Download - Marlow BP Capstone 022616(2)
Biotech Distribution Business PlanEML Capstone Project
Cameron [email protected]
Georgetown UniversityFebruary 26, 2016
Entrepreneurship
Cameron Inc. ?
My Background
• Laboratory manager, Brady Urological Institute JHU• Sales representative, Protea Biosciences• Research associate, Clinical Validation Lab NIH• Director of cell center, Genetic Resources CORE Facility JHU• Director of operations, Indivumed GmbH• Scientist, Adaptimmune LLC
Statement of the Problem Scientists and researchers in the life sciences need better
access to resources such as biotech consumables to complete their work. A convenient method to save time and money would benefit the scientific community.
Proposal My proposition is to solve the need of supply chain management of biotech
consumables for smaller academic institutions and biotech companies. The concept, involves the commercialization and installation of vending
machines or automated retail Purpose of the study is to access if there is value in the market place for this
model.
Current Methods
P-Card
Internal Onsite Store
Freezer Program
Current Process Method Advantage Disadvantage
Purchase Order (P.O.) ControlledAccurate reporting
Time! Procurement mistakesPaper trailShipping costs
P-card or Credit Card TimeAccurate reporting
Limited fundsCategory purchasesFinance costs
Internal Store TimeNo shipping costsStore bulk discount
Limited SelectionDiversity of Vendors
Freezer Program TimeNo Shipping cost
No ControlTheftLimited Selection
Creating Breakthrough Products
Cagan, J., & Vogel, C. (2012). Creating Breakthrough Products: Revealing the Secrets that Drive Global Innovation (2nd ed.). FT Press
Identifying the Opportunity
• S.E.T. Factors• Product Opportunity
Gap• Product Opportunity
Statement
Understanding the Opportunity
• Value Opportunity• Actionable Insights• Product Attributes
Conceptualizing the
opportunity• Product Concept
Program Approval
• Protecting Innovation
Product Launch
• Product Refinement• Production
Prototype• Site of Launch
Fuzzy Front End
“Product = Useful, Usable, and Desirable”
Identifying the OpportunitySocial: How do researchers currently purchase consumables and is it painful? Purchase order, p-card (credit card), online, or onsite storeEconomic: R&D Budget or grant to purchase goods Funding can be limited or have need to be regulated more strictly Governmental regulation of funds to the National Institute of Health and the trickle-
down effect to outside institutions. Save time and money on consumables Public attention to research area (Cancer, HIV, Dementia, etc.) Technology: Emerging, existing, or lack of technologies Vending machines haven’t been used for biotech consumables Similar machines have been used for healthcare (i.e. scrub machines) Vending machines have been used in the auto industry to distribute safety
equipment.
Product opportunity statement: Using limited funds, institutional methods to buy consumables should align to save time and money while utilizing convenient access to new technologies.
Understanding the Opportunity Who is the customer?:
Johns Hopkins University; 5
Glaxo Smith Kline GSK; 3
Thomas Jeffer-son University; 2
University of Pennsylvania; 2
Moffitt Cancer Center; 1
Northwestern University; 1
Georgetown University; 1
N=15 80%
20%
Would Use the Vending MachineYes No
67%
33%
Rely on Vending Machine for Product
Yes No
Understanding the Opportunity
100% Participants said they had limited storage space
100% Participants agreed that if the vending machine was located in
another location or outside building they would NOT use it.
100% Participants have never used Amazon to buy lab products
100% Participants have used Thermo Fisher to buy lab products.
100% Participants must purchase through a procurement
department
Understanding the Opportunity
Participants who have access to an Internal Store:
60% Participants said they would like to see competing internal
stores.
100% Participants agreed that they would like to see a differentiation
of product stocked in the store.
Participants from Large Pharma:
Participants liked the concept because it offered control and security
of product.
Conceptualizing the Opportunity What is needed to start 1 vending machine in 1 facility?
How lean can the process be without sacrificing the concept?
Conceptualizing the Opportunity
5 Top rows Ambient Temp.
2 Bottom rows Refrigerated Temp.
Up to 8 Trays per row depending
on product size.
Additional Temp controlled “Will
Call” lockers.
Conceptualizing the OpportunityPlanogram of Biotech vending machine
Conceptualizing the Opportunity
Pricing
Products
Potential Revenue
$30,000 worth of product
Conceptualizing the Opportunity
Models of Business:
Become a distributor and self stock = $120,000 profit per year
• Disadvantage = higher risk
Rent space in the machine to biotech supply companies = $60,000 profit per year
• Rent trays $70 to $100 per month
• Advantage = no market research
• Advantage = Rely on companies to market their own product
• Advantage = No product loss
“Will Call” lockers = unlimited revenue, Just limited by size of the locker
Conceptualizing the OpportunityCost of entry and annual costs:
Conceptualizing the Opportunity
Areas not covered:
Salary?
Shipping?
Transport? Fuel? Refrigeration?
Rental Space?
Central Receiving?
Margin with key partners and contracting?
Contracting with Academic Institutions?
Contracting with Real Estate companies?
RISKs Contractual buy in, what is in it for the partnering body?
Power failure and loss of refrigerated product?
Equipment failure?
Vending machine access and hours of operation?
HAZMAT What happens if a reagent spills inside or outside of the
machine?
OSHA regulations?
Ability to stock alternative product?
Program Approval and Conclusions
Is Biotech automated vending a viable business?
Was the process of a business plan effective?
Questions?
