The pharmaceutical industry may have been “laggards” in technology adoption, but the wheels are turning with digital, say industry observers. And India has something to cheer here, they add.

Of the 132 “lighthouses” accredited by the World Economic Forum to date, 19 sites are in the pharmaceutical and medical devices industry, of which two are in India, said McKinsey & Co Senior Partner, David Keeling, pointing to how pharma was emerging from the historical perception of being a “laggard” in technology adoption. 

Drugmakers Cipla and Dr Reddy’s Laboratories are the two Indian “lighthouse” examples, while other international names in this league include Johnson & Johnson, GlaxoSmithKline, Teva, Sanofi, Bayer and Novo Nordisk, to mention a few.

The WEF describes “Lighthouses” as “manufacturers showing leadership in applying 4IR (Fourth industrial revolution) technologies at scale to drive step-change financial, operational and sustainability improvements by transforming factories, value chains and business models.” They also serve as “beacons” to help other manufacturers in overcoming challenges in upgrading technology at scale in manufacturing, it explains.

Pointing to the benefits of accelerating digital adoption, Vivek Arora, Partner, Mckinsey & Co, said it resulted in a 25-40 per cent increase in asset productivity and a 30 to 50 per cent increase in labour productivity. On the much-watched quality issue, he said, it resulted in a 30 to 50 per cent reduction in deviations and a 200 per cent increase in product robustness. There was also a 15 per cent reduction in conversion costs and a 20 per cent reduction in lead time, he said.

“Future proof”

Giving an insight into why DRL undertook this digital journey, MS Madhu Sundar, DRL’s Head of Formulation Manufacturing, said the company had, over five years delivered a change in its productivity agenda. Incremental improvements thereafter were becoming difficult to achieve as the “improvement funnel was drying up”. Processes were highly dependent on manual inputs, with low productivity and a high potential for error, he said. And there were last-minute logistics costs due to sub-optimal planning and scheduling.

So they plunged into digitally transforming their largest and most important formulations (finished drugs) facility at Bachupally (Hyderabad). Investing in digitizing operations included covering 250 core processes and upgrading existing equipment to make them digitally ready. The transformation brought a change in performance across cost, quality and delivery, he said.

Geena Malhotra, Cipla’s Global Chief Technology Officer, narrated the Cipla experience of building a “future proof” enterprise with a flexible architecture. Cipla’s Indore oral solid dosage plant is the designated “lighthouse” facility.  Over two years, Cipla deployed ‘digital automation analytics’ (DAA) across 22 Indian sites. Outlining benefits, she said, traditionally, 10 per cent of data was used in decision-making, now at over 90 per cent. The impact was felt across the ecosystem and ancillaries , she added.

The industry representatives spoke at the recently concluded Indian Pharmaceutical Alliance’s quality summit.