11.10.23
What are “3 Key Trends” shaping the CDMO industry in 2023 and beyond? Biopharma executive and healthcare futurist, Ben Locwin, shares his thoughts with Contract Pharma.
Revisiting lean principles and JIT production
The CDMO sector has done a good job over the past 15 years of adopting and incorporating lean principles, such as inventory reduction, Just-In-Time (JIT) production techniques, demand balancing, etc. A top trend, owing to stock-outs due to the COVID-19 pandemic, however, has been increasing buffer inventories from 2-3 months to something more akin to 4-6 months—or more for some commonly-used materials. This isn’t anti-lean, I want to make clear, but supply chain challenges have certainly impacted CDMO production and planning just as they’ve done in the semiconductor industry, food and beverage, and all other product markets. The sensitivity to supply chain has made CDMOs more aware of vulnerabilities that frankly didn’t exist prior to the pandemic when supply chains were more robust.
A data-driven future
It’s not that CDMOs (and Sponsor companies) haven’t been using data for their production planning and verification, but those data sources are becoming more numerous, richer, and more vertically integrated. Real-time analytics have increased, and CDMOs are increasingly governed by their data streams. It’s not necessarily true that “more data are better,” because the volume, velocity, and veracity of those data need to be correct for their intended use for the analytics to be objectively “better.”
Talent shortages
Key among these CDMO trends is that the war for talent is real, and talent shortages abound. When we ask, “how does the work get done,” the answer is “by PEOPLE!” Without the right talent in the right roles at the right time, the work either doesn’t get done, or (more likely) it doesn’t get done as efficiently and effectively as it otherwise might. Solving the talent side of the equation requires identifying the needs appropriately, and seeking assistance whenever possible so that talent shortages don’t lead to production problems. It’s not enough that metrics like “Time-to-Fill” are below some arbitrary threshold, but instead ask the question, “Have we identified the talent needs for the near- to mid-term future to continue to grow and be successful?”
Revisiting lean principles and JIT production
The CDMO sector has done a good job over the past 15 years of adopting and incorporating lean principles, such as inventory reduction, Just-In-Time (JIT) production techniques, demand balancing, etc. A top trend, owing to stock-outs due to the COVID-19 pandemic, however, has been increasing buffer inventories from 2-3 months to something more akin to 4-6 months—or more for some commonly-used materials. This isn’t anti-lean, I want to make clear, but supply chain challenges have certainly impacted CDMO production and planning just as they’ve done in the semiconductor industry, food and beverage, and all other product markets. The sensitivity to supply chain has made CDMOs more aware of vulnerabilities that frankly didn’t exist prior to the pandemic when supply chains were more robust.
A data-driven future
It’s not that CDMOs (and Sponsor companies) haven’t been using data for their production planning and verification, but those data sources are becoming more numerous, richer, and more vertically integrated. Real-time analytics have increased, and CDMOs are increasingly governed by their data streams. It’s not necessarily true that “more data are better,” because the volume, velocity, and veracity of those data need to be correct for their intended use for the analytics to be objectively “better.”
Talent shortages
Key among these CDMO trends is that the war for talent is real, and talent shortages abound. When we ask, “how does the work get done,” the answer is “by PEOPLE!” Without the right talent in the right roles at the right time, the work either doesn’t get done, or (more likely) it doesn’t get done as efficiently and effectively as it otherwise might. Solving the talent side of the equation requires identifying the needs appropriately, and seeking assistance whenever possible so that talent shortages don’t lead to production problems. It’s not enough that metrics like “Time-to-Fill” are below some arbitrary threshold, but instead ask the question, “Have we identified the talent needs for the near- to mid-term future to continue to grow and be successful?”