Pharma plants cannot be designed and built like at the start of the century

In a recent blog post, you argue that pharma plants need a “lifecycle view”. How does that contrast with common practices you see today?

In most organisations, building a pharma plant and then running it as an operating asset are treated as two separate worlds: capital expenditure (CapEx) vs operating expenses (OpEx), with different budgets, incentives and reporting lines.

The two budgets can rapidly pull against each other. Choices that lower CapEx (cheaper heating, ventilation and air conditioning, less automation, less redundancy) often raise lifetime OpEx (more energy, maintenance and manual compliance effort) and vice versa.

Incentives are also misaligned. In pharma, time to market (TTM) usually dominates the business case, not construction cost. McKinsey’s capital-projects practice is explicit that TTM can be the biggest value driver for capital projects in pharmaceuticals, and they push clients to shift focus from only reducing construction costs to improving the total business case and accelerating the product’s TTM. Plants get rushed, which feeds directly into the handover problems.

Because speed dominates, teams overlap activities that shouldn’t overlap. There’s a tendency to compress a project to the point where normal development activities – such as process definition, facility design, procurement and construction – take place at once. This can cause coordination problems in design and interference during construction, leading to cost overruns and schedule delays from rework and field changes.

When building some of the most complex, costly and regulated industrial facilities that exist, this situation leads to several negative consequences that can dog a plant’s efficiency for years once operations start.

What are those consequences?

The formal transition is the commissioning, qualification and validation (CQV) handover. Traditionally, that’s when the engineering, procurement and construction (EPC) contractor hands the facility and its documentation to the owner-operator.

The typical mechanics – and the root of the pain – look like this: EPCs are hired to build and design plants, focusing on documentation for design, engineering and construction. The larger and more complex the project, the more documents are generated. EPCs often produce hundreds or thousands of engineering documents that the owner-operator must then verify and import into their systems, and this complexity can cause inaccessible, inconsistent, incomplete or inadequate data. In practice it is often a late-stage ‘document dump’.

The first consequence is the direct costs: on average, an owner-operator unexpectedly spends 2-4 percent of the project cost to correct and reproduce missing operations and maintenance information manually. On a €1 billion facility, that can represent between €20 million and €40 million.

The second consequence is compliance headaches. The plant’s permanent compliance evidence – qualification records (IQ/OQ/PQ), as-built drawings, the asset register and validated-system baselines – is scattered from day one, without a clear baseline or common asset register. That translates into a struggle, with manual processes required to show that the facility remains in a validated, compliant state.

But the far greater consequence is the effect it has on the future productivity and profitability of the plant. The average overall equipment effectiveness (OEE) in pharma is slightly above 35 percent, compared to 70-80 percent for top performers, and that’s limited mainly by compliance and validation.

Do you see the industry moving in response?

Last year, we surveyed pharma executives to ask this exact question.

What they tell us is that the trend to centralise project information, for example via a digital twin, is clear. While only 17 percent of pharma manufacturing decision makers say they currently operate a facility-level digital twin, 79 percent say they use twins in new projects. We work with Bayer, for example, using our solution Octave InConcert, and they have seen very positive results on handover, data reliability and their ability to maintain as-built information in the highest quality possible.

The trend is a reflection of major industry pain points. In the same survey, two-thirds of pharma executives (68 percent) reported that data silos hindered informed decision making, and 53 percent found it challenging to readily demonstrate compliance.

In short, there’s a clear sense that plants are becoming more complex – as is compliance – and the window of profitability is only getting smaller. That context makes it impossible to deal with construction and information management in the same way as at the start of the century.

What advice would you give to operators who want their plants to hit the ground running and optimise their OEE from day one?

Besides centralising all the project information in a digital twin, a clear trend we see is having your asset register ready from day one, which means setting it up before construction is completed. This avoids documentation that doesn’t fully reflect what was actually installed, incomplete or inaccurate as-builts and a computerised maintenance management system (CMMS)/ enterprise asset management (EAM) investment that can’t deliver value until that data is cleaned and reconciled.

What we see as a far better strategy is the example of Pfizer: having Attune EAM and systems, applications and products (SAP) as integrated core capabilities that can be implemented right away in a new plant, an existing plant or an acquired company. This creates the visibility a large manufacturer needs, from the cleanroom to the boardroom, and addresses what executives tell us is their single greatest pain point: scaling common solutions across manufacturing plants.

 Increasingly, leading manufacturers are looking beyond individual systems and focusing on lifecycle intelligence. The combination of a digital twin, strong data governance, integration across business systems and AI-driven analysis enables organisations to maintain context from design through operations. This creates a continuous feedback loop where operational experience informs future projects, helping to reduce total cost of ownership while improving asset performance and compliance.

This creates the ideal basis to address OEE. Unplanned downtime is the single biggest OEE loss in pharma, and preventing failures before they happen is the most direct lever there is. We see manufacturers increasingly turn to approaches like asset performance management to spot emerging failures early and prescribe the right interventions, based on actual condition, not arbitrary intervals.

All these strategies go in the same direction: building a plant for performance and asset availability, not just as something to be delivered. In these times of patent cliffs and shorter drug lifecycles, that’s crucial to profitability.