Case Study: Fast-track production relocation in China

By Richard Schmude, General Manager at Drees & Sommer Shanghai and Chloe Wang, Project Leader at Drees & Sommer China

The renowned firm QIAGEN is the leading global provider of Sample to Insight solutions that enable customers to gain valuable molecular insights from samples containing DNA, RNA and proteins from blood, tissue and other materials. QIAGEN provides solutions to more than 500,000 customers around the world in Molecular Diagnostics (human healthcare) and Life Sciences (academia, pharma R&D and industrial applications, primarily forensics). QIAGEN currently employs approximately 5,100 people in over 35 locations worldwide.

In Shenzhen (China), QIAGEN operates a manufacturing facility of approximately 10,000 square meters GFA, including all main and affiliated functions such as manufacturing, R&D, QC, and office. The local government has intended to re-develop the whole city quarter where the current facility is located; existing building owners and tenants are told to move out within a rather tight time frame of only 1 ½ years.

Such re-developments are common in China due to the fast-paced urbanization and growth of the big cities: over the course of 10 or 15 years a plot which was previously located rather close to the edge of the city - and comparably cheap - turns into valuable inner-city ground. Accordingly, previously welcomed uses at the city edge, e.g. any kind of manufacturing in rather space-consuming low buildings, are not desirable any more within the city and need to move further out, being replaced by dense buildings and commercial or residential usages. The incentives or compensations can be quite attractive as they normally reflect the significant land price increase over that time.

The project setup

Due to the necessity to have a local steering within the country who is proficient with all details of a clean room facility construction project, QIAGEN has engaged the project management firm Drees & Sommer with the client representation and internal user coordination of the local production team throughout the project. Drees & Sommer is a leading provider of management, engineering and consultancy services for Life Sciences industries facilities construction with 4,000 employees active in 46 locations worldwide.

Project User Requirements

It may be regarded a misconception that a re-location of a cleanroom facility should be “easier” than a comparable greenfield project. In the case for the given project, the re-location was not simply a copy of the existing plant, but rather the opposite: the occasion was taken to re-evaluate all production process steps and to derive a process layout which is not only fully compliant to GMP, local regulation and construction codes, but also optimized regarding the principles of a lean production flow. In addition, it should accommodate for future product lines. This process was started with the detailed Project User Requirements workshops conducted by Drees & Sommer which led to a well-defined Scope of Works for the Designer and was further managed along the way together with the Designer during lean production workshops. By that, the re-location project could safeguard compliance and realize efficiency gains; both would not have been easy to be realized in the old location.

Only based on the clear Project User Requirements, the external management of the construction project could be sourced. It was to be provided within the scope of an Engineering-, Procurement-, Construction- and Validation Management (EPCMV) service package. The tender of such package was carried out mainly by Drees & Sommer on behalf of the client. Drees & Sommer, who deliver projects themselves with similar EPCM mandates and therefore know its ins and outs, have set up a professional rule-based evaluation and recommendation process which included the in-depth scrutinizing of the bidders’ proposals and capabilities. At its end an international pharmaceutical engineering firm was awarded with the respective stage-by-stage service contract.

During this stage it became clear that moving into a pre-existing core and shell building was the only option, so that the time for civil construction could be saved and only the time for the clean room fit-out and MEP (mechanical- and electrical) installations had to be spent. This approach also makes the government permitting process easier, because the necessary fit-out project can in China be approved much faster than a comparable greenfield project; the magnitude of time savings can be around ½ year. The Project URS generated by Drees & Sommer was the clear definition of the technical requirements which any building shell object candidate had to fulfill.

The right location

For proposing potential core-and-shell object candidates, an international real estate broker firm with local representation was engaged. The object candidates were first shortlisted together with the broker, and the remaining candidates were then assessed with a TDD (technical due diligence) and a layout test fit done by the Designer, and a 2nd opinion by Drees & Sommer.

The initially most desirable object candidate of the short list due to the building’s location which was nearby the original facility was looked at in more detail. The clean rooms would have had to be built in the 1st and 2nd floor of a commercial building which was still under construction. The lobby and the elevators were supposed to be shared with other tenants, and the only possible material flow paths would have led to the risk of cross contamination. Besides, the installation space between the top of the future clean room ceiling and the existing structural beams was very tight, which would have led to a lot of problems during the design and installation phase. In addition, the finishing date of the yet unfinished core+shell building would have posed a risk to the project, as in China there are many government steps to be finished for the official acceptance of the core+shell before a compliant fit-out project can be started, which was according to their local experience pointed out rightfully by Drees & Sommer. In the end this choice was ruled out due to the technical and timing risks connected.

