{"id":8905,"date":"2020-10-27T09:45:12","date_gmt":"2020-10-27T16:45:12","guid":{"rendered":"https:\/\/www.qad.com\/blog\/?p=8905"},"modified":"2020-10-27T09:45:12","modified_gmt":"2020-10-27T16:45:12","slug":"the-remedy-for-inefficiencies-in-contract-manufacturing","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2020\/10\/the-remedy-for-inefficiencies-in-contract-manufacturing","title":{"rendered":"The Remedy for Inefficiencies in Contract Manufacturing"},"content":{"rendered":"

[vc_row][vc_column][vc_single_image image=”8907″ img_size=”full”][vc_column_text]Our health care industry depends on the pharmaceutical and medical device industries, and they, in turn, depend on contract manufacturing organizations (CMOs) for their outsourced manufacturing.\u00a0In fact, CMOs have become more than just a one-off production option; they\u2019re now an integral part of biopharmaceutical and medical device manufacturing.<\/span><\/p>\n

In December 2019, Sanofi\u2019s new CEO announced that the company planned to <\/span>optimize its CMOs and suppliers<\/span><\/a> to improve manufacturing productivity and operational efficiency.\u00a0Sanofi expects this initiative to contribute to \u20ac500M in savings.<\/span><\/p>\n

Like other manufacturers, CMOs lose efficiency due to the ongoing effects of disruption on their operations. They can, however, carve out efficiencies by rethinking their infrastructure. Here are three areas in which a CMO can improve that will result in bottom line savings.<\/span><\/p>\n

Optimized Digital Manufacturing<\/span><\/h2>\n

CMOs are held to higher standards. Because they focus on manufacturing in highly-regulated industries, they need to be even more technologically progressive and more adaptive than other manufacturers. They need to innovate, ramp up projects fast, and as projects proceed, perhaps fail fast and try again.<\/span><\/p>\n

Call it <\/span>Industry 4.0<\/span><\/a>, the Fourth Industrial Revolution, or digital manufacturing transformation,\u00a0there\u2019s a movement across industry to automate manufacturing processes and integrate new technologies, such as analytics, AI and the Internet of Things (IoT). The result is an enterprise with more data-sharing and interconnected communication. The benefit of digital manufacturing to CMOs is clear \u2013 it\u2019s the way to maintain production speed and strict regulatory compliance while adapting to rapid shifts in demand. An adaptive ERP support can speed the transition to Industry 4.0 and provide CMOs a solid infrastructure.<\/span><\/p>\n

Digital technology on the shop floor and throughout production activities can intelligently connect manufacturing to the rest of the business and to advanced technologies like machine learning and IoT. <\/span>Digital manufacturing<\/span><\/a> can fully integrate planning, scheduling, quality, cost management, material movement and process control. It also allows manufacturers to better communicate, analyze and use data to meet cost and quality objectives.<\/span><\/p>\n

With <\/span>real-time access to information<\/span><\/a>, manufacturers are in a better position to harness complex biopharmaceutical data and uncover valuable insights, so they can quickly boost production efficiency and meet customer requirements. <\/span>Digital transformation<\/span><\/a> can also result in more efficient asset utilization.<\/span><\/p>\n

Contract Manufacturing Supply Chain Continuity<\/span><\/h2>\n

CMOs have to be resilient to adapt to all the challenges they face \u2013 from changes initiated by their sponsor organization, to changes in the market, to global disruption. But they also have to be a reliable partner that maintains tight governance over its end-to-end supply chain. An adaptive ERP supporting a connected supply chain can provide the strong but flexible infrastructure CMOs need.\u00a0<\/span><\/p>\n

The supply chain for the contract manufacturer is complex. Depending on the product, there may be a chain that looks something like this:<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_single_image image=”8906″ img_size=”full” alignment=”center”][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Every movement in this long supply chain is under strict regulatory guidelines, and the execution must be perfect. A CMO\u2019s challenges include siloed supply chain functions, a lack of supply chain partner visibility, and products, materials and shipments that show up at the wrong time and\/or in the wrong place.<\/span><\/p>\n

Connected supply chain ERP software<\/span><\/a> helps manufacturers effectively connect with supply chain partners around the globe and address the challenges associated with managing complex and ever-changing supply chain activities. With sophisticated forecast modeling and improved planning, management and control of end-to-end supply chains,\u00a0ERP support can deliver secure supply chain performance as well as up to 30 percent lower inventory costs.\u00a0<\/span><\/p>\n

