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Life Science companies are facing several challenges that are forcing them to innovate their businesses.

A survey published in Harvard Business Review (March 2016) found that internal dysfunction and creeping complexity was the main barrier to continued profitable growth.  The survey polled 377 business leaders, most whom represented companies with revenues of $5 billion and above.

Over time, companies accumulate different, inconsistent and silo’ed processes.  These could arise from different processes and technologies as acquisitions are made.  These could arise from the traditional ways of doing things which were successful when the company was much smaller.  These could also be a result of organizational resistance to change.

In addition to combating stalling profitability growth, resolving internal dysfunction or process non-standardization leads to additional benefits, not limited to the following:

  • Faster and lower cost of support – both technology and processes
  • Faster integration in M&A – lower cost and time to integrate, resulting in realizing synergies faster
  • Better control over processes – easier to understand root cause of problems

 

A leader in a niche biologics manufacturing space is undertaking a global process digitization initiative.   They are standardizing their processes, adopting leading practices and building metrics and analytics around processes and sub-processes.

The company’s goal with this digitization initiative is to support their aggressive future growth plans.

In that sense, they are looking at re-imagining processes as a topline enabler.

Digitization of processes helps companies re-imagine their business functions and gain much deeper insights. Such insights can be useful to improve bottom line, move product faster and with greater precision and understand patient or customer behavior at a deeper level.

 

The following are some trends of life science companies re-imagining their business processes:

 

Re-imagining processes – Lines of Business:

Procurement:

A progressive medical device company is looking to 3-D print smaller parts for its products.

A pharmaceutical company leverages 3-D printing capability for printing spare parts, when out of inventory, so that their equipment can function without interruption until the real parts arrive.

 

 

R&D:

A Covance study (appeared in biopharmadive.com in June 2017) has reported that 10% of sites fail to enroll even a single patient for oncology clinical trials.  Where patients are enrolled, the rate of enrolment was found to be slower.  In one case, out of 116 sites only 42 sites were active in patient enrolment.  The study states that even in those active sites it took 15 months to enroll just 77 patients.

Pharmaceutical companies are leveraging analytics for improving their processes to engage patients better and increase their enrolment rate.

Better patient engagement, faster enrolment and a positive customer experience can help pharmaceutical companies get through their clinical trials faster.  For successful trials, this can mean getting approvals a few months faster, which in turn translates to getting the product into the market a few months earlier.  The bottom line is faster revenue realization, but more importantly bringing much-needed therapies to patients sooner.

 

Manufacturing:

Finishing products closer to the customer.  This “late-finishing” of product enables manufacturers to plan and move products better and to react faster to demand changes in the market.

Some companies have chosen to de-couple their packaging operations from their manufacturing, to achieve this.  Still other companies are deploying cutting-edge planning systems to bring about greater sophistication in their planning processes.

Another pharmaceutical manufacturer has piloted process robots for some of its critical but routinely performed processes such as palletization.

 

Distribution:

Pharmaceutical companies, especially biologics, must carefully transport their products.  Historically for cold chain shipments there is a mandatory “temperature” release.  This release is a quality step which ensures that the product has not been subject to temperatures outside a prescribed band.  This ensures that the product properties are not altered and the therapy stays potent and unaltered.

Digitization allows companies to monitor several other parameters and not just temperature.  Light, pressure, humidity, geographical location, time spent at various nodes en route, altitude, shock, etc. are a few other factors that affect all products, not just the temperature-sensitive ones.

Further, when coupled with an event management system and mobile alerts, any incursions can be reported in real-time.  This allows for quick action to be taken that can potentially save the shipment.

The recording and release is no longer an after-event to be historically reported for releasing or destroying shipment.

 

Other Lines of business:

Other lines of business such as HR are also at the forefront of digitizing their business processes.  Resume matching, reading social media signals to understand which key employees could leave the company, etc. are being increasingly deployed.  Digitization in HR also helps executives match roles with employees’ skillsets, experience, personality and passion and put the best people in the right roles.

 

Leading practices, standardized processes

Some consulting companies, based on their observation of process dysfunction at various companies, have drawn up a taxonomy of best practices or standard processes.  They have taken these leading practices and configured, by industry, templates in SAP, which companies can leverage as a starting point and accelerate their ERP implementation.  This approach not only saves considerable time and cost of ERP implementation, but also helps lower the volume of customization.  The latter requires strict policy and stricter adherence to such policy.

An additional value is the quantification of process-related metrics at each logical step.  For example, the number of erroneous orders, or quality release failures with reason codes, helps to periodically monitor the business.

 

Continuous process improvement

Increasingly we see new process-related roles such as Process Owner, Process Lead, Sub-process Lead and even Chief Process Officer.  These roles reflect the importance of managing and governing processes for continued operational excellence.

Not only are these specialists responsible for continuous monitoring of their processes – based on metrics and key performance indicators – but they are also entrusted with continuous improvement.

Process improvement is also facilitated by introducing robots to perform operational functions.  This automation of automated processes – with machine learning – is a new trend.  This is also known as RPA – robotics process automation, where a process robot learns the process, then gets better at executing the process.  The business analyst can focus on data and metrics and glean business insights, rather than battle with the tactics of operations, which are unerringly performed by the process robot.

 

Re-imagining processes is an easy and cost-effective way to effect change.  Companies can start small and scale up their process improvement.  The concept mooted by Dr. Michael Hammer in his book, Faster, Better, Cheaper, is now being taken to a whole new level.

 

I invite you to share your thoughts on this interesting topic.

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