Advantage Procurement

In 2008, use of contaminated Heparin led to the deaths of over 80 patients and several cases of adverse reactions in the US. As a result, the US Food and Drug Administration (FDA) and companies supplying heparin announced a major recall of the anticoagulant, which is used by approximately 12 million Americans each year. The source of the contamination was found to be the use of over-sulfated chondroitin sulfate (OSCS) in the active ingredient, made in China. OSCS was introduced during the early points in the product’s supply chain as it is chemically similar to the active ingredient in heparin.

This heparin contamination issue is not a one-off case. There were many such cases reported in the past, with regulatory agencies issuing frequent safety alerts or product recalls.

Such incidents have forced regulatory agencies and pharmaceutical manufacturers to look into the safety of the medical supply chain and take steps to prevent such contaminated substances from entering the market. It is in this regard that the European Union (EU) has called for Marketing Authorization Holders (MAH) to have a mandatory Qualified Person (QP) declaration for the release of all medicinal products in the EU/ European Economic Area (EEA), which is expected to be compulsory by July, 2013. This declaration will imply that the product has been sourced, produced and controlled in accordance with the requirements of marketing authorization or other relevant regulatory standards.

The procurement of FBS is very complex. Consider a market approaching supply base consolidation, driver of price is parent market, supply-demand dynamics add to more complexity in pricing and finally, supply chain disruptions, adulteration and quality issues. Procurement teams are faced with issues on fluctuating price, demand, quality. Additionally the regulatory authorities are growing stringent on the use of sera. This whitepaper examines the market, its subtleties and complexities and finally tries to address complexities faced by procurement through scenario analysis.

Fetal Bovine Serum (FBS) is the blood fraction that is devoid of cells. It is derived by centrifugation of the supernatant of coagulated fetal bovine blood.
FBS is added to eukaryotic cell culture media to promote growth.
FBS – Demand, Production and Supply
The FBS market being a by-product market is driven by not just the supply demand dynamics of FBS but the beef and cattle slaughter industries. Thus, production of FBS is not driven by end-use for FBS alone.

The demand for FBS arises from various end users including biopharmaceutical production, research, cell culture, immunodiagnostics, environmental research and education etc. With the faster growth in the cell culture market, the sera market is also growing.

The procurement of FBS is very complex. Consider a market approaching supply base consolidation, driver of price is parent market, supply-demand dynamics add to more complexity in pricing and finally, supply chain disruptions, adulteration and quality issues. Procurement teams are faced with issues on fluctuating price, demand, quality. Additionally the regulatory authorities are growing stringent on the use of sera. This whitepaper examines the market, its subtleties and complexities and finally tries to address complexities faced by procurement through scenario analysis.

Fetal Bovine Serum (FBS) is the blood fraction that is devoid of cells. It is derived by centrifugation of the supernatant of coagulated fetal bovine blood.
FBS is added to eukaryotic cell culture media to promote growth.
FBS – Demand, Production and Supply
The FBS market being a by-product market is driven by not just the supply demand dynamics of FBS but the beef and cattle slaughter industries. Thus, production of FBS is not driven by end-use for FBS alone.

The demand for FBS arises from various end users including biopharmaceutical production, research, cell culture, immunodiagnostics, environmental research and education etc. With the faster growth in the cell culture market, the sera market is also growing.

The fabricated metal product manufacturing industry is present in most spheres of economic activity, ranging from the manufacturing of nuts and bolts to custom parts, electronics and even giant turbines. Though it has the advantage of being present in all sectors, this also means greater exposure to their ups and downs. Still, an improving global economy and new opportunities in growth sectors means a bright future is in store. However, in order to capitalize on the favourable outlook, manufacturing companies have to work hard to boost their productivity and make sure they have enough workers and are adaptable to the market conditions.

This paper discusses various factors that would enable the buyer of metal fabricated products to understand the market conditions and take a wiser decision during vendor selection and making long term strategies. The paper would also chalk out the major parameters affecting the fabrication market and how does those parameters differ in each region/country. The trend of market demand of such product has shifted from the developed to the developing economies and the trend is expected to be the same for next 4-5 years till 2020.

The capital investment especially in the developing economies is on the rise and the purchasing managers in the fortune 500 companies are now trimming their suppliers list only to engage with the top performing fabricators in each region/country. These are the same fabricators who managed to escape the manufacturing recession by keeping their prices low during stiff competition. But now, the scenario is being more driven to quality products and hence there are many other factors apart from the raw material prices.

Increasing industrialization and entrance of multinational companies in African countries creates the requirement for strategic fit and alignment of suppliers and buyers to create a robust contract structure for effective implementation of FM services. High interest among buyers in African region for outsourcing of facilities management services and its utmost utilization, require creating a balance between appropriate quality and cost of the services.

