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Contract Manufacturing Roundtable HOW WOULD YOU ASSESS OPEX IN AN OUTSOURCED-MANUFACTURING MODEL? James Bruno, CAP Solutions: Having the same yields and few failed batches may seem like a good metric, but does it tell the real story? I consulted for a company that made over 1,200 batches of a product and had less than five failed batches in a year. While this sounded good, we could have increased the batch size with a minimal investment, reducing operating time and analytical costs. Since the process worked, no one wanted to make the investment. Two years later, they need to reduce their costs due to competition. David Casebier: Navidea Biopharmaceuticals: I would look at the metrics of lag. The lag between manufacturing and release, release and availability of material for use in either a clinical or commercial sense, the delays that may be incurred on a plan due to material not being available, and material that is expired due to lack of use or inability to re-qualify. While just-in-time strategies are not what most CMC folks would advocate, it is important to manage supply for sufficient utility, as well as minimize an overstock of material for two reasons: potential expiry and needless expense brought forward (capital conservation). Kempinski: This is challenging in an outsourcing model, given the corporatewide nature and multi-year commitment of attaining OPEX versus your limited view as a client. One can monitor the implementation of techniques such as Six Sigma which help provide overall methodologies and training for process improvement, process analytical technology (PAT) for identification of material, process, plant and release efficiencies, and overall equipment excellence to evaluate good production time versus total available plant time. Productivity is tied to capacity and quality systems and regulatory requirements, so metrics around inspection findings, deviation history, lead-times, cycle-times, unplanned equipment maintenance, plant utilization, safety issues, etc., can help provide insight to a CMOÕs progress toward OPEX. O'Brien: We utilize a tiered approach to both the assessment and the management of our suppliers based on relationship categories, with basic and specialty suppliers low on the pyramid and collaborative and strategic suppliers at the top. The degree of oversight increases as we move toward the top of the pyramid. In general, our supplier management system integrates operations, quality and procurement and for top-tier relationships, mandates senior experience partnership From DNA to API, CMC Biologics brings leading technical expertise to your project. CMC Biologics is a leading global biologics contract manufacturer, with cGMP compliant facilities in both the United States and Europe. Our innovative team is flexibility Right. focused on complete customer satisfaction. CMC Biologics is your manufacturing partner of choice expertise for clinical and commercial products, and services for every stage of your drug development. innovation On Time. compliance transparency cmcbiologics.com quality CMC Biologics — United States +1 425.485.1900 12 The CMO Leadership Awards 2013 CMC Biologics — Europe +45 7020 9470