Facilities Management In BioPharma: Why Is It Important?

By Loralyn Mears, PhD

What is taken for granted until something goes wrong; accounts for the second highest spend (after salaries) by every organization on the planet; is essentially unknown as an industry; is a mystery job function to 99 percent of the working population, and yet, is absolutely critical to the activity and well-being of every single person who works, shops, travels, commutes or lives in public spaces?

If you answered “building services” or “facilities management”, you’re right! And you’re part of a tiny, minority group who understands that buildings, not just people, need to be managed properly in order to get the most out of them. However, doing so is a bit of an art-meets-science niche function which sounds a lot simpler to execute successfully than it actually is.

The term, “building services” broadly refers to both aspects of buildings, from portfolio and asset management (integrated portfolio strategy for corporate real estate (CRE) transactions including leases, purchases, and sales) to its operations (coordinated facilities services delivery, including engineering, maintenance, cleaning, and the procedures that define how these services are performed). Facilities Management (FM) is an interdisciplinary industry that coordinates the allocation of space, utilization and efficiency of assets, execution and administration of operations and services, and the people and procedures required to provide building tenants with secure and comfortable working environments to facilitate the business needs of the occupants.

In general, the larger the organization, the greater the likelihood that an FM function exists and the greater the number of services that are outsourced. Big pharma, with large asset portfolios (buildings, equipment, and staff) distributed around the globe, typically have a centralized group responsible for CRE / FM. For these organizations, more often than not, CRE / FM services are fully outsourced. Typically, the standard portfolio management strategy is to outsource CRE and FM to different providers. However, it will be interesting to see how the current trend of CRE providers investing and evolving into FM service providers and vice-versa will impact this standard strategy. Furthermore, many clients take the approach of separating their global operations into the three major time zones: APAC (Asia Pacific), EMEA (Europe, Middle East & Africa), and AMER (North & South America) and providing the respective leaders of each of those zones with the autonomy to choose their own CRE and FM providers. Many further divide the FM responsibility into Hard (technical, engineering, operations & maintenance, etc.) and Soft (cleaning, reception, mail room, food, conference room management, etc.) and make the strategic decision to outsource the two to different providers. Most recognize this as a solid strategy for risk mitigation: however, opinions on this approach are shifting.

The need for cost savings, streamlined operations, and a standardized approach to service delivery (a single SLA is becoming the desired end goal) is having an impact on FM vendor selection. Ideally, these benefits (and more) can be best and fully realized via a single provider model for both CRE and FM. Although clients wax poetically about the great sourcing leverage this would afford, the reality is that no provider in the industry can offer a truly global solution – each has greater strengths in some geographies, some management models, and in either Hard or Soft Services, but rarely both, and certainly not in all of the above. Moreover, there is only one large biotechnology company that has a single provider for nearly every service worldwide, and they are rightly concerned about the risks of single sourcing. With the current uncertainty and changes in the FM provider community, it is unclear what the right balance is between geographic strength, service strength, vertical market specialization, cost benefit, and acceptable risk. This should play out over the next couple of years.

Within biopharma, as is the case in other vertical markets, there no longer appears to be a clear pattern on what the preferred FM strategy is or should be with respect to dividing responsibility by asset management versus operations, or the nature of the service delivery of those operations. In fact, what appears to be emerging is a reverse trend of sorts where clients are engaging multiple providers. In some cases, they are even taking the facilities contract management function back in-house.

That said, clients typically never revert to an in-house service delivery model. Perhaps the biggest driver to outsource FM is the cost equation. After human resources (salaries, benefits, etc.), building services is the second highest spend for every organization [2]. As such, streamlining even a small portion of those services can dramatically impact a company’s bottom line. Standardizing business processes and technical operations, in combination with right-sizing an organization and mapping people with the right skills to the right jobs, allows leaders to be more strategic and to better allocate precious dollars to projects that will have the greatest impact on business goals.

WHAT’S DIFFERENT ABOUT FM IN BIOPHARMA?

Biopharma may be the toughest industry overall for business in general given the complexity of drug discovery, the financial and time investment required, the regulations and restrictions, the competition by generics, reduced profit margins, and extremely high capital costs, among other challenges. Not to mention the moving landscape with a recent flurry of M&A and one of the highest turnover rates of top-tier talent. Operations within biopharma facilities, whether performed in-house or outsourced, are equally complex and challenging. Tight adherence to protocols, compliance requirements, and corporate policies are part of the daily rigor of facilities management in biopharma.

