Proac­tive as­set man­age­ment, ex­port drive in South Korea

BioSpectrum (Asia) - - Bio Contents -

In this ar­ti­cle, ben Potenza, vp Mar­ket­ing at equip­net Inc., the com­pany op­er­at­ing the world’s lead­ing on­line mar­ket­place for used lab­o­ra­tory, man­u­fac­tur­ing and pack­ag­ing equip­ment, ex­am­ines the case for phar­ma­ceu­ti­cal and bio­phar­ma­ceu­ti­cal com­pa­nies in South Korea to adopt a proac­tive ap­proach to as­set man­age­ment. he dis­cusses the specialist sup­port avail­able to make it hap­pen and il­lus­trates the fi­nan­cial gains that can ac­crue.

Con­sis­tent double-digit growth in the do­mes­tic phar­ma­ceu­ti­cal mar­ket over the past five years and no­table gov­ern­ment sup­port for phar­ma­ceu­ti­cal R&D and pro­duc­tion of bi­o­log­i­cals have cat­a­pulted South Korea into a prom­i­nent po­si­tion in the Asia-Pa­cific re­gion. A high qual­ity, uni­ver­sal health­care sys­tem is in place, while tight cost con­trol on the price of drugs avail­able in the Na­tional Health In­sur­ance (NHI) scheme - in force since 2011 - is help­ing to keep over­all bud­gets in check as the pop­u­la­tion grows and ages.

Im­por­tantly, South Korea is now du­pli­cat­ing in phar­ma­ceu­ti­cals the suc­cess­ful model from in­dus­try sec­tors as di­verse as ship build­ing, car pro­duc­tion and

smart­phone man­u­fac­ture, where ini­tial in­vest­ment to mimic tech­nol­ogy pi­o­neered in Ja­pan, the US or Europe is quickly fol­lowed by com­pa­nies be­com­ing in­no­va­tors in their own right. For ex­am­ple, as patent pro­tec­tion for bi­o­log­i­cal drugs comes to an end, the new mar­ket for biosim­i­lars (the generic ver­sions of these bi­o­log­i­cal drugs) is pre­dicted to grow to $110bil­lion over the next decade. South Korea aims to cap­ture more than $20bil­lion of this mar­ket by 2020 and, by the same time, have three of the world’s top 50 pharma com­pa­nies.

A sig­nif­i­cant op­por­tu­nity

Within such a dy­namic en­vi­ron­ment it is not sur­pris­ing that mil­lions of dol­lars are now tied up in the so­phis­ti­cated lab­o­ra­tory, pi­lot-scale and pro­duc­tion equip­ment and in­stru­men­ta­tion that these com­pa­nies rely on.

Im­por­tantly, as the in­dus­try ac­cel­er­ates to­wards a more ma­ture state, it is an­tic­i­pated that we will see projects com­plet­ing, re­search goals shift­ing and new fa­cil­i­ties open­ing, whilst oth­ers re­lo­cate or close due to merger and ac­qui­si­tion ac­tiv­ity. The likely re­sult? On one hand, equip­ment will fall out of use, whilst on the other hand, in­vest­ment into new kit will be re­quired. Global in­dus­try sur­veys sug­gest that an av­er­age of around 10 per cent of a com­pany’s as­set base is ly­ing idle at any one time, and that most busi­ness man­agers do not have good vis­i­bil­ity of these un­der-utilised as­sets. This il­lus­trates the size of op­por­tu­nity for a proac­tive ap­proach to as­set man­age­ment.

Value prin­ci­ples and tai­lored so­lu­tions

Against this back­ground, sur­plus as­set man­age­ment best prac­tices have been evolv­ing over the last decade. Specialist ser­vice com­pa­nies, staffed by in­dus­try ex­perts and proven project man­age­ment pro­fes­sion­als, have emerged to be­come lead­ers in this new field. They of­fer an ap­proach and ser­vices that are sig­nif­i­cantly dif­fer­ent from the tra­di­tional equip­ment dealer or auc­tion­eer.

