Replicating Success: Scaling Up Quality Transformation

Four proven approaches to replicating success of a pilot quality transformation throughout the network

By Sasikanth Dola, Jean-Baptiste Pelletier, Lorenzo Positano and Paul Rutten, McKinsey & Company

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Transforming quality in an entire organization that comprises thousands of production steps and employees and tens of thousands of SKUs is one of the most difficult challenges for any pharmaceutical company. By nature, every pharmaceutical product is unique, which means its production process cannot be standardized. By nature, every person working on a line is unique, which means a standardized intervention will not always work. Although pharmacos have found that significant management attention can foster a successful pilot of a quality transformation on the shop floor, scaling the transformation across a network has been an elusive goal for many.

What elements do successful transformations at scale have in common? They start with a clear aspiration and feature strong and consistent communication. The transformation’s leaders lead by example and set ambitious but attainable targets and balanced incentives. And the organization is supported with tools, capability building, better practices and other factors.

However, although successful transformations have common elements, the approaches that companies use to scale up their quality transformations are quite diverse. The starting points to determine the choice of approach are typically the scope of the transformation (a few pain points versus the whole quality system) and the company’s maturity (that is, how much intervention is needed to improve the capabilities and culture). Below are four different approaches, each of which has proven successful in different contexts, and a detailed discussion of how to choose the right one for your company.

1. Cascading Mini-Transformations
How it works: This approach breaks down the organization into manageable units (each typically having 50 to 100 full-time equivalents.) The scaling mechanism is a series of heavily structured local transformations, called “mini-transformations” or “mini-T.” Mini-transformations achieve the benefits of scale by repeating the same approach throughout the organization and applying the knowledge gained in early phases to later phases.

Each mini-transformation is achieved through a standardized process conducted in three to four months. It entails simultaneous and radical changes on the three dimensions of operational excellence: operating system, management infrastructure, and mind-sets and capabilities. Intensive engagement of operators and middle management in root-cause problem solving and reducing the gap to best practices can lead to dramatic performance improvements in just a few weeks for a select set of key performance indicators (KPIs) — such as reducing deviations by a factor of 2 or 3 or reducing line clearance events by 40 to 80 percent.

Why is it successful: The mini-transformation approach succeeds because it creates both tremendous energy in the organization and changes that are visible immediately. Intense coaching, significant attention to capability building and energy from the bottom up are the ingredients for creating a profound cultural transformation.

When to choose and what it takes: The approach of cascading mini-transformations is best suited to organizations faced with a wide variety of challenges, such as undermotivated teams, an absence of standards or respect for them, too many issues blamed on “human errors,” or a lack of execution discipline. To be fully effective, the approach requires a significant investment in a team of “change agents,” who can help to replicate the transformation throughout the organization. This team (typically representing less than 1 percent of the workforce) is composed of people who have strong skills in problem solving, coaching and change management. Often, the speed of the transformation depends on this team’s capacity and effectiveness.

2. Designing a Holistic Production System
How it works: The holistic production system, derived from the renowned Toyota Production System, aims to bring together elements of the quality system and standard production processes in a comprehensive management philosophy. A production system defines the guiding principles the company uses to run its operations within a business and continuously improve its performance. It is a set of standards, practices, principles and tools (including Lean, Six Sigma and other change management methods) that fully describe the best-in-class and expected operating practices across the network. In contrast to the formal setup of quality systems oriented toward compliance, production systems put a stronger emphasis on sharing learning and best practices across the network, training and capability building, and developing people. The best production systems are a living knowledge repository, simple to understand (from top management to shop floor staff), and easy to access.

Why it is successful: Production systems ensure that everyone in the enterprise shares the same operational culture, speaks the same language and applies a standard approach to work. Defining a unique way of working and deploying it gradually across the network can foster operational improvements, transparent performance levels for plants, and strong internal people development.

When to choose and what it takes: Production systems are still relatively rare in pharma but are commonly seen in the automotive, aerospace and high-tech industries. Benchmarks in those industries have demonstrated that implementing a production system allows companies to build a sustainable competitive advantage.

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