Case in Point
The consultant documented how many employees were needed at a given time based on incoming materials. He found that employees were working five eight-hour shifts when they would be better utilized working three 12-hour shifts. The changes to scheduling increased the employee utilization rate from roughly 50% to as high as 90%.
Making the Most of Utilization
Issues with calculating utilization across multinational companies can arise when taking into consideration that not all countries embrace a 40-hour work week. In fact, New Economics Foundation, a British think tank, has proposed a 20-hour work week to deal with issues of unemployment, child neglect due to overwork parents, and carbon emissions from commuting. (Cross your fingers that proposal gets passed.)
In general, companies aim for an 85% utilization rate for technical personnel, with a 65% utilization rate for staff overall in order to be profitable. Of course, the higher the utilization rate for billable employees, the greater the profit margin.
OE to a Certain Degree
Published by Enterey Marketing & Communciations Team
The Enterey Blog
It’s 5 O’clock,
Do You Know Where Your Money is?
A Closer Look at Spend Analysis
$800 is Expensive Coffee!
According to CBS News, the average American spends nearly $800 a year at Starbucks, and that’s just on single-drip coffee (never mind those venti double shot, extra vanilla Frappuccinos, weighing in at close to $6 each). The American Institute of Certified Public Accountants has recently released the “Feed the Pig” ad campaign alerting citizens to this and other spending facts, meanwhile providing simple tips for money management. The idea is that you can’t save if you don’t have a handle on your finances in the first place. Well, the same is true in business.
$260 Billion Lost
Based on the Best Practices in Spending Analysis report, very few companies know what they spend, on which products, or with which suppliers. The result is that supply managers are not equipped to make decisions based on fact, but rather on intuition. In the corporate world, an estimated $260 billion is lost each year due to unanalyzed spend data.
A Solution to the Problem
During a recent large-scale tech transfer, an Enterey senior consultant conducted a thorough spend analysis for the client, a top-tier biotech. The consultant drilled down into what the client was actually spending on manufacturing and highlighted areas where the client could save big. To put it simply, what the consultant found was that there were things for which the client was paying a dollar that could be acquired for a dime instead.
A spend analysis was compiled, and that information was passed on to the client’s Procurement department. This tool allowed the client to not only harness their purchasing power for goods and services, but also created the potential for millions of dollars in savings.
The Right Tool for the Job
Thought leaders credit this type of spend analysis as providing the foundation for a robust procurement program, leading to an average of 10% to 30% savings overall. Spend analysis is also a tool to proactively evaluate possible future changes to production that result from changes in demand.
The moral of the story is that spend analysis is a window that allows a company to see where its money is going and, more importantly, where it can go—protecting investment, maximizing purchasing power, and increasing profit potential. Join the discussion; do you know where your money is?
For more on the spend analysis tool project, click here.
IRVINE, CA--(Marketwire - Mar 29, 2012) - Enterey Life Sciences Consulting, a leading provider of consulting services focused on manufacturing and quality operations for life sciences companies, credits senior consultant with saving a client as much as $3 million annually.
Enterey's senior consultant was tasked with supporting the technology transfer process for a top-tier biotech, which included moving manufacturing operations from the previous clinical facility to a new, fully commercialized facility. The consultant's main priorities were to ensure that manufacturing requirements were met, as well as to manage the impact assessment and implementation plan processes. In addition, the consultant conducted utilization and spend analyses, resulting in millions of dollars of savings.
First, the consultant drilled down into the client's overall spend and highlighted areas where the client could save money.
"To put it simply," explains the consultant, "I looked at the manufacturing spend and informed the client that there were things they were paying a dollar for, when they could get the same items for a dime instead. I then presented the data to the client's procurement department, creating the potential for millions of dollars in savings."
"Spend analysis like this is the foundation of a robust procurement program," according to Gregg Brandyberry, former Vice President of Procurement, Global Systems and Operations at GlaxoSmithKline and former Senior Advisor, A.T. Kearny Procurement and Analytic Solutions, "and combined with procurement best practices, spend analytics can result in overall savings of 10 to 30 percent."
Second, the Enterey consultant developed a tool for the client that allowed employee utilization rates to nearly double.
"Because production for this client is highly specialized and has a lightning-fast turnaround time, I wanted to develop a way to very quickly analyze how many employees are needed at a given time based on incoming materials," says the Enterey consultant. "Whereas employees were working five eight-hour shifts, I found that they should be working three 12-hour shifts instead, and these changes will take the utilization rate from roughly 50 percent up to as much as 90 percent."
According to Enterey CEO Mike Ferletic, "Establishing tools to analyze spend and resource utilization will not only save significant investment, but will also provide a means to proactively evaluate future changes to production when demand changes," and, he says, "these tools give insight as to how to handle those changes."
Enterey Life Sciences Consulting, founded in 2002, provides life sciences consulting expertise in both process- and systems-related projects for biotech, medical device, and pharmaceutical clients. Enterey provides solutions ranging from strategic planning to business-integration, and has a proven track record of success supporting both clinical and commercial facility start-ups.
For information about Enterey, visit: http://www.enterey.com or call (800) 691-2349.