Standard operations, such as janitorial, electrical repair work, or HVAC maintenance are anything but simple in a regulated environment. A clean room or an animal research area (vivarium) may have half a dozen or more protocols on gowning and de-gowning alone, plus dozens of tightly defined procedures for conducting whatever operation or service is required. Individuals who are granted access to regulated areas are required to be certified, and all training must be completed and documented before they are even permitted entry. As the work is completed, each step must be logged and registered in a variety of tracking solutions, most of which are now evolving from pen and clipboard to highly sophisticated, centralized software systems which document the history of every activity in that space and every individual who has entered it.

Specialized operations are what truly differentiate FM in biopharma from other industries. Lab and production equipment calibration, preventive maintenance and repair require highly skilled and experienced operators to perform. Some of the equipment, such as liquid chromatography, nuclear magnetic resonance spectroscopy, electrophoresis and other instruments are generally handled only by their original manufacturers given the complexity of their designs. Utility supply management of raw water, steam, chilled water, compressed air, chemicals, gases, purified water, to gas and energy has a unique set of delivery requirements for the biopharma industry. Water filtration and purification is a central aspect of biopharma operations and entails the integration of interior and exterior systems. The interoperability of irrigation and plumbing systems must be delicately balanced with supply delivery to the lab or plant. Precise application of lime for water softening or the inclusion of ion-exchange resins is required. Reverse osmosis via sophisticated membranes and continuous electrodeionization methods to afford clients with environmentally sustainable approaches to water management are all part of the job. Water supply is taken for granted, but is not so easily accomplished. [3]

Biopharma is also committed to “going green”. This is particularly challenging given the volatility of many of the compounds used in drug development. Radioactive isotopes, nuclear imaging products generated by nuclear reactors, biohazards (blood, viruses, bacteria, tissue samples, etc.) and sharps (needles, blades, etc.) all pose unique challenges with respect to their shipping, handling, receiving, and disposal. Moreover, the toxic approaches required for cleaning and decontaminating areas where these materials are in use can offset environmentally sustainable initiatives in other areas. As such, it’s essential for biopharma clients to collaborate with innovators in the fields of janitorial, waste management, materials supply, and warehousing in order to apply as many green processes as possible. Each green process can afford “points” to those clients in pursuit of LEED certifications.

Reliability engineering is an area of growing interest, both within biopharma clients and some of the FM providers. The primary role of the reliability engineer is to identify and manage asset reliability risks that could adversely affect a facility or business operations.  These highly specialized engineers help define the appropriate maintenance tasks associated to failure modes where frequencies are driven by the criticality of a system so maintenance costs can be optimized.

There is even more complexity in the production of biologics versus the manufacture of traditional chemical drugs. Biologics manufacture is yield-driven and requires dynamic scheduling, whereas chemical manufacture is generally predictable and on a fixed production schedule. The latter better allows for advance planning of preventive maintenance, coordinated shut-downs, stock-piling, and parallel set-ups to divert manufacturing to other lines when needed. Biologics are also high-corrosion environments with extremely rigorous guidelines, restrictions, and protocols to maintain sterile conditions, which does not lend itself well to transfer to secondary manufacturing lines, and thus has its own unique set of FM needs. [4]

HOW HAS FM CHANGED OVER TIME?

In the beginning, companies allocated an average of 400 sq ft per employee [8] when making real estate and work space planning decisions. Computers and printers were big and slow and took up large spaces but real estate (in general) was readily available, costs were reasonable, and corporate footprints with number of employees per square foot kept deliberately low. Most daily work was still done by hand, logged in carbon-copy books, and typed up. To keep the office cool, windows were opened and loud fans were propped up haphazardly to circulate the air. Pollen, dust, dirt – and even critters – gained easy entry through the open windows. In the winters, buildings were heated with coal. Coffee and sandwich carts were wheeled through the office providing goods, while other carts moved from the basement to the office in an endless cycle of collecting and distributing physical mail. You worked 9 to 5 at your desk, in that same building, from Day 1 until you retired.

Of course, technology in the digital age has had a profound impact on how we live and work. Mobile devices have ushered in an era that has moved us quickly from “more accessible” to “on demand” to “never off”. Along with this came the expectation that each of us can be more independent and more productive. Top-heavy organizations that were pyramid triangle-like have been replaced with ones that are shaped more like highways. Corporations now plan for 185 sq ft on average per employee [5] but this is on trend to be further reduced to 150 sq ft [2], and JLL estimates that companies have at least doubled, if not tripled, the number of employees per floor [8]. Offices, if they exist, are smaller (96 sq ft in 2010 [4]) and frequently double as “team gathering rooms”. In keeping with the corporate themes of transparency and visibility, plaster walls are often glass, cubicle partitions are no higher than a monitor. We now also have firewalls, corporate forensic units with “web police,” and power-hungry server rooms that belch out massive amounts of heat. But these server rooms will likely soon go by way of the dinosaur too as comfort grows with storing data in “the cloud”.

