'4IR': The booster pharma majors are taking to improve productivity

Large manufacturers are leveraging new-age technologies and advanced analytics to improve productivity and reduce deviations in production processes

Over the next decade, new technologies such as robotics, automation, and advanced analytics, will shape how medicines are produced at large factories in India.

India’s pharma majors are increasingly warming up to the “smart quality” approach; they are trying to use the new-age technologies that characterise Industry 4.0 (also known as the Fourth Industrial Revolution or 4IR) to disrupt the way pills are made.

Why is this shift happening?

The key lies in increasing productivity and reducing human error. According to a McKinsey report, average performing labs could achieve an even larger productivity improvement of 150-200 per cent of their current rates by using 4IR tech. In some cases, digitisation and automation have already resulted in a more than 65 per cent reduction in overall deviations and 90 per cent faster closure times, the McKinsey report said.

At a recent conference, Satish Reddy, chairman of the 39-year-old Dr Reddy’s Laboratories in Hyderabad, said improving productivity was the main reason his firm focused on 4IR and decided to transform one of its oldest sites with digitisation and automation.

As a result of this exercise, the World Economic Forum (WEF) last year accredited DRL’s 25-year-old site in Hyderabad that was facing business challenges from severe price erosion and rapidly evolving quality expectations as a Digital Lighthouse. The site deployed more than 40 4IR use cases and resulted in a 43 per cent reduction in manufacturing cost per 1,000 pills while enhancing quality and a 56 per cent increase in factory output.

The Global Lighthouse Network is a community of over 100 manufacturers that are showing leadership in applying 4IR technologies such as artificial intelligence, 3D-printing, and Big Data analytics. Basically, these sites are considered “lighthouses” because they act as beacons to other manufacturing sites to adapt and evolve. 

Of the 132 Digital Lighthouses accredited by the WEF across the world, 19 are life sciences companies including the likes of Teva, Johnson & Johnson, Sanofi, GSK and so on. In India, there are two life sciences companies to have received these – Cipla and Dr Reddy’s Laboratories.

Is this just another standard certification? How does digitisation or the use of artificial intelligence (AI) and machine learning (ML) help on the ground?

A pharma industry veteran explained: “Quality is a key concern for all major drug makers who supply to regulated markets, since a warning letter or an import alert could result in substantial revenue loss. So, companies have been focusing on improving quality assurance – but now the industry has realised that quality is a continuous process, and not a test at the end-of-the-batch production.”

He added that pharma plants use different ingredients that are reactive in nature. “For example, a bulk drug may be stored in a certain way in the site where it may react with moisture in the air, and as a result certain impurities can crop in. The industry has faced issues with nitrosamine impurities, which are considered carcinogens. At times these impurities enter the product during the process of manufacturing, which uses water or there is interaction with air or the environment,” he said.

If the process of manufacturing is monitored continuously, and data from the machines are fed in real time to a central server where AI and ML can help in on-the-go decision-making, then it is possible to stop a certain batch if they find an error. There is no need to wait for the batch to finish and then go for a quality test. This saves time and cost. As Reddy pointed out, digitisation is important for quality; it reduces human error.

Samina Hamied, executive vice-chairperson of Cipla pointed out at a recent industry conference that Covid-19 forced them to engage with stakeholders digitally, and Cipla’s work on automation has mostly taken place during the Covid years. “The idea is to have touch-less manufacturing, remove human error and also use AI in research and development,” Hamied said.

Cipla had deployed digital automation analytics (DAA) across a network of 22 Indian sites in parallel. Its Indore oral solid dosage facility led this journey with over 30 4IR use cases, and was accredited as a Digital Lighthouse by the WEF. The deployment of DAA resulted in reduced manufacturing cost, greater agility and speed – a 23 per cent rise in productivity, a 26 per cent reduction in total cost of products manufactured at the facility and 40 per cent reduction in energy consumption.

Vikas Bhadoria, senior partner, McKinsey & Company, told Business Standard that, “A few of the leading companies have already started implementing advanced analytics use cases or making new advances, like going paperless by simplifying paper records to minimise the number of entries and then digitising lab testing records. Some use cases have demonstrated a more than 65 per cent reduction in deviations and over 90 per cent faster closure times.”

The industry agrees that automation leads to reduction in deviation by at least 30-50 per cent.

As such, the focus on quality assurance has resulted in having more stable core operations. In fact, an analysis of the US drug regulator’s observations following inspections of Indian sites shows that there has been a reduction in observations around data reliability, good documentation practices. A McKinsey analysis showed that from 20 per cent observations on lab control, core manufacturing processes in 2018, the proportion fell to 12 per cent in 2022.

For an industry that is acutely dependent on the US and UK markets – the two countries are India’s top two pharma export destinations -- this is a healthy sign.