Leaner labs for thicker pipelines

Guy Malchi, director of the life science sector at Tefen Europe, discusses how viewing QC labs as a component of the supply chain helps fill emptying product pipelines more efficiently

By 2010, product pipelines will be emptying fast as existing drug patents expire. Despite rapidly mounting generic competition that can consume around 70% of drug sales, for many the solution remains innovation.

It is perhaps surprising, then, that during 2002 US investment bank Lehman Brothers predicted that by end-year global drug majors would launch just 47 new drugs - one-third less annually than five years previously. The challenge is not lack of ideas but the gruelling and highly regulated route to market. According to some estimates, each new concept has a 5,000-1 chance of success, at an average cost of US$1bn.

In the US, launches of much-hyped drugs have been delayed by the FDA making challenges to administration processes. Parallel bodies, such as the UK's Medicines Control Agency (MCA), are pursuing an equally stringent path. As a result, quality control (QC) labs during the development phase find themselves between the 'rock' of regulatory compliance and the commercial 'hard place' of getting new drugs to market in optimum time.

improved processes

It is critical that, during the development and manufacturing process, manufacturers identify and implement ways to improve QC lab processes to increase productivity, efficiency, effectiveness, throughput and, ultimately, to overcome the challenges of 2010. The turnaround potential, however, is significant: over six months Tefen believes methodologies are available to increase on-time delivery rates by around 25% and reduce work-in-process (WIP) backlogs by up to 50%, with a profound impact on overall output rates.

Of course, development processes require a degree of creativity to adapt to individual operations. However, there are fundamental management tools, which can yield significant processing improvements. The starting point is to dispense with the misconception that a QC lab provides an independent service outside the manufacturing mainstream. In practice the QC facility is integral to the supply chain - a 'cell' in the wider process - which must recognise the needs of its own immediate suppliers and customers, and design its response accordingly.

Historically, other departments in the chain have typically assumed infinite capacity for QC. The new holistic approach proposed requires them to translate tasks into defined workload with minimum timescales attached and allows effective time reduction analysis to begin. Figure 1 illustrates QC as a component of the overall manufacturing process.

To encompass the issues accurately requires new tools and gap analysis. The widely used Lab Information Management System (LIMS) provides only a partial view since, while it documents executed activity time accurately, it does not track associated periods consumed by, say, colleague conferences or lead time delays.

Focusing on hand-on-time (HOT) reveals that many test procedures use time and resources at twice the rate reported by LIMS. For example, one company's estimated batch test time for a specific drug was 5.4h until a HOT-based observation revealed a true figure of 7.94h - equivalent to a significant shortfall and 47% undercharging.

Similarly, project planning is often conducted on a rigid basis with no allowance for unexpected events. In aggregate, deadlines are often 25% earlier than feasible, which creates both compound service difficulties for the QC labs' own customers in the chain and significant elongation of times to market.

Effective long-term planning on this holistic basis helps calculate resource - including time - requirements accurately, provides sensitivity and scenario analysis and, crucially, redefines the product costing process accounting for QC analysts' time. As importantly, it provides a quantifiable training matrix and a framework for continued productivity improvement.

Such analysis is, however, only a starting point for setting and managing overall expectations. Potential improvements are also available within the QC labs' own working processes.

parallel process

Many labs operate a serial process for tests, i.e. a second begins only upon completion of a first. In this environment, total cycle time is the sum of all tests' activity time plus final validation. Parallel processing, by contrast, adopts the concurrent engineering principle and reduces cycle time to the length of the longest test plus validation. Data collected by Tefen suggests that a parallel cycle time reduction to just 28% of the serial equivalent is often feasible.

Building on these foundations, further potential is offered by the introduction of an enhanced scheduling system (figure 2). This will account for a number of key elements, including:

critical ratio of due date and test standards;

qualification of analysts for tests/products;

instruments/equipment available;

workload and availability of analysts;

test batching optimisation; and

lab complexity.

As a major extension of this analysis, it is helpful to allocate QC analysts' tasks into three categories: value-adds, non-value adds and sustaining - a process which often identifies that as little as 50% of an analyst's time is deployed in sample testing.

Value added activities (VAAs) are either critical to outputs or provide customer value such as:

referring to specifications

weighing and diluting samples;

setting up the GC sequence; and

preparing the mobile phase.

VAA efficiency itself may be increased by parallel working, in tandem with before or after sample analysis.

Non-value added activities (NVAAs), in contrast, are neither necessary to production nor contribute to business effectiveness. Including equipment search, clearing up previous tests, restocking lab supplies during tests and repeated collection of extra data, the majority may be eliminated by 'right first time' working practices.

Sustaining tasks, such as log entries, flask labelling, analysis discussion and the collation of printouts and standards, fall between the two. Essential to business process maintenance, they may often be reduced by focused task simplification analysis.

On average, 38% of analysts' time is spent on VAA and a further 36% on sustaining activities. Of the 26% NVAA balance, lack of workplace organisation accounts for 8% and lack of data and sample availability a further 10%.

In one lab, analysts walked 670 metres/day to search for equipment, samples and machinery. Rescheduling processes and equipment availability reduced this to just 100 metres/day. Indeed, the majority of enhancements are very simple. These include moving tool stores adjacent to place of use, eliminating redundancy, advance kit preparation and, where appropriate, the creation of self-sufficient cells.

continuous improvement

It is equally important to embed a process of continuous improvement for long-term gains. Here, the starting point is a framework for benchmarking key performance indicators (KPI).

This both provides visibility of processes, goals and targets and provides feedback to employees and stakeholders. Most importantly, it empowers the company to shift from reactive to proactive tasks. Areas for quantitative measurement for total productivity cost are outlined in figure 3, and overall implementation of processing, reviewing and acting on KPIs in figure 4.

Depending on context, such new methodologies deliver dramatic improvements in pharmaceutical manufacturing and time to market. Tefen studies suggest that on-time delivery rates typically increase by around 25% while WIP backlog is reduced by up to 50%. Here, perhaps, is one crucial key to unlocking the industry's enormous potential for innovation, meeting the challenge of 2010 and shortening those 5,000-1 odds. It makes a compelling alternative to the prospect of endless, expensive legal battles over patent extension and IP ownership. It also shows effectively filling pipelines need not just be a pipedream.