As one of the pre­em­i­nent ven­dors in this field, Equip Net pro­vides a holis­tic ap­proach to sur­plus as­set man­age­ment that bal­ances the needs across an en­tire global en­ter­prise. This is ef­fec­tively il­lus­trated us­ing its ‘Value Con­trol Model’. Fig­ure 1 shows how a man­aged pro­gramme can be cus­tomised based on time, us­ing:

• A cen­tral track­ing plat­form that pro­vides com­mu­ni­ca­tion and work­flow tools and en­sures ex­po­sure of as­sets through­out the busi­ness

• Var­i­ous dis­po­si­tion chan­nels, in­clud­ing re­de­ploy­ment, ne­go­ti­ated sales with man­aged pric­ing through an on­line mar­ket­place, and com­pet­i­tive auc­tion events

• Clear­ance, dis­posal and scrap pro­grammes

Re­de­ploy­ment can­not be suc­cess­fully and con­sis­tently achieved un­less there is a cen­tral track­ing plat­form in­stalled within all com­pany lo­ca­tions. Users should be able to post, track, iden­tify and in­ter­nally re­de­ploy equip­ment that is not be­ing used in its present lo­ca­tion, ahead of any de­ci­sion to move to ex­ter­nal sale. An estab­lished ex­am­ple of best prac­tice in this area is Equip Net’s ARMS™ (As­set Re­de­ploy­ment Man­age­ment Sys­tem) plat­form. This sim­ple, yet ro­bust, pro­gramme sits be­hind a com­pany’s fire­wall and fea­tures work­flow man­age­ment, mul­ti­ple ac­cess lev­els for plant man­agers and ex­ec­u­tives across the busi­ness, in-depth search func­tion­al­ity and com­pre­hen­sive list­ing spec­i­fi­ca­tions, pro­vid­ing in­for­ma­tion that lets the com­pany know ex­actly what they have and where it’s lo­cated.

Where re­de­ploy­ment is not pos­si­ble, sale or dis­posal is the next log­i­cal step. The rise of the In­ter­net has seen the de­vel­op­ment of var­i­ous web­sites to meet this need. When con­sid­er­ing an on­line trans­ac­tion, how­ever - par­tic­u­larly for a high-value and com­plex piece of equip­ment - the hu­man touch from an in­dus­try ex­pert is per­haps still the most im­por­tant as­pect of any mar­ket­place.

In­no­va­tive fea­tures to look for when se­lect­ing an on­line mar­ket­place in­clude:

• ‘Top-down’ of­fers rather than the more usual ‘bot­tom-

up’ bid­ding model

• Ex­pert eval­u­a­tion of goods of­fered for sale from a proven, re­li­able team

• Ac­cu­rate set­ting of sale prices

• Con­cen­trated pro­mo­tion of the mar­ket­place plat­form and, within it, ad­ver­tis­ing of spe­cific equip­ment

• Pay­ment by re­sults

Of­ten, a com­pany’s de­sire to re­coup as much money as pos­si­ble on sur­plus as­sets is su­per­seded by time re­stric­tions. In such cir­cum­stances, when liq­uid­ity be­comes the high­est pri­or­ity, an auc­tion be­comes the de­pend­able chan­nel in or­der to achieve this goal. De­sign­ing and man­ag­ing a suc­cess­ful auc­tion event de­pends on many fac­tors. A specialist part­ner should ad­vise on the right ap­proach in each case; op­tions might in­clude on­line auc­tions, live/we­b­cast auc­tion events, sealed bid and pri­vate treaty sales. Us­ing a ven­dor with spe­cific in­dus­try ex­pe­ri­ence com­bined with a solid rep­u­ta­tion is cru­cial to suc­cess.

In ev­ery busi­ness there are those as­sets that hold very lit­tle value and are best dealt with through clear­ance, by do­na­tions, scrap and en­vi­ron­men­tal re­cy­cling. You should con­sider the scrap value of your idle equip­ment and com­pare that amount against the mar­ket sales value to ar­rive at a strat­egy that will gen­er­ate the high­est re­turn.

