Forecasting the TCO of Serialization

                         

                         

Agenda

• Calculate your serialization costs by holistically examining all elements involved in your implementation strategy

• Consider certain key factors when anticipating implementation costs, including underlying dependencies, validation costs, and lower productivity levels during downtime

• Adjust your budget to accommodate changes in local and international traceability regulations

                         

                         

An Important Axiom

Price = initial investment only Cost = complete investment over lifecycle

                         

                         

Considered Elements – Initial Costs

•  Plant hardware •  IT Hardware (plant, enterprise) •  Software licenses (line, plant, enterprise) •  Implementation services (line, plant, enterprise) •  SOPs new and updates (line, plant, enterprise) •  Documentation new and updates (line, plant, enterprise) •  Training (line, plant, enterprise) •  Validation (line, plant, enterprise) •  New printing costs (adjustments to fit new barcode) •  Trading partner agreement updates •  Product launch impacts •  Contractual updates •  Risk assessment updates (possible new categories) •  Disaster recovery plan updates and new requirements

                         

                         

Considered Elements – Recurring Costs

New support agreements •  Hardware •  Software •  Services

Increased media and supplies cost Increased data creation

•  Storage costs •  Bandwidth costs

Increased trading partner data exchange volumes •  Bandwidth costs

Increased reporting requirements •  Storage costs

Increased operational processes •  Time impact on COGS

                         

                         

Considered Elements – Incremental Costs

•  New product •  New packaging formats •  New regulatory requirements •  Hardware changes/upgrades •  Software upgrades •  New trading partners •  New data exchange requirements •  New operational requirements •  Artwork changes and approvals •  Downtime/Supply chain disruption due to changes

                         

                         

Summary of Costs: Considered Elements

Calculate your serialization costs by holistically examining all element involved in your implementation strategy.

• Packaging lines • Line level

• Hardware • Software • SOPs

• Site level • Systems • Software • Integration • SOPs

• Enterprise level • Systems • Software • Integration • SOPs

• Trading partner integration • Trading partner SOPs • Documentation • Validation • Regulatory reporting • Change management • Support • Training • Downtime • Product availability • Printing space and brand management • Artwork changes and approvals

                         

                         

Key Factors

Every hardware component, software package, network connection, systems interface, integration service, supportive service, and operational service are simultaneously investment buckets and potential points of failure

                         

                         

Key Factors

Production impact •  Time •  Cost •  Risk

Supply chain impact •  Product availability •  Trading partner data exchange •  Trading partner(s) audits for compliance to regulations

Supply & Demand •  Hardware availability •  Software availability if not GAMP Class 4 •  Professional services (limited serialization resources) •  Internal resources (competition with other projects)

                         

                         

Key Factors

Line of business application support serialization’s affects on •  Inventory control •  Master data •  Warehouse management •  Order management •  Reverse logistics

Business Process Changes •  Order-to-cash process •  Supply chain network compliance •  Returns processing •  Customer support •  Data governance •  Regulatory •  Exception handling

                         

                         

Key Factors

SOPs •  Line level processing for WIP materials •  Finished goods inventory processing •  Quality assurance

•  Sampling •  Investigations

•  Order fulfillment •  Data collection •  New product launch •  Master data management

Validation •  Scope (top-floor to plant-floor integration) •  Forward looking where possible •  Regulation timeline in phases

                         

                         

Summary - Key Factors

Consider certain key factors when anticipating implementation costs, including underlying dependencies, validation costs, and lower productivity levels during downtime

• Inventory control • Master data • Materials management • Warehouse management • Order management • Supply chain management • Customer support • Returns processing • Trading partner compliance • New product launch • Validation • Quality assurance

• Data governance • Data collection • Exception handling • Data exchange • Regulatory reporting • Systems integration • Professional services • Supportive services • Internal resource conflicts • Product availability • Downtime

                         

                         

Change is inevitable

Adjust your budget to accommodate changes in local and international traceability regulations

                         

                         

Change is inevitable

USA – Requirements will continue to phase in until at least 2023, longer if there are delays or alterations based on the pilots, public meetings, required evaluations, and of course the US Congress.

                         

                         

Change is inevitable

Additional markets are implementing or considering implementing serialization mandates

                         

                         

Change is inevitable

Globalization and consolidation of manufacturing increases the likelihood of additional markets being served and different regulations being met.

                         

                         

Change is inevitable

Global Changes may require: • New hardware additions (e.g. bundle aggregation)

• Software modifications, upgrades, or reconfiguration

• New data exchange formats or content

• Updates to regulatory reporting

• Validation

• Changes in SOPs

• Documentation and training

                         

                         

TCO - Summary

• Serialization is far reaching in its impact • Most serialization pilots and early implementations have ignored business application impacts and integration requirements • Supportive services and after go-live costs can far exceed the initial investment, but are rarely considered up-front • The myriad of touchpoints included in all the parts needed to meet serialization compliance can be daunting, but it is critical to consider them and most importantly understand their impacts on other elements

                         

                         

TCO – Questions?