EPCAM and the extended enterprise
Once established internally as an operating model, EPCAM can be extended to strategic business partners as well. IBM has pioneered
a concept called the "Control Tower" to monitor, integrate, and manage contract-manufacturing operations, thus crossing internal
operational boundaries. The rationale is that an operational network is more effective than a vertically integrated business
model. IBM significantly improved its return on net assets and its supply-chain agility by partnering with fewer strategic
suppliers. Technology is a key enabler that provides visibility, operational integration, and lower overall supply variability.
The next-generation Control Tower establishes joint working teams that address specific product, technical, and business problems,
thus improving process control. For example, today IBM's external development partners, IBM Research and Development, and
its Manufacturing Management teams are located in the same facility. This organization solves the company's most difficult
challenges, including developing new products faster, gaining market share, improving quality, and solving compliance problems.
The technological advancements, management science, and regulatory authorities' receptivity to innovation that reduces variability,
uncertainty, and risk have created a fertile environment for change. The opportunity and need for major process-control changes
in the life-sciences and healthcare industries are unprecedented. The current favorable regulatory environment and the emergence
of breakthrough technologies that facilitate Six Sigma process control at the manufacturing-enterprise level make this an
opportune time for manufacturers to pursue improvement.
The need for improvement is great and will only grow. Products are becoming more complex, many products will likely be produced
at low volumes, and various bundling options such as drugs and devices are being considered.
The decision about whether to pursue EPCAM is one of the most important that a company will make. It should not be a quick
decision, rather the decision should be made as part of key strategic initiative that the organization, including manufacturing,
product development, finance, research, and human resources, accepts. The decision affects all employees and changes the way
work is done. Roles and responsibilities change, new skills are developed, and unneeded activities are abandoned.
The process-control transformation can be achieved though the five-level process-control hierarchy model previously described.
EPCAM brings the following advantages:
- Improved patient safety
- Reduced cost of goods sold and cost of quality
- Increased supply reliability even with low volumes and complex products such as biologics
- Timely launch of new products.
The complexity of new products, market demands, and the need for speedy new-product launches are all addressed by EPCAM.
James M. Prendergast* is a global supply-chain leader, Michael Passow is a manager of advanced technology development and adaptive process control, Mike Ricci is a global supply-chain leader, and Srinivas S. Dagalur is a lead application architect at IBM, 525 Lincoln Dr. W., 5 Greentree Center, Third floor, Marlton, NJ 08053-3422, tel.
Dennis Bell is an associate partner and Limuel Sagadraca is a managing consultant at IBM Business Consulting Services.
*To whom all correspondence should be addressed.
Submitted: Oct. 18, 2007. Accepted: Jan. 7, 2008.