Operational Excellence: Walking the Talk

At AstraZeneca, cross-functional teams, empowered by Lean, DMAIC and OEE, are achieving great things.

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By Agnes Shanley, Editor in Chief

We often hear how corporate mergers lead to slash-and-burn downsizing or culture clash, but mergers can also lead to soul-searching, and change a corporate culture for the better. After the formation of AstraZeneca five years ago — a union between Sweden’s Astra AB and the U.K.’s Zeneca Group — the new company’s leadership took a long, hard look at the way it handled quality and efficiency initiatives.

By all indications, the company was doing a good job. Progress had already been made with the corporation’s Site Excellence program. The U.S. Operations’ One Site program had helped eliminate silos and ensure that all plants were on the same wavelength, using the same IT and jargon. On a local level, “continuous improvement” teams were solving specific problems. Still, corporate leaders realized that there was more to do.

At one facility,
cross-functional teamwork
and a capital investment of
less than $100,000
led to more than $60 million
in revenue gains —
without adding staff.

“We’d always worked on improvement projects,” says Ron Matthews, vice president of manufacturing and supply chain at the company. “But solutions and improvements weren’t always aligned so that benefits cascaded across the entire organization.”

All too frequently, Matthews says, data weren’t measured properly and goals weren’t identified early enough. “Staying power” was another issue. “When we looked at results for some programs,” Matthews says, “we found that, two years later, the benefit and enthusiasm had waned.”

Matthews and his team knew that they needed to develop an end-to-end strategy for operational excellence that would address everything from raw material receipt to manufacturing, quality control and distribution. “We didn’t want to end up with a patchwork quilt of efforts, and there had to be a logical sequence or order to what we did,” Matthews says.

They opted for a program based on three key, interconnected concepts:
  • Pull Manufacturing, a subset of Lean;

  • Six Sigma’s DMAIC (for “define, measure, analyze, implement, and control”), which establishes a framework for continuous improvement;

  • Overall equipment effectiveness (OEE).
Integrating these concepts and making them part of workaday reality are cross-functional teams whose members come from quality assurance, engineering, operations and technical services. “There are lots of consultants out there selling something. We knew we had to use our own people to make this work,” Matthews says.

Rather than dive head first into Lean, the company launched a limited, more-focused Pull Manufacturing initiative at its global facilities in 2002. Pull Manufacturing required that the company’s manufacturing teams shift their focus from output to customer alignment and service. “We used Pull to engage staff, identify opportunities and eliminate waste,” Matthews says. The initiative also helped reduce cycle time. In one case, it allowed lead time for a key $1.5-billion-per year product to be reduced by 25% during a period when demand for the drug was increasing by 30%.

If you teach someone to fish . . .

AstraZeneca didn’t move full-scale into Six Sigma, either, or deploy small armies of Six Sigma Green and Black Belts. Instead, operations and quality staff were trained to apply DMAIC principles every day, to measure and improve performance through cross-functional “continuous improvement” (CI) teams.

Two years ago, at Westborough, Mass., cross-functional CI teams involving QA, engineering and operations applied DMAIC principles to solve a major capacity crunch for a key product. Even though Pull Manufacturing had not yet been implemented at the site, the teams uncovered wasteful processes, effectively adding 20 million extra units of capacity per year. “A capital investment of less than $100,000 led to $60 million to $70 million in revenue gains — without adding staff,” Matthews says.

Workgroups have been restructured so that supervisors are very close to the work itself, and teams focus on specific operations. “We’ve engaged operators so that they become owners of the process,” says Matthews. “They feel empowered, have more energy and confidence.”

This approach is now carrying over into hiring and recruitment. For example, a new blister packaging line in Newark, Del., involved a novel, much faster process that demanded a new approach to staffing. “Before, we would have looked at seniority and asked for volunteers,” Matthews says. “This time, we went through a selection process, and interviews, for the operators. We needed to ensure that each person had the skills and competencies required for the team.”

OEE and operator ownership

While Pull and DMAIC address work processes, equipment-focused OEE (see "The Basics of OEE" below) has been critical in allowing the company to squeeze every drop of capacity out of its operating lines. In 2003, for example, on one Newark bottling line, OEE was improved by 10%, adding one million bottles per year of capacity without spending a penny on new equipment.

OEE took a while to gain operations’ full support, admits John Callahan, senior packaging manager on that line. He already had over 20 years of industry experience and had led many teams when Newark’s engineering team introduced him to OEE and DMAIC in 2002. Initially, he recalls, “it looked like it would involve a great deal of effort, and I wasn’t sure of the benefit or how performance would be improved.”

In 2003, engineering established a pilot program on a bottling line, which led to successes, including the 10% gain in OEE. However, Callahan says, operators still didn’t feel that they fully “owned” the process, but that it belonged instead to engineering.

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