Peter Sevenoaks: Just in time for pharmaceuticals

In truth, only very few businesses in the pharmaceuticals, veterinary and healthcare sectors have tentatively embraced or, experimented in adopting this modern approach to their business efficiency improvement programmes. 

IDi Pac has been closely involved with these industries and have for several years been championing Just-In-Time (JIT) or  Late Stage Customisation (LSC) manufacturing initiatives in these sectors.

And, packaging has a major, if not critical role in making JIT/LSC work for these organisations.

For many other industries, with far more complex component supply and manufacturing processes to contend with, these solutions deliver very significant financial, cost saving, supply chain, standardisation, optimisation and control opportunities.

Think of the complexity of a modern car plant and its hundreds of components, all coming together in plant, in time, in the right quantities  – or, a microprocessor /computer manufacturing facility – they would both be uncompetitive and struggling or, out of business – without these modern production management, manufacturing and supply tools/solutions.

The Healthcare industries possibly brings together a handful of components for each product – a bespoke tablet, a blister or bottle, a printed foil, a carton and a patient information leaflet, plus shippers and pallets. These represent relatively very few customised components compared to the motor or computer industries.

So what are the opportunities and prizes at stake for the Healthcare sectors?

First and foremost the biggest opportunity for a business following a lean manufacturing system and the JIT philosophy across its business is the huge change and benefit of return on investment (ROI) brought about by tight, strategic control of inventory and the supply chain. Inventory, for the uninitiated, in accounting terms, is a cost, or waste.

Therefore, why not reduce the inventory, save money – and be more efficient? 

With healthcare and critical medication, obvious ethical availability and strategic supply has to be carefully evaluated and minimised buffer stocks held in case of emergencies. Once these are established, with JIT/LSC the business is supported by a much more flexible, dynamic machine and reactive supply chain, which will shorten lead times, and respond to market conditions more readily as product transfers in such emergencies will become much, much easier.

The resultant savings generated by following a JIT philosophy are not only represented in the final value of the first finished goods produced by this system – it is representative of all the ancillary costs that might have been incurred in having tied-up goods in stock whilst this more traditional situation prevails.
In short, the JIT system focuses is about having the right materials, in the right place at the right time and, in the correct quantities, without having a large safety net of back-up inventory. This model obviously also includes actives – the raw product e.g. antibiotics, tablets, vaccines, concentrate etc. and embraces the reserve ethical strategic supply requirements.

But, why is JIT/LSC not potently and widely deployed in the these sectors, and for that matter,
At iDi Pac we have heard many reasons or excuses, and foremost is the issue of  “patient safety that might be compromised by errors on filling and packing lines.

This is very simply a knee jerk response, and a truly excellent scary umbrella excuse to deploy as it tries to quashes the discussion outright as this is the primary concern of the sector. Today, with sensors, computers, modern coding/marking techniques, vision, tracking and intelligent packing systems  – these arguments are simply invalid and naive. There are many validated pharmaceutical machinery and solution providers who can and will attest to this gross oversight!

To capitalise on JIT/LSC opportunities, businesses need to investigate and convince themselves of the benefits such a step-change might bring to their operations and/or product ranges. It then needs a strong, thick skinned and empowered believer champion to implement it.

Considerable cost savings can be delivered in the course of introducing a JIT process. Perhaps, foremost of these is the opportunity to standardise for best price sourcing. It also impacts manufacturing in terms of lower set-up costs and better reactive deployment of fast, efficient production runs.

So what are the prizes that can be delivered – and what are the costs?

The prizes are the cost savings plus more sales if you get it right and a more responsive and flexible reactive supply chain.

The costs depend on the scale of the operation and will rely on having a good efficient ERP solution plus a shift in thinking by the company’s management. These costs are not insignificant, but the resultant step-change in operations and flexibility, plus the reduced stock holding should generate handsome returns as well as modernising some long stagnant sleeping giants. 

Obviously, there are huge implications in suddenly switching an old world conservative industry sector – to this reactive way of thinking and conducting their business arrangements, but the prizes are so significant and the benefits prodigious.

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