Speeding up product lifecycle management

In the life science industries bringing new products to market is costly and slow. Martin Sykes, from Agile Software, considers the opportunity for product lifecycle management software to reduce the time to market, shrink costs and manage risk

Over the last five years information technology has opened new markets on the internet, rationalised back-office processes, managed the supply chain and production processes and allowed greater access to information on customer behaviour. However, despite these efforts the asset most likely to improve a company's marketed drug portfolio - product information - remains largely unmanaged.

Product lifecycle management (PLM) is the next major wave of opportunity for manufacturers looking to improve business performance. Just as enterprise resource planning (ERP) consolidated disparate back-office activities into a cohesive environment for running business operations, PLM consolidates the many business activities that create, modify and use data during all phases of a product's lifecycle.

PLM represents the best opportunity to reduce product lifecycle costs, while simultaneously increasing an enterprise's ability to innovate on product families throughout the product lifecycle. Reducing lifecycle costs results in increased profits and financial resources. Increasing the ability to innovate means competitive differentiation that grows revenue and expands markets.

Companies have deployed enterprise 'systems of record' to manage the key operations which drive profitability and growth across all areas of their business: customer relationship management (CRM) systems manage the customer record; enterprise resource planning (ERP) systems for the financial record; supply chain management (SCM) for the supplier record; and human capital management (HCM) systems for the employee record. Unlike other enterprise assets customers, suppliers, employees and equipment a company's products define its competitive advantage.

PLM creates a strategic framework for making informed decisions through the discovery, preclinical, clinical, regulatory approval, and full commercialisation processes. This framework enables companies to have a high level of visibility and collaboration across the many internal and external functions.

management solutions

Effectively managed, PLM ends the traditional isolation of the various functional teams operating in multiple departments and across locations in many countries. PLM eliminates many time-consuming manual, paper-based change-management, tracking and approval mechanisms, while providing central visibility and control over programmes, costs and schedules.

The multi-departmental, multi-company nature of PLM is changing the way that new products are brought to market, crossing boundaries previously seen as bottlenecks and problem areas.

Looking at PLM solutions from an enterprise level there are six major impact areas on a product's cash flow cycle as shown in figure 1. For pharma companies this cycle lasts 25+ years and today we typically see independent PLM solutions being developed for different activities throughout the lifecycle. Specifically, PLM solutions help drug companies increase revenue, increase profit, and reduce the risk of non-compliance by:

• Accelerating new drug development, introduction and commercialisation;

• Prioritising new product development and introduction (NPD&I) by making more informed decisions about resource allocation;

• Managing collaboration with outsourced service providers and supply chain networks;

• Providing a change management platform;

• Enabling complete packaging and label management;

• Making regulatory submission preparation and communication faster and easier;

• Providing a closed-loop complaint handling and corrective action/preventive action system.

A typical PLM solution will consist of a core data model providing an enterprise-wide single source of product information with integrated modules for the key product processes.

These would be based around a secure collaborative environment for all contributors, whether inside the organisation or external, and may start with a requirements capture module. This may be tied to portfolio, project and resource management tools and a document management capability for all types of product information.

significant impact

A quality management module will allow full traceability of product issues, while cost management will enable rationalisation of materials and SKUs. Integration with other enterprise systems like ERP, SCM and CRM will typically be deployed, along with specialist integrations to design and visualisation tools.

All of these capabilities are generally available in many organisations in stand-alone tools. With PLM solutions these are delivered in an integrated environment with one repository and cross-enterprise workflows.

There are three areas where PLM is having a major impact in pharma companies today: packaging management; quality management; and portfolio management.

The benefits chart in figure 2 has been developed and validated with senior executives responsible for pack management in pharmaceutical companies and major consultancies. In large pharmaceutical companies there may be thousands of users across functions working together on a process with up to 200 steps that spans concept development to label detailing, managing more than 20,000 artwork changes per year. The number of different packaging components - artwork, text and physical materials - being managed across a large pharma organisation is between 40,000 and 120,000.

The management and physical costs of the packaging account for 60-75% of the total cost. Even a small difference in the cost for changing any of these components rapidly adds up to significant amounts and significant reductions in time to market.

A major pharmaceutical company might expect packaging issues to result in between four and 10 recalls per year and from seven to 20 serious incidents on average. Each recall typically costs between £500,000 (€731,000) and £2m (€3m). With a PLM-based pack management solution a pharma company should be able to achieve at least a 50% reduction in recalls and serious incidents. This financial cost does not include the loss of regulator or customer confidence. The exact benefit for each company will be different as it depends on size, complexity and the current level of organisation capability. However, the benefits framework indicates companies should be looking for total benefits in the tens of millions per year.

quality issues

Product quality is of vital importance for patient safety and therefore it is a major priority for regulators and the pharmaceutical industry as a whole.

