BioNJ’s Manufacturing Briefing 2022 at the New Jersey Institute of Technology brought together industry thought leaders to navigate an ever-changing and ever-more-difficult industry landscape, especially in the wake of the pandemic.
“This is our first in-person biomanufacturing conference in two years,” said BioNJ President and CEO Debbie Hart opening the event. “Biomanufacturing has been evolving over many years recently, and not ever more so than during COVID-19.”
Laurie Lanoue, a partner at McKinsey & Co., set the stage ahead of the panel discussions, laying out trends and challenges reshaping the manufacturing industry based on the firm’s data analysis. “There is a lot going on,” Lanoue said bluntly as she kicked off her presentation.
Lanoue acknowledged and broke down the myriad challenges that manufacturing companies are facing, which include acute headwinds that all of businesses are encountering, such as rising inflation, geopolitical considerations, supply chain disruptions and labor shortages.
“The future is going to be a little bit challenging,” said Lenoue. “And many of us in our tenure in the industry have not yet faced such a situation.”
In discussing inflation woes, Lanoue said the result is an up to 140% increase in raw material costs. In describing how tricky inflation can be, Lanoue quoted a former professor.
“It’s like toothpaste. Once it’s out of the tube, it doesn’t go back in,” she explained, stressing that it is a hill that all companies need to climb.
She also ticked off some sobering points about those challenges. The pandemic resulted in an 18% increase in consumption from 2019 which created a demand that coincided with a supply shock of up to 15 months of delays due to constrained transportation.
“When we analyze today’s supply chain, our estimate is that 30% to 60% of today’s supply chain could be displaced due to non-financial reasons,” said Lanoue. “That is an enormous number.”
That fact led to a discussion on localization with increased state interventions and domestic investment for the development of regional supply chains. Lanoue noted that 18% of life sciences companies believe localization is one of the top five trends a COO should consider.
Among labor market challenges, an estimated 35% of life sciences employees are planning to quit their jobs in the next three to six months.
Added into that difficult equation are pressures like new expectations of work, a growing focus on environmental; social and corporate governance issues; and the diffusion of individual player power.
Lanoue explained that there are new expectations for work with 40% of employees considering leaving as part of the great resignation and 50% of employees recommending improvements in digital tools. In fact, 88% of life sciences employees may be affected by automation, centralization and evolving skills landscape.
Another trend is that as innovation comes from new players and external sources of funding, the industry is less concentrated.
Despite these realities, Lanoue stressed that some tailwinds create opportunities such as advances in digital tech and user willingness, new modalities increasing pressure to innovate in life sciences. She noted that the industry innovated out of necessity during COVID-19 and doing so resulted in quicker to market products and improved yield, quality and modularity across value chains.
Lanoue listed five potential responses for the biopharma industry: putting reliability and resilience at the center of operations; reinventing talent strategies and redesigning organizations to adapt to changing priorities with agility; accelerating the deployment of digital and analytics to mitigate cost pressures and labor challenges; regionalizing approaches to network strategy; and re-imagining network strategies based on a growing portfolio of modalities and tech platforms.
That laid the foundation for a series of discussions on such topics as lessons learned from pandemic; the post-pandemic cliff and supply chain instability; incorporating innovation into manufacturing strategy; and accelerating manufacturing performance and productivity.
Throughout the day, panelists and experts moved through the topics, offering solutions and responses.
While the discussions hit on different issues, many of the same themes recurred, as all companies across all industries are facing a similar set of headwinds in different forms throughout their businesses.
Some of the refrains from panelists included leveling the playing field between workers in the office and those remote; being more creative and purposeful; improving communication; focusing on the voice of the customer; working closely with partners; localizing supply chains in the wake of the pandemic; creating more synergy in operations; increasing flexibility; and balancing the hybrid work model with the benefits of face-to-face interaction and training.
While there is no shortage of challenges and hurdles, the mere fact that the briefing returned to an in-person format was reason enough for optimism in an industry that was on the front lines of the pandemic over the last few years.
And the backdrop of NJIT in Newark on a sunny September day on a campus bustling with students underscored that optimism.
“I love this kind of event,” said NJIT President Teik Lim. “The reason I love this kind of event is that one of my priorities is that we want to build bridges with the world outside of NJIT, with businesses, with legislators, nonprofits,” said Lim.
He noted that these mutually beneficial partnerships are a priority because the students of today are much more holistic.
“Experiential learning is such a value-added component of their education,” Lim said.
Hart summed up why bringing this collection of thought leaders and experts together is so important.
“At BioNJ, we want to make sure that we’re supporting New Jersey’s life sciences ecosystem and make sure that it is a place where innovation is happening unencumbered and then patients can access that innovation,” she said.