If it can’t be measured, it can’t be managed.
In the field of business KPIs, this is the motto of the pharma industry. All business transactions, operations, and sales performances need to be measured. This enables us to assess their utility and management procedures. Business key performance (KPIs) indicators are crucial to this process.
Business KPIs provide the industry with insight into 4 key aspects:
They are the perfect tool to facilitate faster decision-making and produce easily comprehensible data. They reduce the money and time spent behind manually tracking and analyzing data transitions. Here are some of the integral areas where KPIs prove to be indispensable:
Business KPI #1: R&D cost on drug development
Pharma companies face 2 critical issues right now. Firstly, there is a need for the rapid development of new drugs (due to rising rates of patent expirations). Secondly, consumers now demand empirical evidence regarding clinical trial procedures.
These require a solid ground of trust between consumers and the pharma industry. Here is where data comes in. To prevent negative public perception, companies need to implement an R&D cost on drug development KPI. It measures the total expense that a pharma company invests in their R&D sector as compared to the total number of drug discoveries that occur during that period.
Business KPI #2: Lead, Takt, and Cycle Time
These 3 business KPIs are interconnected units. They measure the efficiency of pharma operations. While they are often used interchangeably, they are not the same.
Cycle time is the average of the time taken to complete the production of one unit within a pharma company. Therefore, it helps determine a product’s optimal time of delivery. Takt time measures the average time taken between starting the production of one unit to that of the next unit. It lays out the rate at which drugs should be produced to meet customer requirements. Hence, it is dependent on the market demands. Lead time quantifies the average of the time taken between receiving an order till the time of its delivery. Therefore, it looks at the operation through the client’s eyes – from placement of the order to it arriving at their doorstep.
Business KPI #3: Product Quality Complaint Rate
Customer service is one of the most important areas of pharma companies. A paradigm shift from passive clients to active purchasers has reshaped consumerism en masse. However, the industry is facing the heat of the public eye. Therefore, an open dialogue between management and customers is crucial. Product quality complaint rate (PQCR) KPI proves its excellence here. It is 1 of the 3 quality KPIs that the FDA (2016) included in its guidelines. It measures the number of customer complaints regarding product quality with relation to the total number of products distributed within a fixed period. Consequently, this can influence decisions about the price and production rate of a product.
Business KPI #4: Sales Growth
“Marketing without data is like driving with your eyes closed.” Dan Zarella
Sales growth provides the pharma marketing department with the data needed to strategize innovative campaigns. Insight into the performance of drugs, demographic preferences, and the success rate of sales teams are invaluable. Consequently, the organization of employee training programs can help those teams that suffer a dip in sales.
Business KPI #5: Health and Safety KPIs
Excerpt of the publicly available EHS Performance Data of Pfizer, 2019.
These business KPIs measure a pharma company’s health and safety performance. Additionally, its degree of compliance with regulations is also quantified. For an industry that deals directly with people’s health, ticking all the boxes of regulatory bodies is a priority. Furthermore, FDA regulations are now stricter than before. Hence, companies need to remain acutely aware of how their departments maintain such standards of health safety.
Health and safety KPIs also monitor data on a company’s degree of compliance in areas like greenhouse gas emissions and inspections. Therefore, you can track which areas require attention. Subsequent measures can be taken in order to avoid issues of non-compliance. If such data is made public, empirical transparency between customers and companies will be solidified.
What’s the Next Step?
While KPIs do yield necessary information, imagine having a large volume of important data scattered haphazardly. Chances are, you would never want to deal with it.
Therefore, dashboards are the ideal strategy for dealing with these large volumes of data. This business analytic tool provides visual data through charts and graphs. Resultingly, these facilitate easy comprehension of facts. No time and effort are wasted behind interpreting and sorting data received from KPIs. Therefore, it allows for faster-decision making. This should be your next move.
Now that you know the 5 top business KPIs, check out the 5 trends that need to keep an eye on in the pharma industry!