This week we look at five critical operational metrics that can make or break a biopharma manufacturer’s year. Ones that, as the business grows beyond small business accounting packages and manual processes, biopharma leaders often struggle to measure:
- Vendor Delivery Performance
- Customer Delivery Performance
- Manufacturing Schedule performance
- Quality Management impact
- Quality Audit Performance
Often, we see organizations fail to monitor these KPIs because they are growing fast, and their existing systems cannot keep up or they do not have the functionality needed to drive and sustain manufacturing excellence. Let’s explore how the right digital platform can be the difference between manufacturing excellence and missed opportunity.
1. Vendor Delivery Performance
Managing the supply chain to meet promise dates.
For any manufacturer, how well they manage their supply chain can make or break on-time delivery. For those awaiting their end products, it can be life-changing. Biopharma companies must receive raw materials from approved and quality-audited suppliers and their manufacturers within expected lead times to produce products on schedule.
At Merit, we often work with biopharma customers that are growing so fast that their supply needs far exceed their primary supplier’s ability to deliver. Equally often, they fail to have a second-source supplier vetted, retained, and ready to produce in those instances where the first supplier comes up short.
Having visibility into vendor performance trends including on-time delivery and quality performance can give an early warning to a biopharma that is taxing their vendor’s capacity with growth, or simply has a high reliance on a vendor. Having automated vendor approvals and enforcement makes it more efficient to work with multiple, approved vendors for controlled items, ensuring biopharma manufacturers have adequate supply sources in place to meet their forecasted production plans.
To track vendor delivery performance, you should measure and work to improve your vendors’:
- On-time delivery performance
- Average supplier lead time on purchased materials
- Material receipts quality performance
2. Customer Delivery Performance
Scheduling production orders in time to meet delivery dates.
Customer delivery performance measures how your organization can meet the standards expected by your customers. It shows how successful you are at providing products to your customer on time, using planned resources, without any extra cost to the business.
Unlike most industries that go from customer order to production or fulfillment, biopharma businesses must also complete significant ‘customer readiness’ steps between the time an order is placed, and it is ready to be produced. These steps include receipt of specific starter material from the customer, collaboration on exact specifications, approval of raw material batches, approval of specific manufacturing processes and tolerances, and specific instructions that must be agreed to and adhered to.
In the absence of a digitally managed process, manufacturers are left wondering, “Did we receive the expected starting material from the customer by the date committed? Were we able to produce the proposed batch record for the customer to sign off on, both within the times committed? If not, what is the impact on the promise date?”
Having the right digital and customer collaboration platform in place helps eliminate these issues and puts the answers to those questions at the manufacturer’s fingertips.
Critical Customer Delivery Performance metrics should include:
- Sales Order delivery performance (on time, in full, in spec)
- Sales Order quoting lead times
- Sales Order cycle times from initial contact to signed contract/order
3. Manufacturing Schedule Performance
Producing products fast enough to meet order delivery dates.
As your orders come in, you should not have to estimate or guess on delivery dates. This will frustrate your customers and impact your credibility with them. With strong manufacturing schedule performance metrics in place, you will make sure your orders are fulfilled most efficiently, without interruptions, delay, or stress.
Biopharma companies that engage us typically have 40% or more of their actual production time tied up in a collective “other time” bucket that has nothing to do with the actual cycle time.
What’s filling this massive “other” bucket? Sometimes time is wasted because they lack visibility into quality control tests. Sometimes, they’re unable to schedule production because they discover too late that the certified personnel, they need are not available. More drops in the bucket. Sometimes equipment calibration is not happening on time which leads to more delays. Sometimes it’s all of those situations, plus a host of other constraints that they fail to manage because they lack an integrated, digital platform – one that provides the visibility they need to ensure those processes are happening in time to keep the production line moving on time.
To monitor manufacturing schedule performance, you should use these key performance indicators:
- On-time Manufacturing Order completion percentage
- Produced materials requiring rework percentage
4. Quality Management Impact
Passing customer quality tests.
Even when on-time delivery isn’t an issue, delivering on time and meeting stringent quality and compliance guidelines can be. As we meet with these customers, one of the key questions we ask is “Can you perform consistently within your quality management system while hitting available to promise times?”
Having the right digital platform with controls can help ensure that the product our customers deliver to their customers conforms to the expected quality guidelines and expectations. This not only builds confidence in the relationship but helps the manufacturer avoid costly remediation steps that would otherwise be necessary.
Another pain point we hear about is that quality testing, inspection, and other release processes are creating a bottleneck in the supply chain. Most often this comes from the fact that the manufacturer lacks forward visibility to QC testing requirements.
Understanding the dependencies and required time and quality resources needed to stay on schedule and meet planned delivery dates allows the organization to adjust plans and/or resources and avoid those unpleasant surprises.
We recommend that you track quality throughput with these metrics:
- Average days to inspect and disposition incoming purchased materials
- Average days to inspect and disposition manufactured materials
- Number of days to address deviations/nonconformances
5. Quality Audit Performance
Demonstrating that you’re meeting your commitments to product and patient safety.
Tracking your compliance with regulations for product and patient safety is critical in your business. Whether it’s an official FDA Audit or an internal SOP compliance audit or a Supplier Quality Process audit, the controls you have in place help you ensure patient safety and the long-term viability of your organization. A robust compliance program is essential to validate that audits are effective and that you’re using the information learned from your controls to enhance your business processes.
We believe these are the leading indicators to track for Quality Audit Performance:
- On-time completion rates for scheduled audits
- Number of major non-compliance items
- Percentage of high-risk noncompliance instances
- Percentage of recurring problems
- Time to closure for corrective action requests
If you’re looking for ways to better measure and manage the metrics that matter to you using the right digital business platform, we’d like to help. See how Merit for Life Science – Operations can give you the foundation your business needs to succeed.
For more information, contact our team.