Ever since the term "Lean Manufacturing" was coined by MIT professor James Womack in his book, “The Machine that Changed the World,” the concept has attracted more followers and a great deal of controversy. Clearly, the concepts driving Lean can be and are being adopted by more drug companies, and not just for manufacturing.
On Nov. 9, Pharmaceutical Manufacturing magazine and Quality New Jersey co-sponsored an event in Princeton, N.J. hosted by Celsis, Inc. The event focused on Lean Manufacturing, and the role that Rapid Microbial Monitoring (RMM) technology can facilitate pharmaceutical operational excellence.
In this interview, we talk with that event's keynote speaker, Phil Emard, president of OpEx, Inc., about Lean Manufacturing, its origins, what it is and isn’t, what is driving it within pharma, and what to look for in a Lean consultant.
PM – How did you get involved with Lean Manufacturing?
PE – It all began about 14 years ago when I was working at Boeing. One day I got a call from my boss. “Hey, corporate is sending this guy down to the plant,” he said. “He’s a retired Toyota engineer.” I knew the drill: give him the nickel tour, show him all the great things we’ve done and send him on his way.
So in walks this 65-year-old Japanese gentleman with his interpreter. After formal introductions and a brief chat, we walk out onto the factory floor. We’re not even out the door before he’s firing questions with both guns. The hair on the back of my neck stood straight out. I’d spent four years putting that factory together.
I dutifully took notes on what he said as we walked around. Once it was over, I figured it would be a “don’t call us, we’ll call you” experience. But then my boss called and asked me to report on the tour and pull whatever gems could be gleaned from it. As I typed up my notes, I realized that everything he had said was correct. Our award-winning factory was the root of many of the problems we were having, such as long lead times.
At that point, I changed career paths and became a disciple of that Japanese gentleman, spending three years studying the Toyota Production System methods.
PM – So what is Lean all about?
PE – First of all, I don’t care particularly for the term "Lean Manufacturing." It connotes all kinds of things and creates barriers whenever I enter a facility. “Oh no, here comes another consultant trying to lock heads,” is the reaction I often get.
The cornerstone of Lean is determining value based on what is valuable to the customer. Sometimes, discovering what your customers want can be quite surprising. Right now, for instance, I do a lot of consulting for hospitals. They’re buying a great deal of fancy imaging equipment, but do you know what their customers care most about? Well, it’s food!
With Lean, you identify the value stream from concept to product launch including raw materials, and eliminate all muda (Japanese for waste).
PM – Aren’t time and motion studies a critical part of Lean?
PE – Frederick Taylor pioneered the concept of time and motion studies, but the problem is that he had focused on the individual. This approach created distinct departmental silos in many operations — which are still in place today — where one department may optimize its efficiency at the cost of the overall process.
PM – How important is inventory reduction?
PE – The more inventory you have on hand, the longer your product lead time is and the more difficult it will be for you to respond to a sudden change in the marketplace. Right now, Chrysler has over 70 days worth of inventory, where Toyota has 18 to 20 and is now the second leading carmaker in the world, poised to take over the number one slot from GM within the next two years. And their margins are roughly 17%, whereas GM and Ford are just hovering on profitability.
Toyota tries to build only at the demand of the customer. The company keeps lead times and turnaround times as low as absolutely possible so they can meet those market needs quickly. So Lean is a way of life: the relentless pursuit of perfection in the elimination of waste.
PM – Who do you consider to be the father of Lean?
PE – Lean has more than one father and mother. Hirano, Shingo, Deming and Juran all made great contributions, but the concepts really sprang from Henry Ford and Tayishi Ohno.
Ford incorporated the idea of the continuous pursuit of quality improvement. And he did this at a period in history when it took 13 days to move from iron ore in the ground to a finished good awaiting shipment. Within this framework, building a Model T took only 81 hours, a tremendous accomplishment. Think about it. There wasn’t any fancy inventory management software available at the time.
Now let me ask you a question. When I say “Henry Ford,” what do you immediately think of?
PM – The assembly line?
PE – Exactly. But what drives that concept is the concept of flow; everything must be kept in motion. Ford’s goal was to eliminate waste, relentlessly, in his system. But consumers had little choice. They could get any color Model T they wanted as long as it was black. That’s where Toyota came in. They took Ford’s flow model and they adapted it for highly variable products.
My first impression of this was actually a Kawasaki plant in Japan where you would see SUVs, jet skis, snowmobiles and street bikes all coming down the same assembly line, just smoothly flowing based on the demand of the customer. So if the customer wanted 300 dirt bikes, they built 300 bikes and they could intermix those in their production systems almost seamlessly.