Operation Strategy Development2018-07-05T14:46:20+00:00

Operational Strategy Development

Our clients are Top Ten Biopharma and start-up organisations.
This is feedback from our clients over the last 5 years

Development of Principles Underpinning Strategy

Testimonial

“Primecore did a great job at analyzing our portfolio and defining guiding principles to be used to formulate specific manufacturing strategies. In a second step we aligned all products with these guiding principles and developed a gap analysis as well as an action plan to close these gaps. Since we established this basis we have been using the frame work to continue to refine our manufacturing strategy. Clearly this work was very value adding and I appreciate Primecore’s strong support.”

VP of Global Manufacture

Background

Company size: 14,000 employees; Valuation $20B to $50B

Industry sector and location: Biologics US, Europe & Asia

Assignment Duration: Six months

Client Sponsor: Head of Global Manufacturing

Assignment Objective

The company had historically manufactured all products in-house. Decisions, on which in-house facility to use and at what capacity, were made on a case by case basis with a sense that there was a lack of consistency in the decision making process. The result of this approach was that the company was forecasting capacity constraints for important products and was thus risking a stock out situation.

The assignment objective was to develop a more business focused approach when deciding:

  • Whether to manufacture a product in-house versus utilizing contract manufacturing companies (CMOs).
  • The appropriate levels of in-house capacity to make available for products.

Approach

1. Primecore worked with the clients strategy group to categorize all products based on their individual and (for products sold in combination) collective importance to the company. Products with a defined minimum revenue/profit contribution were deemed to be critical to the business while others due to their unique therapeutic value to the patient were deemed to be brand critical.

2. A set of guiding principles were agreed with the client leadership team in terms of forming a basis for the use of CMO capacity and also to establish the appropriate equipment utilization levels for each product.

3. The principles were then applied to the company’s actual products and a gap analysis done to identify areas where the existing network departed from the principles.

4. The cost/resource implications of closing each gap was carried out and constraints were placed on the strategy in situations where the investment level was prohibitive.

5. This information was then used to inform the five year capital investment plan.

Outcome

1. The process gave a lot of confidence to the Operations leadership that they were following an objective process, which cut down on a lot of wasteful discussion and analysis.

2. This approach supported good medium and long term planning.

Lessons

The company found that in many cases in the past the decision making was flawed. The information communicated to the Leadership team was often based on Cost of Sales or persuasive bids by a manufacturing facility rather than sound business cases and strategic criteria. This led to decisions resulting in situations where valuable plant capacity was filled with non-strategic products and expensive capital investments on plant expansions were an inefficient use of money.

Now they have a defined framework to ensure that the Leadership team is given the required information in a standard way which is then used in consistent and transparent strategic decision making. Without this framework the company might have instead fallen into the trap of sending low volume, but business and brand critical, products to CMO organizations (who themselves have a preference for higher volume stable products) while less valuable products would have continued to be manufactured in-house.

Development of Vision
and Strategic Goals and Objectives

Testimonial

” The development of a clear Vision goals and strategy brought structure and method to the way we manage our business. We realized how futile our attempts had been as we were reacting rather than planning – we are now more strategic”.

Snr. Director Portfolio Management Office.

Background

Company size: 24,000 employees; Valuation $100B to $150B

Industry sector and location: BioPharma Europe

Assignment Duration:  Six months

Client Sponsor:   VP of Regional Operations

Assignment Objective

To establish a clear vision for the regional operations (two sites with approximately six manufacturing plants and supporting facilities). This vision would then be deployed into clear strategic goals which would be further broken down into verifiable time bound objectives.

Approach

1. The leadership team, through a series of workshops crafted a clear vision statement and logo which could be deployed throughout the sites to give a consistent message in terms of the primary objectives for the region. The sites incorporated both commercial manufacturing and launch plants and saw the effective lifecycle management of their product portfolio as their ultimate vision.

2. Six strategic goals were identified and prioritized as being necessary to transform the operations from their current state to the desired future state.

3. Thirty verifiable objectives (typically five per goal) were identified in support of the goals. Objectives were weighted based on the relative importance of the goal(s) they underpinned and the degree to which they contributed to that goal.