Here, the focus encompasses an assessment of the market maturity and appropriate outsourcing strategies along with the step by step approach for pricing structure in contracts to ensure better strategies and successful implementation of FM services in Africa.

This whitepaper is aimed at procurement personnel who have Facilities Management under their repertoire and approach for implementation of best outsourcing strategies for FM category. It also helps the suppliers to understand the requirements and expectations of the buyers in developing geographies.

This whitepaper throws light on the outsourcing practices should be adopted by the buyers while entering or having operations in Africa. The nature of research includes the market assessment followed by engagement strategies and pricing model possibly helps clients to outsource facilities management services in African countries.

In collaboration with Meenakshi L, Lead Analyst, Pharma R&D

In August, the FDA approved the first ever 3D printed drug Spritam — an anti-epileptic medicine developed by Aprecia Pharmaceuticals.

Aprecia uses ZipDose Technology platform that enables delivery of a high drug load, up to 1000 mg in a single dose.

FDA had previously approved medical devices and prosthetics developed by additive manufacturing technologies, but the approval of Spritam marks a new era in the manufacturing of tablets.

As Prof Lee Cronin of University of Glasgow said in a 2012 TED talk, “the idea is that we want to have a universal set of inks that we put out with the printer, and you download the blueprint, the organic chemistry for that molecule and you make it in the device. And so you can make your molecule in the printer using this software.” (http://beroeinc.co/1WE58qS)

In other words, this technology can potentially “democratise” the manufacturing of medicines, though it may not pan out as a cottage industry anytime soon.

3D printing (3DP) is a process of making three dimensional (3D) solid objects from a digital model. The methodology uses an additive process, where successive layers of material are laid down in different shapes.

This revolutionary printing technology is beginning to find applications across multiple avenues within the healthcare industry. The applications include but not limited to device, prosthetics, tissues and organs.

This technology will surely feature in the radar of contract manufacturers, who produce billions of dollars worth of medicines on behalf of their pharma clients.

Besides manufacturing, pharmaceutical R&D can also experience a big change because of 3DP. In fact, Organovo, a biotechnology firm based in La Jolla, manufactures 3D liver using bio-printing technology that is employed to test effectiveness and safety of drugs.

Below are several other implications of 3DP:

1.    Custom manufacture of drug dosages: One can manufacture multiple dosages of the same drug to suit the needs of a patient. This comes in handy especially in case of rare diseases, where the severity of the ailment is varied in a small patient pool.

2.    Multiple API’s manufactured from same machine with little or no down time: The Howard Hughes Medical Institute has developed a 3D printer that can synthesise and fabricate up to 14 different APIs from same raw materials and building blocks. Although the scale is currently in “mg to g” range, given the growth in innovation in this dynamic technology space, the day is not far for commercial scale manufacture.

3.    One stop shop: Unlike traditional manufacturing process that requires a plethora of equipment for various processes involved in development of an API, all the chemical processes and subsequent reactions can be completed within a single 3D printing machine.

4.    Direct-To-Consumer (DTC) Drugs: 3D printing offers an opportunity for manufacturing the drug at doctor’s office, which does not require large scale packaging, logistics and distribution. This can upend manufacturing and distribution supply chain.

5.    Clinical Trial Manufacture: Clinical trial drug formulation and manufacture is a very crucial step in drug development. This segment of investigative new drug manufacture is very rarely outsourced. At this stage, the final formulation and dosage are still under development. As a result, the focus on speed, agility, quality and scientific expertise are of prime importance. 3D printing can bring in agility, automation and option of multiple formulation/dosage manufacture at lower capital expense over a period of time.

The chief hurdle for utilizing 3D printing in clinical trial manufacture is the approval from FDA. However, considering the precedent set by the regulatory agency, the day is not far when this technology finds widespread adoption in clinical trial manufacturing space.

Serum is one of most important ingredient in cell culture processes as it ensures a natural cell cycle and metabolism during cell culture process. Serum is a very complex product and has growth factors, hormones, vitamins, minerals and other necessary nutrients which are very important for cells to grow in an in-vitro environment.

In August, the FDA approved the first ever 3D printed drug Spritam — an anti-epileptic medicine developed by Aprecia Pharmaceuticals.

Aprecia uses ZipDose Technology platform that enables delivery of a high drug load, up to 1000 mg in a single dose.

FDA had previously approved medical devices and prosthetics developed by additive manufacturing technologies, but the approval of Spritam marks a new era in the manufacturing of tablets. This technology can potentially “democratise” the manufacturing of medicines, though it may not pan out as a cottage industry anytime soon.

