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Strategic Issues for Capital Goods Suppliers in the Regenerative Medicine Industry

Lookup NU author(s): Professor Christian Hicks

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Abstract

Capital goods, such as plant and machinery are used for the production of other goods, rather than for final consumption. The design of capital goods determines the nature of the processes that are used for producing products. This paper develops classifications that explore and explain important linkages between the design of capital goods, the configuration of processes and the nature of the final product. At one extreme dedicated plant is produced on an engineer-to-order basis that is used to produce standardised products in high volume. At the other extreme, flexible plant is developed using existing designs to produce a wide variety of products in low volume. This paper investigates these issues in the pharmaceutical and regenerative medicine industries. The traditional pharmaceutical model was based upon the high volume production of chemical based products using dedicated plant. The cell therapy industry incorporates allogenic therapies where source cells are taken from one source, expanded and then prescribed to many patients. These products can be produced using similar models to the pharmaceutical industry. Autologous therapies take cells from an individual, expand them and then return them to same person, thus operating on a service model. Cellular therapies are highly perishable and the cells need to be transported under controlled conditions. This has significant supply chain implications, particularly with regard to the scale and location of processing, which determines that suitability of plant and equipment. This paper examines these issues through case studies that illustrate alternative strategies being developed by capital goods suppliers to the regenerative medicine industry.Capital goods, such as plant and machinery are used for the production of other goods, rather than for final consumption. The design of capital goods determines the nature of the processes that are used for producing products. This paper develops classifications that explore and explain important linkages between the design of capital goods, the configuration of processes and the nature of the final product. At one extreme dedicated plant is produced on an engineer-to-order basis that is used to produce standardised products in high volume. At the other extreme, flexible plant is developed using existing designs to produce a wide variety of products in low volume. This paper investigates these issues in the pharmaceutical and regenerative medicine industries. The traditional pharmaceutical model was based upon the high volume production of chemical based products using dedicated plant. The cell therapy industry incorporates allogenic therapies where source cells are taken from one source, expanded and then prescribed to many patients. These products can be produced using similar models to the pharmaceutical industry. Autologous therapies take cells from an individual, expand them and then return them to same person, thus operating on a service model. Cellular therapies are highly perishable and the cells need to be transported under controlled conditions. This has significant supply chain implications, particularly with regard to the scale and location of processing, which determines that suitability of plant and equipment. This paper examines these issues through case studies that illustrate alternative strategies being developed by capital goods suppliers to the regenerative medicine industry.


Publication metadata

Author(s): Hicks C, Teng CW, O'Neill P

Editor(s): Grubbstrom,RW;Hinterhuber,H.

Publication type: Conference Proceedings (inc. Abstract)

Publication status: Published

Conference Name: 18th International Working Seminar on Production Economics

Year of Conference: 2014


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