Process Design Initiatives to Reduce Cost of Goods. By Hector T Davila
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- Osborn Day
- 5 years ago
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1 Process Design Initiatives to Reduce Cost of Goods By Hector T Davila
2 Topics of Discussion Incentives for Reduction of Cost of Goods Examples of Process Initiatives Summary
3 Incentives for Reducing COGS Challenges faced by the Pharmaceutical Industry Economic Downturn - flat global forecast Reduction on New Drug Discoveries Fierce competition for Generics Increase of cost of Sales Regulatory Changes Expanding Markets in other world regions Sales Model requiring higher expenditures
4 Worldwide Total Prescription Drug Sales Data based on EvaluatePharma (29 MAY 2012)
5 Motivation for Reducing COGS Companies turning to low COGS Supply Chain Alternatives (less than 20% of Sales Cost) Local Challenges High Utility Cost Reduction on Tax Incentives Mature Labor Force Legacy Manufacturing Facilities
6 Motivation for Reducing COGS Need solutions to reduced cost on all areas -Examine areas that specifically Impact Cost of Goods - New Technologies - Basic Engineering
7 What is COGS? Cost of Goods Sold(COGS) Cost to Manufacture Cost of Delivering to the Store Manufacturing Cost Cost of Materials Cost of Labor Overhead Cost (All other cost not covered)
8 The Bottom Line
9 Non-Process Solutions Energy Supply Solutions Renewable energy High Efficiency Utility Equipment Negotiate utility rates and infrastructure costs Analyze generation options, including renewable, combined heat/power and standby generation PPA s Power Purchase Agreements
10 Non-Process Solutions Energy Consumption Solutions Optimize energy usage Reduce peak load Identify energy conservation projects: lights, motors, HVAC, refrigeration, steam/hot water systems, air compressors, waste heat recovery, and new technologies total lifecycle costs of new equipment purchases, including rebates, and new technologies
11 Process Initiatives Process is no longer a free ride Need to explore solutions to impact the COGS as early as process development and design Solutions that would impact: Cost of Materials Labor Utility Requirements Maintenance Cost
12 Areas of Opportunity Extracted from
13 Process Initiatives Line Sizing Properly Sized Lines Direct Relation to energy consumption Economic Balance between Installation and Operating Cost Design for Optimum Economic Pipe Diameter
14 Process Initiatives Pumps Proper Size and Selection Use of Variable Frequency Drives High Efficiency Motors Evaluate performance and adjust Impeller Trimming Operation Set Points 20 to 25% of all Energy Consumption
15 Process Initiatives Minimize Space for Material Handling Reduce HVAC Less Cleaning Area
16 Process Initiatives Move Material Handling Outside Favor through wall design Move Control Panel to Tech Areas Wall Recessed Component Reduce Facility Surface needing Cleaning
17 Process Initiatives COOLING HEAT RESIDUAL HEAT AHU DC Heat Recovery Evaluate Temperature Profiles Recovery Heat from Waste Stream
18 Process Initiatives COOLING HEAT RESIDUAL HEAT AHU DC Use of Heat Recovery Unit Reduction on Steam Consumption, up (>30%)
19 Process Initiatives GV pptx
20 Process Initiatives CONTINUOUS PROCESS GV pptx
21 Process Initiatives GEA Claims 40% saving on labor Reduction of manufacturing space by 60% 50% energy savings based on reduced installed power and heat recovery Minimize Material Handling
22 Process Initiatives Features Labor savings Reduction of manufacturing floor space Potential for heat recovery Minimize Material Handling Extended Runs
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24 Process Initiatives Constant Level Solvent Exchange Continuous Feed Solvent Exchange vs. Batch Reduction of Solvent Use Reduction of Cycle Time Reduction in Utility Consumption
25 Process Initiatives Size reduction after Drying Requires milling operation after Filter Dryer
26 Process Initiatives Inline Shear Disperser Size Classification during crystallization Eliminate mill handling Management of solids suspended in a slurry solution
27 Summary Reduction of Process Areas Optimize hydraulic power Batch vs. Continuous Operations Energy reuse Process Alternatives
28 What We Must Do Be Flexible and Innovative Use of Technological and Regulatory tools effectively Use of sound engineering principles
29 Process Design Initiatives to Reduce Cost of Goods