Questions about capacity have become more commonplace lately in the midst of the COVID-19 pandemic. Clients know that many CDMOs have reallocated laboratory and production personnel to minimize employees’ risk to potential contagion, or, in some cases, been impacted by brief inventory constraints of Personal Protective Equipment (PPE) and other consumables.
What isn’t necessarily asked directly, but definitely is driving their queries, is what will happen when a vaccine for COVID-19 is approved for use in the general population. What will capacity be like then, when the entire world anxiously awaits the vaccine to be produced and distributed?
The question, “What is your capacity?” is one that all CDMOs were challenged to answer even before the pandemic. Regardless of the pandemic or any other consideration, the practical response is, “It depends.”
I contend that if a CDMO responds with “3 billion doses” or “60 percent” or something similarly simple, then the inquiring client really should question that CDMO’s understanding of their business. The informed CDMO will answer by asking more questions in order to provide a comprehensive, directly applicable, and accurate response.
The question, while it seems simple enough, cannot be addressed easily, quickly and without a good level of detail.
Why is that?
Well, when we consider capacity at our business, we must take into account nearly 250,000 square feet of facility space with many rooms of varied capabilities; more than 500 employees of differing skills working in multiple functional areas; a diverse fleet of instruments, equipment and machinery; on-hand quantities of supplies, raw materials and consumables with differing replenishment cycles; etc.—all working in tandem to produce batches of multiple sizes and strengths of different molecules and formats for dozens of clients worldwide. It’s a complex weave of parameters to properly assess the output of any given process or product.
What is your capacity?
It is a difficult question to answer unless you consider the full picture of interconnected activities that must coalesce to successfully operate a CDMO’s diverse environment. There are an infinite number of combinations available in an operation like ours, and a client needs the right mix of our resources to dovetail in order to complete a batch.
So, when we examine capacity, we consider such factors as:
- The suites in which client-centric operations will be conducted, as not all suites are created equal (more about that later);
- The equipment needed—both fixed and portable, and of appropriate scale to complete the train for a given process or, in the case of the lab, the instrumentation needed to conduct the test;
- Available employees with the requisite skills across necessary shifts; and
- Materials available—here, approved and ready for use, which is challenging sometimes, because supply of novel active pharmaceutical ingredients (APIs) can be constrained in early development. API rarely is constrained in commercial manufacturing, but can experience variable lead times, especially in a pandemic.
In our high-mix environment, formulations and processes are usually not standardized. Our unit operations vary by product, batch sizes and equipment requirements. And some products require special handling. For example, if an API is light sensitive, highly potent or even explosive in its nature, we must utilize suites and equipment with special capabilities.
Every client project is different, and therefore capacity calculations differ for every client project.
Moreover, most clients require certain anchor assets—larger capital equipment with long lead times, for which it is costly to enable a step change in output. For example, our Xcelodose 600S, which our scientists use to help clients get API into clinical studies faster, frequently operates at high levels of utilization.
If every single client required that particular piece of equipment, it would become a constraint for the entire enterprise—much like “Herbie,” the slowest scout in the well-known Theory of Constraints book, The Goal. Then our output would be gated entirely by one bottleneck asset, which would definitely influence overall capacity.
Our smaller, more portable pieces of equipment are available in multiples, which mitigate bottlenecks but can make pursuing standardization challenging.
In our world of solid oral dose pharmaceuticals, analytical chemistry has a high degree of standardization—assays, dissolutions, tests for moisture and particle size, etc. Instrumentation is generally not variable while methods will be. But still, even within our laboratories, many variables exist, including personnel. We consider not just direct chemist time, but also shift structures and all support functions through which documentation flows. These functions factor into capacity also.
We typically staff to a particular model, such as two shifts involving two operators per manufacturing room, five days per week. We can readily increase capacity in many operations simply by adding more people more hours of the week.
Finally, we must factor in cleaning and set up. Generally, for CDMOs, the time that an equipment train or a suite is manufacturing actual product pales in comparison to the time needed to clean and set up equipment and rooms for the next process. Think of dominos, and how quickly they fall as compared to the time needed to set them up. Cleaning and set-up times are long compared to actual production for the small batches often in demand in our growing universe of orphan drugs and niche medications.
And under what model or approach do CDMOs improve productivity and output—and, thus, capacity?
There’s Lean Manufacturing, the pursuit of the reduction of waste in all forms made universally known by Toyota and the Toyota production system.
There’s Six Sigma, the pursuit of eliminating defect rates. This approach not only drives a higher standard of quality, but it also can improve capacity if your team was spending time making defective product.
And there’s the Theory of Constraints, the pursuit of understanding the constraint in any process and eliminating it to the point that some other step in the process becomes the next constraint to tackle.
All of these methods have merit depending upon the challenge you’re trying to solve.
At Metrics Contract Services, we ultimately reduce these variable factors down to hours as the common basis on which to measure capacity and utilization across people, equipment and rooms. We rough cut capacity multiple months in advance to drive resource and capital planning. And we rely upon near-term scheduling, which involves appropriate functional units that must coalesce to successfully complete a set of activities associated with a batch or a testing event.
None of this is to say that capacity is impossible to calculate or plan for. Not at all.
But this is to say capacity is not a quick and easy answer without proper context.
So, when a client asks me, “What is your capacity?” I reply, that depends on the applicable process at a point in time—and I’ll need to ask some clarifying questions to give an accurate response.
John S. Ross is president of Mayne Pharma USA, part of Mayne Pharma, an Australian-headquartered specialty pharmaceutical company focused on applying its 40 years of drug delivery expertise to commercialize branded and generic pharmaceuticals. Mayne Pharma also provides contract development and manufacturing services to more than 100 clients worldwide through its CDMO, Metrics Contract Services. Ross earned his MBA from the Ivey School of Business at the University of Western Ontario, from which he also received a bachelor’s degree in math and statistics. He has more than 25 years of experience in pharmaceutical industry marketing, sales, manufacturing, distribution, global sourcing, and supply chain management.