Electronic Document Management in Pharma

The Business Case and Beyond
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“Electronic Document Management in Pharma: The Business Case and Beyond” Robert Dvorak, Ph.D., Director Syncade/Data Integration Management at Emerson Process Management

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Making the Business Case

Agenda

Introduction


  

Why?
Gathering the Data

Making the Case
Getting a Decision

[File Name or Event] 5 Emerson Confidential 27-Jun-01, Slide 5

Building a Business Case - WHY?
    

Significant investment

Significant potential return
Making the most of the opportunity Where do I start? How do I plan?

[File Name or Event] 6 Emerson Confidential 27-Jun-01, Slide 6

Understand the Culture

  

What are the problems?
Where am I likely to get resistance? What kind of data will I need? Who will make the decisions?

[File Name or Event] 7 Emerson Confidential 27-Jun-01, Slide 7

Where do I start
   

Work Flow Process Mapping

Entity Relationship Modeling
Value Stream Mapping Operation Excellence Report

[File Name or Event] 8 Emerson Confidential 27-Jun-01, Slide 8

Significant Reasons

Non-Departmental Visualization
– Provides clear picture for Sr. Mgmt. working outside the process

Capture and Quantify both Direct and Indirect Costs Starts Initiative in proper place to establish both a collaborative process and baseline for expectations Begins Process for “Reason Based Vision”
– Removes emotions from the process

[File Name or Event] 9 Emerson Confidential 27-Jun-01, Slide 9

Significant Reasons - continued

Six Sigma Approach
– Problem statement drives solution, Don’t work solution back into a “problem statement”

Creates baseline for non-technical discussion of Business Drivers
– Cost Savings, Process Improvements, Quality Improvements, Efficiency, Responsiveness, Frames “Root Cause” identification

 

Provides Quantitative and Qualitative values Provides roadmap for phased approach with spending focused on High Return/Impact areas first

[File Name or Event] 10 Emerson Confidential 27-Jun-01, Slide 10

And the Survey Says

Allows the total organization to understand and visualize “Current State” and “Future State” value of investing in a Operations Management Solution Avoids creating unrealistic expectations

Sets the process apart from the corporate ERP experience

[File Name or Event] 11 Emerson Confidential 27-Jun-01, Slide 11

Organization

Must Have Sponsorship From a Senior Executive Form a Multi-Disciplinary Team
– – – – Manufacturing Quality IT Materials

Agree on Objectives
– Prioritize

 

Develop the Business Case Find an Experienced Partner

[File Name or Event] 12 Emerson Confidential 27-Jun-01, Slide 12

Structure
 

 

Operational Excellence Program Model Focus: Justification, Organizational Readiness, Road Map Analysis, Assessment vs. Study Interview type process Outline with discussion topics, questions, and potential requirements Flow charts for work flow processes; Value Stream Mapping Tool (studies only; not assessments) Wrap up each day
– Process check – Confirm agenda for next day

[File Name or Event] 13 Emerson Confidential 27-Jun-01, Slide 13

Structure – Operational Excellence
1. Initial Assessment: What problem needs to be solved? 2. Detailed Study: What are the specifics of the problem and the capability of the processes? 3. Report and Recommendation: How will modifications to business processes and systems deliver benefit? How will changes impact the organization

4. Project Implementation: Define / execute realistic plan
5. Results Analysis: Compare results to initial baseline

6. On-Going Control: What work practices can be put in place to sustain and increase the gain?
[File Name or Event] 14 Emerson Confidential 27-Jun-01, Slide 14

Study Methodology

   

  

Assess current state Prototype & define future state requirements Define potential future states Define future state business processes Define scope of options & phases to ultimate future state (road map) Analyze benefits for options (ROI, intangibles, etc.) Roll out planning High level project execution strategy Managing organizational change

[File Name or Event] 15 Emerson Confidential 27-Jun-01, Slide 15

Assessment/Study Deliverables

 


Study more detailed than Assessment User and/or functional requirements Prototype Review of business processes Business report with financial analysis

[File Name or Event] 16 Emerson Confidential 27-Jun-01, Slide 16

Why Study/Assess?

