A Report Card for Pharma’s Lean Six Sigma Efforts

Increasing Complexity and Pressure are driving more operational excellence programs, but, research suggests that a gulf still divides leaders from followers

1 of 2 < 1 | 2 View on one page

The University of St. Gallen in Switzerland has been studying pharma’s Lean and Six Sigma efforts quite closely for a number of years. Since results of the university’s first detailed Operational Excellence survey were released in 2004, a research team led by Professor Thomas Friedli has been tracking results, distilling the essence of what pharma OpEx leaders are doing right.  

Research associate Thomas Gronauer recently discussed the effort and how 2008’s OpEx programs differ from 2004’s. The university will release final results at the end of this year, when its researchers, together with Prabir Basu and colleagues from NIPTE in the U.S., will also publish a book designed for the “next stage” of pharma OpEx: Tackling the organizational inertia that can often impede sustainable progress and results with Lean, Six Sigma and quality programs.

PhM: Please tell us a bit more about your latest survey.

T.G.: We changed the survey design. In the past it was a one shot survey. Now we do regular surveys, twice a year, at the beginning and end of each year. 

We go with the same approach to the survey, first getting information on site structure, products, then examining enablers, and, finally, measuring KPIs and comparing these results to data from highest performers in the industry.

PhM: What were the broad brush stroke trends you saw with the most recent survey?

T.G.: First, production has become more complex, and the number of SKU’s has doubled. Material turns are higher, suggesting that the old-fashioned high-volume mono site approach to drug manufacturing is disappearing. We see a broader use of OpEx tools within the industry but no big improvements, despite increasing pressures. We also see a persistent neglect of “human factors.”

PhM: Where is the industry making the greatest improvements in Lean and Six Sigma practices, and which areas remain problematic?

T.G.: We see a lot of  improvement in the area of total productive maintenance, as neasured by OEE, the ratio of unplanned maintenance, shorter set up and cleaning times, and lower maintenance costs per employee (Figure 1). 

Operational Excellence

Fig 1: click to enlarge

We also see improvement in total quality management, with top performers showing much lower supplier complaint rates, cost of quality and rejected batches (Figure 2). At these companies, the number of QA and QC employees per [total] employees is lower.

There was little improvement in Lean measured by lead time or service level, but that may be due to our sample. We saw that stock-keeping units (SKUs) doubled since the first survey, but that study reflected data from large mono sites, some of which later disappeared from market, so there were fewer of them in the second survey. Lead time for top performers got a bit longer, but we would say this is due to a more complex production program (Figure 3).

PhM: What, in short, are the top performers doing that others might try to emulate?

T.G.: In general, they know their bottlenecks better, they emphasize fast, stable and compliant knowledge transfer and production flow, and they produce to order rather than the forecast.

Operational Excellence Pharmaceuticals

Fig 2: click to enlarge

 PhM: Where do your survey data come from? Are most respondents from Western European manufacturers? Did you receive any input from the U.S.?

T.G.: In our last survey, roughly 5-10% of responses came from the U.S., with the rest coming mainly from Western European, and some Eastern European sites.

PhM: In our own informal reader surveys, we’ve found sustainability to be a key problem with pharma OpEx programs. Many seem to be “one offs.” Someone in manufacturing wants to do Lean, everyone is gung ho about the effort, but then a few years later the program is gone, and hasn’t been tied to other objectives. Are you seeing improvements in sustainability?

T.G.: We have seen many of the same problems in our qualitative field research. The biggest challenge is taking OpEx from a single initiative, or project basis to an ongoing initiative and reintegrated production system.Getting the Big Picture

In general, programs that have lasting impact are integrated and holistic, and have an underlying long-term development pathway, both for the initiative and the organization.  They are also viewed as large scale change initiatives.

Successful approaches are characterized by cross functionality, not only including manufacturing and production, but indirect areas like quality, materials management, HR and accounting.

It is essential to realize that one cannot get change overnight. Toyota’s top managers have said that true operational excellence programs take at least 10 years to work. The key is ensuring that changes are seen day to day in operations and driven from the shop floor.

PhM: What should management’s role, ideally, be? Last year, our readers singled out top and mid-management as leading obstacles to Lean, Six Sigma and Quality by Design efforts. This year, they pointed to mid-management.

1 of 2 < 1 | 2 View on one page
Show Comments
Hide Comments

Join the discussion

We welcome your thoughtful comments.
All comments will display your user name.

Want to participate in the discussion?

Register for free

Log in for complete access.

Comments

No one has commented on this page yet.

RSS feed for comments on this page | RSS feed for all comments