Along with this independence has come greater responsibility for both us as employees and our employers who need to enable WFH (work from home) and manage all of the security, calendar coordination, social media, and digital resources needed to support doing so. The concept of the office itself is going away, right along with the red stapler. The concept of the desk and corporate land lines will soon disappear too. Employees are dropping in – and out – of shared workspaces as needed or as they wish. Job definition has become fuzzy, reporting lines are matrixed, and efforts are more project-like than job-like.

Clean energy like solar and wind are making their way into our workplaces. Innovation, big data and analytics are the new weapons to strike down competitors: you can’t manage what you can’t measure. Cross-pollination across job functions, with external collaborators and via the vendors in your supply chain, is sparking  new ideas and clever mash-ups that are helping define brands, products, and corporate values. By 2020, there will be an unprecedented five, different generations in the workplace [10]. There seems to be an increasingly blurry division between the preferences on how the millennials work and what they want versus the boomers. It’s becoming less about who wants what and how they do it and being whittled simply into a “this is how it’s done now” mode.

So how does all this impact FM? Cost pressures are forcing management to make tough decisions. Let people go to the competition or invest in their development? Centralize resources and streamline job functions, amp up flexibility with reduced investments in brick and mortar operations, and embrace “go virtual”? Make mega-million dollar investments in new, open architecture, natural light  “fun” work atmospheres with bean bags, Starbucks coffee stations, scooter-friendly hallways to stay viable, and recruit workers or try to refurbish typically window-less old office buildings?

In general, most of biopharma has an age issue: buildings are aging (and increasingly expensive to maintain) and the staff who maintain them are aging too with an average of 49 which is 5-6 years older than most other industries (and new recruits aren’t entering the field [1]). Manufacturing and lab equipment is being replaced less frequently and “run to fail” strategies are commonplace. Repair, repair, and repair again. New technology requires an advanced skill set to maintain and repair: and these skilled workers are in increasingly short supply. Mobile devices enable higher productivity and real-time situation fixes with improved alerting to divert potential situations from escalating. Glass walls and wide open expansive spaces with lots of sunlight are wonderful but difficult and costly to keep clean, not to mention the energy costs and difficulty to thermo-regulate. Everyone wants to cut costs – but nobody wants to reduce service delivery or compromise quality and compliance.

Real estate reports show growing interest in newly constructed and refurbished spaces as a means of attracting top talent and remaining viable [11]. Large metropolitan, cosmopolitan areas continue to be hot spots for business locations, and rents are rising. Mexico City is booming, Brazil and China are losing ground as the interest in setting up off-shore pharmaceutical operations is shifting.

While much has changed over the last few decades, some things appear to be constant and will likely be part of the FM landscape in the decades ahead. For example, there are several questions that every FM operator asks, such as how can we reduce our footprint, our utility costs, and/or our impact on the environment? What can we do more efficiently? How can we better leverage technology? How much do we spend on this operation? The only thing likely to change is how we address these questions and measure their impact.

WHAT DOES THE FUTURE OF FM LOOK LIKE?

Based on what’s trending now, key themes for the future of FM may include:

