How to Strengthen Cost Management in Pharmaceutical Production

First, the cost management and control of drug production

Drug cost management is a huge and complicated process, and the final formation of cost is influenced by many factors, such as the enthusiasm of employees, the process design of R&D department, the production execution efficiency of production department, the level of information application and so on.

(A) Labor cost management To a certain extent, the cost management of enterprises is also the management of people. People are the most basic driving factor of various costs. When the number of employees in a company increases, various costs will also increase. According to statistics, every time a company adds a person, there will probably be dozens of expenses such as salary, bonus, various insurances, housing accumulation fund, recruitment fee and file fee. Of course, besides the number of employees will affect the cost, the proficiency and efficiency of employees will also greatly affect the cost of enterprises. Therefore, the essence of some large multinational companies in employing people is to create maximum benefits with the least number of people.

After the implementation of GMP certification, pharmaceutical enterprises started new production lines, and the automation level was also improved, and the demand for production personnel was reduced, but at the same time, production personnel were required to have corresponding cultural quality and professional skills. This requires training employees according to GMP requirements, and everyone consciously integrates into the quality management system to ensure that every link from raw material selection to finished product delivery is under standardized and stable control. It is an effective way to control personnel costs to implant the concept that "drug quality is produced, not tested" into every producer's mind.

(II) Material cost management and control Drugs are special commodities related to human health. The US Food and Drug Administration requires pharmaceutical companies to pass the good manufacturing practice (GMP) certification, and GMP requires that pharmaceutical production must use high-quality raw materials. The management and control of material cost mainly involves two processes:

(1) Material procurement process. In the process of purchasing, the premise of cost control is that the purchased raw materials must meet good manufacturing specifications. Before purchasing, the purchaser should be familiar with the price composition of the purchased raw materials, understand the source price of the finished raw materials produced by the supplier, and lay the foundation for its accurate price verification; The choice of suppliers is also very important. Good suppliers can make suggestions for the company's development and save costs, while bad suppliers will bring a lot of trouble and increase a lot of intangible costs. Procurement personnel can also establish supplier files and a reliable and stable procurement network, thus achieving effective control of material procurement costs.

For Chinese herbal medicines with strong dependence and large demand, enterprises can also establish planting bases according to GAP requirements to ensure the quality and supply of raw materials, thus saving raw material costs in procurement.

(2) Material production process. The target cost method can be used to control the cost in the production process. The main idea is that product research and development should be based on the price that the market is willing to pay, so as to set the price of the company's products. With the assistance of the financial department, the target cost is decomposed into several process costs according to the cost formation process, so as to control each process cost.

Taking tablet production as an example, its technological process mainly includes material selection, batching, cutting and washing, water extraction, drying, crushing, sieving, granulating, full mixing, tabletting and packaging. Then the financial department can formulate the total target cost and distribute it to the production workshop, and assist the workshop to decompose the target cost into several process target costs according to its technological process.

In this process, how to reduce the material consumption of each process is a key point on the premise of ensuring the quality of drugs, and the most effective way to manage the material consumption is to establish a quota acquisition system. The "bill of materials" compiled by R&D department is the most basic tool to control the material cost, which includes which materials must be used in the production of each product and the amount of each material. After the bill of materials is compiled, it will be distributed to the production management department, purchasing department, production department, warehouse, quality management department and finance department. The production department fills in the limited picking list according to the bill of materials, and goes to the warehouse for picking in batches. Make corresponding records when the warehouse issues materials, and deduct the remaining available quantity of the picking unit and the picking person. If the quota is used up, it can't be collected again, and the material consumption is strictly controlled from the source.

Once the bill of materials is made, it cannot be changed at will. If the R&D process changes, production is difficult, and there are new substitute materials, it can be revised in written form and communicated to the above departments in time, with written reasons, contents and detailed explanations. At the end of each month, summarize all the excess picking lists of this month, count the quantity, amount and reasons of excess material consumption, and report them to the vice president in charge of production in an attempt to solve these excess picking problems and improve the work.

(3) After GMP certification of maintenance and energy and power cost control, pharmaceutical enterprises will build new solid workshops, injection workshops and related auxiliary workshops. GMP requires high technology, humidity, temperature and cleanliness. Therefore, when enterprises purchase new production equipment, the increase of equipment will inevitably lead to the increase of hardware maintenance costs, and at the same time, the consumption of energy and power such as electricity, water and gas in the production process will also increase.

