IT Strategies for Evaluating CMO Performance

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Equipment and Processing Report

Equipment and Processing Report, Equipment and Processing Report-07-16-2008, Volume 0, Issue 0

A pharmaceutical company's information-technology infrastructure could facilitate the appraisal of the performance of contract manufacturing organizations.

More and more, pharmaceutical companies are choosing to outsource their manufacturing projects. This trend is likely to continue for the foreseeable future. To reap the full benefits of this strategy, a drug company must evaluate the performance of its contract manufacturing organizations (CMOs) and determine whether it meets industry and regulatory standards. Quality and compliance information are particularly important to this evaluation.

A pharmaceutical company’s information technology (IT) infrastructure could potentially facilitate the appraisal of CMO performance. A drug company’s enterprise resource planning (ERP) system is the system of record for regulatory purposes, says Jim Sabogal, vice-president of the life-sciences industry business unit at SAP America (Newtown Square, PA). This designation is based on the fact that batch information, quality information, and information relating to good manufacturing practices are stored as part of an ERP system’s record.

Yet ERP systems historically have been “transactional in nature, and not necessarily built to manage your value network,” comments Hussain Mooraj, research director in healthcare and life sciences at AMR Research (Boston, MA). ERP systems have traditionally focused on a few indicators such as timeliness of delivery and overlooked quality and compliance data.

But the IT environment is changing. SAP’s “Manufacturing Integration and Intelligence” (MII) development platform appears to provide a way for pharmaceutical companies to tap their ERP systems’ previously unused potential. Mooraj calls the MII platform a toolkit that could allow pharmaceutical companies to build an interface for exchanging quality and compliance information with their CMOs. The product helps integrate enterprise-level applications with operational systems such as manufacturing execution systems (MES) and laboratory information management systems (LIMS), even if the latter are not SAP systems.

The MII solution enables integration between a pharmaceutical manufacturer’s ERP and a CMO’s plant-floor systems. MII extracts data about orders, quality, and yield from the CMO’s plant-floor systems (e.g., MES and LIMS) to compute composite metrics such as overall equipment effectiveness, says Andy Dé, senior director of solutions marketing in life sciences at SAP. The solution presents the data to the sponsor company within the context of a role-based dashboard that can be configured to suit the needs of various manufacturing roles. Thus, the MII platform allows monitoring, exception management, and performance management in near-real time.

Using the MII solution does present challenges, however. MII lacks a packaged approach to application life-cycle maintenance and management, Mooraj observes. Nor does the platform contain plug-and-play reporting or analytical applications. Because CMOs’ IT infrastructures differ widely, a pharmaceutical company must use the MII toolkit to custom build the integration with its CMO. “Essentially, you are using MII to build out software,” Mooraj explains.


This strategy has been adopted and executed successfully in other industries. For example, aerospace manufacturer Pratt and Whitney (East Hartford, CT) is using MII to exchange quality and compliance information with its CMOs, says Mooraj.

But so far, no life-science company has taken this approach to CMO monitoring. One reason that the pharmaceutical industry lags behind in this respect could be that it is highly regulated. Additions to pharmaceutical companies’ IT infrastructure must be validated. But in some cases, US Food and Drug Administration rules are ambiguous, and whether a particular application must be validated is sometimes open to interpretation. This confusion discourages the acceptance of IT innovations within the pharmaceutical industry.

Still, intense competition and the growth in pharmaceutical outsourcing could persuade drugmakers to embrace new IT applications that enable the evaluation of CMO performance. To realize outsourcing’s potential to lower costs, a pharmaceutical company “better have an IT system that fully automates data flow back and forth,” says Sabogal. IT strategies can reduce the potential for human error and provide sponsor companies visibility into their CMOs’ operations.

The MII platform is a solution with good potential, Mooraj admits. But to realize that potential, companies must overcome their resistance to new technologies and accept the added work that the strategy entails.