I'll be updating this post throughout the day with some key points, trends and insights revealed at Managing Automation's in-progress fourth Progressive Manufacturing Summit.

In the pharmaceuticals industry, research and development (R&D) has increased quite a bit over the past 25-35 years, says Kelvin Cooper, SVP, Worldwide Pharmaceutical Sciences, Pfizer. However, due to a number of discoveries and global challenges — more and stricter regulation requirements, rising health-care costs, complex medical delivery systems (it used to be just tablets; now we've got inhalers and nanoparticles, etc.), infrastructure and centers of emphasis — productivity has failed to to keep up, Cooper says.

Pfizer, for one, is working to build a demand-based delivery system, which presents its own massive challenges. Currently, Pfizer keeps many more drugs in supply than it needs. While just-in-time (JIT) delivery would reduce huge inventories (which are much larger in pharma relative to other industries), it also presents a dramatic materials-demand challenge: Cancer patients, for instance, cannot afford to run out of supply.

One change the manufacturer hopes to implement is to switch from making large batches of a drug at one time to making drugs in a continual process. A continual manufacturing process should help to "reduce inventory and be much more responsive to demand," he said. However, he cautioned that the switch would take up to 10-15 years due to the company being steeped in years of batch processing and because the switch will entail many regulatory hurdles.

UPDATE 1:

Another R&D contradiction lies in the clash between two business models: cost cutting and innovation investment.

In a panel on executive leadership, three panelists see (and recommend) a lot of hunkering down and cutting cost expenditures. On the other hand, all three also say companies absolutely must invest in innovation today to stay competitive.

Some innovation challenges, according to Craig Giffi, vice chairman at Deloitte & Touche USA LLP, and Eric Mittelstadt, CEO of the National Council for Advanced Manufacturing (NACFAM): providing new products in new markets; and manufacturers being agile enough to do this.

The key in an economic downturn, they say, is to keep investing in R&D even when cutting operations costs.

Bruce McKay,executive VP at Livingston & Haven, says that business is currently good in sectors, but "we definitely see a recession in 2009."

Yet McKay suggests an upside of an economic downturn. After noting that raw materials need to be put back in check (i.e., "materials checks and balances"), he cites a recession's potential to drive companies to put emphasis back on innovation.

Pfizer's Cooper echoes this sentiment in pharma manufacturing, saying in his presentation that now is "a time of great change, great challenges and great opportunity."

The opportunity, specifically: building a culture of innovation and continuous improvement.

UPDATE 2:

Reading through the May 2008 issue of Managing Automation during a brief break between presentations, I came across a round-table discussion that addresses the duality of risk and benefit of investing in innovation.

Mike Jackson, engineering manager at Stahlin Non-Metallic Enclosures, put it this way:

[Regarding] comfort level and associated risk, there are two routes that you can take. You can just stay within your comfort level, but that's not being that innovative and you're not moving things forward; you're just simply doing the status quo. We recognize that there is inherent risk with being innovative in anything you do. But, in our view, being innovative and aligning ourselves with the corporate strategy, the ultimate result of that is what value is it going to bring to the customer and our company as well?

UPDATE 3:

In a poll of summit attendees, 76 percent say they are investing in the implementation of a "digital factory."

Wow, relatively few in last year's audience even knew what the digital factory was.

Why are increasingly more manufacturers investing in digitizing data and other functions of the innovative digital factory? Most are moving to a paperless environment. Digitizing data with access to real-time analytics is a big catalyst. Some companies, still mostly limited to larger companies (think Boeing and the like), are taking advantage of simulation for manufacturing scenarios and processes, PLM, Six Sigma, etc.

Stephanie Neil, moderator and Managing Automation's senior editor, put it very well: "The digital factory, really, has no walls."

UPDATE 4:

Tim Opitz, director, Production Operations and Support & Services, 787 Systems Integration, Boeing, spoke about how the plane maker is "transforming from a vertically integrated enterprise" that does most of its own design, supplier management, manufacturing and integration into "a more virtual enterprise that relies heavily on partners and suppliers. Much of this comes with the 787 Dreamliner.

The Boeing project is taking a model-based approach to its integrated solution, using digital design, build and support all in one single source for collaborative global sharing.

Opitz says this "virtual manufacturing" is not only critical in Boeing's global collaboration environment (The list of Boeing's disparate partners all over the world is staggering.) — it is also the neccessary evolution of the digital factory.

Opitz also touched on Boeing's Dreamlifter, a modified Boeing 747-400 (large cargo freighter) used exclusively for transporting aircraft parts to the planemaker from suppliers around the world for final assembly. Though the aircraft has gotten little attention relative to the Dreamliner, Opitz calls the Dreamlifter "a major engineering and manufacturing feat" that cuts down on ocean shipping that can be a logistics nightmare.

More to come tomorrow...