MANUFACTURING INEFFICIENCY COSTS INDUSTRY $50 BILLION ANNUALLY, STUDY FINDS
The pharmaceutical industry is wasting more than $50 billion each year through inadequate IT and misplaced decisionmaking, according to an academic study.
The Pharmaceutical Manufacturing Research Project, a joint venture by Georgetown University and Washington University in St. Louis business schools, collected data from 42 manufacturing facilities owned by 19 companies to determine factors that affected industry performance. The "Final Benchmarking Report" assessed performance in terms of manufacturing times, frequency of deviations from manufacturing standards, reasons for deviations, manufacturing yield and rates of improvement for those metrics.
The study determined that improvements in manufacturing processes could save industry more than $50 billion in manufacturing costs, which the researchers believe could result in lower drug prices and more money for R&D. The report received no industry or government funding.
The researchers found that five factors affect manufacturing performance: IT; decisionmaking; outsourcing; process analytical technology (PAT); and size and range of manufacturing. But IT and who's in charge of decisionmaking played the most important roles in how efficient and effective a company's manufacturing was, one of the authors, Georgetown professor Jeffrey Macher, said.
The point of the report was to take an objective view of these issues in order to help industry improve its manufacturing, he added. As drugs become more complex, manufacturing will be more complicated and the need for efficient manufacturing will become more important.
A more extensive use of IT to electronically and automatically report, track and resolve deviations, track people and centrally store data "corresponds to higher levels of performance" and will help companies to more quickly diagnose problems as well, the report said. In addition, better manufacturing performance results when lower-level employees, rather than department heads, make decisions.