Manage and Control Risk with Effective Enterprise Management<\/span><\/h2>\n

It\u2019s difficult to maintain efficient, dependable core processes and data when the organization itself is changing. New products, mergers and acquisitions (M&A), divestitures and even restructuring can interfere with core effectiveness and directly impact a CMO\u2019s ability to manage and control risk.<\/span><\/p>\n

Evolving Modalities and Advanced Drug Delivery Solutions<\/span><\/h3>\n

The pharma <\/span>CMO pipeline<\/span><\/a> is changing.\u00a0Small molecule chemistries are being supplemented with biologics, which are now approaching 50 percent of the pipeline.\u00a0To grow,\u00a0pharma CMOs will need to support this change and others, including new therapies and unique drug delivery solutions.\u00a0A company\u2019s capacity, capabilities and infrastructure are affected by how they react to these changes. As the changes occur, a CMO has to continue to communicate data, processes and analytics across the organization to be effective.<\/span><\/p>\n

Capacity Expansion \/ Mergers & Acquisitions (M&A)<\/span><\/h3>\n

When demand for capacity or capabilities changes, or a manufacturing location needs to change, a CMO has to adapt rapidly.\u00a0CMOs have long turned to Mergers and Acquisitions (M&A) to help diversify their capabilities. <\/span>There were over <\/span>130 acquisitions<\/span><\/a> among service providers during the three-year period from 2015-2017.<\/span><\/p>\n

When organizational changes cause the ground beneath your business to shift, adaptive ERP software like <\/span>Effective Enterprise Management<\/span><\/a> will help CMOs stay on the growth track. It includes Global Financials and Shared Services, and delivers trustworthy, yet flexible core processes and real-time or near-real-time data and analytics across the business. Accurate, timely and trusted core data and processes support operations and auditing, help perform data discovery and support management decision making.<\/span><\/p>\n

Click <\/span>here<\/strong><\/span><\/span><\/span><\/span><\/a><\/span> to see where your organization falls on the adaptability scale.<\/span><\/h4>\n

M&A can also result in CMO organizations with multiple ERPs,\u00a0often with\u00a0different time zones and languages. And many CMOs may have to contend with way too many ERPs \u2013 one for every business they acquire and maybe some from businesses they\u2019ve already acquired. Most companies realize a <\/span>15 percent annual productivity savings<\/span><\/a> when they repair their shared services function with one strong, adaptive ERP.<\/span><\/p>\n

Become an Adaptive Manufacturing Enterprise and Survive Disruption<\/span><\/h2>\n

It\u2019s well worth the effort to re-evaluate the efficiency of your manufacturing operation regularly, especially as you face increasing disruption in the markets you serve. <\/span>QAD Adaptive ERP<\/span><\/a> can determine your productivity as well as your future growth. Join our <\/span>5-episode webinar series<\/span><\/a> to learn how your organization can become an Adaptive Manufacturing Enterprise.<\/span>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"

[vc_row][vc_column][vc_single_image image=”8907″ img_size=”full”][vc_column_text]Our health care industry depends on the pharmaceutical and medical device industries, and they, in turn, depend on contract manufacturing organizations (CMOs) for their outsourced manufacturing.\u00a0In fact, CMOs have become more than just a one-off production option; they\u2019re now an integral part of biopharmaceutical and medical device manufacturing. In December 2019, Sanofi\u2019s new […]<\/p>\n","protected":false},"author":29,"featured_media":8907,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[182,199],"tags":[1421,773,1309,9,296,1423,1424,294,1378,1422,885,50,583],"class_list":["post-8905","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-manufacturing-trends","tag-adaptable-erp","tag-adaptive-erp","tag-adaptive-manufacturing-enterprise","tag-cloud-erp","tag-cmo","tag-cmo-erp","tag-contract-manufacturer","tag-contract-manufacturing","tag-effective-enterprise-management","tag-erp-for-manufacturing","tag-ma","tag-medical-device-manufacturing","tag-oem"],"yoast_head":"\nThe Remedy for Inefficiencies in Contract Manufacturing | QAD Blog<\/title>\n<meta name=\"description\" content=\"Contract manufacturing must operate at peak efficiency. 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