For new equipment, in order to reduce the equipment maintenance rate and the maintenance cost to the maximum extent, we must strictly implement the pre-job training system, require employees to be familiar with the necessary equipment use and maintenance system, implement the system of special person in charge and assessment, and require maintenance personnel to maintain it regularly and make records.

For water, electricity and other energy costs, technical measures to save energy and reduce consumption are explored through production details, and ways to save energy and reduce consumption are actively sought. Save water and electricity according to actual production demand and avoid waste; The design of gas supply pipeline should be as beneficial as possible to reduce transmission loss, purchase gas and install pressure devices.

Second, measures to strengthen the management and control of drug production costs

The competition in the modern pharmaceutical market is becoming more and more fierce. Especially in China, pharmaceutical enterprises generally have poor innovation ability, less investment in scientific research and weak competitiveness, which requires enterprises to improve their management level, strengthen cost control and improve their comprehensive competitiveness.

(A) Pay attention to the role of human factors is the key to determine the cost of enterprises. The mentality, skills and behavior of employees determine the form of cost and how much cost will occur.

The boss and senior manager of a pharmaceutical factory emphasize the need to reduce costs every day, but the actual situation is that employees in various departments do nothing at work and even play games; Workshop staff did not fully follow the drug quality standards in the production process, resulting in a large number of drugs being recycled because of unqualified products, which was a serious waste. The reason is that pharmaceutical companies do not attach importance to the role of employees, and sometimes in order to save labor costs, they deliberately depress employees' wages, which greatly damages the enthusiasm of employees, thus passively slacking, and also causes a large number of intangible costs to increase.

The best cost control method is to motivate employees to care about the interests of the company and link the interests of the company with his personal interests. Usually, the effective incentive methods are: equity incentive; Engage in contract system; Implement a reward system for employees who put forward reasonable suggestions for cost saving and are adopted by the company; For employees who are not active in work attitude, ability and experience, some restrictive measures can be implemented to stimulate their enthusiasm, such as compulsory training and establishing the system of responsible persons.

Cost management and control is not only a matter for the financial department, but also involves every department and every employee. Only by cultivating employees' good cost consciousness, allowing employees to actively study and participate in training, improving working methods and increasing the cost-benefit ratio can we finally reduce costs and implement the formulated measures.

(2) Pay attention to the principle of cost-effectiveness. Traditional cost management unilaterally emphasizes saving and saving, while international companies believe that the basic concept of cost saving control has not adapted to the development of modern enterprises, by reducing the purchase price or grade of raw materials; Or reduce the material input of a single product (cut corners); Or consider lowering the process price to achieve the purpose of cutting costs, which will lead to the decline of product quality, the loss of labor resources of enterprises, and even the loss of existing markets. Modern enterprise cost control strategy is to implement cost management control from a strategic height. In other words, it is not to cut costs, but to improve productivity, shorten production cycle, increase output and ensure product quality.

We can't simply treat cost as an expenditure, but as an investment, and the investment must have a return. This investment has two meanings, one is to try to put an end to wasteful behavior; Second, if the cost is huge, but it can also bring huge returns, then the cost is worthwhile. For example, for pharmaceutical companies that invest in R&D, the more R&D companies invest, the greater the profits of developing new products in the future. For example, Novartis, one of the top ten pharmaceutical companies, has the highest R&D output rate. In recent years, it has increased the acquisition of small and medium-sized biotechnology companies with strong innovation ability. Facts have proved that only continuous innovation can save the crisis of innovation.

(3) It is an organic whole to introduce market competition mechanism and reduce unnecessary value-added enterprises. Only when the management department, R&D department, production department and sales department do their best can the enterprise realize the maximum value. Assuming that a department is only a cost center, then this department rarely cares about how to use the company's resources to create greater value; Assuming that the cost center is upgraded to a profit center, in order to produce the final product, R&D, logistics, production and other links can be found in the market, thus introducing the competition mechanism, then the department will have the incentive to save funds, personnel and materials as much as possible, thus saving costs.

(IV) Strengthening cost information management According to the actual situation of our company, we can actively introduce cost module management into ERP projects, and go deep into the workshop to track and query the batches of raw materials and products, so that a complete ERP application model can cover the whole process of enterprise management such as product sales orders, demand forecasting, product sales, product production, raw material procurement and cost accounting.

The management and control of production cost of pharmaceutical enterprises still need to be explored in practice. In short, today's market competition is also the competition of cost management. To win in the competition, we must promote the stable development of enterprises through various management.