Monday Jun 17, 2013

Enterprise Product Lifecycle Management: Why Pharma Should Engage Now?

Bertrand Godillot - Senior Director, Enterprise PLM Solutions EMEA

Modern Approaches

We have recently seen some traction around new ways of looking at product lifecycle management in the pharmaceutical industry. Traditional approaches focused on revenue optimization for in market products. Modern approaches bring the light on the front end (early to late phase III), cross functional processes which lead to commercialization: from clinical to operations…

The Shifting Focus

There are multiple reasons for this shift, but the most important one is probably the massive structural change in the pharmaceutical companies’ product portfolios: the golden ages of blockbusters are gone! Pharmaceutical executives have been extremely active in the last few years trying to figure their way out of foreseeable challenges in revenue streams and margins: acquisitions, out and in-license, generics business development etc… At the same time, they have embarked into classic cost reduction initiatives, especially outsourcing. On this later point, a number of product related activities have been transferred to partners including late stage development, clinical trials, clinical supplies, regulatory activities, as well as commercial manufacturing.

So far we have seen very little focus into the execution part of the story! Execution performance remains poor, essentially because of a significant lack of coordination between disciplines. This leads to unacceptable delays and compliance issues responsible for missed revenue and increased costs. Both top and bottom lines are affected. While successful modern Product Lifecycle Management initiatives would drive “indecent” benefits to the pharmaceutical industry, very few companies have developed implementation plans…

Lean Techniques 

It is about applying “lean” techniques before moving to commercialization. It is also about developing a progressive IT roadmap to migrate towards a simplified, more integrated landscape. Both of these should be executed concurrently to ensure continuity of compliant business with the “product” at the center.

While early adopters of PLM for pharmaceutical are definitively out there, they are, interestingly enough, not very talkative about their results. The main reason is to be found in the competitive advantage they gain out of their transformation to a “connected” organization: enhanced visibility, consistency and predictability in business process execution, and better compliance.

We are certainly ready to give our views and share our experiences with decision makers in the pharmaceutical industry to help drive this topic in their organizations!


Thursday Apr 11, 2013

What Is Wrong with the Management of the Product Portfolio?

James Ramsey - Master Principal Consultant

Editor's Note: This article is the first in a series entitled "The Value of Complete Product Lifecycle Portfolio Management"

Introduction

This is the first in a series of articles exploring the benefit of taking a lifecycle approach to managing the product portfolio.  The article discusses the importance of Product Portfolio Management and identifies some common barriers preventing companies achieving the perfect portfolio mix.

For the purposes of this article, consider the Product Portfolio as a representation of a company’s business strategy providing the plan of action of how it will meet its goals, and Product Portfolio Management as the continuous business process of refining and optimizing the product mix.

Importance of Product Portfolio Management

Companies can have the fuzziest “innovation front-ends” and the best idea-to-launch processes, but if they lack formalized decision-making processes around their product portfolios they will be continually disappointed with their return on innovation. 

According to Cooper & Edgett (Product Development Institute Inc), “recent benchmarking studies have identified portfolio management as the weakest area in product innovation management.”  Whilst there is no doubting the importance of generating ideas and being able to execute on them, a company is only going to achieve the desired growth from innovation if it is executing on the right mix of ideas. 


Product Portfolio Management is often disconnected from Product Lifecycle Management (PLM)


The business benefits of PLM systems are well established.  Many of these benefits come from creating a centralized “Product Record” and by executing projects in the development pipeline in the right way, utilizing the right resources.

But profitable innovation is not just about executing efficiently and doing things in the right way, it is also about investing in doing the right things.

Increasingly a widening gap is emerging between a company’s PLM driven execution activities and their innovation strategy.  Most companies still support their strategic product portfolio planning processes with multiple Excel spreadsheets, point software solutions and PowerPoint presentations, all totally disconnected from the PLM product record.


[Read More]

Monday Feb 25, 2013

RoHS II Regulation Challenges Medical Device Manufacturers

Elmar Frühe - Master Principal Consultant, Enterprise PLM Solutions EMEA

A New Challenge

There is a new challenge making Medical Device manufacturer’s worry:  the updated RoHS regulation, now officially known as RoHS 2011/65/EU or just RoHS 2.0. RoHS regulation and the corresponding responsibility to manufacture or buy only compliant components and products is already well accepted by the Electronic and High Tech industry, but still new to the Medical Device markets.

