BioBenchmarksm Study Overview January 2004

1
BioBenchmarksm Study OverviewJanuary 2004
2
Agenda

• Tefens Introduction
• BioPharma Consortium
• BioBenchmarksm Overview
• Key Metrics

3
Tefen Business Card

• Tefen is a publicly traded, international
  management and operations consulting firm, which
  brings over 20 years of experience, serving some
  of the worlds leading corporations.
• Tefen designs and implements innovative strategic
  and operational solutions that improve
  bottom-line performance through increased
  productivity, optimised business processes,
  enhanced customer service and quality assurance.
• Seven offices across Europe, USA and Israel.
• Over 250 Full-Time Professional staff.
• ISO 9001 Certified, ensuring Quality and Customer
  Satisfaction processes and procedures are
  inherent in our work, both during and post
  engagement.
• We have successfully worked with over 30 of the
  top 50 global Life Sciences businesses, including
  8 of the top 10 BioPharma companies.
• Tefen facilitates the BioPharma Operations
  Excellence Consortium and completed the first
  ever, comprehensive BioBenchmarksm study.

4
Tefens Mission

• To improve overall organizational and operational
  performance by

Reducing Operating Costs
Increasing Productivity
Improving Customer Service Level
Tefen develops strong partnerships with clients
to ensure mutual success
5
Areas of Service
We have the expertise, skills, and resources to
support your company and become your
organizational design and operations improvement
partner.
Operations Excellence Implementation Supply
Chain Optimization Quality Operations
Improvement Customer Experience Service
Level Enhancement Enhancing RD
Effectiveness New Operation Establishment
6
The Biopharmaceutical Industry
Modernization Cycle time Delivery
consistency Cost-effectiveness Multi-product

• A combination of internal and external pressures
  are forcing many biopharmaceutical companies to
  become world-class operational performers

Biopharma Companies
Internal
World- class operations
External

• Benchmarking provides companies with a baseline
  against which to measure their place within the
  industry and identify an improvement roadmap

Competition Regulatory Agencies Price
controls Biogenerics Investors
7
BioBenchmarksm Study

• Study Background
• The study was initiated based on the desire and
  positive feedback from the consortium members
  (April 2002)
• Study Objectives
• Create a qualitative and quantitative baseline of
  operational performance for biopharmaceutical
  companies
• Provide information that will allow participating
  companies to identify their operational gaps and
  drive improvement
• Results of the study should be used to
• Help in the identification of best practice areas
  and a roadmap for improvement
• Identify where a company stands in the industry,
  performance-wise
• Identify potential goals for specific operational
  areas

8
BioBenchmarksm Study (Phase I)
Study Set-up (4/02-10/02)
Data Collection (10/02-5/03)
Data Analysis (6/03-8/03)
Final Results (8/03-12/03)

• Consortium input to determine study scope and
  design
• Identify benchmark participants
• Design benchmark questionnaire

• Submit initial questionnaire form for collection
  of key metrics
• Follow up with on-site interviews and data
  collection to map key business processes

• Data imported into secure database
• Verification of submitted data (e.g., metrics
  comparability)
• Identify best practices among analyzed
  organizations using through comparisons and
  correlations
• Preparation of summary reports

• Publish and present final report and distribute
  to participants
• Special insert created for Biopharm
  International magazine

9
Study Participants
20 sites from 13 leading companies participated
in the study
10
Study Design

• The study consisted of two main parts
• Operations benchmark15 key area were studied
• Manufacturing - Fermentation, Purification,
  Filling, Packaging, Planning scheduling,
  Equipment maintenance
• QA - Disposition, Deviation management, Change
  control, Document management
• QC - Raw materials, In-process, Facility
  monitoring, Product release, Stability
• The questionnaires combined included over 1400
  questions
• Executive surveyDesigned to poll top executives
  at industry leading companies to collect
  information on the industry state, trends and
  leadership

11
Study Deliverables

• Summary report, plotting benchmark data averages,
  best-in-class, and distributions
• A customized report for each active participant,
  showing their data reflected against the
  performance of their peers
• Industry vision and trends Executives Survey
• High-level process and system design for
  identified best-in-class business processes

12
Additional Participants

• Tefen is offering biopharma companies, which were
  not part of the first phase of the study, to join
  the project
• The new companies data will be added to the
  existing database and compared to the industry
  performance
• A summary report and improvement roadmap will be
  prepared and presented to the company management
  team at a full day workshop