As Prof Lee Cronin of University of Glasgow said in a 2012 TED talk, “the idea is that we want to have a universal set of inks that we put out with the printer, and you download the blueprint, the organic chemistry for that molecule and you make it in the device. And so you can make your molecule in the printer using this software.” (http://beroeinc.co/1WE58qS)

3D printing (3DP) is a process of making three dimensional (3D) solid objects from a digital model. The methodology uses an additive process, where successive layers of material are laid down in different shapes.

This revolutionary printing technology is beginning to find applications across multiple avenues within the healthcare industry. The applications include but not limited to device, prosthetics, tissues and organs.

This technology will surely feature in the radar of contract manufacturers, who produce billions of dollars worth of medicines on behalf of their pharma clients.

Besides manufacturing, pharmaceutical R&D can also experience a big change because of 3DP. In fact, Organovo, a biotechnology firm based in La Jolla, manufactures 3D liver using bio-printing technology that is employed to test effectiveness and safety of drugs.

Below are several other implications of 3DP:

1.    Custom manufacture of drug dosages:  Using a 3D printer one can manufacture multiple dosages of the same drug to suit the needs of a patient. This comes in very handy especially in case of rare diseases, wherein in a small patient pool the severity of the disease is varied.
2.    Demand based manufacturing:  This can come in handy for those patients who suffer from rare ailments, and a drug can be printed out based on a specific algorithm

3.    Multiple API’s manufactured from same machine with little or no down time: The Howard Hughes Medical Institute has developed a 3D printer that can synthesise and fabricate up to 14 different APIs from same raw materials and building blocks. Although the scale is currently in “mg to g” range, with the growth in innovation in this dynamic technology space, the day is not far for commercial scale manufacture.
4.    One stop shop: Unlike traditional manufacturing process that requires a plethora of equipment for various processes involved in development of an API, all the chemical processes and subsequent reactions can be completed within a single 3D printing machine.

5.    Direct-To-Consumer (DTC) Drugs: 3D printing offers an opportunity for manufacturing the drug at doctor’s office, which does not require large scale packaging, logistics and distribution. This can upend manufacturing and distribution supply chain.
6.    Clinical Trial Manufacture: Clinical trial drug formulation and manufacture is a very crucial step in drug development. This segment of investigative new drug manufacture is very rarely outsourced. At this stage, the final formulation and dosage are still under development. As a result, the focus on speed, agility, quality and scientific expertise are of prime importance.

3D printing can bring in agility, automation and option of multiple formulation/dosage manufacture at lower capital expense over a period of time.

The Eastern economies like China and India are considered as the economies that will drive the global growth in the future. Improvements in infrastructure and the new investments by manufacturing industries are some of the drivers of construction growth in the emerging eastern economies. The impact of these emerging economies on the construction industry is huge with China being the highest contributor to construction spends and India following closely. The diminishing construction activity has resulted in the western economies expanding geographically and challenging the local service providers. There is rising curiosity as to whether the emerging players will replace their western competitors by 2015. This whitepaper does a capability analysis of the western firms (US and Western Europe) against the emerging players from Brazil, China and India.

Globally the spare parts market is catered to by Spare Parts Distributors, OEM spare parts suppliers and MRO Integrators.

The spare parts market is highly fragmented in North America as well as Europe. UK, Nordic, Germany, France and the Netherlands are the key developed regions for spare parts markets in Europe. Hungary, Poland and countries in Southern and Eastern parts of Europe are the emerging regions for spare parts markets.

In July, United Nations Security Council (UNSC) endorsed a deal to end years of economic sanctions on Iran in return for curbs on its nuclear programme.

Sanctions are unlikely to be removed until next year, as the deal requires approval by the U.S. Congress.

The re-entry of Iran into the world energy scene will impact the market for petrochemical derivatives more than Crude Oil.

Marketers especially in the CPG and Food and Beverage industry spend a considerable amount (28.15 billion) in digital coupons to increase their sales, along with increasing brand loyalty amongst customers.

Companies are finding it difficult to increase their chances of coupon redemption when compared to the number of coupons that are distributed every year. This whitepaper will help clients to make a decision on what type of vendors should be engaged with in order to increase the chances of redemption and thereby increase ROI.

Approach of Consumers, Retailers, Brands and Coupon Service Providers towards Digital Coupons

Consumers increasingly prefer digital coupons more mainly because they are easily accessible via different mobile channels like; apps, daily deal, group buying sites, social network etc. The increase in smartphone and tablet penetration amongst consumers is also leading to more usage of digital coupons. The consumers would be receiving coupons on all the products irrespective of their preferences for the brand/ product.

