Monday, January 31, 2005

Will the FDA kill Biotech?

Another Motley Fool article...

http://www.fool.com/Server/FoolPrint.asp?File=/news/commentary/2005/commentary05012803.htm

The Pipeline to Biotech Success

See Motley Fool article at link below...


http://www.fool.com/Server/FoolPrint.asp?File=/news/commentary/2005/commentary05012602.htm

Wyeth adds jobs in Boston

see the link below from BioSpace.com for the story...

http://biospace.com/news_story.cfm?StoryID=18859720&full=1

This is a Service Industry

Sounds pretty basic right? Fundamentals never change, and they rarely go out of style…

But maybe there’s another way to look at this…

“Experiences are distinct from services as services are from goods…”

quoted from Pine and Gilmore: The Experience Economy by way of Tom Peters…

We don’t look to Quality programs too often, because we all know “That’s a great idea, but we don’t make widgets, we provide a service…”

I would make the argument (elsewhere…that’s a whole ‘nother topic…) that there are things to be learned from the Quality movement even as it applies to the rendering of professional services…

What we do is different from manufacturing a product. We deliver a service, and we like to think that “Service” is higher up the “Value Added” chain than a “Product” and maybe it is.

What’s higher up the “Value Added” chain than service?...some people are suggesting that the proper management of our Client’s “Experience” can be the crucial differentiator we are all looking for.

Look at Lou Carbone’s website for experience engineering- www.expeng.com…
There are a couple of good articles to read…
Or try Chapters 8 and 9 in Tom Peter’s Re-Imagine…

Maybe we are still a “Service” industry…maybe the duration of a capital engineering project isn’t readily compared to the much briefer “experience” of applying for a home loan, shopping at a high-end natural foods store, or visiting a doctor’s office.

At a minimum, we should stop and think about what we could learn from these ideas and figure out a way to improve our “Service”, just as we should figure out what we can learn from the Quality movement.

Or perhaps we need to raise the bar…

Ask ourselves questions like

“What experience can I best provide my Client?...”

or …

“What impression to I want to leave my Client with?...”

Maybe it’s a risk to get away from providing good solid service…

Maybe the bigger risk is thinking that’s all you need to do…


The Engineering Man-Hour

What happens to an engineering man-hour? I don’t mean how they get spent, although that’s a good question. I’m talking about what gets paid for, and how much….

Let’s consider a typical billing rate of $50 an hour, with a multiplier of 2.0, resulting in a billable rate of $100 per hour….although that may be optimistic these days…

A majority of this cost goes to paying the direct salary of the individual…the remainder goes to statutory benefits, taxes, corporate overhead, and finally, a profit…hopefully….

The employee’s paycheck can also be broken down…taxes, benefit costs, and finally (again) take-home pay…

What makes up the majority of this $100 rate…the answer would appear to be the employee and the benefit costs for that employee…Employer contributions to taxes, statutory benefits, employee health care costs, and 401k contributions, etc are all added to the basic pay rate.

The employee comprises the most significant cost facing the professional service company they may work for and the Clients they serve. I guess this can be considered a blinding flash of the obvious.

I am interested more in the implications that may be present here….


Profit = Revenue – Cost

Revenue is down- given the cost pressure in the industry, companies are getting less money from their Clients.

Reduce profits??? Never a popular idea…but maybe this gets tried first…though not by choice…

And some people will tell you that companies are currently bidding below costs just to stay in business…although how that works in the long run I’m not too sure.

That leaves reducing Cost- seems like the obvious solution…this probably gets tried next…

Hire employees with less experience so their hourly rate is lower?
Hire employees with fewer qualifications to do the work?
Pass cost reductions along to employees???, i.e. offer fewer benefits…skip raises…

These approaches could lead to a lot of questions about quality issues…


Or is there a “third way”???…

Maybe this is the time to invest in the best possible people…

Maybe the best people make the biggest difference in the single largest cost of doing business…

Can we afford to risk making a mistake on the single largest cost of doing business?

It’s difficult to make sure that you get what you pay for, but in the end that’s exactly what happens…

Counterfit Drug Products

The following link goes to an article from Business Week Online about the growth in the counterfeting business...

http://biz.yahoo.com/bizwk/050128/b3919001mz001_1.html

It's along article and covers a lot of products other than pharmaceuticals, but worth reading...

Friday, January 28, 2005

Industry Slowdown???

The attached link goes to an article about GSK cutting jobs...

http://money.iwon.com/jsp/nw/nwdt_rt.jsp?cat=USMARKET&src=704&feed=dji§ion=news&news_id=dji-00035320050125&date=20050125&alias=/alias/money/cm/nw

while this is a concern in and of itself, look at the last line in the article...

It references an industry analysis which reports sales growth is expected to slow from 10% over the past decade to 5% for the next decade...

that can't be good...

does this mean that the level of current competition (bloodletting is more like it) can be expected to continue for the next 5 years?

that definitely can't be good...

Thursday, January 27, 2005

The Suggestion Box is open...

I intend to have posts covering various topics and hope to have a "threaded discussion" with feedback from others...

I have a bunch of topics in mind, but...

I would appreciate your suggestions...list any topics you would like to see a discussion about...

and we'll see how it goes.




Welcome!!!

The intent of this forum is a general discusion of issues affecting the Pharm/ Bio Industry, specifically issues which impact process, facility design, validation and commissioning activities...

We may focus on Architecture and Engineering issues, but other topics would be welcome...

While the title of this blog includes a "Philly" reference, comments are appreciated from any locale...

Comments are greatly appreciated...the interaction of the discussion and comments will be what makes this blog a success...