PESTLINPESTLE IN:‐ Rating Implications of Key External Factors
CATEGORIES OF EXTERNAL FORCES
1. KEY EXTERNAL FACTORS – LIST
2. IMPLICATIONS OF EACH KEY FACTOR – IDENTIFY
3. IMPACT & IMPORTANCE –
RATING* TI TY DY RI
POLITICAL 1. Government Regulations and FDA Approvals 2. Elections Republicans vs Democrats 3. Influential (Politicians and Celebrities get Cancer or
Diseases) 4. Customers 5. Procurement Departments
1. FDA approval prolongs drug development 2. Republicans vs Democrats (Democrats favor Biotech funding by
71%) 3. Foundational Sponsorships for research 4. Understand the research and consumables needed to conduct
that Research 5. Getting department buy in ( I will make their lives easier)
1. L 2. L 3. L 4. H 5. M
1. M 2. L 3. L 4. H 5. H
1. H 2. L 3. L 4. H 5. M
1. M 2. M 3. H 4. H 5. H
ECONOMIC 1. Government Funding (Trickle Down) (Personal Experience in Cancer Research)
2. Venture Capital 3. Customer Purchasing /Ecommerce /Vending Machine 4. Staff
1. NIH >‐ EDU >‐ Biotech 2. ex. Shark Tank Who will buy in? 3. P card‐ / Club Membership / Ease of use (NO Purchase Orders)
Direct link to budget numbers 4. Level of staff members
M H H H
H H H H
H H H H
H H H H
SOCIAL 1. Advertising Google 2. Social Media (LinkedIn, Facebook, Twitter, Research Gate) 3. Trade Shows (AACR, ASCO, BIO etc.) 4. Customer Service Policy
1. Understanding google analytics. Must be top 10 in search 2. Required weekly update Stay current with consumer and research
trends) 3. Choosing the right research demographic (Customers) 4. Teaching employees how to handle difficult customers to keep
them coming back
1. L 2. L 3. H 4. H
1. H 2. H 3. H 4. H
1. H 2. H 3. H 4. H
1. H 2. H 3. H 4. H
TECHNOLOGICAL & INFRASTRUCTURE
1. Website Development E Commerce‐ (Amazon or Newegg model) Vending Machine (http://biotechvending.com/) Consumer Account control
2. Off Site Back up / Power Generators / Alarms
1. Developer Costs Web / Database / Maintenance Costs / Vending Machine
2. Disaster Control
1. H 2. H
1. H 2. H
1. H 2. H
1. H 2. H
ENVIRONMENTAL 1. Technology allows for Regulated Consumption and Customer Quality Control.
2. Financial Regulatory PI level and Sponsor Level 3. Warehouse Distribution workflow to Stock vending
machines 4. Vending Machine Placement
1. Principle Investigator (PI) has more control over research spending, Principle Investigator (PI) can control quality of Research and knowledge of Staff Activity
2. Financial Reporting for Grant funding 3. Institutional access / Storage of Product 4. Lobby of Academic and Industry partners / agreements
1. L 2. H 3. H 4. H
1. M 2. M 3. H 4. H
1. H 2. H 3. H 4. H
1. H 2. H 3. H 4. H
LEGAL 1. Form a LLC 2. Biotech Companies 3. Direct Manufacturers 4. Internal Stores
1. Form Inc. depending on company growth 2. Obtain contracts with Institutions to place equipment. Make
agreements with Realtor Companies that own the buildings 3. Form agreements for pricing 4. Threaten unfair business practices lawsuit
1. H 2. H 3. H 4. L
1. M 2. H 3. H 4. H
1. L 2. H 3. H 4. L
1. M 2. H 3. H 4. H
INTERNATIONAL 1. European Market? 2. Stock Foreign Products?
1. Has not been considered (Yet) 2. Product Quality Control and Actual Market for product
1. L 2. L
1. L 2. L
1. L 2. L
1. L 2. L
NATURAL RESOURCES 1. Biotech Companies (GE Health Care / VWR / Thermo Fisher Scientific) Direct Manufactures (Life Technologies / BioRad / Rockland ImmunoChemicals)
2. Specialty Products such as DNA Primers or Oligose pairs (Big Market) (JHU CORE store)
1. Discounts, Bulk Pricing, Retail Markup / Product Quality 2. How to Quality Control / Product expiration / Cold Chain
Management
1. H 2. L
1. H 2. H
1. H 2. H
1. H 2. M
Rating Implications of Key External Factors: From the rating of top ten external factors the following key uncertainty questions have been developed. 1. Political (Customers): “Customers” Who will be target demographic
and at what level? Is it the Technician, Principle Investigator, or Procurement?
2. Economical (Customer Purchasing): “Revenue” Can revenue generated self-support this venture?
3. Technological Infrastructure (Ecommerce +Vending): Will the cost be too high to obtain a solid infrastructure and how much support will be needed?
4. Natural Resources (Distributors): Will distributors embrace the idea for additional revenue with less than optimal margin?
5. Legal (Who’s on first): Can this business model be protected or should there be a huge push for secured space?
6. Economical (Venture Capital): Will the sharks buy in?7. Environmental (line of sight): Will Institutions or Building Landlords
provide space with line of sight? Rent?8. Social (Customer service): Can employees realize the value provided
and see the product through the customer’s eyes? 9. Environmental (Warehouse): How far away can a distribution
warehouse be located to provide same day delivery of orders? 10. Technological Infrastructure (Back up): Are additional costs too
infrastructure too high to insure stability?