• Expanded Scope: The greater the scope, the greater the savings. Given unprecedented cost-pressures, investment, and consolidation within the world’s leading FM companies, and an imperative need to focus on core strengths to gain competitive advantage, more organizations will be awarding more of their building services to third parties. Whether or not the service delivery will be managed by a single provider or multiple parties managed in-house is up for debate.
• Strategic Role: Given how dynamic biopharma is, with a recent surge of M&A, anemic pipelines, a downturn in new drug filings in 2014, pressure by generics, and an upsurge of contract manufacturing organizations (CMOs), companies need solutions that enable a flexible structure with variable cost. Product transfer, ownership changes and policy updates are driving demand for flexibility yet fixed cost structures still dominate the market. FM providers will play a more strategic role, upstream of operations, assisting with capacity planning, work place modeling, different asset-ownership structures, and scenario planning to prepare for up – and down – swings in production, and offer proactive solutions on how to maximize available space.
• Big Data: CMMS (Computer Maintenance Management Systems) have the capability, today, to integrate with numerous data types, including CAD (Computer Aided Design) building plans with utility maps, financial spreadsheets, historical maintenance, and occupancy data, energy consumption, etc., yet most CMMS in biopharma are limited in the data they are connected to. Analytics will enable insight versus oversight and help drive strategic plans from portfolio management to emergency and disaster situation preparedness. Lab and plant equipment can be evaluated to select the right maintenance strategy and help identify the most cost-effective balance between preventive and reactive maintenance to better inform capital expense planning.
• Cradle to Grave: Getting your FM provider involved at the building design process may seem like a foreign concept, but this has already happened on a few occasions in 2014. Incorporating the deep knowledge of building operations known to an FM provider while plans are being constructed helps ensure maximal efficiency and fewer retro-fits or make-do situations in the future of the building. As a result, costs to commission, validate, and later operate the building are significantly reduced. Assets are properly registered, tracked, and maintained from Day 1.
• Procurement-on-Demand: given the enormous leverage of FM providers in key service categories including cleaning, food, uniforms, security, and other large expenses incurred by every client, tremendous savings are afforded to clients via the procurement teams of their FM providers. It may be a giant leap, but the concept that FM providers, who already manage the sourcing and financial tracking of the client’s biggest expenditures, could be tasked with handling all of procurement’s sourcing activities. This could be done on demand, under the direction of a client’s procurement leader, and, in the future, may not be as crazy as it sounds now. Couple this with “target costing” as an approach versus a commercial model for cost-savings and glidepaths on historic baseline costs, and now the market gets interesting.
• Green Guardian: the statistics are scary [12]. The world discards 500 billion single-use plastic bags each year. The USA discards enough paper and wood each year from construction and renovation projects to heat 50 million homes – for 20 years. Americans also discard 35 billion plastic water bottles (fewer than 5 percent are recycled) and 4 billion Starbucks cups each year. We have generated more plastic in the past decade than in our history on Earth. We need solutions to better manage the energy heating and cooling our buildings, reduce the chemicals we use for cleaning, use data-driven decisions to change filters or tubing instead of simply following a manufacturer’s recommendation. FM people are at the heart of building operations and the new stewards of the environment – soon adding “Green Guardian” to their ever growing list of responsibilities.

REFERENCES CITED

1. JLL. (2014). “The Key to Attracting and Retaining New Talent? Understanding Millennials.” [Whitepaper]. Retrieved from: www.us.jll.com/lifesciences
2. Shevory, Kristina. “Office Work Space is Shrinking, but That’s Not All Bad”. NY Times. January 18, 2011. Retrieved from: http://www.nytimes.com/2011/01/19/realestate/commercial/19space.html?pagewanted=all&_r=0
3. Kohli, J.P.S. (2014) Pharmaceutical Facility Management, Second Edition. New Delhi, India: Artz and Printz.
4. PhRMA.  (2013). Medicines in Development Biologics. [Whitepaper]  Retrieved from: http://www.phrma.org/sites/default/files/pdf/biologics2013.pdf
5. IFMA. (2014). “Facility Management Trend Report – Emerging Opportunities for Industry Leaders”. [Whitepaper]. Retrieved from: http://www.ifma.org/marketplace/store/product-view/facility-management-trend-report-emerging-opportunities-for-industry-leaders-e-file#sthash.XFGRpB8e.dpuf
6. El Nasser, Haya. “The office is shrinking as tech creates workplace everywhere”. USA TODAY. June 5, 2012. Retrieved from: http://usatoday30.usatoday.com/money/workplace/story/2012-06-05/tech-creates-workplace-everywhere/55405518/1
7. The Week Staff. “America’s workspaces are shrinking (unless you’re the boss)”. The Week. February 9, 2011. http://theweek.com/article/index/211935/americas-workspaces-are-shrinking-unless-youre-the-boss
8. JLL. (2014). “Rewriting the code of Life Sciences CRE 2014 Corporate Real Estate Trends for the Life Sciences Sector”. [Whitepaper]. Retrieved from: www.us.jll.com/lifesciences
9. IAMC. (2014). Chair Opening Remarks. Spring Forum. Pinehurst, NC. April 26-30, 2014.
10. Chen, Stephanie. “Goodbye office space? The shrinking American cubicle.” CNN. February 8, 2011. Web.  http://www.cnn.com/2011/LIVING/02/08/shrinking.american.cubicle/
11. DTZ. (2014). “Occupier Perspective Global Occupancy Costs – Logistics 2014.” [Whitepaper].
12. Hasselberger, Lynn; The Green Divas. “22 Facts About Plastic Pollution (And 10 Things We Can Do About It)”. Ecowatch. April 7, 2014. http://ecowatch.com/2014/04/07/22-facts-plastic-pollution-10-things-can-do-about-it/