13
Industry Trends
14
Overall Industry Trends

• Manufacturing
• Capacity is not seen as a constraint in most
  organizations - On average, 65 of fermentation
  capacity is used, 72 of purification
• Outside of tracking process parameters, there is
  a lack of performance tracking
• Contract manufacturers, as expected, perform best
  in measures of changeover. They suffer, however,
  in the quality processes
• Equipment maintenance is well behind other high
  tech industries
• Overall, plant planning and scheduling is fairly
  disconnected from the disposition process, the
  one area contributing most to overall cycle time

15
Overall Industry Trends

• Quality Assurance
• Lot disposition time (Cycle Time) is the most
  visible metric in most companies
• In most cases, there is very little visibility
  into the actual disposition process
• Placing QA resources in the production
  environment, whether on the floor or co-located
  with the group, improves resolution of quality
  issues and speeds cycle time
• Many companies in the study are moving this
  direction
• Deviation management is the biggest challenge for
  most organizations, with very few meeting cycle
  time targets
• Automation is slowly being adopted, with quality
  systems the first to go entirely electronic
  (CAPA, LIMS, etc)
• Turnover in quality groups plays a significant
  impact on disposition performance
• Change control, within the industry, is poorly
  managed and structured
• Very little real control or visibility of the
  process
• Documentation groups suffer from poor planning
  and expediting

16
Overall Industry Trends

• Quality Control
• Many laboratories still function with a research
  mindset
• Cross training is perceived as the best way to
  manage turnover
• Relative to clinical labs, time spent on
  testing is low
• Most common Key Performance Indicators (KPIs)
  being tracked are Cycle Time and of Deviations
• Relative to other Clinical Labs and other
  industries, KPI tracking is not adequate to drive
  continuous improvement
• Majority of companies are using or planning to
  use a Laboratory Information Management System
  (LIMS), but the utilization of LIMS functionality
  varies
• LIMS vendor of choice of the industry is Thermo
  LabSystems
• LIMS is not used as common for Stability and Raw
  Material samples
• LIMS integration with Deviation Management,
  Electronic Document Management, and Instruments
  is at an early stage

17
Ops. Excellence Building Blocks
18
Operations Excellence Building Blocks

• Disposition time, as a single measure, can be an
  excellent barometer to the overall health of an
  organization.
• Controlling this measure will enable a
  significant improvement in delivery consistency
  and adherent to schedule

Bulk Manufacturing
Automation
Batch Record Review
Disposition / Cycle Time
Lot Release Testing
Planning and Scheduling
Deviation Management
19
Operations Excellence Building Blocks

• 6 key areas contribute most to overall company
  performance, and we evaluated your performance
  against the industry in these areas

Area
Company
Bulk manufacturing
Lot disposition and batch record review
Sample
Deviation management
Lot release testing
Planning and scheduling
Automation
Red- Bottom 25, Yellow- 25-49, Gray-50-74,
Green- Top 25
20
A sample Building Block Deviation Management
Score Card and Detailed Results
21
Deviation Management
Key Performance Metric
Company
Deviation Turnaround Time
of Deviations Closed On Time
Deviation Closure Efficiency
Sample
Sample
Red- Bottom 25, Yellow- 25-49, Gray-50-74,
Green- Top 25
22
Deviation Management Success Drivers

• Implement rigorous root cause analysis using
  cross functional teams to eliminate reoccurrence
• Quality resources co-located with production or
  on the production floor
• Use of Key Performance Indicators (KPIs) to
  control closure time, variability, and backlog
  and provide visibility to management
• Early notification and commencement of resolution
  process for new deviations (triage team)
• Minimize of signatures
• Retention of deviation management staff
• Dedicated investigators within the operations
  groups
• Electronic deviation management system to
  streamline data flow and simplify process
• Use of capacity planning and backlog analysis
  tools

Sample
For each system and key business process the
success drivers were identified. Specific company
gaps have been highlighted.
23
Deviation Management Source of Deviations

• Manufacturing areas are accountable for the
  majority of deviations, industry-wide

24
Deviation Management Performance

• Companies with the following tended to have
  shorter deviation closure times
• Dedicated investigators
• Smaller number of minimum signatures required to
  close a deviation
• QA on the production floor
• Longer tenure of the deviation management group
• Overall, the industry is performing poorly in
  closing deviations within target times
• A small number of companies within the study
  require the closure of corrective actions as part
  of closing the deviation itself
• As with QA, variability is not regularly tracked
  in most companies

25
Deviation Management Parameters
Company

• As with disposition, the current backlog must be
  reduced before overall deviation closure times
  can be reduced

