Magazine Article | March 7, 2010

Fiscally Fit Facilities: A New Look At What It Means To Be Lean

Source: Life Science Leader

By Cindy Lieberman

Optimizing the fitness of a manufacturing facility requires a multifaceted approach, using a combination of lowering operating expenses, increasing throughput, and reducing inventory.

Most companies today have taken steps to manage expenses and inventory levels without negatively impacting customer service. Yet for many manufacturers, it is still possible to cut additional days out of their production cycles by implementing a high-throughput, rapid microbial screening system.

Surprisingly, many of today’s modern, automated manufacturing facilities still test for microbiological contamination using a method dating back to the late 1800s. This traditional method relies on visual identification of microbial growth and averages 5 days for nonsterile and a minimum of 14 days for sterile products. During this wait time, raw materials, in-process batch, or finished goods can be quarantined — adding days to manufacturing lead times, tying up working capital, and ultimately leaving the facility far from fiscally fit.

Fortunately, current rapid microbial screening systems — which are validated and accepted by the FDA — enable manufacturers to accurately screen for the absence of microbial contamination in only 24 hours, ensuring product quality and trimming four days from the average production cycle. Similarly, rapid methods also can be used for sterility testing, providing results in 7 days versus 14 to 17 days with traditional methods and cutting a week or more from production.

Quantifying The Value
Manufacturers can accurately quantify the financial value of implementing a rapid microbial screening system. For example, a high-throughput rapid system can be purchased and installed for less than $100,000, achieve payback in six to nine months, and realize an average five-year net present value in excess of $500,000 for nonsterile testing and well upwards of $1 million for sterility testing at a single plant.

Likewise, implementing a rapid system goes a long way toward boosting a facility’s overall fitness score, with a host of quantifiable benefits:

  • Reduces working capital requirements — Rapid methods can decrease the investment in product held in quarantined inventory at any given time. And since it takes fewer days to produce the same amount of product, the shortened cycle time also reduces safety stock requirements and its associated working capital investment.
  • Improved operational efficiencies — Shorter cycle times result in a leaner, more responsive manufacturing operation, which improves a company’s financial metrics — including return on invested capital and inventory turns.
  • Improves recovery from contamination events — Rapid detection means earlier detection of contamination when it does occur. This helps to minimize the amount of product affected, accelerate corrective action, and get the facility back on track quickly. Also, risk of customer service interruptions or product recalls is minimized.
  • Saves warehouse space — Reduced inventories throughout your supply chain may decrease the need for outsourced warehousing or defer the costs associated with facility expansion.
  • Shortens the cash cycle — With rapid methods, finished goods are released to market faster, leading to an accelerated revenue cycle.
  • Swift decision making — Implementing a rapid screening system provides actionable information that allows product to move forward quickly. When contamination is detected, that batch can be isolated and attention focused on remediation and further process improvement.

Even the most efficient operations can benefit from careful analysis of current product release methods to see if micro-hold time can be reduced. The potential cost savings and reduced lead times and working capital requirements can enable companies to pursue more productive endeavors, like funding new projects, developing new products, or even conserving cash.

Cindy Lieberman joined Celsis Rapid Detection in 2007 as a VP. She brings significant manufacturing supply chain, technology, and healthcare industry experience to the role from her previous positions, most recently with Zebra Technologies. She is a graduate of Northwestern University.