Merck KGaA: Big-Ticket Investments in Manufacturing Scale & Digital Innovation

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Merck KGaA has moved to continuously expand its manufacturing capacity and capability in recent years with a number of headline-grabbing investments in sites in its home market of Germany and across the world. Moreover, the company is now increasingly at the forefront of digitalisation and innovation in its manufacturing and supply chain management, striking up partnerships with tech firms and leveraging tools such as artificial intelligence and blockchain.

 

Sizeable Investments in Manufacturing, Packaging and Distribution Sites

Some of the company’s recent big-ticket investments include a EUR 63 million injection into a new packaging centre in 2018, which was itself part of a wider EUR one billion push to transform Merck KGaA’s Darmstadt complex into a contemporary global headquarters. The new 15,000 m2 facility is dedicated to the packaging and shipping of its current portfolio of pharma medicines in more than 90 countries and help meet increasing patient needs for flagship medicines Glucophage®, Concor® and Euthyrox®.

In May 2019, the company announced the continued expansion of its biopharmaceutical production facility in Irvine, United Kingdom, with a EUR 3.1 million investment. Irvine is Merck KGaA’s only global location where it manufactures both liquid and powder cell culture media and the expansion means that it will be able to supply an additional two million litres of specialized medicine to the global healthcare industry.

Also in the UK, in November 2019 the company announced the completion of a 5,250 m2 expansion to its site in Gillingham, which serves as the primary distribution centre for the region in its global supply chain.

 

Greater Uptake of Innovative Digital Tools

This continuous investment has not been limited to scale alone, but also to the greater adoption of digital tools and innovations to streamline and improve the manufacturing process.

April 2019 saw the launch of the BioContinuum™ Buffer Delivery Platform, part of the BioContinuum™ Platform intended to address intensified bioprocessing and continuous manufacturing. According to the company’s annual report, “this integrated solution is tailored to provide the highest levels of accuracy and precision in buffer preparation and management. The configurable platform supplies process buffers at a fraction of the resources and facility space, resulting in a more streamlined buffer suite and a more efficient manufacturing process.”

This adoption of this platform has the potential to drastically remove manufacturing costs. The annual report notes that “Its launch marked a key step in our strategy to deliver “contiguous” bioprocessing, which goes beyond connecting the individual unit operations to include the orchestration and management of all the processing steps — materials, production, testing, and analytics — with an industry-leading, streamlined, and optimized approach. Pilot studies suggest that conversion to such a manufacturing method may reduce manufacturing costs by up to 50 percent.”

Since late 2019, the company’s healthcare division has now deployed artificial intelligence and predictive analytics throughout its entire supply chain. For example, in the fertility drug‐related pilot test that Merck has been conducting since April 2019, supply chain planners get detailed alerts via automated phone messages every morning about supply shortages and spikes in demand.

Other key developments include new partnerships with technology firms TraceLink – to use real-time data points in the company’s supply chain to more accurately predict future demand for its drugs – and Aera technology – to help boost its decision‐making through predictive and prescriptive modelling.

Moreover, in January 2019 Merck KGaA obtained a US patent for a blockchain tool that gives physical objects like drug shipments a secure fingerprint in the digital realm, thereby allowing for a more dependable identification process in the supply chain.

With these investments and partnerships in place, the company is seeking to position itself at the forefront of complex manufacturing and supply chain management and ahead of the competition in its readiness for manufacturing the latest generations of therapies.

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