Even though brands are investing more on digital coupons every year through different channels, the digital coupon redemption is only close to 6% out of the total number of coupons downloaded. This makes digital coupons costlier than traditional ones.

Coupon service providers are adopting new technologies to make digital coupons more targeted or one-to-one basis. This would help the companies to increase the total number of coupons redeemed when compared to the total number of coupons distributed and thereby helping the clients to increase their ROI.

Digital Coupon Industry Outlook

Digital coupons accounted for less than 1% of the total coupons distributed for the year 2014. Although digital coupons account for a small share of the total coupon market, marketers’ focus on digital coupons are increasing due to the growing e-commerce and m-commerce coupled with the growth in social media.

The number of users who redeem coupons via mobile are expected to increase from 78.69 million to 104.11 million between 2014 and 2016. It is estimated that in 2014 only 36.5% of the marketers are offering mobile coupons. By 2016, it is expected that about 44.5% of the marketers would offer coupons via mobile.

Brazilian government imposes anti-dumping duty on polypropylene (PP) imports coming into the nation from South Africa, India, and South Korea.

PP import volumes coming into Brazil have been growing at a CAGR of ~16% since 2006, with the share of imports in the nation’s domestic consumption of PP steadily rising from close to 5% in 2006 to an estimated 15% in 2014. Price competitive imports from the aforementioned nations had seen their popularity grow among the Brazilian buyers during this period.

The increasing imports have forced the Government to impose an anti-dumping duty ranging between 2.4% to 16% on PP coming from above regions. This recent development is of much importance to the region’s burgeoning CPG, F&B, and pharma industries, with regards to their packaging spend on PP The future of PP procurement in Brazil will depend on how the trade dynamics will shift due to the imposed anti-dumping duties, which are bound to result in increased procurement spend in the PP_ space. Which nodes of the value chain would be affected by this decision? What will become to the PP volumes coming into Brazil from these nations? Will they pull out of the market? If yes, who might fill the void? How will the domestic market respond, and what repercussions are in store for the price outlook of the market?

This whitepaper aims to seek answers to these questions, and help category managers grasp the nuances of PP procurement in Brazil by analysing the following parameters:

• Trade dynamics of the Brazilian PP market
• Shift in PP procurement practices in Brazil over the past 8 years
• Import regulations: the need to protect the domestic producers
• Impact of anti-dumping duties on the PP producers of India, South Africa, and South Korea
• Impact of anti-dumping duties on the future of Brazilian PP import mix
• Analysis on which value chain stakeholder (resin producer, resin converter, or packaging consumer) would absorb the price increase
• Price outlook of domestic PP prices in Brazil – from the perspective of buyers switching from imported PP to domestically produced PP
• Analysis of price-competitive alternatives available for Procurement managers operating in the Brazilian market

The crude oil prices have been plummeting steadily over the past 8 months, owing primarily to oversupply in the market. This oversupply of crude oil was met with a reduced demand from China, Japan and Europe, thus taking a toll on the crude oil producing nations. In the war between OPEC and US over the market share, there are nations that are on the verge of exiting from the competition. Russia, for which energy exports account for nearly 70% of its export revenue, is one such nation to be adversely affected. Its marred political relations with its neighboring nations add to its woes. These dynamics have forced Russia to explore the unprecedented ties with China and India to substitute the client base it once held in Europe.

Introduction
Oil is the largest internationally traded commodity both by volume and value and hence, its price is critical to the world’s economy. From 2010 till mid-2014, world oil prices were stable at USD110 a barrel. But since June 2014, prices have seen a sharp decline, with Brent having dipped below USD 45 a barrel. The reasons for this are twofold.

• Mute demand from China and Japan due to slag in the economic growth
  Surge in the US production

Historically, Saudi Arabia has been the market leader in crude oil production. But horizontal drilling and hydraulic fracturing in underground shale rock has boosted US output by 66% over the past five years. With this surging crude oil production, US have not only been able to suffice its domestic need but also have become the competing crude oil exporter. In an attempt to hasten cutbacks by US shale drillers so as to retain their market leadership, OPEC have stood by the decision to not to cut their production, thus resulting in declining crude oil price. The dormant demand due to slag in economic growth in China and Japan has compounded the repercussion of this decline in price.

In the current scenario, where all the financial markets are interconnected, no country can seal off its economy from the ripple effects of falling crude prices. However, the impact of the same is not equal on all the crude oil producing nations. It majorly depends upon the cost of extraction. Countries with costly oil extraction could suffer from potential sovereign bankruptcy.