[File Name or Event] 17 Emerson Confidential 27-Jun-01, Slide 17

Focus for Value Addition
WORK PROCESSES

Operational Issues
– Increase throughput – Increase yield / Reduce variability – Reduce cycle time / WIP

NORMAL

ABNORMAL

Asset Management Issues – Reduce unplanned downtime / equipment failures – Improve maintenance processes / prioritize efforts

VALUE ADDED

NON-VALUE ADDED

ESSENTIAL

UNNECESSARY

Compliance Issues – Reduce cost of quality / improve quality processes

FLOW

REDUCE

ELIMINATE

– Simplify paperwork management / convert to electronic tools

[File Name or Event] 18 Emerson Confidential 27-Jun-01, Slide 18

Value Stream Map Example
A12 No Manual Document Changes Required Probability 95 %
A38

A10

Reduced

A15

A20

A30
Doc Time Each 0 Mins Avg Document Time 0.00 Mins

A40

Reduced & RFT

A48

A50

A60

Reduced & RFT
A65

A70

Reduced & RFT Processing

A80

Check Printed Batch Record
Cycle Time Avg Document Time RFT Document Rework 5 5 99 0.05 Mins Mins % Mins

Doc Time Each 0 Mins Avg Document Time 0.00 Mins

Weigh & Dispense Staging
Cycle Time Avg Document Time RFT Document Rework 10 10 95 0.50 Mins Mins % Mins

Weigh & Dispense

ERP Transactions & Confirmations
Cycle Time Avg Document Time RFT Document Rework 0.5 2 95 0.1 Days Mins % Mins

Avg Document Time 1 Mins

Store Kits & Check Orders
Cycle Time Avg Document Time RFT Document Rework 5 5 99 0.1 Mins Mins % Mins

Kit & Material Verification
Cycle Time Avg Document Time RFT Document Rework 60 5 98 0.8 Mins Mins % Mins

SAP Entries
Avg Document Time RFT Document Rework

Cycle Time Avg Document Time RFT Document Rework

1 15 98 0.24

Days Mins % Mins

Avg Document Time 0 Mins

Cycle Time Avg Document Time RFT Document Rework

100 10 98 2.5

Hrs Hrs % Mins

0 98 0.1

Mins % Mins

A18

A40

Reduced

A48

A17

Reduced
10 %

Doc Time Each 0 Mins Avg Document Time 0.00 Mins

Manual Document Changes
Cycle Time Doc Time Each Avg Document Time RFT 2 5 .5 99 0.05 Days Mins Mins % Mins

Doc Time Each 0 Mins Avg Document Time 0.00 Mins

Manual Document Changes Required Probability

A85

Document Rework

Avg Document Time 0 Mins

A90

A100

Reduced & RFT

A105

A110 Reduced & RFT

A115

A120

Reduced & RFT QA Review

A125

A130 Reduced & RFT

A135

A140

Reduced & RFT

A145

A150

Reduced & RFT

A155

A160

Enter Data in SS

First Production Review
Cycle Time Avg Document Time RFT Document Rework 1 5 98 0.00 Days Mins % Mins

Doc Time Each 0 Mins Avg Document Time 0.00 Mins

Tech Services Review

Doc Time Each 0 Mins Avg Document Time 0.00 Mins

Doc Time Each 0 Mins Avg Document Time 0.00 Mins

Final Production Review
Cycle Time Avg Document Time RFT Document Rework 1 10 95 1.00 Days Mins % Mins