26
Deviation Management Structure
Answer

• Most companies in the study do not have a
  dedicated pool of investigators to support
  deviation closure. Of those that do, this role
  resides in QC resources focused on QC related
  deviations
• Companies with an automated system tended to have
  higher efficiency of deviation closure (more
  deviations closed per staff member)

27
Deviation Management Structure

• Co-location of deviation management staff with
  production didnt appear to show the same
  benefits to overall turnaround time as did having
  QA on-the-floor

28
Deviation Management Structure

• Most companies have set 30 days as their
  deviation closure target for deviations,
  regardless of the deviation (major, minor, etc.)
  In some cases, this goal is impossible to meet
  based on retesting requirements, resulting in a
  second deviation for missing the first date

29
Deviation Management Process

• Companies with operations-led investigations
  showed quicker resolution of deviations

30
Deviation Management Process

• The number of signatures required to close a
  deviation plays a significant role in the
  deviation closure time

31
Deviation Management Process
Answer

• The existence of a review board or triage team
  did not seem to improve deviation closure time
• In many cases, this board does not review all
  deviations, only major ones, and decisions arent
  made in this meeting

Company
32
Deviation Management Staffing
Company

• The existence of a 21 CFR Part 11 compliant
  system seems to have a significant impact on
  specialist efficiency (deviations
  close/specialist)

33
Deviation Management Structure
Answer

• Very few companies have completely automated
  their deviation management process, although most
  are considering purchasing a system to support
  this

34
Deviation Management Systems
Answer

• Nearly all companies are using some database to
  manage deviations, with very few relying on a 21
  CFR Part 11 system

35
Summary of Key Metrics and Information Captured
36
QA - Disposition

• Average Disposition Time
• On Time Disposition
• Scrap Rate ()
• Lots/yr/reviewer
• Total of Lots to Disposition
• Weeks of Lots to Disposition (weeks)
• of Lots Expedited
• Overtime ()
• Target Disposition Time
• Disposition Headcount (Bulk)
• Disposition Headcount (Finished Product)
• Tenure

37
QA - Deviations

• Deviations Closed/Week
• Average Closure Time Without Investigation
• Average Closure Time With Investigation
• Closed Within 30 Days
• Closed Within 60 Days
• Average CAPA Closure Time
• Total of Deviations In-Process (backlog)
• Weeks of Backlog (weeks)
• CAPAs Generated per Week
• Deviations Closed/Per Week/Per Specialist
• Overtime
• of Deviations Requiring Full Investigation
• Deviations Closed on the Floor
• Deviations that Go Through the Board
• Deviation Specialists Headcount

38
QA - Documentation

• Average Cycle Time/Change
• Average Documents Turnaround Time (rush)
• Average Documents Turnaround Time (non-rush)
• of Documents Changes for Typos
• Total of Document Changes Initiated per Month
• Total In-Process (backlog)
• Weeks of Backlog
• of Documents Expedited
• Documents Processed/Per Specialist/Month
• SOPs/BPRs Managed / Specialist
• Overtime

39
QA Change Control

• Average Cycle Time to Close a Change
• of Changes Initiated per Month
• Average of Changes In-Process
• Weeks of Backlog
• Overtime

40
QC

• Main focus on product release and RM
• Sample cycle time
• On-time delivery performance
• Retest (all errors)
• Retest (lab errors only)
• lab errors out of total retests
• Test Results/Analyst/Month
• Product Release
• Raw Materials
• Stability
• Facility Monitoring
• In-process

41
QC

• Tests Outsourced
• Turnover (internal)
• Turnover (external)
• Staff flexibility (avg. of test types per
  analyst/ total of test types)
• of products under reduced testing
• Total of lab investigations/month
• Total hours spent on lab investigations/month
• Average time to close an investigations

42
Manufacturing

• Capacity utilization
• on time runs vs. schedule
• Changeover time (same product)
• Changeover time (different products)
• Equipment availability
• Batch record turnaround time
• Success rate
• Overtime
• Operators/supervisor Ratio
• Tenure
• Turnover (internal external)
• Operator availability

43
Maintenance

• Major tools/tech
• Calibrations/tech
• Ratio of planned to unplanned hours
• PM duration
• Calibration duration
• of maintenance performed by operators
• Spare parts inventory ()
• Spare parts stock-out
• Overtime

44
Planning

• Bulk inventory (days)
• Filled inventory (days)
• Packaged inventory (days)
• On-time delivery ()