In the end QIAGEN decided for the best option, which was an already finished empty core+shell object, which fulfilled all the technical requirements for a state-of-the-art clean room production much better, but which however was located only at the other end of the Shenzhen urban area.

Design Management

Drees & Sommer steered the design progress by organizing design review workshops at the stages of 30% - schematic design, 60% - preliminary design, 90% - construction detail design, and 100% for final completion.

In China, for a brownfield project, a concept design (schematic Design) shall not modify a few important parameters which were defined by the land planning bureau, including the height of the building, the exterior façade system, the external building logo and appearance, the plot ratio and the grass ratio etc. If there is such a modification requirement from tenant raised indeed, a time-consuming process for application and authority approval will be necessary, which was to be avoided for the given project. This put constraints on the design of the clean room ventilation (number / size of vertical shafts whilst avoiding exterior façade duct work), location of external fresh air / exhaust air points for avoidance of cross contamination, etc. which all had to be solved one by one on the way.

The purpose to set up a 90% construction design review workshop is in order to finalize a set of drawings for the authority design review; in China, these official “blue print drawings” are still produced with the conventional diazo duplication process on bluish sulphate paper. This set of drawings requires both the certified design institute and certified design review consultant to chop for the legal usage for the registered project. Usually after a design review loop by a licensed 3rd party review company (who will not look at the process or clean rooms, but will look at issues like structural safety, firefighting and code compliance in general), the drawings are necessary to be adjusted. Drees & Sommer has organized the final review loop from QIAGEN in parallel with the 3rd party review, so that the 100% drawings could be created up to the point in the least possible time.

Relocation Moving Planning and Design

For all existing process equipment a study had to be made already during the design stage if the existing equipment was to be moved to the new facility, or alternatively a new one was to be purchased, or alternatively a mixture of both was to be chosen. This had to be analyzed under the aspect of their GMP-compliance status and in how far that status could be preserved by a (comparatively easy) relocation and re-qualification, and regarding the operational view where the time of no possible commercial production had to be minimized. This careful and detailed relocation sequencing and time planning was managed by Drees & Sommer together with QIAGEN’s production team already during the design phase was then fed back into the design.

Procurement Management

The procurement strategy was defined in the early stage of the project. In China, a qualified contractor with the necessary licenses (the GC General Contractor) shall take the legal responsibility for construction site, especially for the health and safety aspects, also for a fit-out project. The work scope for the GC was defined to include black utilities, clean rooms, and the general fit-out works. For key items where the quality directly impacts the process, special work packages were carved out, i.e. for the purified water PW system, the AHU and the chiller equipment, and for the attractive and user-friendly decoration of the lobby and office areas.

Construction Management

The construction management was carried out by the EPCM service provider and supported by the QIAGEN client team. Safety was always the top priority during construction. Within the quite tight schedule, quality control became the main challenge running through whole construction stage. Clear procedures had to be set up for material and shop drawing approvals, inspections, and acceptances.

Cost management

The EPCMV consultant was responsible for the cost management incl. bid price assessment, variation management, and invoice checking for their main contractors. However, a lot of other costs such as process equipment, consultants or staffing, subsidiaries / compensations etc. are not within their scope and not managed by them. Besides, it is reasonable to have their recommendations double-checked by someone proficient with construction and the Chinese circumstances. Drees & Sommer filled this gap and organized the overall cost management according to QIAGEN’s requirements for both CAPEX and OPEX aspects; it was achieved successfully that the project could stay inside the approved budget.

Qualification and Validation management and Scheduling

QIAGEN decided to rely on limited additional consultancy services to cover the validation activities mainly of clean rooms, PW, and equipment. Drees & Sommer prepared a basic validation plan to describe what kind of resources are necessary, and supported QIAGEN to tender suitable consultants which could close the gap.

The biggest challenge was to make the most efficient plan for shifting the manufacturing production license from the old to the new facility. The scheduling of this is inter-connected with the mechanical completion and authority acceptance status of the new facility, its IOQ progress, the production equipment movement plan, the application for the business license address change, and the medical device registration certificate renewals. All these different work streams were handled by different departments and responsibles of QIAGEN, and each step required the whole team’s cooperation. Drees & Sommer has steered this collaboration and conducted all the relevant scheduling work. In the end, the GMP readiness target was achieved 2 weeks earlier than planned.

The project was managed in a double-tier setup, where an EPCMV service provider handles the design and manages the main construction packages, and where Drees & Sommer took care for the internal coordination of the local team and supervised the EPCMV service provider. This setup combines global expertise with local presence and has resulted in a full project success.