In order to minimize costs and optimize product quality, drug company leaders must focus on the forest rather than the trees, suggests Pankaj Mohan, U.S.-based management leader for global process engineering at Eli Lilly. In this exclusive interview with Pharmaceutical Manufacturing Editor in Chief Agnes Shanley, Mohan shares strategies that can help more drug manufacturers move from good to great. He also discusses his book, "Pharmaceutical Operations Management: Manufacturing for Competitive Advantage," coauthored with Jarka Glassey and Gary Montague of the University of Newcastle, available through McGraw-Hill (books.mcgraw-hill.com).
[Editor's Note: Whereas in most of our Q&A-formatted articles, we use P.M. as an abbreviation for Pharmaceutical Manufacturing, in this interview, A.S. stands for Agnes Shanley and P.M. stands for Pankaj Mohan.]
A.S.: What made you write the book, and what message do you want people to draw from it?
P.M.: I’ve worked in both sides of pharma: commercialization and manufacturing, and also taught as an academic. To date, there has been no comprehensive work that considers the entire drug manufacturing life cycle or presents a systematic framework of pharma’s new paradigm, based on productivity and quality. My coauthors and I wanted to help people see “the big picture,” and focus on issues such as quality by design, reducing speed to market, and reducing cost. We felt that, as the pharmaceutical industry moves toward a new paradigm, it would be very important to show how that paradigm will look.
A.S.: The book seems to follow the structure of the pharma value chain.
P.M.: We start with commercialization, focusing on the late stage, then move into new plant construction and process capability analysis, asking, once you operate a plant, then what are the operational concerns you have, especially regarding variability.
We then delve into discussions of productivity and the change in mindset as the drug industry evolves to a new system incorporating the concepts of Lean and Six Sigma.
We finish off with a discussion on the kind of leadership needed to transform pharma’s existing system into its new paradigm, focused on reducing cost and speed to market, to ensure quality medicine to the customers. [Editor’s Note: This chapter of the book is available on this website at "Three Keys to Productivity Improvement."]
A.S.: We’ve been surprised to notice that some pharma companies are still very reluctant to embrace the principles of “operational excellence.” Some have stated out right that Lean just isn’t for them. Can the industry afford to reject transformative programs, and is the key to change hiring people from outside pharma, to bring in fresh ways of thinking?
P.M.: First, we find that many pharma companies are embracing op ex. Lilly has always encouraged it and is at the forefront of implementing Six Sigma and so forth. When companies don’t see the value in such programs, it’s usually because their leadership fails to see the “big picture.”
I’ve known some pharma CEOs who have come from other sectors and done very well. However, I personally feel that pharma leadership should have some domain expertise. It’s a very long value chain, and having some knowledge and experience of this sector is very important. There’s no black and white answer. More and more, industries are thinking about training their leadership to think out of the box, and they’re collectively brainstorming to move to the new paradigm.
A.S.: We’ve noticed a “technology divide” in pharma — not only huge discrepancies between large and small companies, but major variations among plants operated by the same company. Some plants are paper based, others automated. Are standards for technology and IT needed to move industry forward?
P.M.: Two different questions come into play here. First, what is the optimal technology solution? Second, what is the business case for implementing it? I’m not a very big fan of driving one standard throughout any corporation. You have to balance new technology considerations against local needs.
Consider, for example, a case where you want to introduce more advanced control system to an existing process. We present such a case history in our book, examining an actual plant that was producing with factory losses due to quality issues and product nonconformance.
We knew that introducing a more sophisticated process control technology would resolve some of the problems, but we implemented it in stages. First, we did a cost/benefit analysis to understand what the financial return would be from each piece of the investment.
Then, we also looked at modern tools such as Real Options. [Editor's Note: For an example of how some pharma companies are using Real Options, see the unrelated white paper "Using a Real Options Approach to Achieve Manufacturing Flexibility."] We broke down the project into smaller chunks and analyzed the risks entailed in each so that we could mitigate the financial risk as we took the project forward.