Driving cost optimisation and productivity

By Silvia Esteban

With costs and expenditure taking the current pharmaceutical limelight, Silvia Esteban offers up her expertise on how to optimise company costs and productivity.

In the current economic climate, pharma and biotech business leaders are looking closely at their value chain; the strategically relevant activities and assets that impact the quality and cost of R&D. Of the utmost importance to the profitability of a company is CAPEX and OPEX optimisation. We should not, however, be focusing only on reductions or cuts, but on working better, smarter and more efficiently. The idea is to ultimately make the business more viable in the long term by reducing costs through operational & organisational change. Cost structure must be examined throughout the business and cost discipline imbedded within the company culture to see sustainable gains.

Data visibility is a fundamental aspect of CAPEX and OPEX optimisation (Figure 1). Having the necessary data and business analytics facilitates the making of informed decisions, which, when combined with Lean processes and productivity, will generate an optimal level of both CAPEX and OPEX. If this is the case, then why is it that while detailed, accurate data is routinely used to assess therapeutic targets and manage smaller, more targeted pipelines, few companies use the same level of data to drive asset management and utilisation programmes?

The fact is that, although some biotech and pharma companies have adopted measures such as asset tracking, spend and utilisation analysis, they have not maximised the benefit these tools can bring. We believe that the industry must shift towards data-driven asset management, offering analysis of workflow and waste, data analytics designed to measure service quality and benchmarking data to ensure spend, service levels and other variants are best in practise.

A key factor in gaining control over spend is inventory. Purchasing decisions are typically made by assessing the state of the current inventory compared to the assets requested by the departments. However, the assessment of the current inventory is generally based on data that is, in our experience, at best only 45 percent accurate. To remain viable, an accurate inventory is an essential component of any effective asset management programme.

As a first step in asset management optimisation, GE Healthcare’s Laboratory Asset Management Assessment (LAMA) programme can increase inventory accuracy to at least 95 percent. Improving inventory paves the way for powerful new capital planning tools and processes, enabling the allocation of budget based on thorough analysis and powerful data. In addition, the programme can offer visibility of contract spend and opportunity for redeployment of unused assets.

Throughout the LAMA programme, a dedicated onsite team from GE Healthcare engages with different functional areas within the organisation to appraise the current business practices and processes connected to laboratory asset management. Following analysis of all collected data, a final report is provided – delivering a comprehensive gap analysis comparing current versus optimised state, highlighting recommendations for improvements and the benefits an optimised service solution would bring to the organisation.

A large US biotech company had experienced rapid expansion, growing beyond its infrastructure. Over a three-year period, the number of employees and assets in R&D alone had doubled. Although the company had over 2,000 assets located at one site, there were no centralised systems in place to track assets and service spend, and severely limited reporting capability. To fully assess the current state and provide recommendations for improvements, the company chose LAMA from GE Healthcare.

In the three months following the LAMA report and recommendations, US$400k in hard savings were identified, as well as US$800k in soft savings (e.g. scientist productivity, reduced POs, equipment uptime). In addition, the exercise yielded the longer term benefits of a more accurate inventory, visibility of service spend, and industry benchmark data.

With CAPEX and OPEX at top of mind, LAMA can deliver the data necessary to kick-start optimisation and plays a pivotal role in transforming processes that will cut costs and drive productivity. Alignment to the right partner that has deep domain expertise in the industry and is flexible and creative in identifying solutions will deliver value and ensure that you stay ahead of the game.

Biography

Silvia Esteban is the Global Marketing Manager for GE Healthcare’s Scientific Asset Services business. Her expertise is in developing go-to-market offerings and solutions that can deliver customer value for R & D and Laboratory Equipment within Life Sciences. Esteban has also excelled in implementing global integrated strategic marketing plans to better communicate to customers the benefits these solutions bring to their organisations.

Esteban has over 12 years experience delivering strategic marketing and communication programmes to the Life Sciences and Pharmaceutical industries, and has worked for the top three Life Science instrumentation companies delivering customers innovative and cost effective product and service solutions.