meet with different areas to discuss their goals and what would make the business case compelling to them. Be sure to consider the science. Since most facilities produce a different product/range for the company, they each offer different representative samples of multiple microbiology tests to help validate the science Page 4 of 7

5 Identify and quantify the areas of value As Table 2 illustrates, automated rapid micro detection can provide quantifiable return in several areas that go beyond just reduced time to result. The acquisition of this information may require interaction with other parts of the business to get the numbers for calculation. Table 2: Sample Areas of Value Area Key Savings Analysis Required Faster final product testing: Quicker detection of contamination in batch and key ingredients: One time reduction in inventory. Reduce direct labor spent in non time Reduce cost of rejected WIP Reduce WIP Final hold time x COGS x financial cost Tests per year run, labor savings x avg cost per technician Plant start ups: Partial automation: If plant/line not at capacity, then Reduce the number of days required savings are in direct labor. Time to restart plant production from saved x direct labor cost per day x shutdown. frequency of start-ups = annual savings If plant at capacity, then additional savings in added capacity which will reduce overhead absorption for all product. Reduce administration time spend in Tests per year run with automation, the analysis, reporting and auditing labor savings x avg cost per analyst. of test results? Page 5 of 7

6 Compile and aggregate the data The final area of the business case that is typically presented to executive management for approval is the financial analysis. This can take many forms, but typically will include the savings data illustrated below. Industry experts, such as Pascal Yvon 1 and Michael Miller 2 have written documents that are good reference for detailed calculation of net present value and other ROI formulas. Table 3 A Simple ROI Analysis (Sample Data): Summary Improving all areas of manufacturing can create benefits through shorter time to market, reduced inventory costs and improved efficiency. Most Pharmaceutical manufacturing companies have embraced the principals of Lean and Six Sigma to create operational excellence. Unfortunately, one area that has been overlooked is the Micro quality control (QC), which still operates using 19 th century principals of inspection and detection, a labor intensive and error-prone that creates an unnecessary risk to the pharmaceutical manufacturer. Automated rapid micro methods provide real, quantifiable results to the manufacturing. Building a business case for the technology can seem like a daunting. Leveraging the input and experience from other stakeholders, vendors, and industry experts helps simplify the and generate an analysis that ensure a compelling justification. 1 Pascal Yvonn, PharmD, MBA, Rapid Methods: Return on Investments, October 2008, < 2 Michael J. Miller, Ph.D., Ensuring ROI from your RMM, Pharmaceutical Manufacturing, 2009 < > Page 6 of 7

7 About Rapid Micro Biosystems Rapid Micro Biosystems provides innovative products for faster detection of microbial contamination in the manufacture of pharmaceutical, biotechnology, and personal care products. The company's Growth Direct TM System detects contamination earlier, delivering compelling economic benefits to manufacturers, while improving their quality. The Growth Direct System is the first and only automated system that addresses all key microbial QC applications and fits with current regulatory practices, a critical accelerator for adoption. Automated analysis eliminates error-prone manual steps and saves labor; rapidly detecting contamination enables manufacturers to reduce inventory carrying costs, shorten manufacturing cycle time, and reduce product losses, delivering significant cost savings and increased operational efficiency. Page 7 of 7