New Delhi, July 05, 2014 – Arecent McKinsey report states that Indian pharmaceutical market can reach USD 55 billion by 2020, and the market has also the potential to touch USD 70 billion, but it comes with a rider. To achieve this target, the industry should putconcerted efforts in the five key emerging opportunities namely, patented products, consumer healthcare drugs, biologics, vaccines, and the public health market.The same report also cautions that pricing control and economic slowdown may lead to a downturn in the market, to USD 35 billion.
While the external factors get difficult to control, the pharmaceutical companies need to strengthen the internal operational capabilities, in order to grow profitably. The rising industry complexity is a factor thatcompels the industry players to boost collaboration among the stakeholders and strive to sustain the performance. The major challenges that are impacting the business prospects for Indian pharmaceutical companies include quality of drugs, quality of clinical trials, and patent issues.Recently, some Indian pharmaceutical companies have been penalized in the USA for flouting FDA norms.
Cost leadership is a major differentiator for market competitiveness. Large pharmaceutical companies are normally adopting various strategic business initiatives such as ERP, Six Sigma, Lean, TQM, TPM, and contemporary management accounting techniques to optimize productivity and cost of the product. As business complexity in pharmaceutical sector is a given, it is an imperative for the pharmaceutical companies to adopt technology solutions to increase the operational excellence. With advanced technology solutions, the pharmaceutical companies can improve the visibility of data across the business processes and can take faster business decisions.
Inherent Challenges in Life Sciences Industry
Missing Operational Excellence
Pharmaceutical companies should strive foroperational excellence to thwart market competition. To achieve operational excellence, the pharmaceutical companies should focus on better quality, industry compliance, increased productivity, higher throughput, low utility cost, and less waste.However, the small and medium enterprises (SMEs) are reluctant to invest in technology. Lower technology investment restricts the operational efficiency of the company and increases the operational cost.
Lack of Data-driven Decisions
Since pharmaceutical industry is highly scientific process oriented, it is necessary for the companies to explore data-driven decision making. According to a Thompson Reuters report, 26.5% IT leaders catering to the IT needs of pharmaceutical industry predict that “big data” will play a major role in the decision making process.There is an urgent need to exploit“big data”to derive useful insights for better planning and decision-making. Unfortunately, the Indianpharmaceutical industry is slow to catch up with this technological trend.
Inefficient Supply Chain
Supply chain is the backbone of pharmaceutical industry. From drug discovery to clinical trials, to manufacturing, to distribution, each segment requires a robust supply chain management process to increase productivity and operational inefficiency. According to a report, an efficient supply chain management can reduce inventory holding by 25%-60% and improve the order fulfillment cycle time by 30%-50%. But the inability of developing an efficient supply chain costs the companies heavily. For example, poor inventory planning can cost a pharmaceutical company 10%-18% of net revenues.
Stringent Regulatory Control
There is an increasing need for compliance with regulatory norms of different countries and international agencies such as FDAand WHO. If a company wishes to market the products in the US region, an approval from FDA is mandatory. The clinical trial process also attracts major attention from the FDA regarding safety, efficacy, capacity, and purity of the drug. The pharmaceutical companies are also subject to various state and federal laws regarding production environment, safety, and environment protection.
Poor Drug Quality
Quality is a major issue with pharmaceutical manufacturers. In 2013, a major Indian pharmaceutical company was penalized in the US for flouting the FDA quality norms.There are many instances when Indian regulators collude with local manufacturers to approve the products. This allows smaller companies to manufacture sub-standard drugs and market it in the developing countries.The sub-standard drugs available at lower price pose a threat to the quality drugs marketed by leading pharmaceutical companies.
Leveraging the Technology to Optimize Growth Opportunities
What’s required for Indian life sciences companies today to mitigate the daunting challenges is, to adopt technology solutions. For example, Tectura® Life Sciences solution, built on Microsoft Dynamics, covers all business areas: from purchasing, sales, production, financial accounting, quality control, vendor rating, raw material data management, laboratory systems, resource management, warehouse management, and logistics, to marketing and distribution. Many leading life sciences companies of India have leveraged this solution to improve their operational efficiency.Life sciences companies require customized solution to address their challenges.For example, order management, formulation,active ingredients administration, inventory management, lot tracing, sequence planning, quality management, supply chain management, and production planning are the key areas to be integrated.
Bringing in Manufacturing Excellence
Companies need a solution having greater flexibility, easy integration, and extensive features to support the business operations. Components like manufacturing specification provide data to core ERP solution through an interface, which is version controlled and user authenticated. Similarly, formulae,BOMs, and recipes are critical data structures that life sciences companies adhere to strictly. Tectura Life Sciences offers extensive functionalities to configure manufacturing specifications, recipes, formula’s bills of materials (BOMs), and work plans. The manufacturing specifications can be integrated with Microsoft Dynamics solution. It helps compiling all necessary work instructions basis the production plan. Being version controlled and protected by password, this module ensures that data security is maintained.
