Operational Excellence in the Indian Pharmaceutical Industry

The Delphi Study on Operational Excellence (OPEX) in the Indian Pharmaceutical Industry offers a detailed and forward-looking assessment of how the Indian pharma industry is expected to evolve in terms of operational efficiency and global competitiveness. Conducted through a collaboration between the University of St. Gallen, Switzerland, the Indian Pharmaceutical Association, and industry experts, this 2018 study analyses key trends, challenges, and projections for the future of the Indian pharma sector.

What the Study is All About

The main goal of the study was to assess how the Indian pharma industry could improve its operational practices to maintain competitiveness in the global market. Moreover, the Delphi methodology, which involved surveying industry experts, enabled a broad and reflective view of industry expectations regarding operational improvements. Consequently, the projections focused on key areas, including quality management, operational efficiency, and India’s position in the global pharmaceutical supply chain.

Key Components of the Study

The study featured ten major projections, each evaluated by a panel of industry experts. Furthermore, these projections assessed critical aspects such as quality management, operational efficiency, and India’s role in the global pharmaceutical supply chain. Importantly, the Delphi method ensured a dynamic exchange of knowledge between participants, thereby allowing for a more refined consensus.

Methodology and Process

The Delphi study involved a real-time online platform where 70 experts assessed various projections about the future state of the Indian pharma industry. Additionally, the experts rated each projection in terms of its probability of occurrence, importance, and the level of consensus around it. After reviewing the initial assessments and comments from other participants, experts had the opportunity to revise their judgments, which ultimately led to a more accurate and reflective analysis.

The core methodology revolved around:

Definition of Projections: Projections were identified based on a comprehensive literature review and interviews with industry experts.
Assessment of Projections: Experts provided quantitative estimates for each projection and added qualitative arguments to support their judgments.
Reconsideration and Iteration: Experts reviewed other participants’ assessments and were allowed to reconsider their views.
Final Evaluation: A consolidation of the qualitative and quantitative results was carried out, thereby leading to the identification of key trends and insights.

Key Projections and Findings

OPEX Implementation
Experts agreed that while OPEX practices were being adopted in the Indian pharma sector, full-scale implementation across the board was still a challenge. The projection indicated a 63% probability that OPEX would become a key element of competitiveness by 2018. However, widespread adoption remained difficult due to variability in company sizes and operational capabilities.
Continuous Improvement in Quality Systems
The probability of Continuous Improvement (CI) practices being widely adopted in internal quality systems was rated at 64%. Although some companies had already begun adopting these practices, the experts pointed out that most were still focusing on regulatory compliance rather than genuine operational improvements. Consequently, CI was seen as a critical area for enhancing both compliance and efficiency.
OPEX as a Competitive Advantage
There was a 66% probability that OPEX would become widely recognised as a competitive advantage, both at the management and operational levels. Moreover, experts noted that understanding OPEX principles and applying them throughout an organisation would be vital for achieving long-term success. Nevertheless, there was some concern about the industry’s ability to uniformly apply these principles across all levels.
Product Quality vs. Cost as a Differentiator
Experts expected that by 2018, product quality would surpass cost efficiency as the key competitive differentiator for Indian pharmaceutical companies. However, there was still some dissent, with many experts arguing that cost control remained critical in the domestic market. For exports, nevertheless, product quality was expected to become the defining feature, with the likelihood of this projection estimated at 61%.
Developing a Competitive Product Pipeline
There was significant disagreement about whether Indian pharmaceutical companies could develop a product pipeline competitive with Western companies by 2018. While innovation in generics and biosimilars was growing, the development of new chemical entities (NCEs) remained challenging due to high resource requirements. As a result, this projection received a relatively low probability rating of 53%.
International Recognition
A majority of experts (68%) believed that by 2018, Indian pharma would be recognised as a reliable global supplier of pharmaceutical products. This was largely due to the Indian industry’s competitive pricing, large number of US FDA-approved facilities, and growing expertise in manufacturing. Consequently, recognition was expected to grow, especially for exports to regulated markets.
Reduction of Regulatory Risk Perception
There was a mixed response regarding whether global regulatory bodies would stop viewing Indian pharma companies as potential risks. Although Indian companies were making progress in complying with international standards, there were concerns about issues like data integrity and manufacturing practices. Thus, the probability of this change was estimated at 59%.
Workforce Qualification
The experts projected a 67% probability that the qualification levels of Indian shop-floor workers would match those of their European counterparts by 2018. However, the need for specialised training—particularly in regulatory compliance and manufacturing processes—was emphasised. Therefore, although the lack of skilled workers was a major barrier, improvements in training and development were expected to close this gap.
Data Integrity and Compliance
With increasing global scrutiny on data integrity, the study projected a 65% probability that Indian pharma companies would avoid major data falsification incidents by 2018. Furthermore, the industry had already begun to implement stricter data integrity practices, especially for maintaining compliance with US FDA requirements. Consequently, digitalisation and automated data tracking were seen as key tools for reducing errors and improving transparency.
Failure Culture and Continuous Improvement
The study explored the idea of a failure culture in which mistakes would be viewed as opportunities for learning and improvement. However, the likelihood of such a culture taking root in the Indian pharma industry by 2018 was rated at 59%. Thus, significant cultural changes would still be needed to fully embrace continuous improvement principles.

Key Takeaways of the Delphi Study

The Delphi study concluded that the Indian pharmaceutical industry had made significant strides toward achieving Operational Excellence (OPEX). Nevertheless, several challenges persisted in fully implementing OPEX principles across all levels of operation.

Key takeaways included:

OPEX is essential for the long-term success of Indian pharma companies, especially in global markets.
The quality of products will be the main driver of competitiveness, particularly in regulated markets like the US and Europe.
Continuous Improvement practices need to be adopted widely, not just for regulatory compliance but also to enhance operational efficiency and global competitiveness.
Indian pharma companies must invest in R&D and build their capacity for innovative drug development to stay competitive with Western firms.

Therefore, while the Indian pharmaceutical industry showed progress in adopting OPEX practices, the 2018 study highlighted that continued investment in training, compliance, innovation, and quality control would be necessary for the sector to maintain and enhance its global standing.

Recent Developments

Systematic Review on OPEX for Regulatory Compliance (2022)
A Nov 2022 study outlined the critical importance of Operational Excellence (OPEX) in ensuring regulatory compliance within the Indian pharmaceutical industry. Moreover, it emphasised the use of Total Quality Management (TQM) and Lean Manufacturing to meet stringent global standards, especially for US FDA approvals. Similarly, a Feb 2019 study highlighted seven key enablers driving operational excellence, including continuous improvement (Kaizen), risk management, and digitalisation—all of which are crucial for compliance and efficiency.
Critical Success Factors for OPEX in Pharmaceuticals
Another recent qualitative study identified the Critical Success Factors (CSFs) that drive operational excellence in pharmaceutical manufacturing. Consequently, factors such as strong leadership commitment, effective technology adoption (automation, AI), continuous employee training, and strict quality control protocols emerged as key. Firms prioritising these factors, therefore, experience significant improvements in compliance, production speed, and cost efficiency.
Post-COVID-19 OPEX Adaptations
In the post-pandemic landscape, studies have explored how the Indian pharma sector adapted to new challenges in global supply chain management. As a result, there has been a shift toward greater data integration and digitalisation to monitor and improve manufacturing performance, manage disruptions, and maintain regulatory standards.

Take Home

Collectively, these studies highlight the ongoing transformation of the Indian pharmaceutical sector, where Operational Excellence (OPEX) remains key to maintaining global competitiveness and meeting international quality standards.