IDA Ireland / PharmaChemical Ireland Symposium

Jim McKiernan McKiernan Associates

Benchmarking the Pharma Industry in Ireland

September 23rd 2009

Contents

Background

Study approach

Key findings

Conclusions

Background

Need to reduce CoGS

Global over-capacity

Increasing regulatory

requirements

Pharma Production

Key Drivers in Pharma Technical Operations

From large to smaller, agile

plants

Impact of novel delivery routes

and new molecules

From traditional to more diverse

portfolios

Process oriented and

demand-driven

Leading pharmaceutical production sites

have programmes in

place to respond to these drivers

BackgroundO

pe

rati

on

al

Ex

ce

lle

nc

eH

igh

Lo

w

Low High

Strategic Relevance

Historical Position

Today’s Leaders

Future Leaders“Cultural

Gravity”

Today’s Visionaries

Medium

Me

diu

m

Historical Position: COGS 20 - 30% Total inventory

>12 months Passive role on

corporate strategy

Future Leaders: Optimal COGS Fast and flexible to market Proactive contributor to

corporate strategy

Study Approach

Built on successful benchmarking study conducted in 2006/07

Questionnaire refined with input from PCI OPEX Working Group

Baseline year 2008 for all participants

Data collection started March 2009

Initial report July 2009

Study Approach

37 units

50 units

39 units

Prod

uctio

nSu

ppor

t & o

ther

s

API Formulation Packaging

Quality Control, Quality Assurance

Engineering / Maintenance

Supply Chain Logistics

New Product introduction

Management Processes

Regulatory Compliance

IT

Finance

Human Resource

API

Formulation

Packaging

Key Findings

Sites are responding pro-actively to external events

Limited use of site effectiveness KPIs and IT productivity tools

General

• Service and GMP compliance remain at world class levels• Most sites are positioning themselves for a more strategic role within their

corporations• Most sites engaged in active Operational Excellence activities

Performance management

• Use of diverse KPIs but without integrated performance management• New KPIs such as OEE, PEE and CpK increasingly used• Measures for overall site effectiveness missing (e.g. velocity)• Limited performance measurement in QC/QA, SCM, Engineering

Operationalpain points

• Low OEE/PEE levels • Long changeover times• Unclear effects of operational improvement programs• Continued low usage of IT applications such as MES/DMS

Trends

• Ongoing Manufacturing network consolidation• Reducing API volumes due to new molecular/delivery characteristics• Increasing involvement of sites in development & launch activities• Increasing average educational levels (e.g. more 3rd level)

Key Findings

Op

erat

ion

al E

xcel

len

ce

High

Low

Low High

Strategic Relevance

Historical Position

Medium

Medium

API

F&P

All sites have at the least consolidated their strategic positioning with several showing clear strengthening

9 have improved across both dimensions

Several sites are still slow to adopt operational excellence with some showing no movement

How the sites have evolved 2006 to 2008

Conclusions

Leading sites creating strong strategic role and embrace operational excellence

A number of sites at high risk as global consolidation continues

Compliance is excellent and IMB continues to exercise strong regulatory oversight

Mixed messages about effectiveness of R&D collaborations with academia – needs follow-up

Adoption of OpEx KPIs gathering momentum

Inventory, cycle times and changeovers need further work

Thank You

Questions?