Manufacturing: The NGP Head-to-Head

Dr Stan Higgins, CEO of the North East Process Industry Cluster (NEPICS) and Mike Rodd, Segment Manager – Process Control, Bürkert Fluid Control Systems, discuss demands on manufacturers within pharma, the advantages of specialisation, leadership and management.

NGP. As a greater volume and variety of new products move into clinical development, the industry’s pipeline will become wider and more complex, and the demands placed on manufacturing and distribution will become even greater. How can you meet these growing demands?

SH. Within the North East of England cluster we have the complete pharmaceutical supply chain capability, from National Health Service hospitals, academic and industrial R&D, all the way through the supply chain to approximately one-third of the UK’s pharmaceutical manufacturing capability. Furthermore, as a region we are broadening the research base of pharmaceuticals. For example, a considerable proportion of stem cell research in the UK is concentrated around Newcastle-upon-Tyne.

Manufacturing companies within the cluster, which include GlaxoSmithKline, sanofi-aventis, SSL International and Merck Sharp Dohme, are benefiting from the region’s concentration on developing its technical and innovation capabilities. This is making significant in-roads into improving pharmaceutical manufacturing productivity. For example one of our world leading pharmaceutical facilities has been able to capture two significant drug products with little or no capital investment, due to cluster driven productivity initiatives.

Because this sector is so important to the regional economy, the supply chain is heavily focused towards the pharmaceutical industry. This ranges from engineering and quality management expertise to highly flexible intermediate manufactures such as Degussa, Shasun and Aesica in addition to a wide range of process development and pilot scale manufactures and formulators such as High Force Research, Onyx Scientific and Specials Laboratory.

MR. We have seen many industries re-inventing themselves across a broad scope and have identified a clear need to have technologies and competencies readily available to respond. We take inputs for product development from a variety of “field sources” to ensure that we offer concurrent designs and specifications but one of the most exciting opportunities that we have is the chance to develop solutions out in the field through sharing ideas and concepts by working closely with customers. We find that this active knowledge management means we can channel resources appropriately and swiftly to be able to meet the growing complexities head on.

Bürkert is fortunate to have a large R&D department who are constantly researching bluesky technologies and innovations, which we harness and integrate into our product range accordingly; manufacturing for the future today is our goal.

NGP. According to a recent article by Michael T. Ricci, BS, MBA, and Heather E. Fraser BPharm, MBA, in Drug Discovery and Development, redefining and redesigning the supply chain requires companies to make an accurate assessment of their existing and future product portfolios. Industries have a choice of greater specialisation, becoming volume manufacturers or network integrators. Do you agree?

MR. Specialisation is the historical differentiation on which many successful companies built their reputations and core business. Today, the value chains that exist within Bürkert have been created in response to the way in which our customers have sought change and alignment of their product portfolios with attention to the market place evolution.

Actually, the impact on us will be minimal due to the organisational structure and strategic focus we have built; on the one hand high volume value for money products amount to “daily business” and on the other hand integrated solutions and network integration is a significant and growing factor which is driving investment.

By concentrating on market segments and especially the process physics behind relevant applications we will continue to offer flexibility and choice as a matter of standard practice and supported by in depth knowledge and resources.

SH. Yes we agree, because you cannot avoid the economic facts of life. Industries as they get older have to become more efficient at what they do in order to compete with others that have entered the market. This is true of any sector and pharmaceutical is no different. If you go to any pharmaceutical manufacturing facility today, anywhere in the world, there will be initiatives in place to improve productivity – manufacturing output has to be increased for the same labour and energy inputs as before. In the North East of England we may be the most successful in achieving such productivity improvement, thereby enabling our facilities to compete with anyone in the world.

On the other hand, quite naturally as new sub-sectors of the bio-pharmaceutical industry emerge, for example through genomics, these newer industries are less concerned with productivity than speed and grabbing market share. In the North East of England we already have up to 50 such companies growing in our region, therefore we are able to say with some authority that in new product areas diversity has to be encouraged with a greater degree of specialisation because we recognise that these entrepreneurial faster moving, fast growing biotechnology and pharmaceutical companies will provide the product portfolios of the future.

The North East of England is particularly well placed for the emerging biotech/biopharma companies because we have bodies in place to help with network integration and NEPIC (North East Process Industry Cluster) and CELS (The Centre of Excellence for Life Sciences) work in partnership in achieving this. NEPIC helping with large scale industrial manufacturing issues, whilst CELS incubates start-up companies and assists with research development activities. The pharmaceutical industry has only survived through its ability to consolidate, to be big enough to invest in emerging new products, more and more purchased from the entrepreneurial companies mentioned above, and achieve economies of scale to compete in a global market. This business model has evolved through natural selection rather than being developed by a business guru.

NGP. How does you respond to the need to develop new evaluative tools for assessing the safety and efficacy of new medical products?

SH. The cluster of emerging biotechnology and biopharmaceutical companies based in the North East of England work closely together particularly through networks developed by CELS and NEPIC. The academic community from the region’s five universities also collaborate on numerous biopharmaceutical and healthcare projects. Their interaction is supported by BioNet.

In addition, the region has the National Health Service’s intellectual property intelligence unit based at RTC North providing the intelligence on the potential of new products and new ideas. By providing this level of connectivity, the region’s academics and industrial researchers have developed several new evaluative tools and techniques. These have on occasions lead to new healthcare diagnostic devices.

The region is particularly strong in the area of bio-informatics, with world leading companies such as Nonlinear Dynamics, one of the fastest growing technology companies in the world. The North East of England leads the UK in bio-informatics and has established the UK’s Biosytems Informatics Institute to support the further development of this sector.

This region provides significant funding and other support for the development of new innovative healthcare technologies with funding bodies established who provide proof of concept monies, which can lead to significant private sector investment into new products.

