Novartis: Suffern Plant Becomes a Global Role Model

April 1, 2005
Cross-functional product-centered teams and a culture of empowerment should help the facility double output next year, when it starts to manufacture a new drug for the World Health Organization.
TEAM OF THE YEAR AWARD FINALIST,LARGE-SCALE PROJECTS:NOVARTIS, SUFFERN, N.Y.Novartis' Suffern, N.Y. plant is the Swiss company's sole pharmaceutical production facility in the U.S. Four years ago, the plant faced an uncertain future; productivity had slumped, and it had become less competitive than its counterparts in Europe.Tom van Laar, then head of U.S. Tech Ops, and his management team responded by launching team-based Lean Manufacturing efforts in November 2003 (Pharmaceutical Manufacturing, July/August 2004, p. 12). The project planned to reduce operational costs by 40%, or $43 million over the next two years, implement Lean Manufacturing for the facility's key brand, Diovan, reduce inventory and cycle time, and implement a horizontal process-oriented organization.Three-quarters of the plant's 450 full-time employees were embedded into four horizontal, product-based process oriented teams, with the remainder, including quality assurance and distribution and supply chain, providing support services to the teams. One year later, the number of teams was reduced to three. Teams are all self-directed and members of each report directly to one team leader.What a difference two years make. Not only have the facility's teams exceeded cost-cutting goals, they have also increased manufacturing and packaging output by 20%. They've also shortened Diovan cycle times by 50%, reducing them from 28 to 14 days, and they have their sights on a 10-day target by June 2005. The facility has also cut back orders greater than 10 days from 19 to 9.The once lagging plant is now a role model for the corporation. European facilities are basing some of their Lean Manufacturing objectives on its program, and incorporating its team structure, particularly its alignment of quality assurance (QA) with manufacturing, into their plans. And van Laar has been promoted to global head of Tech Ops.Next year, the plant -- along with a production facility in China -- will start supplying a new malaria drug, Coartem, at cost, to the World Health Organization. This decision would never have been made if the company were not confident of Suffern's improved competitive structure and flexible, responsive Lean organization. It won't be easy; the new Coartem line will double plant manufacturing  volumes, adding at the peak 200 million packs.For Walter Markl, head of finance for Pharm Ops U.S., addition of Coartem was an affirmation that Tech Ops had taken the right approach to team building, when it looked out three to five years in the future. "I always felt that we had created a living organism," he says. "The addition of Coartem shows that we can retain the structure, move things around to improve them, and adjust. If anything, it shows how important flexibility is when you set teams up. You can't just engrave things in stone."At first the challenges in setting up the teams were significant: Tech Ops had to balance natural product splits, based on equipment and process flows, with the number of SKUs, product complexity and number of full-time employees.People the keyExtensive honest and open two-way communication helped ease the transition, Suffern team members say. An internally developed selection process, which will be used to recruit new staff for the Coartem line, focuses on values and behaviors and has also been effective in highlighting and keeping the best staff, and empowering them.Process and line teams now regularly decide when and how to meet their weekly targets through work sharing and overtime. Operators routinely volunteer to work on days off, if necessary, to meet production goals.Key opinion leaders from the shop floor provide direct and confidential feedback to management on a biweekly basis through the Information Support Group (ISG). With its rotating membership, the ISG is now used to gain feedback for further business and change-management initiatives.Team-based performance appraisals are being piloted in 2005 and have been well received, says Luanne Shock, head of H.R. for Pharm Ops U.S. H.R. will now focus on values and behaviors and the willingness to embrace teamwork and to be empowered, she says. "We're also bringing in the power of the operators. A core group will participate in the hiring process." The facility had a record number of volunteers interested in joining this group.The Coartem addition, while daunting, should be manageable, says Brian Hanifin, Diovan team leader. "We've been reaching out to cross-functional groups of scientists, operators and engineers, to get input to ensure incremental growth without compromising team structure," he says.Dozens of operators have already been trained and are signing off on batch records. Eventually, all site operators will be able to do this.Team spirit is high, says Vivian McCain, team leader for the site's "LLL" team (for Lotrel, Lotensin and Lopressor, other key brands made at the site). "Just yesterday an operator came to me and told me he'd been thinking about the Coartem addition and where we needed to be. He felt that this was just the right time for him to get additional training to help in doing investigations to move the project forward," McCain says. "People are stepping up to volunteer for things. They're asking to do more."Training in "soft skills" has become very important, says HR director Shock. A new "social styles" workshop, for example, will help employees recognize their different work and communication styles, so they can better understand each other and work together, while a "constructive feedback" session will also be held for operators to help them be more effective at peer review.Robust reward and recognition programs support buy-in. Cost-neutral improvements like days off have been very well received, says Shock. The Suffern site is also utilizing the latest IT and other technology, and has installed SAP and an extensive MES platform. It's now working on a large PAT initiative and RFID pilot programs.