Outlining the business-vital areas pharma organizations should consider today in energy risk management, including the value of resiliency
Extreme weather events that were thought to be once-in-a-generation are becoming all too common, making companies look at their operations differently and acknowledge the essential role that reliable power plays in productivity and revenue. This is especially important for the highly automated pharmaceutical and life sciences manufacturing industry, where power affects everything from production to the supply chain. However, each organization has a different set of resources, operational and location challenges, and determining the best path forward can vary significantly from company to company.
Defining the problem and developing an optimal solution strategy will help enhance a company’s operations, productivity and ultimately, help protect revenues.
Highly automated pharmaceutical production requires precise research, development, manufacturing, packaging and distribution supported by energy conversion assets (ECAs). ECAs consume energy in its raw form, converting it to an operationally intensive process.
Because these assets are often overlooked and under-maintained, deferred maintenance can be considered as an “invisible risk”—and may wreak havoc on budgets during unexpected equipment failure. This failure can prove to be costly as the site may not be able to continue some or all production processes until the problem is resolved.
The pharmaceutical manufacturing industry can’t transform itself to be less reliant on power. In fact, with higher levels of automation, the role and need for secure power is amplified. However, organizations can better protect their operations and gain efficiencies with proper maintenance, upgrades to a more reliable power system and energy management.
Energy management can simply be described as monitoring and helping to mitigate energy consumption, use and risk. As is the case with many companies, decisions about risk are often driven by potential financial impact on the business.
There are several areas that an organization should consider.
Define the cost of downtime
To help mitigate risks and support continuity with the right level of electricity reliability, it is important to first understand the value of resiliency and the cost of power interruption. A clear understanding of this cost will identify the downside and serve as an integral factor when developing future strategies.
How would your labor, production, distribution, etc. be impacted in the event of downtime? How much would the investigation itself cost your company? Will there be a disruption to the supply chain, and what are its implications for reputation and brand?
These questions can help organizations to fully understand the critical role of power reliability for the business.
Believe it or not, not all companies have a firm grip on these cost factors. However, proper measurement and verification of these costs resulting from unplanned downtime or equipment failure are foundational for the analysis.
Companies should avoid comparing the cost of downtime to charges associated with a power resiliency plan. It is common for people to make decisions based on current information rather than projected costs of owning and maintaining the equipment. This can be misleading. It’s not an apples-to-apples comparison—ultimately shaping actions that aren’t beneficial to an operation or the future of the business.
Identify resiliency goals
Once an organization has clearly defined their cost of downtime, the next step is to define the company’s resiliency goals and objectives. Understanding the short- and long-term imperatives, such as the cost of adding equipment, growing a plant footprint or pivoting the business model, will help drive better decisions.
While many people think backing up the entire facility is the best option, it may not be feasible for every pharmaceutical manufacturer. Companies should consider their own unique goals and objectives, and how they relate to resiliency. It’s important to understand that competing challenges may lie within an overall organization.
Drug manufacturers should start their evaluation by considering the following items:
There are also several key contributing factors that should be considered:
Once these goals and objectives have been outlined, an organization should be able to create a flexible and reliable power system that best meets their specific needs.
Turning to energy infrastructure as a service (EIaaS)
In addition to defining the cost of downtime and site goals, organizations should consider who will design the resiliency project, what type of equipment will be needed, whom to work with and how the project will impact the company’s sustainability goals, time frame and more.
Most energy and manufacturing professionals are inundated with facts and figures about the cost of power outages. As a result, many have invested, or are planning to invest, in resiliency systems and considering various technology and process solutions based on their history of outages and how they affect operations.
Standard solutions include microgrids, uninterruptible power supplies, backup generation, solar and/or wind with battery storage, and distributed energy systems.
This can be overwhelming for an organization to consider, especially when it is already juggling competing priorities. That’s why a growing number of pharma manufacturers are turning toward the concept of energy infrastructure as a service (EIaaS).
EIaaS brings together all aspects of the project, including design, capitalization, construction, implementation and maintenance, to help lower an organization’s risks while helping to eliminate costly recurring repairs to aging equipment.
To get started, a credible EIaaS provider will meet with an organization to develop a road map toward a comprehensive solution that fits the company’s objectives. The provider will have a source available to supply the necessary capital for project implementation, and they’ll also own and be responsible for the maintenance and monitoring of the equipment. Taking ownership of the equipment means taking on the risk of its operation too, which allows organizations to stay focused on their core business and competencies.
Companies can pair generators and/or upgrade their solar generation and battery energy storage to include software controls to achieve a basic level of backup. These systems can potentially handle up to multi-hour outages and graceful shutdown of servers or other outage-sensitive equipment. Levels of redundancy, automation, generation and service go from a basic level through to subscription-based-as-a-service models with low risk and high electricity reliability available. 24/7 monitoring is a crucial component of EIaaS as well.
An ElaaS example that comes to mind is a Spain-based pharma company’s North Carolina operations that supplies life-saving plasma products that demand ultra-clean rooms and intense refrigeration requirements.
The company needed to provide backup power services to 15 buildings spread across a 467-acre campus. It collaborated with the manufacturer to design a flexible centralized backup power system that supports its sophisticated operations at a lower cost than having multiple “micro-systems” spread across the campus.
Take control of your power systems
We have become accustomed to power being available whenever we turn on a light switch or press a button. So, when unplanned downtime occurs, there is a range of responses to the situation.
Some people decide to wait until power is restored, while others spring into action to uncover the cause, understand the ramifications to the bottom line and learn what can be done differently in the future.
Understanding critical processes and costs associated with downtime and designing a system to help protect these aspects of the business is integral to success. Many manufacturing companies are also now considering how to blend sustainability initiatives with resiliency. Renewable energy and battery storage are great options for those who are looking to reach those goals.
Life sciences companies can’t control the weather or other events that may cause unplanned downtime, but there is a way they can prepare for them. Careful selection of an ElaaS provider that can guide a company’s energy pathway to evaluate specific energy and resiliency needs with emerging fuel and resiliency technologies can lead to stronger infrastructure and help mitigate the steep financial and reputational costs resulting from outages.
About the author
Eric Bennett oversees the pharmaceuticals segment at Duke Energy Sustainability Solutions.