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Aegis is the Brains in the Machine for Merck Serono

by Kevin O'Marah  |  August 20, 2010  |  Comments Off on Aegis is the Brains in the Machine for Merck Serono

I had a chance to speak to Aegis Analytical’s CEO Bob Di Scipio recently and experienced a flashback to my days as a new analyst getting all worked up about the technology enabled breakthroughs happening deep in the supply chain.  Aegis sells a technology we at Gartner classify as Process Analytical Technology (PAT).  To quote my able colleague Simon Jacobson on what this means: (see Hype Cycle for Life Sciences, 2010) “PAT carries significant appeal for organizations seeking to eliminate error-prone manual activities, guesswork and variability from the production process, subsequently eliminating any likelihood of nonconforming products making their way into the supply chain”. 

Translation: PAT puts brains in the machine.  From a business value standpoint what this says is:

 “The ability to reliably produce to demand offers massive reductions in scrap and discards, on-hold inventory and finished goods inventory. This becomes significant when a single batch of product represents a multimillion-dollar revenue opportunity.”

So far, this is a typical analyst angle on technology being pitched to improve a business process.  The story gets more interesting however when you follow it down the rabbithole to a case studyhttp://my.gartner.com/portal/server.pt/gateway/PTARGS_0_1912388_353_260_3460702_43/http%3B/remoteapphost.gartner.com%3B8003/GartnerPortlets/docDisplay.do?function=printDocument&resId=1408213 written by another of our top analysts Wayne McDonnell, who spoke to no less an authority than Merck Serono’s EVP of Operations Dr. Hanns-Eberhard Erle about what all this really means to a 5Bn Euro manufacturer of lifesaving biopharmaceuticals.  Dr. Erle was looking for a system that “could collect, connect and analyze process data in both R&D and commercial manufacturing” so that new molecules could move more quickly and reliably from lab to plant and so that the plant could produce more and better batches with the same assets.  

Pulling up one more level, consider the articulated business benefits that this case points to.  First is “faster and more efficient tech transfer of processes from the pilot scale in R&D to commercial manufacturing”, something we capture in the notion of Time-to-Value – one of the highest order metrics considered on the DDVN dimension of Innovation Excellence.  Second is “10% to 15% improvement in productivity at the commercial manufacturing scale”, something we capture in Total Supply Chain Costs – one of the highest order metrics on the DDVN dimension of Operational Excellence.  The case goes on to point out process improvements that above all else mean Merck Serono is able to move to a steeper part of the learning curve as it drives from science to cure. 

In terms of money, this technology contributes to such huge impact gains as better returns on capital invested in R&D and in Property, Plant and Equipment. At the higher level where I like to look for breakthroughs that matter to society, this translates to more people getting affordable access to treatments that alleviate some of the suffering caused by cancer, neurodegenerative diseases and metabolic disorders. 

We published a book called “Supply Chain Saves the World” http://www.amazon.com/Supply-Chain-Saves-World-Research/dp/0978592808 back in 2006 which was all about how technologies like Aegis’ PAT offering were contributing to a global productivity miracle capable of literally solving world hunger.  Every time I trace a story like this from its root deep in the machinery of the global supply chain to its impact on the wider world I am energized anew about what we all do for a living.  It may be hard to explain at a cocktail party, but in your heart you know how big a deal it really is to put brains in the machine.

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Kevin O'Marah
GVP

Kevin has led AMR's Global Supply Chain research since 2000, publishing seminal work on sustainability, product innovation and the AMR Supply Chain Top 25. He was previously Vice President at Oracle and a strategy consultant in London, Washington D.C. and Warsaw, Poland. Read Full Bio




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