International Journal of Management and Organizational Research
Measuring Operational Performance in the Pharmaceutical Industry: Key Metrics and Best Practices
Isaac Awulu1, Valentina Ochuko Obukadata2, Imoiboho Williams3
- 1
- 2
- 3
This is an author-deposited copy. The version of record was originally published elsewhere: Originally published in International Journal of Management and Organizational Research, Volume 1, Issue 6, 2022. DOI 10.54660/IJMOR.2022.1.6.72-96 . Original source: https://www.themanagementjournal.com/archives/year-2022.vol-1.issue-6.
Abstract
The pharmaceutical industry operates under a combination of pressures that is unusual in manufacturing: strict regulatory oversight, long product qualification cycles, high gross margins that historically masked operational inefficiency, and a growing public expectation that medicines will be available without interruption. Together these forces have moved operational performance measurement from a back-office accounting exercise to a strategic capability. This paper reviews the literature and industry practice on operational performance measurement in pharmaceutical manufacturing and supply, and proposes an integrative framework organised around six dimensions: quality and compliance, delivery reliability, asset and labour productivity, cost efficiency, inventory and working capital, and organisational health including safety and sustainability. For each dimension the paper identifies the metrics most commonly used, specifies their calculation, and discusses their known limitations and gaming risks. The paper then synthesises best practices in measurement system design, covering metric selection and cascading, data governance and definitional discipline, tiered daily management, external benchmarking, leading versus lagging indicator balance, and the role of digital manufacturing technologies. A four-stage maturity model is offered to help organisations sequence improvement. The central argument is that the value of a performance measurement system in this sector derives less from the sophistication of any individual metric than from definitional consistency, the visible linkage between shop floor indicators and patient level outcomes, and the behavioural response the system provokes. Poorly designed systems in regulated environments are not merely uninformative; they can actively degrade quality culture by encouraging metric management in place of process improvement.
Keywords: operational performance measurementpharmaceutical manufacturingkey performance indicatorsoverall equipment effectivenessquality metricsdrug shortagesbenchmarkingPharma 4.0operational excellence
How to cite
| BibTeX | Download .bib |
|---|---|
| RIS | Download .ris |
| EndNote | Download .enw |
Licensed under CC BY 4.0.