Lean Forward, Pharma

Operational excellence requires collaboration and efficient allocation of resources

By Steven E. Kuehn, Editor in Chief

Witnessing first-hand the commercial might of large, complex organizations and their ability — literally — to move the earth, I’ve come to have a profound respect for the thousands, if not the hundreds of thousands of people who organize themselves to engineer and implement technology-based solutions to the world’s knottiest societal issues and toughest technical problems.

Complex solutions, like delivering safe, effective and reliable medications to improve the health and lives of the world’s population, are the product of well organized and structured groups of great people, pursuing shared commercial goals with professional passion — both corporately and personally.

Regardless of scale, the inherent complexities of pharmaceutical development and manufacturing require intensive organizational infrastructures to create the operational ecosystems necessary to reliably mass produce high-quality therapeutic drugs. But how do companies manage these ecosystems to their best effect? Well, that is the $64,000 dollar question isn’t it — and one that process and organizational experts have been trying to answer for more than a century, culminating in the widening implementation of Lean Six-Sigma principles and systems to achieve operational excellence.

In this month’s cover story “Honing the Competitive Edge” (p. 20), I explore Pharma’s maturing uptake of Lean Six-Sigma and how its transformative, therapeutic powers can have a positive impact on the commercial health of the industry. As I interviewed sources and came to learn of Pharma’s hesitant, perhaps inconsistent embrace of Lean Six-Sigma dogma, I recalled having similar conversations in the ’80s and ’90s: first with hard goods and heavy equipment manufacturing managers applying Lean to operations, then later with similar operatives in the process, automation and information technology industries.

Over the years, these industries increasingly adopted Lean Six-Sigma operational ethics but did not really institutionalize them without growing pains or their fair share of stumbles, missteps and clumsy implementations. Pain before gain, but the gains did come in the form of significant rises in productivity and output. Apparently for Pharma, the journey to Lean began a little later — something that I propose is a good thing. By being late to the party, Pharma can take advantage of a mature body of knowledge, decades of applicational experience and, perhaps most importantly, the advanced development of information technologies and applicational platforms now available. Pharma also has the opportunity to leverage, in real-time, the mountains of data coming from all elements of the process and manufacturing environment.
There is an art and a science to implementing Lean Six-Sigma successfully and at its core it takes people and information to make it happen. Pharma executives, especially those managing development and processing assets, as well as increasingly global supply chains understand that institutionalizing these principles will work well to help their companies achieve operational excellence, competitive agility and commercial success.

Pharma is at a critical juncture in its history; its cost structures are shifting just about as fast as the competitive and market landscape. Cost containment is an imperative that operational executives must consistently pursue and achieve across their enterprises — it’s a fact of life. But it is a mistake, when applying Lean principals operationally, to over broadly justify their use in cutting operational resources in a misguided attempt to control costs and satisfy shareholders. Over time I’ve observed that making business units compete for an ever shrinking portion of resources creates a “survival of the fittest” culture that kills collaboration, promotes unethical business practices and produces unintended and often negative business consequences. The maxim “One Cannot Cut Thy Way to Growth” is appropriate to remember at this point. Lean Six-Sigma’s sharp tools are great at cutting the fat, but taken too far can cut the muscle and sever the connective tissues that support a healthy organizational body.

SteveN E. kuehn, Editor in Chief
skuehn@putman.net

Published in the October 2013 edition of Pharmaceutical Manufacturing magazine

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