The regulation itself becomeseffective on 2nd January 2014 and includes all Medical Devices (according legislation 93/42/EWG) except active medical implants. In Vitro Diagnostics products will follow in 2016. So the time to act is now!


RoHS II 

So what does the RoHS regulation mean specifically? First of all medical-device products have to be built without (or limited) use of certain hazardous substances like lead, cadmium or mercury. In addition the manufacturer has to prove by an adequate documentation that one is following the RoHS compliance. And last but not least there is a certificate of conformity and a CE-labeling necessary.

Every quality and regulation representative in Medical Device companies is facing a huge additional amount of work or another pile of (paper based) documentation and dossiers ready to be shipped with the product. But couldn't life be easier if software could support the overall process from a compliant design to sufficient documentation? Yes it could and the good news is that the appropriate software is there!


A Best Practice Solution

Medical Device companies using Product Lifecycle Management (PLM) software today are not nervous about the new regulation. Starting in the very early beginning of the product design they already keep an eye on being RoHS compliant while selecting only allowed components. They additionally qualify their manufacturers and suppliers as being a trustful partner providing materials and components without containing any hazardous substances. Of course all the declarations and certificates are stored as an electronic record in the system ready to be reused for any audit or technical documentation. Even new introduced parts undergo an approval process including strong supplier collaboration and collecting all signatures needed for a “Compliance OK” designation!

During the ongoing Product Lifecycle the PLM system helps to manage all the processes and information in a collaborative network. Any requirement, Bill of materials, drawings as well as schematics and layouts are managed within the system. Furthermore, they have a lifecycle status, are linked together and are change and revision controlled within the software tool. In addition, quality related processes are built in a PLM tool to manage a closed loop from a first sample inspection finding to the final corrective action and design change.

So when it comes to an audit or to the necessary RoHS documentation including product descriptions, construction drawings, compliance declarations, process plans and operation procedures, the system already has the information ready to submit or print. Medical Companies already using PLM software dramatically reduce the cost and effort of being compliant and of course mitigate the risk of launching a non-compliant product.


In Summary 

All in all PLM systems help to keep a compliant data set of records within one single source of truth – always ready to be used and managed in a collaborative network – saving time and costs, ensuring high quality and mitigating the risk of non-compliance .

Monday Feb 11, 2013

Building a Better Business Case

Bertrand Godillot - Senior Director, Enterprise PLM Solutions EMEA

Hard Cost Benefits

How would you back up a recommendation to your board to implement a Product Lifecycle Management strategy? Soft benefits only go so far in convincing decision makers yet most executives shrink from providing hard cost benefits to them. Why?  

In most cases they are doing this for the first time and are desperately looking for help! The problem begins when most solution providers position standardized spreadsheets as customer specific benefits calculators. While the usual suspect consulting firms sell their expertise, and six or so months later an RFI process is launched, few initiatives reach this stage with a realistic, approved business case.


The Cash Curve 

Over the years, the "cash curve" has proven to be a successful framework. It helps drive business process discussions with representatives from sales and marketing, development, sourcing, quality, manufacturing engineering and operations. Similarly to some of the lean techniques, it helps visualizing dependencies between disciplines as well as some of the bottlenecks, issues, nightmares... In other words, areas of improvements -primarily from a process perspective, can be identified, shared and acknowledged across disciplines. This is clearly a major first step in the development of a proper business case.


Evaluating Benefits

Evaluating benefits is somewhat industry specific. A pharmaceutical or a medical device company is likely to be very sensitive to compliance and risk mitigation. Consumer packaged goods companies will be very focused on brand protection. Consumer electronics will pay a lot of attention to scrap, rework, and obsolete inventory. A common denominator for all seems to be the ideal balance between growth and margin.

Therefore, a PLM business case should always include three main sections:

Increased Revenue

Cost Reduction

Industry Specific driver: Risk Mitigation, Brand Protection...

Unsurprisingly, there has been a lot of frustration on both sides in the past as very few executives would commit on the revenue dimension: in this just like in a number of other domains, compensation drives behaviour...