Avg Document Time 1 Mins

Book Lot in ERP

Avg Document Time 0 Mins

QA Lot Disposition

Avg Document Time 0 Mins

Document Log

Cycle Time Avg Document Time RFT Document Rework

0 0 98 0.30

Hrs Mins % Mins

Cycle Time Doc Time Each Avg Document Time RFT Document Rework

3 5 1.50 98 0.08

Days Mins Mins % Mins

Cycle Time Doc Time Each Avg Document Time RFT Document Rework

5 5 1.50 98 0.08

Days Mins Mins % Mins

Cycle Time Avg Document Time RFT Document Rework

1 2 95 0.10

Days Mins % Mins

Cycle Time Avg Document Time RFT Document Rework

7 10 98 0.36

Days Mins % Mins

Cycle Time Avg Document Time

0 0

Mins Mins

C165

Avg Document Time 0 Mins

A170

A175

A180

A185

A190

A195

A200
A205

A210 Reduced

Document Library

Avg Document Time 0 Mins

Box & Index

Avg Document Time 0 Mins

Confirm & Scan Records
Cycle Time Avg Document Time 0 0 Days Mins

Avg Document Time 0 Mins

File Records in Long Term Storage
Cycle Time Avg Document Time 0 0 Days Mins

Destroy Records
Avg Document Time 0 Mins

Cycle Time Avg Document Time

0 0

Days Mins

Cycle Time Avg Document Time

0 0

Days Mins

Cycle Time Avg Document Time

1 .1

Days Mins

[File Name or Event] 19 Emerson Confidential 27-Jun-01, Slide 19

Value Stream Map Elements

[File Name or Event] 20 Emerson Confidential 27-Jun-01, Slide 20

Example Benefits
Benefit Category Range of Benefits Reduction Range

Document Review Approval (SOPs)
Batch Record Preparation & Handling Batch Record Review Data Entry & Calculations Deviations Logbook Handling Supplies (paper, boxes etc.); Storage Material Losses

$100,000 - $3 Million
$11,000 - $1.3 Million $115,000 - $1.0 Million $20,000 - $4.6 Million $6,000 - $1.3 Million $7,000 – $105,000 $3,000 – $40,000 Value of preventable discards

10% - 80%
40% - 80% 40% - 80% 40% - 90% 25% - 60% 25% - 80%

30% - 60%

Testing
Inventory Carrying Costs Throughput RANGE OF TOTAL ANNUAL BENEFITS

Preventable deviations testing
Reduced Inventory Carrying $ $0 - $value of additional batches $450,000 - >$10 Million

30% - 50%

[File Name or Event] 21 Emerson Confidential 27-Jun-01, Slide 21

Batch Record Review

 

100 batch records 100 opportunities per 195 total defects in 100 batch records 19,500 defects per million opportunities 3.6 sigma 6 sigma is only 4 defects per million opportunities!

7% 7%

Missing Entry Incorrect Entry

10%

39%

Clarification Required Question

12%

Calculation Error Other 25%

[File Name or Event] 22 Emerson Confidential 27-Jun-01, Slide 22

Deviation Reduction Scenario
Deviations by category
120

 
Material Related Document Related Process Related Operator Related Equipment Related

4200 Deviations/yr 50% Caused by Operator Error 25% of Operator Errors are Avoidable with EBR

100

80

Deviations

60

40

20

0 Jan Feb Mar Month Apr May

[File Name or Event] 23 Emerson Confidential 27-Jun-01, Slide 23

Financial Analysis Example
10-year Cash Flow Analysis ($Million)
$3.0 $2.0 $10.0 $1.0 $8.0 $14.0 $12.0
After-tax Cashflow
Capital Investment Total Pre-tax Cashflow Cumulative Pre-Tax Cash Flow Cumulative After Tax Cash Flow

$6.0 $0 $(1.0) $(2.0) $(2.0) $(3.0) $(4.0) 1 2 3 4 5 6 7 8 9 10 $4.0 $2.0 $-

[File Name or Event] 24 Emerson Confidential 27-Jun-01, Slide 24

Range of Savings and ROI
 

    

