Production Planning and Inventory Control in Pharmaceutical Manufacturing Process

Production Planning and Inventory Control in Pharmaceutical Manufacturing Process

 

 

 

 

Over the past several years, the CELDi Biopharmaceutical Operations Initiative at UC
Berkeley has worked with a variety of biopharmaceutical firms to optimize production
planning and supply chain management. Production and supply chain operations in the
biopharmaceutical industry feature a variety of characteristics that make production
and inventory planning challenging. For instance,
• Bulk production has significant economies of scale, and capacity is shared, leading
to campaign-style production.
• Bulk production is either in batches, with significant levels of random yield, or
semi-continuous (known as a perfusion process), with random production rates
(although rates are known soon after production starts).
• There is significant region-specific differentiation between bulk production and
finished goods production (filling/finishing/labeling).
• There is an expiration period for bulk drugs, and a new, non-cumulative expira-
tion period for finished drugs.
• In some cases, bulk production batches must be entirely differentiated (that is,
processed into finished goods for specific markets), even if it would be more
efficient to partially differentiate them.
• Quality analysis can take significantly more time than production, with a very
high variability in the required amount of time.
• In many cases, some but not all production steps are outsourced, so:
– Utilization of this outsourced capacity must be “scheduled” in advance

– Even a large biopharmaceutical firm may be a small customer of the out-
sourcer.
– There can be great uncertainty in the time until outsourced jobs are returned
from the contract manufacturer, even though production itself is quite quick
• Disruptions can have tremendous negative impact, so detailed knowledge of the
tradeoff between inventory cost, covered disruptions, and customer service are
very useful for decision-making.
Solving an integrated planning/operations model with these characteristics is obvi-
ously quite challenging. The overall strategy of the CELDi Biopharmaceutical Opera-
tions Initiative is, therefore, two-fold: first, analyze simple, stylized models with some
of these characteristics to better understand policies for these models. Second, use
optimization and simulation-optimization techniques to optimize parameter settings in
more complex systems.

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Manostaxx
Manostaxx – Industrial Management Consulting

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