In order to evaluate the reliability o f the comparison, sensitivity analysis was carried out for relevant variables in the disposables approach. The parameter chosen for the comparison was the ratio o f disposable NPV over conventional NPV, which is >1 when the disposables-based option is financially the more attractive.
The variables studied included capital investment, staff costs and materials costs. Figure 4.8A shows the impact on the NPV ratio o f a variation o f +/-25% made to each o f these disposable plant variables. (Note when the capital investment is varied, the depreciation costs are also affected as they are, by definition, directly related to the capital investment.) It can be seen that these three variables have only a slight impact on the NPV ratio. However the variation range for materials costs may be higher than +-25% as was indicated in Chapter 3. For that reason a separate study o f the impact o f the cost o f materials was carried out in section 4.4.3.
8 t z a ■Î2 ■D z 2 5% 0% -2 5%
I
£ z Û. ■o s: z 0 Variation Variation BFigure 4.8 Sensitivity analysis: effect o f a variation o f +/-25% on crucial cost variables.. The variables studied were: a) Fixed capital investment (4), S ta ff costs (D), Materials costs (A) and b) time to market(—f . (Note: Only the disposable
4.4.2 Time to market
Considering that opting for a disposables-based process may allow for earlier entry to market it is interesting to evaluate the impact this may have on the NPV. This is achieved using Equation 1.2 in Chapter 1 but considering that the start o f manufacture and sales occurs earlier than year ‘m ’. This does assume that the life-span o f the project ( t ) is unchanged, i.e. that despite the earlier entry to market the product will be
sold for the same length o f time. That could result in an underestimation o f the benefits. Non-linear least squares and interpolation were used to deal with fractions o f years gained in time to market.
Figure 4.8B shows how a 9 months reduction or increase in entry to market with the disposables-based approach can affect significantly the NPV ratio. For example the NPV ratio is 0.74 when the time to market is the same but increases to 1.00 if disposables allows for a 9 months earlier entry to market.
4.4.3 Materials costs
The cost o f the pieces o f disposable equipment is crucial in the evaluation o f this manufacturing alternative. The central costs are those o f the membranes taking 64% o f the total materials costs as can be seen from Table 4.1. The second most important cost is that corresponding to the matrix at 18% o f the total costs.
Figure 4.9 shows the impact on the NPV ratio o f using cheaper membranes. The first set o f bars looks at the replacement o f traditional membranes in the two UF steps o f the process, i.e. lysate clarification and product concentration. As can be seen from the graph the NPV ratio reaches a plateau at approximately 0.93. There is a negligible difference between the impact o f a price 10 or 100 times lower.
The case study considered that flat sheet membranes are used in both processing options. These high quality membranes are designed to be re-used and are therefore expensive with a price per area o f approximately £1200 per m^ (Millipore catalogue 1999). However other types o f membranes can be used, namely disposable hollow fibre membranes developed for medical applications. The high production volumes of such membranes result in lower prices. For example disposable kidney dialysis cartridges manufactured by Nissho Nipro Corporation (distributed in the U.K. by
HyMed Healthcare Ltd.) are sold at £29 per 2.1 cartridge (cellulose triacetate). This corresponds to a cost o f £14 per n f , 85-fold less than the flat sheet membranes mentioned above. U) o Ü (A a> c 2 n E Q) E nj (A O a (A
□ Disposable membranes in UF steps
■ Disposable membranes in UF and MF steps same as conventional 2x cheaper 5x cheaper 10x cheaper Q 100x cheaper 0.2 0.4 0.6 0.8 NPVdisp I NPVconv 1.2
Figure 4.9 Im pact on the N P V ratio (NPVdisp/NPVconv) o f the use o f intrinsically
d isp o sa b le m em branes in the UF or/an d M F steps o f the d isp o sa b les-b a sed process.
The second set of bars in Figure 4.9 considers that additionally to the UF membranes, the MF step can also be operated with a disposable membrane. A distinction between MF and UF was made, as it may be more difficult to find a disposable MF design that will cope with the high cell concentrations that arise in the cell-harvesting step. On the assumption that both are technically feasible, a 10-fold reduction in the membranes costs is then sufficient to make the disposable option economically identical to the stainless steel option.