Optimizing Global Biopharmaceutical Operations Through Risk Mitigation and Management - A UC Berkeley survey provides insight into biopharma's risk concerns and strategies. - BioPharm International


Optimizing Global Biopharmaceutical Operations Through Risk Mitigation and Management
A UC Berkeley survey provides insight into biopharma's risk concerns and strategies.

BioPharm International
Volume 25, Issue 12, pp. 38-43


Adding to the complexity, mechanisms for drug production are typically not standardized even within firms, technologies continue to change, and generic drugs are poised to dramatically impact the industry (2). In recent years, this changing dynamic has been a key focus of research at the University of California, Berkeley, culminating with the recent establishment of the CELDi Biopharmaceutical Operations Initiative (BOI), focusing on the development of cutting-edge tools, techniques, and approaches to improve production systems, logistics systems, supply chain, inventory, and distribution within biopharmaceutical firms—essentially, biopharmaceutical operations. The research initiative is jointly sponsored by member firms and the National Science Foundation (NSF) under the Industry/University Cooperative Research Program.

Key to the development of this initiative was a series of industry–academia workshops held at Berkeley (one sponsored by the NSF) in which the challenges and opportunities in biopharmaceutical operations management were explored. Across the industry, managers have an overlapping set of concerns, and are eager for better approaches, tools, and techniques that account for the unique characteristics of biopharmaceutical operations and help deal with these concerns. A common theme emerged from these workshops: the need for more effective risk-management tools and approaches. Many firms are specifically focusing on identifying and hedging risks associated with their operations, and are eager to collaborate to improve tools, techniques, and approaches to do so. As a precursor to a concerted research effort in this area, the BOI surveyed nearly 300 industry members to explore attitudes about risk related to suppliers, raw materials, contamination, outsourcing, disposable technology, demand forecasting, inventory, and distribution, with a particular focusing on understanding which concerns are most significant, how firms measure these risks, and what mitigation strategies they currently have in place (see sidebar, "Survey Respondents"). Below is a summary of the survey's key observations.


Survey respondents
Overall, firms are most concerned with quality risks, contamination risks, and risks associated with lack of visibility into contract manufacturing operations. More broadly, firms are concerned with a broad spectrum of risk-related issues, including supplier risk, manufacturing reliability, inventory risks, cold-chain issues, and forecasting-related risks. In preliminary interviews that accompanied the survey, several respondents even highlighted their concern that firms in the industry lack a "global" or "system" view of risks faced, and rather than developing a cohesive strategy to minimize risk, consider risks one at a time, thereby ignoring their interactions.

Surprisingly given these concerns, however, there is relatively little focus in the industry on detailed analysis of relevant data, relatively little formal quantification of risk, little formal modeling and simulation of risk or risk mitigation strategies, little focus on inventory optimization, and little measurement of uncertainty.

In contrast, in many industries risk mitigation involves spending considerable resources collecting and analyzing data, assessing the types of variability in the data, optimizing resource utilization to mitigate risk, and developing rigorous models to understand where inventory and other buffers can most effectively be utilized to hedge against risk. Surprisingly, for such a sophisticated industry in so many ways (e.g., compared with basic consumer products or industrial equipment manufacturers), this industry has a qualitative view of risk management. This finding is particularly surprising given the vast amount of data that is collected in the industry.


The BOI survey was distributed using a mailing list compiled at industry meetings and from Berkeley's BOI industry partners. Although the number of usable responses varies from question to question, surveys were at least partially completed. Forty-six percent of respondents work at biotech/biopharm firms, and an additional 24% work at pharmaceutical firms. The bulk of the remaining respondents identify themselves as equipment or raw-material suppliers, or as employees of contract organizations. Twenty-five percent of the respondents work at large companies (more than 50,000 employees), 20% work at very small firms (less than 100 employees), and the rest are distributed somewhere between those two extremes. Slightly less than one quarter of respondents' firms have no products on the market, while slightly less than half have 20 or more products on the market. In terms of annual sales, respondents also come from a broad spectrum of companies—35% are from large companies with $5 billion or more in annual sales, and the rest of the respondents are relatively equally distributed over the range from no annual sales to $5 billion in annual sales. Respondents' firms operate globally, with sales and manufacturing distributed around the world, and R&D most often concentrated on the US East and West Coasts, and in Western Europe.

About 30% of survey respondents work in R&D, and 20% work in manufacturing; the rest are scattered throughout various roles in engineering, quality, planning, and so forth. About half are managers or directors; the rest are either consultants, or in various roles ranging from the C-suite to independent contractors. Note that the BOI team made no attempt to limit responses from a particular firm, so that the results reflect the opinions of multiple respondents within a firm.

blog comments powered by Disqus



Harnessing the Power of Modified T Cells to Treat Cancer
October 17, 2014
Lilly to Close Manufacturing Facility in Puerto Rico
October 17, 2014
BioReliance Introduces New Predictive Assays
October 17, 2014
Industry Stakeholders Tackle the Use of Biological Qualifiers at WHO Naming Session
October 16, 2014
Pfizer Ireland Plant Receives ISPE Award
October 16, 2014
Author Guidelines
Source: BioPharm International,
Click here