Are you experiencing an increasing number of shorter run SKUs and fewer longer-run brands? If you are, you are not alone. In fact, according to Nosco’s analysis of IMS Health data, 91% of all Rx SKUs have annual volume of 500,000 units or less. We believe similar percentages can be found in veterinary products and medical devices. Additionally, we may all agree that “blockbusters” are being replaced by lower-volume “niche-busters.”
The effect of these lower volumes will cause many changes in conventional manufacturing and distribution, including the duration of production runs, the amounts of raw materials and finished goods on hand, and changeover processes from one product to another.
In our case—contract printing and packaging—there is a relatively new technology that is well-matched to shorter production runs: digital printing. Traditionally (digital printers have been around for at least as long as small computers have), digital printing had higher production costs than conventional offset or flexo printing. The economics of those technologies were especially strong for long production runs.
However, two changes are occurring. One is that, as noted, smaller volumes of pharmaceutical products are being manufactured. The other is that the continuing drop in microelectronics pricing are lowering the cost of digital printing. A third factor is how modern supply chains are operating, with closer coordination between production and consumption, and the desire throughout the industry to operate with “lean” supply chain and manufacturing principles.
It is our contention that pharma manufacturers can significantly compress their supply chain cycle time, reduce inventory, reduce obsolescence, improve service levels, and save money with digital offset package production. Until now, we were bound by the old rules of conventional printing technology. Fortunately, technology constraints of the past are melting away. In the past, technology was a barrier, now it is an enabler.
The progress of digital printing
We are in the midst of a digital revolution. Our cameras are digital, our music is digital, and so is our television signal. Nearly everything that has transitioned to digital has removed manual steps and cost from the creative or production process. In fact, our entire economy is evolving because digital conversion offers the potential to make a process instant, flexible and lower-cost.
Conventional printing processes take as many as 17 steps from art generation to plate making to printing (see figure). These intermediate steps include making printing plates (which in turn require their own proofing and quality-control checks) and monitoring the mechanical aspects of applying inks, aligning the paper stock and so forth. With the advent of computer-to-plate technology (CTP), many of these manual steps are being eliminated, but the cost of excessive make-ready, a higher internal cost of quality (defects), and the use of plates, still required longer runs to achieve the lowest price—even if a manufacturer were buying for shorter-run SKUs. Manufacturers had to live with excessive inventory and most likely obsolescence. Even today, flexographic and offset print processes are not necessarily considered lean—certainly not for shorter-run SKUs.
From a supply-chain and operations perspective, conventional printing represents many opportunities for errors, defects, and waste – lowering quality and raising cost. Now, with the advent of digital offset print production, printers can function with as few as three steps as the print production process is fully digital and highly compressed. Art is produced digitally, sent digitally to the press operator station, and onto the print engine, at the press of a button. And since no printing plates are needed, registration is guaranteed with minimal make-ready time required. Additionally, printers can experience significantly fewer defects, and have the ability to reduce lead times by more than half.
As a result, printers are seeing increasing use of digital offset technology. In fact, Nosco already digitally prints static or serialized drug and device labels for thousands of SKUs, and is now ramping up production of folding cartons. Digital production is saving drug and device producers hundreds of thousands of dollars annually. We call this an evolution because the transition to digital production is only beginning. As digital press technology evolves, we will see more and more volume move in this direction. With the world going digital, it really was only a matter of time.
Although relatively new for pharmaceutical packaging, digital printing is well established with more than 560 HP Indigo digital presses installed worldwide. In fact, according to HP data, the volume of labels printed on HP Indigo presses skyrocketed 500% between 2001 and 2006.
Revamping supply chains
What digital technology has done for photography and music recordings has now come to package printing. In fact, digital printing technology is transforming the pharmaceutical packaging supply chain by cutting costs, shrinking cycle time and minimizing errors and defects. At the same time, it not only shrinks or even eliminates inventory, but also reduces waste generated during startup or due to obsolescence. It’s been said that, “digital print production isn’t a manufacturing process, it’s a business solution.” It’s really a new supply chain model.
Nosco’s experience with digital printing, combined with its lean production initiatives, has shown that lead time for package production can be cut from 21-28 days to 14 or even less. This reduction enables the planning buffer and incoming quality assurance (IQA) time can shrink (which can take days all by itself), leading to a more compressed delivery schedule. Due to reduced changeover or make-ready time, it can be economical to purchase only the number of labels and folding cartons you needed at a given time, thus reducing inventories and work in progress.
An additional feature of digital printing is that it simplifies the addition of variable information, such as sequential or random bar codes. This variable information supports track & trace security systems in pharmaceutical distribution, and paves the way for eventual e-pedigree requirements. Digital printing also lends itself easily to the addition of covert or other security features, enhancing brand security. Digital printing complements lean initiatives because it delivers predictable and accurate performance, eliminates waste and reduces variability.
It also ranks as a sustainable process. Environmental advantages include a savings in ink, materials and support processes due to a streamlined make-ready that produces good labels and folding cartons within a few minutes. In fact, HP has found that digital production reduces ink consumption by as much as 75%. In addition, eliminating printing plates cuts waste and expenses even more. PC
ABOUT THE AUTHOR
Joe Tenhagen is vice president, marketing, at Nosco Inc. (847 360 4801; [email protected]). Nosco is a leading provider of labels, folding cartons and package inserts, brand protections and serialization to the life sciences and other regulated industries. For more information on digital printing for pharmaceutical packaging, visit www.ExpectanEvolution, where a new e-book, “On_Demand Digital Printed Packaging: ‘ReWiring an Industry,’ is available.