Unlocking Business Efficiency through Proactive Asset Management

Ben Potenza
VP Marketing
EquipNet Inc.

This article discusses how the processes of asset redeployment, as well as the buying and selling of surplus and idle laboratory and production instrumentation can benefit the pharmaceutical industry.

The global pharmaceutical market is growing 7.8 percent year on year and is estimated to be worth around USD 1.6 trillion by 2020. As the world's population continues to grow and age, so will this industry1. At the same time, pharmaceutical companies are facing a range of challenges which are forcing them to reduce both time to market and costs. For instance, more stringent healthcare regulations are being introduced and payers are putting pressure on companies to adapt their pricing policies and commercial models .

Mergers and acquisitions are becoming more common-place, which means that equipment can fall out of use even though they remain valuable for a variety of uses such as drug discovery, manufacturing and the packaging of commercially available products. Additionally, new products are constantly being launched across the sector, meaning that instrumentation needs are also evolving.

An Innovative Solution

An increasing demand from pharmaceutical businesses for low-cost laboratory and manufacturing instrumentation solutions has resulted from the need for companies to focus on leaner production, as well as meeting the fluctuations in demand. These pharmaceutical companies are now beginning to purchase high -quality, used equipment in order to expand into new production areas, as well as to maximize budget; it is common to save between 50-75 percent of the cost of new instrumentation. Furthermore, the advantage with purchasing second-hand equipment is that it is often available immediately, unlike new instrumentation2.

In order to obtain returns from surplus machinery, time and expertise is needed. Many pharmaceutical companies do not have this however and implementing a partnership with a specialist provider can help to execute an asset management strategy. These asset management experts can provide useful information on budgets, specification and risk mitigation (how reputable a supplier is, for example). Industry experts can then guide companies through the purchasing process by helping them to obtain existing warranties on equipment and provide follow-up support allowing an efficient process for the purchaser.

EquipNet provides a holistic approach to surplus asset management for both buyers and sellers and this is illustrated in the EquipNet 'Value Control Model'(See Figure 1 on next page), which is based on time and can be customized using a central tracking platform. This provides communication and workflow tools and ensures the exposure of all assets throughout a business. A variety of disposition channels, which include redeployment, negotiated sales with managed pricing through an online market and competitive auctions can also be used. Other options include clearance, disposal and scrap programs, which can be customized for each specific customer.

To redeploy equipment and keep track of surplus assets, partners should possess a reputable software platform to list assets across a business. A company can then view all equipment across a variety of locations worldwide .







Redeployment

Redeployment of instrumentation allows businesses to gain the highest possible value from equipment and is hard to achieve without a central tracking platform. This software allows users to post, track, identify and then internally redeploy an instrument that is laying idle or not being used in its current location. Should this not be possible a company can then decide whether the external sale of equipment or the purchase of another instrument is necessary.

A proven example of a tracking platform used within this market is EquipNet's Asset Redeployment Management System (ARMS') platform, which features workflow management and multiple access levels for employees across a business, including plant managers and executives. ARMS can provide in -depth information on the equipment a business currently owns and which site it is located at.

Looking to Sell?

Should the redeployment of an asset not be possible, a company should then look to sell the instrument. An auction is a reliable way to sell equipment. Dealing with the auction process however is difficult and success depends on a number of factors. An asset management partner can provide advice on how to approach this process for each individual customer.

Therefore, using a company with specific industry experience and a good reputation is important. Options can include online auctions, live/webcast auction events, sealed bids and private treaty events. Further customized solutions for selling equipment include EquipNet's MarketPlace platform. MarketPlace lists used equipment available for purchase, however, in contrast to auctions, which are scheduled events for selling a large group of used equipment from client facilities, MarketPlace allows price negotiation for an instrument at anytime.

Should it not be possible to redeploy assets as they have little or no value , clearance by donations, scrap and environmental recycling are the best options. It can be the case that the scrap value of idle equipment can achieve the highest return. It is common for EquipNet to advise clients in this area.

The purchase of second-hand equipment Pharmaceutical companies now face the ever more difficult challenge of meeting rising demand, as well as more rigorous commercial targets. All kinds of businesses are now taking advantage of the savings to be made from purchasing pre-owned equipment from top-tier manufacturers. This is in contrast to constantly buying new instrumentation.

Buyer companies therefore, often invest in high-quality second-hand instrumentation in order to maintain a low cost-base while continuing to improve company processes and services. Asset management partners can inform businesses of appropriate auctions, as well as how to use negotiated sales platforms such as MarketPlace. Collection and delivery are all that need to be organized following the purchase of equipment.

Summary

As the pharmaceutical sector continues to grow, businesses are keen to further reduce time to market, as well as costs. Redeploying and selling equipment with a reliable asset management partner can help businesses obtain the maximum returns on an instrument, as well as ensure operational efficiency. Buyers are also able to purchase unwanted, highquality equipment for a fair price. An asset management partner can therefore provide important solutions for companies looking to redeploy, sell and purchase surplus assets.

Reference

PwC- http://www.pwc.com/gx/en/industries/pharmaceuticals-life-sciences /pharma-2020/vision-to-decision.html NiceInsight-http://www.niceinsight.com/articles.