Novartis Goes Lean

PharmaManufacturing.com

A bold initiative at the drug manufacturer's Suffern, N.Y. plant aims to reduce cycle times by 70% and cut spending by 40%. The program, a pilot for all Novartis sites worldwide, has been "risky and nerve racking, but necessary."

By Agnes Shanley, Editor in Chief

Under increasing pressure to reduce costs, and improve the quality of their products, more pharmaceutical companies are adopting techniques well established in other industries--Lean manufacturing, Six Sigma, process teams--to drugmaking. Many of the techniques, first developed for discrete manufacturing, can't simply be "dropped in" to the more complex pharmaceutical plant. Nevertheless, their adoption reflects the industry's increased emphasis on manufacturing optimization.

At its Suffern, N.Y. plant, Novartis is now in the final stretch of a transformation involving process reengineering and Lean manufacturing principles. Launched in November 2002, the initiative aims to reduce cycle times by 70% and reduce spending by 40%. The facility's management and workers have scrutinized and are reengineering every process and role at the site, leveraging IT and other new technologies, and creating process-oriented teams without first line supervisors. The Suffern program is a pilot for all Novartis sites worldwide.

It's not an effort for the faint of heart, for control freaks, or those averse to change. The journey so far has been "risky and nerve racking, but necessary," says Tom Van Laar, vice president of pharmaceutical operations at the facility. "We could just opt not to do the radical reengineering, which will affect some jobs, and then wait and risk all jobs," he says. "This is all about becoming more competitive for the future."

For site operator Michael Pidgeon, buying into the lean concept was the most difficult part about the program. "Most of us have been doing our jobs a certain way for a long time, and to accept that business won't be as usual isn't always easy," he says. "However, as we see the benefits, it has become easier to handle."

Novartis' Suffern program will improve all major work processes, from overall supply chain management and cycle time to validation, lab processes and change control. "We map the way they're handled now, design a blue-sky vision of how they could be handled in the future, then conduct a gap analysis of how to get there," Van Laar says. This process involves everyone from the operators on up. "In every case, we've seen at least a 40 to 50 percent reduction in the work required for each area, because that work was non-value added," he says.

The effort has brought more focus to day-to-day jobs. "Before the program started, we were measuring all kinds of key performance indicators (KPI) across the site, from attendance by shift/team, to batch record errors, both minor and major," says John Micheline, coordinator for the facility team charged with producing the facility's major product, the hypertension treatment, Diovan. "These broad KPIs caused our focus to be all over the map. Now we concentrate on issues that are important to the end users, such as customer service levels and cycle times."

Flatter Organizational Structure

In the past, the facility was structured like most pharmaceutical manufacturing operations, with very traditional, vertically-focused departments. Last November, it adopted a product-based team approach, eliminating the supervisor role so that engineers, operators, and support staff such as IT, mechanics and maintenance, report directly to one team leader.

Currently, 80 people across functional disciplines work on the Diovan team, which was the pilot Lean team for the site. There are no longer any departmental supervisors, and all members report to team leader, Brian Hanifin (photo). Three other teams at the 500 person facility focus on various mixes of other products at the plant. 

 "Lots of companies say they have teams, but, more often than not, they're still taking a vertical approach--you need to take an end-to-end approach to team building, from when raw materials come in through the door, through to when product leaves," Hanifin says. "Any time you have a handoff, you add complexity," he says.

Before the plant took this new approach, Hanifin says, if he needed a process engineer, a planner and a packaging engineer, he had to go to three different bosses to try and coordinate work. "I'd have to convince them that my priority was their priority," he says.

One of the biggest changes that the new program has brought is eliminating the front-end supervisory role, and adding the new role of "coordinator," designed to optimize use of resources and to transfer more supervisory skills to the operators. The coordinator role was loosely defined, at first--intentionally, Hanifin says, because Novartis wasn't sure how the team, and the role, would evolve.

In some cases, former supervisors went on to coordinator jobs. However, this introduced some role uncertainty. "Operators immediately treated them like supervisors and would go to the coordinators for everything," Hanifin says.

Those supervisors who were used to traditional top-down roles weren't comfortable as coordinators and couldn't adjust to the change, Van Laar says, and some left the company. For those who have been able to adapt, he says, the change has been positive. He was especially pleased when, at a recent meeting, a supervisor-turned-coordinator admitted that, as a supervisor, he used to feel he had to lean on people to get things done. "All of a sudden, I'm not leaning on people and they're getting things done," he said. That unprompted statement was an affirmation for Van Laar. "That's the kind of cultural change we're aiming for," he says.