~$500,000 Annual Benefits Upstream Processing >$10M Annual Benefits for Large, Multi-product Downstream Finishing Facility with Large Scope 9 months – 5 years payback 13% - 25% IRR 9% - 20% MIRR 1% - 51% ROI $150,000 - $3 Million NPV

[File Name or Event] 25 Emerson Confidential 27-Jun-01, Slide 25

Intangible Benefits

Enhanced Compliance Supporting GXPs
Improved Organizational Focus / Culture
– Right-First-Time Manufacturing Focus – Document Centric Focus -> Product/Process Focus – Empowered Organization: Decisions Based on Readily Available Data and Information

Systemized Knowledge

[File Name or Event] 26 Emerson Confidential 27-Jun-01, Slide 26

26
EMERSON CONFIDENTIAL 4/26/05

Organizational Impact Considerations
    

Business Process Changes

Training Requirements
Resource Re-Allocation Cultural Change Key to Success is to Manage Change Carefully

[File Name or Event] 27 Emerson Confidential 27-Jun-01, Slide 27

Company X

The manufacturing operation includes a three stage batch process of fermentation, extraction and purification to make a family of proteins sold to pharmaceutical manufacturers.

Because volumes are low, the most cost-effective production method utilizes manual rather than automated procedures. When executed correctly, manual production is a highly efficient and very precise method for producing low quantities of products that have complex processing requirements.

[File Name or Event] 28 Emerson Confidential 27-Jun-01, Slide 28

State the Problems Clearly: Company X

High value, low production products in this facility are manually, rather than mechanically, manufactured. Plant personnel execute work instructions and write required results by hand directly into one of many Production Records, which are all 100-200 pages long. Process errors, especially near the ends of batch cycles, can critically interrupt long batch cycles. SOPs and Work Instructions are vital to product production and must be clear, concise, complete, and continuously updated to reflect changes and improvements. Quality procedures, such as procedural and process documents, require annual controlling and review and the facility has about 200 such documents. The facility manually issues and maintains controlled documents using a combination of Microsoft Word, Microsoft Excel, and FileMaker Pro.

[File Name or Event] 29 Emerson Confidential 27-Jun-01, Slide 29

Results Company X

Issuance time per Batch Record reduced from 4 to 2 hours; One week’s Production Records issuance time reduced from 16 to 6 hours. Reduced 800 person-hours per year.

[File Name or Event] 30 Emerson Confidential 27-Jun-01, Slide 30

Getting the Decision

Decision Management
– Set up the process
• Presentation format for report • Identify stakeholders/timing • Define the setting for the presentation/decisions to align the justification

[File Name or Event] 31 Emerson Confidential 27-Jun-01, Slide 31

Getting the Decision

Decision Management
– Frame the decision
• Identify emotional investments for/against the decision • Establish the decision approach (consensus, vote, directed leadership) • Define decision boundaries (just this phase, full project, etc.) • Define alternatives – Go/No-go – Pilot/Full Project/No-go – Etc. • Set objectives (and weights for them) • Define scoring criteria

[File Name or Event] 32 Emerson Confidential 27-Jun-01, Slide 32

Getting the Decision

Decision Management
– Execute the decision process
• Debate/advocate – Make sure key stakeholders get heard – Prefocus discussion • List criteria • Provide weights for options • Generate a matrix of options/scores for decision

[File Name or Event] 33 Emerson Confidential 27-Jun-01, Slide 33

Getting the Decision

[File Name or Event] 34 Emerson Confidential 27-Jun-01, Slide 34

Summary
Making the Business Case

Start by understanding the culture. Get a defined process in place. Leverage the study to provide data. Focus on getting a decision made.

Emerson Confidential 08_July15, Slide 35

Stay Tuned for Our Q&A

You may still send in questions. We will address as many as possible in the time allotted.

Thank You

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