With a typical production and maintenance lifetime measured in decades, the decision to devote capital resources to build a development or manufacturing facility is a significant investment that carries long reaching implications for any business. In our industry, facilities have to be built out well in advance of proof of clinical efficacy and commercialization, which further magnifies the risk to an organization’s potential to be successful.
Let’s look at the elements that should factor in any strategic discussion that takes place prior to a decision to build. Today, we find the complexity of the equation escalating as we incorporate the support of overseas organizations for key steps within the drug development lifecycle. As the industry struggles to integrate the principles of ICH Q8, Q9, and Q10 as part of our routine product development process, the demands on the facilities we develop can only become greater. I propose a model for expanding the strategic planning effort that contains a clearly defined facilities planning lifecycle to make sure that decisions surrounding the design timing and functionality of a facility maximize its return on investment.
UPDATED REGULATORY GUIDANCE
From the regulatory perspective, the basic characteristics of facility design are well understood. The latest regulatory guidances issued by the FDA and ICH, however, recommend a more focused scientific development approach that integrates risk management more prominently throughout the product development lifecycle. The full potential of these two factors not only impacts our approach to product and process development but may also set the stage for greater flexibility when developing an organization’s strategic and tactical capital plans. As organizations look for new and more effective ways to reduce the investment and overall time to market for new therapies, they turn to the low cost, highly skilled labor force overseas. This has great potential during the early phases of product development, such as formulation and pre-clinical characterization. Outsourcing is a significant opportunity to reduce the overall cost of development and decrease time to market as we move toward parallel processing. Still, with regard to pursuing an outsourcing strategy for any type of development, the question remains: Can we better leverage this business decision by integrating the capability with associated facilities and their operations? The decision to outsource in itself is a significant one for any company; I think it could be made in consideration of the short and long term capabilities and requirements of the capital infrastructure.
STRATEGIC FACILITY PLANNING MODEL
The impact of mitigated or poor decisions in terms of facility design and function will be felt immediately across an organization if a strategic business opportunity cannot be exploited. Best in class operations have long recognized the importance of establishing a process methodology which could provide the decision makers with the best data possible for the best decision possible in terms of facility design and function. The more methodical the strategic planning process the easier it is to integrate the metrics and measurements your business can use to achieve its goals. This model shows the vision and the execution plan, consisting of long and short term analysis coupled with ongoing activities that keep the focus on strategic objectives. The components of the model are shown in Figure 1.
STRATEGIC PLANNING PROCESS—UPSTREAM AND DOWNSTREAM
The business impact of a facility directly relates to overall corporate performance. The strategic planning process upstream is geared to business performance objectives, while business impact analysis is important to allow these goals to percolate downstream. If an organization uses a strategy map or balanced scorecard process to establish overall business objectives it is easy to integrate capital considerations as part of the strategic planning process.
Here are five information sources that support the strategic definition process:
- Current Economic Conditions Analysis
- Existing and New Market Analysis
- Regulatory Strategies
- Pipeline/Portfolio Analysis
Although they may appear to be disparate, these five supportive analyses are influenced and affected by capital decisions and an organization’s ability to meet the current and future needs of the market. An example: an organization sets a strategic goal to double the number of new molecular entities (NME) that it brings to market over the next decade. One path to this end is to decide to invest in state-of-the-art R&D facilities because one of their strategic goals is to design a facility that promotes scientific cooperation, and to lure the best and brightest post-doctoral candidates to the organization. While at first the relationship may not be apparent, the integration of capital considerations can have a tremendous impact on an organization’s ability to meet their corporate objectives — in this case, to double NMEs. Making the capital investment factor a standardized component of the strategic planning process can influence many business objectives. Examples of other strategic facility touch points are highlighted in Table 1.
TACTICAL PLANNING LIFECYCLE
Now comes the time to develop a facilities tactical plan. The lifecycle approach is an ideal framework that makes sure planning activities remain aligned with overall strategic objectives. Since the facility contribution has already been identified and defined this crucial next step is much easier. The process should have clearly defined success metrics and checks and balances which feed back to the overall tactical plan. The facilities planning lifecycle is shown in Figure 2.
The strength in the process comes from the methodology itself. Identifying these requirements in the tactical plan at the outset will save time and money in retrofit costs and ensure that all initiated projects support the business’ strategic objectives.
ON-GOING PLANNING — DOCUMENTATION
The last step in the overall planning lifecycle concerns ongoing planning integration and monitoring key metrics: this is central to achieving program success in the long term. Facilities projects are notorious for budget, timeline and resource overruns. Establishing a simple one page summary — often called a “dashboard”— will help management and key stakeholders at all levels understand the status of key initiatives within the facility. Lean principles promote documentation for all projects; similarly, regulatory life sciences require documentation for each phase.
The FDA’s efforts to move the industry to a risk-based, scientifically driven methodology for product development affects all phases of the product development lifecycle. A methodical approach to strategic planning that integrates capital considerations as you define the facility lifecycle process and its on-going monitoring will allow your organization to extract the maximum value in terms of corporate performance for its capital investment.
Bikash Chatterjee is the president of Pharmatech Associates, Inc. He has been involved in the bio-pharmaceutical, pharmaceutical, medical device and diagnostics industry for over 20 years. His expertise includes site selection, project management, design, and validation of facilities for both U.S. and European regulatory requirements.