Getting Insight from the Factory Floor

The initial disruption of the COVID-19 pandemic strained existing manufacturing supply chains and revealed inefficiencies that could only become apparent in the most extreme circumstances. Today, the lasting effects of that disruption are an ever-present reminder that the industry requires improvement. Returning to “normal” is not an option. 

Is technological advancement the solution? Research estimates that the global digital pharmaceutical supply chain management market – valued at $961 million in 2022 – will top $1.8 billion by 2031, so it seems likely. And yet, with 37 percent of US drug shortages and 65 percent EU drug shortages stemming from supply chain or manufacturing issues, it’s also clear that technology alone will not solve the challenges. Meanwhile, labor gaps threaten to exacerbate already-decreased production, and the uncertain economic climate has leaders tightening belts and slashing spending. 

The path to digitalized manufacturing is also uncertain for manufacturing leaders across sectors. Parsec’s 2023 North American (NA) and European State of Manufacturing surveys revealed a significant gap in knowledge about how data from different levels of manufacturing enterprises interact in digitalized manufacturing environments and what it means to be “fully” digital:

• Only 31 percent of North American and 8 percent of European manufacturers have completed their digital transformation journeys, and 42 percent of manufacturers (31 percent  of “completed” companies) still conduct most or all of their reporting using non-digital processes.
• More than half of North American and 30 percent of European manufacturers who aren’t using a manufacturing execution system (MES) say they do not need it because they already use an enterprise resource planning (ERP) system. 
• 75 percent of North American and 26 percent of European manufacturers not using a MES say they aren’t sure what the benefits of the investment would be.

Given the industry’s current obstacles and mandate for progress, it is particularly concerning that about one-quarter of respondents (North America: 27 percent, Europe: 25 percent) have never even heard of these systems!

But some manufacturers are investing in automation, analytics, and management tools; 61 percent of IT professionals in pharma organizations said their investments in digital transformation ramped up in 2020. 

The likely first step was an investment in ERP systems; companies indicated that it could maximize the value of the extensive work they have already done (digitalizing the “business” side of their operations). There is no doubt that ERP systems can help leaders make sense of their operations, but they are not designed to provide granular insight to instigate meaningful, enterprise-wide change. Simply put, manufacturers need something that can show them the trees in addition to the forest.

In fast-paced, high-volume manufacturing environments, minor inefficiencies compound into major issues. Such problems eventually show up in ERP system reports – some become late deliveries and others become quality concerns, lost revenue, or failures to meet production goals; however, the root causes of these issues often begin on the manufacturing floor and can vary wildly. Late deliveries, for example, might start with slowed cycle times, unplanned downtime, materials shortages, equipment errors, or any number of manufacturing-level problems in between. Identifying the right fix for each area of opportunity hinges on having a clear line of sight into manufacturing processes. Facility-level monitoring solutions – such as MES – give pharma manufacturers that line of sight, helping them see the root causes of delays or quality concerns. Though not a panacea, MES platforms can help businesses identify and avoid potential issues before they occur.

MES platforms can track performance data, such as equipment usage, cycle times, and energy consumption, providing actionable insights on potential bottlenecks in production. MES platforms also help manufacturers anticipate upstream supply issues, helping them avoid lost hours because of unplanned shortages or missed deliveries. Though ERPs offer some level of supply chain tracking, these capabilities usually apply to the produced units that leave the facility, rather than the materials coming in. This, in turn, could be a boon for manufacturers who still lack this ability; indeed, 53 percent of manufacturers in both North America and Europe surveyed by Parsec said they were hardly or only somewhat prepared to address supply chain issues.

There is no tangible amount of data that will make all supply chain concerns disappear; you cannot analyze your way out of a dearth of resources. However, you can use insight to focus on disruptions that are within your control. Here, blending manufacturing and business-level insights is crucial. 

Investing in an MES alongside an ERP isn’t redundant; in fact, it is quite the opposite. By leveraging what it learns from the data within an ERP, an MES can provide even more pertinent information and supplementary optimizations. Case-in-point: our survey found that 65 percent of MES users also use an ERP, and 95 percent say they are satisfied with the delineation of responsibilities between the two. For what it’s worth, 65 percent is also the portion of European respondents who feel good (or excellent) about their digital transformation journeys so far. Coincidence? Maybe, but this alignment certainly warrants a mention!

Bridging the gap
 

Investments in digital tools are certain to remain at the top of pharma’s priority list in the new year. With more than half of respondents (North America: 52 percent; Europe: 56 percent) saying it is at least very important that software solutions offer AI or machine learning functionalities, manufacturers have a clear desire to continue on this path. It’s interesting then that fewer respondents (North America: 34 percent, Europe: 40 percent) say they are very or extremely prepared to use AI and machine learning in their operations. We must work to close this gap.

As efforts continue, making the most of these systems will take time, commitment, and an expanded understanding of what “end-to-end” insight really means. To overcome the challenges pharma faces – and the increased risk that may be on the horizon thanks to environmental factors, manufacturers in the sector will need a firm understanding of their operations from top-down and bottom-up perspectives.

As is often the case in life, having a “yes and” mindset when it comes to solution adoption can be incredibly helpful: “Yes – an ERP lends great operational value… and having an MES helps extend that value across the enterprise.” In other words, data points at each level supplement one another, informing reports and predictions with additional insights that help leaders understand not just what’s wrong, but why it’s wrong.