In future contributions, articles will drill down in each of the value area of the "cash curve" and share what should be considered as part of a Product Lifecycle Management business case. These will include pragmatic examples to make this as valuable as possible. Hopefully, this will help development and operations representatives in their business case development. 

Wednesday Feb 06, 2013

The Rise of Information and the Risk to Brands

Clinton Chadwick - Principal PLM Consultant – Oracle
 
Information Overload and Brands
 
A world of ever more empowered consumers means brands are simultaneously becoming more important and open to more risk. Consumers are suffering from information overload. A simple consumer question like “what is the best laptop to buy?” or “is grape juice safe for my child to drink” instantly becomes a discussion inexorably linked to brands.


When consumers try and find answers to these questions are swimming in a sea of information.  Brand names are key landmarks in navigating this sea. While the details of what consumer may read on the websites, blogs and social network posts they find will fade, what remains is brands – “Brand X makes great laptops”, “Brand Y juice is safe for my child”.


Furthermore when researching products, brands are an extremely import keywords for internet searches. Without brand names, the amount of results and the ratio of useful information to noise is vanishly small.


 
The Risk to Brands
 
This unprecedented access to information greatly empowers consumers. This includes both positive information about brands and, more importantly, negative.  Consumers are more likely to share their bad experiences than their positive ones so companies have come to expect many more complaints than complements.


Previously, it took a major product problem with significant impacts before the issue would come into the media spotlight. Even then, the coverage was often limited to a particular region or geographic area.


Now, it only takes a few negative consumer experiences to damage a brand. Design or quality problems that would never be large enough to gain traditional media attention are now quickly publicized by unhappy consumers via websites, chat forums and increasingly – social media.


This grassroots publicity begins impacting potential customers immediately.  Consumers now often begin their purchasing process with internet research. These consumers will be impacted by the reports to unhappy customers – even if those customers’ experiences were with vastly different products.


This reality greatly amplifies the negative consequences of even the smallest design or quality problem.

How can this be prevented?


 
Mitigating Brand Risk
 
The risk comes from design and quality problems that produce a sufficient quantity of unhappy consumers that they produce an online record of the product problems for future potential customers to find.


Is it possible to prevent unhappy customers entirely? No, there will always be unhappy customers for a variety of reasons. However, savvy consumers know this already. If they see isolated bad experiences they will naturally filter these out and ignore them. It is only when many consumers confirm the same problem that potential customers sit up and take notice!


Avoiding serious design and quality problems is a matter rigorous and consistent innovation processes that include numerous checks and controls.


The innovation process is a particularly complex one as it involves virtually every part of the enterprise from marketing to R&D to procurement. However, innovation is inherently a creative process in which individuals need freedom and flexibility.


 
Solving the Problem with Product Lifecycle Management (PLM)
 
Combining the rigor and consistency with complexity and flexibility is very challenging to do manually either on paper or with Office type computer applications. Enterprise PLM applications like Oracle Agile PLM enables a consistent, auditable innovation process which still allows for creative freedom for small, mid and large organizations.


Product Lifecycle Management mitigates the problem of brand risk in a few way:

  • Product Data Management. Having a single version of the truth is the best way to make sure that teams are all speaking the same product “language”. Miscommunication due to individuals or teams looking at wrong or outdated product information is source of significant potential errors.
  • Project Management. One of the largest problems with innovation project is skipping steps. It is natural for a busy team to decide to skip a step and sometimes this is an appropriate decision, but often it can open the door to significant risk. Projects with PLM can still be flexible, but when a decision to accelerate a project by skipping steps (this is often a valid course of action) are made there is a record of when, who when and why.
  • Approval Workflows. Making sure the appropriate checks are made is critical and automating the process is a great way to enforce these important steps.
  • Automated Compliance. Compliance takes many forms depending on the industry one is working in. Some PLM solutions include automated compliance determination which can perform automatic checks on your product data to determine if the product is compliance with regulations like RoHS, REACH and even FDA regulations. With complex products, it is conceivable to miss a single non-compliant part or material with potentially disastrous implications. Automating this process is the best way to avoid this risk.
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A cross industry discussion on ways to better manage product data and the entire product lifecycle from idea to end of life with special attention to the unique challenges faced by European companies.

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