In prac­tice

A ma­jor phar­ma­ceu­ti­cal com­pany was re­quired to close one sec­tion of its R&D lab­o­ra­tory fa­cil­ity in Europe. It en­listed the help of Equip­Net, who cre­ated an in­ven­tory of re­dun­dant as­sets from the site, with the in­tent of re­de­ploy­ing as much as pos­si­ble. Re­main­ing items were then to be sold on – all within a six-month project time­frame.

In or­der to achieve this, as­sets were ini­tially cat­a­logued and pho­tographed, and fair mar­ket val­u­a­tions were estab­lished for each item. Items were then listed on a se­cure, com­pany-spe­cific soft­ware plat­form so that the or­gan­i­sa­tion’s many fa­cil­i­ties had full ex­po­sure to the items avail­able. Due to tight time re­straints, the equip­ment was si­mul­ta­ne­ously ad­ver­tised ex­ter­nally on­line. Items that didn’t re­de­ploy or sell through the man­aged price ap­proach were put into a web-based auc­tion.

The lo­ca­tion was cleared within the al­lot­ted time­frame and the com­pany max­imised the re­turn on its orig­i­nal in­vest­ment in those as­sets – all with­out in­ter­rupt­ing on­go­ing op­er­a­tions. At the end of the project:

• 10 per cent of the items were re­de­ployed. By re­lo­cat­ing this equip­ment, new pur­chases were avoided, gen­er­at­ing a cost sav­ing of more than $200,000

• 64 per cent of the items were sold

• 20 per cent of the items held no re­sale value and were scrapped

Buy­ing not sell­ing?

Un­til re­cently, pur­chas­ing sec­ond-user equip­ment was only seen as rel­e­vant for cash-strapped start-ups and hard up aca­demic labs. Now though, things are dif­fer­ent. Busi­nesses of all shapes and sizes – from cut­ting-edge re­search com­pa­nies, to multi-na­tional, multi-fa­cil­ity gi­ants – are now reg­u­larly con­sid­er­ing this route to equip their fa­cil­i­ties. Why? The abil­ity to save be­tween 50-75% of the cost of new equip­ment is, of course, a very at­trac­tive fac­tor. Bud­gets can be stretched fur­ther and cash saved for ad­di­tional items. In ad­di­tion, sec­ond-user equip­ment is gen­er­ally avail­able im­me­di­ately. De­liv­ery can be made as soon as a pur­chase is com­pleted, some­thing that is not al­ways guar­an­teed when or­der­ing a new sys­tem.

The many pos­i­tives out­weigh any po­ten­tial chal­lenges. When pur­chas­ing sec­ond-user equip­ment, many of the same fac­tors that con­cern peo­ple when they are sell­ing as­sets – work­ing with some­one who has knowl­edge of the in­stru­men­ta­tion and with spe­cial­ists who un­der­stand mar­ket value – are im­por­tant. In prac­tice, by re­search­ing the ex­act model that you are con­sid­er­ing, and en­sur­ing you find out as much in­for­ma­tion as pos­si­ble re­gard­ing pre­vi­ous use, main­te­nance his­tory and the like, risk is min­imised.

Sum­mary

Proac­tive as­set man­age­ment – re­lo­cat­ing or sell­ing idle equip­ment, and buy­ing sec­ond-user kit – is be­ing recog­nised as a valu­able strat­egy, but many busi­nesses also re­alise that they do not have the re­source or skill base to tackle the is­sue in-house. By col­lab­o­rat­ing with an ex­pe­ri­enced ex­ter­nal part­ner, com­pa­nies can nav­i­gate re­de­ploy­ment, auc­tion and dis­posal of equip­ment ef­fi­ciently and ef­fec­tively. Work­ing along­side a specialist not only re­duces work­load, al­low­ing staff to fo­cus on their day to day busi­ness, but also en­sures com­pa­nies find the best mar­ket for their as­sets, and so de­liver max­i­mum value in any given cir­cum­stance.

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