Since the 1980s, Goldratt UK has worked with many pharmaceuticals organisations – both in clinical research and in API and dose production and packaging. The market has always been a challenging environment for pharmaceutical producers, the population is growing and demand is not decreasing; expectations of life and healthcare are going up. In less than twenty years, the number of people aged sixty-five and over will increase by over 40% [1] – meaning it is only going to get tougher. And, as if this wasn’t difficult enough to manage, we have since been hit by a global pandemic which puts two huge additional pressures on pharmaceutical production. Firstly, it affects the people we can physically bring into work and have working together. Secondly, there are now additional healthcare demands and rapid requirements for not just the development of cures, inoculations, and so on, but also in terms of methods of prevention. There is an urgent requirement for all the supporting materials needed to treat symptoms of the virus and protect other people from catching it.
Social distancing has meant that businesses are not able to run full shifts and full departments. This unavoidably results in a reduction in capacity; whether you work in API, bulk pharmaceutical or managing the packing lines (packaging up products for different companies, countries and markets) you will undoubtedly be operating with less capacity than before the pandemic. Social distancing requirements have meant we have all had to make changes to the people we can have present in the labs, on the factory floors, on the packing lines and in the testing labs. Naturally, the available capacity to do the regular, growing volume of pharmaceutical manufacture is at best, limited, and at worst, drastically reduced. If you are struggling to meet demand now with lower capacity, you will find a previous blog post of ours helpful: ‘Operating with Reduced Capacity: Maintaining Output’. Ultimately, you need to still be delivering your (growing) order book. The difficulty of meeting this means that customers’ stocks of necessary drugs will be dwindling, their orders won’t be getting fulfilled and you are probably having some tough conversations about what they can have, and when they can have it. Your customers will not be happy.
Restricted capacity is doubly difficult for pharmaceutical companies to manage because a drop in API output affects both direct API sales and the API available for your own pharmaceutical production. If the drop in capacity is also affecting pharmaceutical production, this will affect your bulk pharmaceutical sales, as well as the pills you need to be feeding your packing lines for your customers. Then, obviously a drop in packing capacity affects the ability to satisfy your own end customers. It’s a difficult situation to manage.
At a high level the solution is quite simple: you need more capacity. But how do you get more capacity out of an environment that is already heavily loaded? And, now you are having to deal with social distancing measures to keep your people safe which makes it even harder…
The reality is that you need to manage the production flows of API, of pharmaceutical production, and of packed materials. They all feed each other (dependent workflows) whilst also having their own direct sales (independent customers). The most important fact to remember is that all flows are determined by the rate at which the bottleneck performs. When the flows are properly understood, and the bottlenecks are understood, it is possible to make significant improvements in output when the bottlenecks are being managed efficiently. So, you can achieve an increase in output even when you do not have all the previously available supporting staff and all the same people in the building at the same time. It can be done. It will require real focus to pick out the things that matter in amongst all of the parallel activities.
At Goldratt UK, we work with our pharmaceutical clients to separate what is crucially important to manage from other things which simply keep the business functioning as usual. Through keeping the focus on bottleneck output, we help pharmaceutical facilities with an already growing demand, and with the new challenges brought with COVID, to ensure they succeed and thrive in a very difficult time.
[1] Centre for Ageing Better ‘The State of Ageing in 2019: Adding Life to our years’.
By Phil Snelgrove, Lauren Wiles