After loss of patent there is no bigger risk to pharma companies than a regulatory intervention because of a product quality issue. PLM solutions have been identified for three major areas of quality management - internal audit management, tracking resolution of external audit commitments and CAPA (Corrective Action/Preventive Action) resulting from both internal and external product issues.

Large pharma companies typically manage hundreds of external commitments per year with many more internally generated quality issues and requirements to co-ordinate audits across thousands of suppliers. A PLM solution allows for the planning and scheduling of audit activities as well as the tracking to complete resolution of all issues raised, whether from internal or external inspection, thus reducing compliance risk significantly.

In the last year PLM providers have begun to deliver the first complete closed-loop CAPA processes that enable pharmaceutical companies to reduce quality variability and decrease quality assurance administrative costs.

Having CAPA procedures online and tightly integrated with core product information reduces costs by eliminating manual documentation requirements and expensive communication errors and lengthy feedback procedures. Through rapid identification, analysis and correction of issues, companies can increase quality, thus improving both their bottom line and competitive position.

improvement initiatives

Across pharmaceutical companies, particularly in the manufacturing and supply chain groups, there is a vital need to manage changes effectively. These may be changes in product specifications, test methods, operating procedures or formulations, to name just a few. Each of these may be considered a product, produced by a defined process with its own lifecycle. PLM solutions offer work-flow based processes for executing controlled changes with a full audit history.

Successful companies have typically started with an initiative to improve and standardise manual processes then implemented electronic solutions to track and manage changes. In benefit terms this is characterised by a 60% reduction in change cycle times and a 40% reduction in resources.

There are many opportunities throughout the pharmaceutical value chain for portfolio, programme and project management tools. Crucial for portfolio management is enhanced visibility across the entire pipeline as companies are integrating drug candidates from internal discovery programmes as well as initiatives with partners and the results of mergers.

definition and scope

PLM-based solutions enable companies to prioritise their pipeline successfully by providing critical and transparent programme management capabilities. The capabilities of PLM solutions are especially useful to portfolio managers who can focus resources on drug candidates and projects most likely to survive and deliver the greatest returns.

Why would companies choose a PLM solution for portfolio management? Because of the direct link between plans, resources and the product information necessary to get new products to market faster.

PLM solutions can be planned at an organisation-wide strategic level, at a business unit level and for very specific business activities. At each level there are some common factors that make the PLM implementations successful. In common with many IT projects, the most important factors are to understand the definition and scope of the business processes and to have an executive owner with responsibility across the whole PLM solution space.

A key aspect of PLM solutions is the provision of a single source of truth about product information. To support this there must be an understanding of the benefits that arise by having one source of product information. The typical ERP scenario, with its characteristic multiple and differently configured instances, results in more complicated integration and more than one version of the truth.

Using PLM vendors with pharmaceutical domain expertise is critical for achieving rapid project delivery and significant returns. Experience suggests that the majority of well executed projects will achieve payback in one year with clear benefits demonstrated in operational metrics for cost reduction and time to market improvements.

Only a few of the PLM vendors can today confidently demonstrate FDA 21 CFR Part 11 compliance, with a full audit & version history and knowledge of the validation requirements for the pharmaceutical industry. Developing validation plans, protocols, and executing them can be a time-consuming and expensive task. Often the cost to validate a system is as much as, or more, than the system itself. Agile is the first and only solutions provider focused on product lifecycle management to offer a suite of protocols that customers can use in their validation effort.

In 2003 life sciences companies started to make significant investments in PLM projects. Many companies are tackling formulation management separately from packaging management, change control, etc. This is partly because of organisational silos with different priorities, but mainly because in the current economic climate IT projects have been scaled back and organisations are unwilling to invest in a wholesale implementation of a top-down integrated PLM strategy that links packaging, product development operations and business processes. This is a missed opportunity today but one that a few companies are starting to address in 2004.

tactical decisions

PLM processes software touches all aspects of the product that a manufacturer makes. These integrated processes don't exist now and, in many cases, are not even on a manufacturer's radar screen. A PLM strategy is needed to map the strategic vendor partnerships and tactical software decisions that need to be made.

A PLM strategy is a must for life sciences companies which depend on the suitability, timeliness, quality, and sustainability of the products that they bring to market. Companies that consider product development a core competency should investigate PLM immediately to maintain their leadership in this area.

Other companies should see PLM as a necessary requirement to maintain parity with competitors and to integrate fully with the skills of their partners.

Profile

Martin Sykes is consulting director for life sciences with Agile Software, a leading provider of PLM software to the life sciences industry. He joined Agile in 2003, having spent seven years at GlaxoSmithKline in r&d, manufacturing and global roles . Prior to this Sykes worked in consultancy, developing automated solutions for the pharmaceutical industry. T +44 771 771 7403 martin.sykes@agile.com.