All opinions are my own.

Monday, August 30, 2010

The Importance of Fundamentals

Globally Johnson & Johnson is known for its integrity and product quality. Few years ago they handled the Tylenol situation extremely well and were commended for it.

It is astounding that Year 2010 has become a nightmare for Johnson & Johnson. It is heart breaking to read a statement “Certain over-the-counter (OTC) Children’s and Infants’ liquid products manufactured in the United States have been recalled as they may contain a higher concentration of active ingredient than is specified; others may contain inactive ingredients that may not meet internal testing requirements; and others may contain tiny particles.”

Overage of active ingredient and inclusion of tiny particles is simply failure of the people to do what they are supposed to do at any manufacturing operation. In any manufacturing operation people design, operate and maintain equipment to ensure that the process operates as designed. It is a good manufacturing practice to calibrate the equipment routinely to ensure that the equipment is operating as designed. Filters get replaced on a routine basis. In addition, a mass balance is made by every chemical blending operation to make sure the process is being operated at standard or better. Mass balance and cost calculations if done you on a daily, weekly or as chosen basis tell you if your costs and material usage are on track.

Any overuse of materials will show up as the material cost being higher than standard cost and will also show up as inventory shrinkage. Higher than standard cost will be a financial variance i.e. the operation is loosing money on the product. Inventory shrinkage also shows up as a financial variance. In the case of Johnson & Johnson or any manufacturing company the two safety nets, that are supposed to catch overuse, failed. In layman terms, they lost money i.e. someone was sleeping at the financial desk.

Overuse of active ingredient and contamination of particles in the product suggests that on the operations side the manufacturing, maintenance and quality control functions also failed.

What happened at Johnson & Johnson is a gross malfunction at a Global Fortune 125 company. It seems that many at J&J forgot to apply FINANCIAL AND ENGINEERING fundamentals. Based on what I have read, it seems profits took precedence over quality. Their “Quality Czar” will have his hands dirty as he cleans the house.

Girish Malhotra, PE

EPCOT International

Tuesday, August 17, 2010

Square Plug In A Round Hole: Does This Scenario Exist in Pharmaceuticals?

“Square plug in a round hole” is a statement about situations that do not fit in normal life but under the right circumstances we can live with them. If this happens in a manufacturing operation, common wisdom is that money is lost on such a product/process and it would not be commercialized. However, if it happens in an operation where the money can be recovered by passing the inefficiency costs to the customers, would any one worry? Probably not! It would be worth exploring if such a scenario prevails in the manufacture of pharmaceuticals.

Chemists/Chemical Engineers develop an optimum (quality by design) process for an active pharmaceutical ingredient. During the scale up and commercialization process they find that they do not have the right size equipment and/or the configuration that exacts their desired process. However, there is a high demand for the product. Considerable monies can be earned if we produce and market this product quickly without large investment. We can alter the process or modify the existing equipment at a minimum cost to fit the process in the available equipment. The product is being produced in equipment that is not a perfect fit. It requires continuous quality analysis and equipment cleaning to minimize contamination. Would such a process be an example of “square plug in a round hole”? Further analysis might be helpful.

Based on an optimum heat and mass balance for an active pharmaceutical ingredient (API), we need equipment of size and configuration “X” to produce the product at the lowest cost. Many manufacturing sites do not have the exact size and configuration available. However, we have equipment of size and configuration “Y” and our process could be modified to fit in it. With necessary modifications product of the desired quality can be produced. The costs would be higher than the costs of an optimized process. Product produced by such processes would require repeated analysis of the intermediates and the final product to ensure our process and equipment would deliver the desired quality product. Necessary manufacturing protocol would have to be strictly followed and enforced. Equipment would have to be thoroughly cleaned between batches. All of the associated manufacturing costs will be passed on to the customer. Due to high demand the product could be produced at different sites. The process or the equipment would have to be modified to fit the local situations.

Since we have force fitted a process in equipment that is not specifically designed for it, I would call such a process “square plug in a round hole” that has opportunities to lower costs but since the company is able to meet or exceed their profit margins lowest cost optimized process considerations and process innovation become irrelevant. Under these circumstances we also overlook “square plug in a round hole” connotation.

In the above scenario “quality by analysis” becomes a way of life. Pharmaceuticals are living in such an environment. Since the companies are able to demonstrate product quality repeatability, meet regulatory guidelines and achieve their profit margins having an optimum process or practicing the best manufacturing technology is not necessary. What do you think?

Girish Malhotra, PE

EPCOT International