2006 TOTY Finalist Profiles: Merck Production System Team, Arecibo, Puerto Rico

April 6, 2006
A 30-member team at Merck’s Arecibo facility has led the way in transforming the company’s global manufacturing operations.

Today Arecibo, Tomorrow the World

Editor's Note: To read the introduction to all five Team of the Year Finalists' stories and access links to the other teams' profiles, click here.

Idalia Rivera worked for many years as a quality director at Merck’s pharmaceutical manufacturing facility in Caguas, Puerto Rico. It came as a bit of a shock when the company asked her to move to nearby Arecibo and become an integrated production team leader for coating operations. Merck had created this new role within the framework of the new Merck Production System (MPS), a Lean-based initiative being piloted in Arecibo and counted on to transform and reinvigorate the company’s global manufacturing operations. “Not only did I not have any experience in production, I hadn’t even participated on the MPS team,” she says. “Were they crazy?”

After she started on the job, Rivera was in for a few more surprises, she recalls. “I was not the only person learning. We were all learning about MPS.”

That learning continues, but the risk that Merck took in introducing MPS a year ago and then choosing Arecibo as its proving grounds is paying dividends, large and small. Rivera’s team, for example, has led a project based upon single minute exchange of dies (SMED) methodology that has reduced changeover time on one packaging line by 75%. Such improvements could not have happened before.

“The company as a whole is benefiting from the work that Arecibo has done,” says Martin Khun, leader of the Global Merck Production System. Their work, he says, has enabled at least 20 other sites to move ahead and start leaning out their processes and eliminating waste.

Embracing the challenge

Merck’s recent challenges have been well documented, as has its decision to transform its manufacturing operations from within (see "Merck's Lean Mission," January 2006) There was plenty of motivation to start the change process in Arecibo. It’s a large, complex facility that manufactures many of Merck’s most important products by means of varied processes. “More importantly, the site was willing to take on the challenge, and the leadership in Arecibo was ready to sponsor such a major transformation,” Khun adds. “Sponsorship is a key success factor for any change effort like Lean.”

The 30 members of Arecibo’s cross-functional MPS team have set their sights high. “We didn’t want to do this in phases or pockets,” says Herminio Bosques, leader of the MPS design team. “We wanted to do it all at once.”

The Merck Production System is based upon Lean principles such as demand pull, continuous flow of product, waste elimination, continuous improvement and customer service. These objectives are reflected in Arecibo’s achievements within the last year:

  • 50% overall reductions in cycle time;
  • 65% reduction in product testing time;
  • 30% reductions in inventory for some product;
  • 10 to 20% operating expense reductions;/LI>
  • 50% reduction in changeover time on some packaging lines.

Not all successes can be quantified. “We have already been able to achieve efficiencies that we never thought possible,” says Daneris Fernandez, vice president of Merck’s Puerto Rico operations. “But the most dramatic change is in our people. We now work together like we have never done before.”

Stretching talents

The secrets of Arecibo’s MPS success are many. Foremost among them has been maintaining clear and open communication with the site’s workers, many of whom were understandably anxious about the implications of Lean. “Some people were translating Lean as losing jobs,” says Luis Oscar Garcia, the integrated production team leader for Proscar, a prostate medication. “A key factor was to present the business case to our people. We had to communicate that our situation was not unique to Merck or to Puerto Rico. [The need for improved manufacturing] is a global phenomenon. If we want to stay competitive, we have to make dramatic changes and Lean was the tool that we needed.”

The MPS team worked hard to reassure employees that their talents would be valued within the new paradigm. They also took great care to talk, one on one, with employees who had concerns, to communicate goals and accomplishments through regular meetings, internal newspapers and web correspondence. And management committed to training employees, offering 15 role-based training programs to give targeted Lean training to different functional groups.

The proud members of Merck's MPS team in Arecibo.

As Merck found with Idalia Rivera, MPS became a way of uncovering workers’ hidden talents. Antonio Menendez is another example. Formerly a planning expert and planning lead on the MPS design team, he is now a process expert on the line producing the osteoporosis drug Fosamax.

Workers are being encouraged to take on multidisciplinary roles. “With SMED, it was important that everyone be involved in the process,” says Angel Vega, a technical and maintenance expert on coating operations. “In the past, only mechanics did changeovers. Now, we’ve convinced operators on the line that they can do this, too.”

Consider Maria Aquino, a quality expert who has been instrumental in designing processes to eliminate waste. She led a team that automated batch records. What was once a laborious process of stamping and photocopying paper documentation is now done by computer in a matter of minutes — and by the same people. No jobs were cut. “They’re doing the same job, but differently,” she says.

Operators are being entrusted with knowledge that had previously been the province of management — for example, OEE [Overall Equipment Effectiveness], says Hector Ramos, an IPT leader for Fosamax. “Now, they know what it is, and how to use it to speed changeovers, improve quality in the process and overall performance.”

Maintaining the momentum

Cesar Hernandez may have the hardest job on the MPS team. Named MPS leader after the project “went live,” he is charged with sustaining the momentum that has been created in Arecibo.

Hernandez’s key objectives are to continue to improve communication between management and operators and amongst all staff, and to continue to foster the knowledge of the people within the facility. He and the MPS team are now putting systems in place to ensure continuous improvement. They are developing surveys, for example, to monitor employees’ knowledge base, and changes in culture and employee behavior.

By design, the team will revisit all of its processes and value stream mapping twice a year. “Every six months we’re renewing and reinventing ourselves, making sure that we’re driving in the right direction,” says Bosques.

“For me, the single-most important achievement has been the change we’ve seen in the mindset of our people,” says Garcia, the Proscar IPT team leader. “We struggled with productivity for years. Now everyone is looking for ways to improve.”

About the Author

Paul Thomas | Managing Editor