4. A five year program was put in place identifying which goals would be achieved in which years.

5. Using strategic portfolio management a series of programs were approved to deliver the individual objectives.

Outcome

1. This assignment was a particularly successful assignment for Primecore and its client. Three years on the client has achieved many of its goals and objectives which have been recognized through corporate awards. While there has been some adjustment to the portfolio over the years, this approach has led to very significant improvements to the performance of this region.
2. The plants involved have both endured rationalization and benefited from investment but have at all times been focused on the realization of clear business objectives.

Lessons

1. To develop a stable and effective portfolio management process, the leadership team must first be fully bought in to a common set of prioritized goals and objectives.

Product Operations Strategy

Background

Company size: 22,000 employees; Valuation $45B

Industry sector and location: Biologics US, Europe & Asia

Assignment Duration:  Nine months

Client Sponsor:  Global Head Product Operations – Small Molecule OpU

Assignment Objective

  • Following a major acquisition which more than doubled the client’s product portfolio, the client wished to create product operations strategies for the in-line and late stage pipeline products across all the business units which made up the newly combined business.
  • Primecore was retained to complete this task for one of the business units, which accounted for approximately $5B in annual revenue.
  • The portfolio of products consisted of twenty-three products serving five key therapeutic areas.

Approach

Each product Operations strategy was to define a 10-year time horizon of operational activities by unifying data from commercial, research, and operations units into concrete outcomes or probable strategic scenarios, to provide a framework for Operations decision analysis.

The strategies were to set out the “Marching Orders” for Operations.

Primecore worked closely with each Product Lead, who would become the ultimate owners of the product strategy. Primary input, review and endorsement was required from the Global Brand Teams, Global Product Teams, Global Development Teams, and Global Manufacturing Teams. Primecore then synthesised this input to develop the product strategy.

For each product, Primecore prepared a Product Family Overview based on the Target Product Profile.

An analysis was performed of the Development & Commercial Outlook and Goals, the Competitive Landscape and the Demand Scenarios based on the Long-Range Plan.

An analysis of the Manufacturing Network Capacity was then performed, to evaluate if the supply chain had the capacity and the capability to meet the long range forecast commercial requirements.

A Cost of Goods analysis was completed.

An analysis was performed on the technical, compliance, supply and regulatory risks impacting Operations capability, to identify strategic mitigation requirements.

The analysis of all these elements informed the identification of the Strategic Programs and Projects which the client needed to prioritise and support, in order to meet the Commercial Objectives of the product.

The output of the analysis for each product was prepared in a standard product operations strategy document template, with detailed references to all data sources and which could be updated by the Product Lead at the appropriate frequency.

Outcome

The approach deployed required colleagues in the two legacy organisations to develop new understandings of system capabilities and network capacity capabilities.

The critical analysis and challenging of the long-range planning forecasts provided confidence in the unit level demand forecasts for all indications, markets, presentations and dose strengths.

Assumptions underpinning the timing of operational decisions for pipeline programmes were clarified.

Rigorous capacity analysis of the external supply chain network was performed for each product.

Projected capacity utilisation scenarios were developed based on the commercial forecasts and adjusted for inventory policy, potential loss of product expiry timing and authorised generic launch events.

Appropriate supply network interventions were agreed to address any supply, compliance, technical and regulatory risks.

Significant programmes to reduce cost of goods were identified.

The client has established a strategic operations program governance structure, to enable successful program realisation.

The approach adopted by Primecore ensured the on-time completion of the eighteen strategy documents.

Lessons

The development of a joined-up product operations strategy requires all the various input owners across the enterprise to be aligned and connected.

The rigour required by the process to create and maintain these documents enabled the organisation to develop an enterprise wide consistent and accurate picture of the supply network and operations system capabilities.

With this shared and aligned view established, the organisation was able to define and prioritise the strategic initiatives required to deliver the commercial objectives.

The organisation has learned the benefit which enterprise wide alignment and process rigour provides when developing operations strategy and is now using this approach to refresh product operations strategy as required. The organisation will utilise this approach with any future product acquisitions.

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