Operations Excellence: Perfecting IT Management System Selection for Biopharmaceutical Organizations

The biopharmaceutical industry is one of the most complex, and disaggregated, when it comes to using Information Technology (IT). If one were to tally up the number of enterprise-level solutions available to manage different parts of the business, it would make a chief financial officer cringe. Although the large enterprise resource planning (ERP) providers (SAP and Oracle) claim to be making the world simpler by integrating more functionality into their systems, best-in-breed advocates within companies have demonstrated that the one-stop-shop model for business management systems is short of being a fully matured concept.

Marc Puich

Simplification is a core concept of Operations Excellence that is contrary to current balkanized IT deployments. Continuous improvement requires a relentless effort to eliminate waste in all forms. The gurus of lean operations would argue that implementation of complex IT systems for business management is wasteful—why not use simple and easy-to-implement visual management tools instead? If statistical process control charting on pieces of paper worked well in the past to determine when a process was reaching an out-of-control state, why do we need distributed control systems and process historians?

Realistically, the correct balance of IT lies somewhere between today's complex mix of systems and paper-based systems. Finding that balance requires keeping the following key points in mind when developing a software strategy:

• Improve first, automate later. An IT system is not going to solve your problem. If you are experiencing challenges meeting your production schedule, it is probably because your processes are operating at a One Sigma level of consistency, not because you don't have a finite scheduling system and electronic batch records. When waste is significantly removed from the system, companies find that the need to automate is suddenly eliminated or reduced. Is there a need for a deviation management system if there is only one discrepancy in every few lots? Implementing a system seems like a solution, but it can often distract an organization from attacking real, and often more challenging, issues

• Begin with the customer. Developing an IT strategy should begin with an external focus. This process requires taking a critical look at what functionality is truly necessary to support your customer, versus what would be nice to have. The goal of a system is not to remove people from a process, but to provide the customers with what they need. Every screen, every field, every report that does not result in driving better service to the customer is a waste. If the IT solution doesn't reduce the cost to serve the customer successfully, then it should be eliminated. Remember—customers are most frequently internal, not external

• Be happy with 80 percent. As long as the current or proposed system meets the most critical requirements of the customer, companies should resist a best-in-breed philosophy. The main problem with the best-in-breed approach to software is the resulting waste that occurs. The overhead expense and configuration redundancy that accompany each new enterprise application add up quickly, and can be somewhat invisible to owners of the system. The biggest risk is that critical resources are focused on the software, and not on their core responsibility of supporting the customer.

This concept also applies to customization. The fastest and most successful ERP implementations are out-of-the box (vanilla systems). An honest assessment of the real needs of the system from the customer perspective can mean the difference between a one-year and a six-year implementation

• Don't automate too early. Companies should focus on automating after stabilizing the business. Trying to implement enterprise applications during a growth phase (or with an uncertain future) poses significant risks. Processes are not locked down, strategy is not fully flushed out, and needs of the organization are still evolving. Specifically, in bio-pharma we have witnessed companies that invested millions in systems that became obsolete shortly after being acquired. Often, companies are willing to invest capital and people's time in IT systems during growth periods, but not in stepping back and questioning the effectiveness and efficiency of the underlying processes. This results in IT systems that lock in wasteful ways of conducting business that become difficult and costly to change.

Even with the aforementioned concerns, I'm no Luddite. There is no question that the proper application of IT can be a critical component to driving efficiency and actually reducing waste.

Highly efficient companies use IT extensively, and with great success. However, the need and resulting form of the IT system were determined through systematic root cause analysis, that determined its use was the only way to drive better and more consistent performance. As companies reach for Six Sigma performance, humans involved in the process become too variable and error prone.

Additionally, information needs to be viewed, analyzed, and reacted to in real-time. Within biopharma, the most exciting waste reducing technology is process analytical technology. Can you imagine a plant with no quality control laboratories (and no laboratory information management system?) Until then, biopharma should concentrate on solving real problems that cause inefficiencies, making the difficult choices around removing waste, and minimizing the footprint of IT on the organization.

OPERATIONS EXCELLENCE CONSORTIUM

The complete schedule for future meetings of the Operations Excellence Consortium will be available soon. The next West Coast meeting is scheduled for July 20, hosted by Bayer in Berkeley, CA. Please refer to www.Tefen.com/bio for additional information.

Marc Punch is a partner at Tefen,Lt.,1065 E. Hillsdale Blvd., Suite 1615, Foster City, CA 94404; tell 650.357.1120 X117 (Office) 415.290.4580 (mobile), fax 650.372.1350, marc@Tefen.com