MR. Safety in Bürkert is viewed with utmost importance. Our commitment to it is reflected in the extremely high quality standards and modern business oriented qualitative objectives that are transferred through the company. We conduct extensive research and tests inside our own laboratories and are able to replicate general or specific working conditions and hence evaluate materials, components and complete products with both foresight and market input.

We have generated significant and patented technology to increase process efficiency and higher yields due to being able to sharpen chromatography peaks to guarantee efficacy in the end product. We take a great deal of care to ensure our complete understanding of environments and process data and use it in conjunction with regulatory and advisory bodies and their guidelines.

Having the ability to respond like this supports the closeness with which we work in the market and subsequently gain valuable trend data to continually advance the evaluation of safe materials and products.

NGP. Critics say that the pharmaceutical industry has sacrificed leadership in manufacturing technology and advanced process engineering to regulatory fears and cost cutting. Do you believe this to be true?

MR. No. We believe that technical advance, regulation and costs make up some of the success factors that determine how a company will deliver it strategy to market and how long that company can sustain competitive advantage. The pharmaceutical industry has adopted the SCADA and bus system communication globally, which has its roots in Europe. The evolution of these systems seems to run in tandem with the batch processing and strict record management required.

At the component level, manufacturers like Bürkert, who have significant first move advantage, have been incrementally adjusting and contouring their product landscape to match the manufacturing technology required. The offering has to include not only the products but the experience behind “advanced process engineering” and there are many bodies affiliated to the industry, such as ASME BPE, which make this leadership possible.

SH. It definitely is true that the pharmaceutical industry, at the manufacturing stage, is highly conservative and there are many reasons for this. First of all the regulatory authorities find it easier to give licences to technologies and processes that they understand. Secondly, speed to market often dictates the amount of time available for process and manufacturing development is squeezed. And finally, when a product is getting close to market, clinical trials will have been conducted on the product in a highly specific validated manner. This puts a limit on the significance of any changes allowable to the manufacturing processes and procedures during scale-up.

Clearly the regulatory environment, coupled with the need for speed to market using validated processes and procedures, makes any changes to the manufacturing technology difficult and costly. This is because of the need to carry out the necessary evaluative processes and sometimes the need to register the product and re-auditing of the manufacturing facilities.

NGP. It has been said that the pharmaceutical industry is less advanced in terms of channel management than most other sectors. Does this affect the relationship with the manufacturer?

SH. Yes it does. The pharmaceutical industry has over the years driven its suppliers into a position of absolute security of supply without necessarily properly assessing supply chain risks. Intermediate suppliers have often been forced to keep large levels of stock in situations where there has been minimal risk to the security of supply. Furthermore, pharmaceutical companies have often forced two or three suppliers into this position.

If we are to become more competitive as an industry, channel management, through raw materials and final product supply, must be improved to take cost out of the product. The only way that this can be done is through the application of proper risk management procedures throughout the supply chain, because without this the kind of lean manufacturing results that have been achieved in other industry sectors will not be possible in pharmaceuticals.

Within the North of England supply chain there are logistic experts in pharmaceutical facility design and construction, quality management, manufacturing, packaging and distribution with international shipping and distribution experts utilising the UK’s road and rail network and through the UK’s second largest port and busy regional airports.

MR. Channel management promotes quite a precise visibility to market needs and allows quicker introductions and launches of new product. In the pharmaceutical industry the emphasis on managing the relationship with the manufacturer is going to be critical to ensure responsiveness and the resultant top line revenues could be affected if the relationship is not healthy with the manufacturer; therefore I am sure that this is motivation for both sides to work out the best way for future cooperation. As speed to market is important to all channels it is imperative that suppliers act as partners and can develop reliable and innovative modular systems, which can be deployed quickly and effectively.

If the advances are really less than other sectors then there is opportunity to learn and develop jointly which could actually turn out to be a significant advantage when deploying absolute best practice.

Dr Stan Higgins: “If we are to become more competitive as an industry, channel management must be improved”

Mike Rodd: “We have generated significant and patented technology to increase process efficiency”

Dr Stan Higgins BA, PhD, CSci, CChem, FRSC is CEO of the North East Process Industry Cluster.

Dr Higgins has 36 years experience working in the process industries. In pharmaceuticals he has experience in medicinal chemistry and product development, process development and manufacturing with Reckitt and Coleman, Glaxo and Solvay. Dr Higgins has also been the responsible person during regulatory audits on a number of manufacturing sites. Dr Higgins has also been Managing Director and Technical Director of companies and operations in the pharmaceutical intermediate supply chain, for example Eastman Fine Chemicals, Laporte Fine Chemicals, James Robinson and Akzo Speciality Chemicals. NEPIC represents 200 chemical, fine and speciality, biotechnology and pharmaceutical companies. Pharmaceutical companies within NEPIC generate 35 percent of the UK’s Pharmaceutical GDP with two of the top three pharmaceutical companies amongst 14 others with bases in the region. The supply chain contains over 200 other companies.

Mike Rodd is Segment Manager – Process Control for Bürkert Fluid Control Systems.

Mike joined Bürkert in 2001 and was responsible for the UK team and business, after working for WIKA Instruments Ltd. for 10 years. Bürkert is a private, family owned company with its HQ in Ingelfingen, Germany and over 34 subsidiaries globally. Since the summer of 2006, Mike has been working for Segment Management, a customer oriented concept focusing the Bürkert expertise and knowledge on systems and solutions for applications. Mike has over 15 years of industry experience, including mechanical and electrical engineering, and sales and product management for hygienic processing covering pressure, temperature, level, flow and some analyses measurements. He is currently studying for his MBA in International Business and will finish in September 2007.