Today, large pharmaceutical companies are leaning on outside contract manufacturing organizations (CMO) to produce active pharmaceutical ingredients (API) more than ever. This allows big pharmaceutical companies to focus their efforts on research and development of new drugs as well as keep up with demand. Because CMOs are focused solely on manufacturing quality products, they have the expertise, tools and equipment in place that big pharmaceutical companies may not have. The key difference between the two is that big pharmaceutical companies have a lot of resources while CMOs often have small margins to work within. Thus, CMOs are always seeking new ways to increase efficiency to meet and maintain lean budgets, while ensuring high-quality output.
When it comes to compressed air, a high-cost utility, maintaining high air quality at the lowest possible operating cost is paramount for CMOs because of their restricted budgets. There are three key API manufacturing factors that play into a compressed air strategy, and it takes the right operating strategy to achieve energy efficiency, performance and quality targets. It’s important to know which approach to take for a compressed air system – any downtime or quality and performance issues can result in a significant loss of resources for CMOs. This, in turn, impacts the corresponding big pharmaceutical companies.
Conserving capital through compressed air as a service
When a contracted API manufacturing facility makes a hefty investment, like a compressed air system, it’s important to consider all associated costs – the compressor itself, maintenance and service, parts, quality of output, among others. In this situation, CMOs are paying for the equipment as well as the air power. They need to consider all of the associated costs and create a plan for if downtime occurs.
To combat some of the associated maintenance costs of purchased equipment, API manufacturers are turning to renting compressed air equipment versus buying a compressor through a dedicated rental with a multi-year agreement. By treating compressed air like any other utility, such as water or electricity, API manufacturers no longer have to worry about buying compressed air equipment and can “rent” it instead, freeing up capital to purchase other equipment they need to optimize production of the pharmaceutical ingredients. Dedicated compressor rentals are provided according to the unique needs of the site and give CMOs the benefits of high-quality equipment, without the hassle of dealing with maintenance over time since service is included with the rental equipment.
Identify the right equipment to reduce total cost of ownership (TCO) and increase energy efficiency
Another factor to consider is the type of equipment that is being utilized. With dedicated rentals, CMOs can pay a little extra every month to use new, advanced compressed air equipment that can save them resources on power and increase energy efficiency. For some CMOs, the cost of an oil-free compressor is too much to take on, so they opt for oil-flooded equipment to save money upfront. Renting equipment can allow CMOs to upgrade to oil-free equipment, which ensures the cleanest air possible from the compressor.
If a CMO chooses to purchase equipment, it should consider several expense factors including: installation, depreciation, acquisition costs, power costs, maintenance costs and disposal costs. Similar to a car that depreciates the moment it’s driven off a lot, when CMOs purchase their own equipment, it also depreciates over time. On the contrary, facilities that utilize dedicated rentals are relieved of worrying about deprecation costs as well as acquisition costs, maintenance costs or disposal costs, cutting their investment and stress significantly.
Lastly, the disposal cost of a compressor can be a hefty expense for a CMO. When purchasing equipment, manufacturers have to consider the disposal cost when the equipment is decommissioned. Facilities can’t just throw it away, but instead have to deal with the cost to remove, dispose and demolish parts. With a dedicated rental program, the disposal costs are often covered by the OEM so a CMO does not have to pay them.
