Decentralized manufacturing and edge computing
Pioneering advances in life sciences
Crafting personalized medicines, meeting local market needs, and fortifying supply chains are just some of the benefits that life sciences organizations can gain from operating under a decentralized manufacturing model. Learn more about the benefits of decentralized manufacturing, transformation challenges, and how to determine if it’s the right fit for your organization.
Decentralized manufacturing in life sciences
Decentralized manufacturing can offer managers and employees greater control of the production process, boosting overall operational efficiency. The process can cut transportation costs and carbon footprints, accelerate lead times, and boost customer satisfaction with products tailored specifically for their needs.
A localized manufacturing model also fortifies a company’s resilience against global supply chain disruptions, which can occur in the ever-evolving geopolitical landscape. Similarly, the model addresses challenges posed by numerous, complex regulatory requirements that can vary widely from where a product is developed, approved, and manufactured, and where it ultimately is used.
For these and other reasons, an increasing number of large pharmaceutical and other life sciences companies are looking at decentralized manufacturing to streamline approval processes, speed tailored products to market, and satisfy customers.
Is the model right for your company?
When it comes to production, organization leaders should determine if decentralized manufacturing is the right fit for their company. The model’s potential can be evaluated first by examining the company’s manufacturing output through the lens of volume versus the degree of required personalization. Using this axis:
Significant potential is realized when production volume is relatively lower and personalization is high. Products in this category include personalized therapies, customized implants, and customized medtech devices.
Moderate potential is found when both production volume and personalization are at mid-levels. Products here include small-scale biopharmaceuticals (e.g., vaccines) and perishable pharmaceuticals.
Minimal potential is found when production volume is high and personalization is minimal. These include a wide range of products where centralized manufacturing remains most cost-effective.
But volume and degree of product personalization are not the only influences on decentralized manufacturing. To truly weave the vision into reality, several guiding principles should also be considered and evaluated to ensure the strategy meets an organization’s priority:
- Customization and flexibility: Creating production lines that can swiftly pivot to meet the unique needs of local markets, crafting personalized treatments and devices with precision.
- Localized production: A network of nimble production hubs that reduce the reliance on sprawling supply chains, instead delivering goods directly to the communities they serve.
- Distributed control and decision-making: Empowered local managers or sophisticated automated systems making real-time decisions, ensuring each facility adapts swiftly to changing demands.
- Supply chain resilience: Robust web of manufacturing sites, each capable of weathering disruptions and ensuring continuous supply even amid global uncertainties.
- Scalability and modularity: Modular production units that can be easily expanded or reconfigured, scaling up operations as demand grows.
- Sustainability: Eco-friendly practices taking root, from minimized waste to energy-efficient processes, fostering a greener production model.
Challenges of transitioning to decentralized manufacturing
As with all aspects of the life sciences field, transitioning to a new manufacturing model brings its own challenges—and potential solutions—that should be carefully evaluated and addressed:
A key competitive advantage for life sciences companies
Evaluating and prioritizing decentralized manufacturing will become a key competitive advantage for life sciences companies as the industry navigates a constantly evolving landscape of patient circumstances, geopolitical shifts, digital technologies, and regulatory requirements.
While enabling decentralized manufacturing may seem daunting, Deloitte’s Life Sciences consultants have in-depth manufacturing strategy experience and are ready to collaborate with your organization to identify opportunities to leverage decentralized manufacturing.
Authors:
Matt Heim
Managing Director
Deloitte Consulting LLP
mheim@deloitte.com
Prateek Saini
Senior Manager
Deloitte Consulting LLP
prasaini@deloitte.com
Elizabeth Beck
Senior Manager
Deloitte Consulting LLP
elizbeck@deloitte.com