Conforming to Regulatory Compliances
As life sciences companies need to meet the FDA/GMP/WHO compliances, there is an urgent requirement for the companies to look for a comprehensive solution that can help reduce the risk of non-compliance along with complete visibility into the quality of products. Tectura Life Sciences solution allows companies to ensure adhering to FDA regulations, complying with standard operating procedures, and validating the industry checklists.This solution is compliant with GMP requirements, and maintains audit trails and signature records for both manual and automated transactions to satisfy 21 CFR Part 11.
Ensuring Better Quality of Products
In life sciences industry, quality management acts as an ethical guide to deliver the product as promised to customers. The industry has a mandate to comply with a number of regulatory compliances, which again largely address to the quality of the product. Tectura Quality Management solution offers a wide range of measures such as test plans, process tests, test orders, test accuracy control, skip-lot function, and vendor rating to thwart the challenges. The solution also provides components to integrate client-defined measures to abide by the quality policies of the company. Companies can easily integrate all test areas with procedural documents to ensure easy validation.
Faster Product Recall
Lot tracing is a critical component for life sciences operational process. For instance, during FDA audits if any product fails to meet the standards, then the company should recall the product immediately. Tectura’s Life Sciences solution enables complete lot and serial traceability with forward and backward tracking capability across the production chain. This feature improves the response time for product recall and ensures peace of mind for the manufacturers.
Efficient Production Planning
During production planning and control stage, life sciences companies need planning functionalities that allow optimal resource utilization. Companies require integrated sequence planning to configure planning parameters, schedules, resource availability, and sequencing. Mostly, at production floor short-term changes are expected due to machine failures and unplanned customer orders. The production manager should ensure that resource utilization is optimized and transparency is built into the system. With advance sequence planning module of Tectura Life Sciences, companies can even handle ad hoc requirements more efficiently without disturbing the scheduled jobs. During scheduling and sequence optimization, the production floor manager can verify inventory to check whether the required materials are available in the stock and right measures are predefined in the system.
Managing Cost Optimally
As life sciences companies use myriads of raw materials to compose a complex molecule, calculating the costing of individual ingredients is necessary. While many ERP solutions have inherent issues in calculating the cost of a product, Tectura Life Sciences solution helps calculate the production cost basis the raw material price and the amount of portion used. Various fixed and variable costs are defined to estimate the final cost of the finished product. Using this solution, companies can define the size of lots and relationship between quantity and unit cost.
Conclusion
As the Indian life sciences industry is faces global competition, itiscrucial for the business owners and decision makers of the company to rely on comprehensive business solutions to mitigate the daunting challenges. Many leading pharmaceutical companies have trusted innovative business solutions like Tectura Life Sciencessolution that integrates all business processes, including production and planning, quality, supply chain, sales and marketing, and finance and accounting. It allows companies to bring in operational excellence,conform to quality and regulatory compliance,and increase profitability.
About the Author
Mr. Chetan Pathak, Corporate Operations Director, Tectura India
Managing at the helm of Tectura India, Chetan exemplifies Tectura’s commitment to delivering exceptional and sustained value to the clients. Chetan joined Tectura India as Corporate Operations Director in April 2009. With an extensive and diverse experience of over 26 years in the areas of technology and consulting business, Chetan spearheads Tectura’s strategy for operations in India, Nepal, Bangladesh, Sri Lanka, Maldives, Mauritius, and New Caledonia. Chetan is Tectura India’s primary decision- and policy-maker, setting the tone for company’s values, ethics, and culture.
In this capacity, Chetan provides complete leadership on strategic and operational issues. A proven leader with deep expertise in executing on strategic global, regional, and local initiatives and goals, Chetan manages growth of Tectura India’s business, profitability, and customer satisfaction. With a passion for mentoring and coaching, Chetan builds up the path for enterprise leadership team. At Tectura India, he drives three revenue streams – Local Business, Direct Offshoring, and Inter-company Business. Chetan leads relationship management with Microsoft and various channel partners. His focus for business excellence has helped Tectura India achieve many awards from Microsoft locally and globally.
Prior to joining Tectura India, Chetan was the Vice President – India Operations, Ramco Systems. At Ramco Systems, he was responsible for managing the Enterprise Solutions business, Enterprise Process Solutions business, SaaS business, and BPO. Before joining Ramco Systems, Chetan also worked with leading technology organizations such as Tata Unisys and IDM Ltd. Chetan holds a BE degree in Mechanical Engineering and MBA in Marketing Management from Gujrat University. CCI Newswire
