Transcript WDM Summit Berlin 1210x - Pharmaceutical Manufacturing

Operational Excellence
Establishing a Culture of Quality
Prof. Dr. Thomas Friedli
April 5th ,2011
Agenda
1
Models & Patterns of OPEX programs
2
The Cultural Challenge
3
Summary
2
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New drug approvals are not keeping pace with rising
R&D expenditures
Number of NMEs first launched onto the world market
Global R&D expenditures
50
70
40
60
35
+70 %
-50 %
30
50
40
25
30
20
20
R&D expenditures ($ bn)
80
45
Number of NMEs
90
10
0
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008* 2009* 2010* 2011*
Source: CMR Factbook (2008)
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The New Economics of Innovation
Historical
revenues
Revenues with greater
price pressures and
shorter cycles
Dollars
Historical margins
Margins in new environment
New fixed development and manufacturing costs
Historical fixed development and manufacturing costs
6
Product
introduction
12
Years from product launch
Source: Pisano, HBS
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Why should you care about manufacturing? –
Cost structure on Company level
13%
31%
5%
53%
3%
63%
R&D
Manufacturing
General & Administration
Sales & Marketing
Margin
9%
22%
11%
20%
25%
11%
Brand-name
companies
Generics
manufacturer
Source: University of St.Gallen, Benchmarking Industry Report (2009)
12%
4%
18%
Contract
manufacturer
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Pharma has no Track Record of Thinking in Process
Improvements!
 Pharmaceutical Manufacturing has traditionally focused on endproduct quality!
 The Pharmaceutical Industry has not focused on developing a scientific
understanding of their processes. This leads to a high rate of internal
failures such as reworks and rejects!
 Pharmaceutical manufacturing processes are often complex and include
many non-value-added activities!
 Pharmaceutical manufacturing tended to view individual sites
independently!
 The role of leadership and "human effects" had been neglected!
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A Framework for thinking about Operational Excellence
OPEX Framework
Preventive
maintenance
Process
management
usage
Cross-funct.
product
development
Standardized
equipment
Supplier
quality
Planning
adherence
1
Layout optimization
management
Standardized
processes
Stable running machines
Pull system
JIT
TQM
Effective
technology
Housekeeping
Set - up time
reductions
Standardized
replenishment
Low inventory
Stable processes
2
3
High continuous
Self -directed
Low abseentism
improvement rates
teams
Low absenteeism &
fluctuation
& fluctuation
Flexible
workforce
Operational Performance
TPM
Customer
integration
Effective Management System
Direction setting
Management commitment and company culture
Employee involvement & continuous improvement
Functional integration & qualification
Source: University of St.Gallen
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The Evolution of OPEX in the Pharmaceutical Industry
Level of Operational
Excellence
"Integrated Operations
System"
"Transformation"
"Best Practice
Transfer"
"Pre-OPEX"
-199X
Source: Friedli et al. - Pathway to Operational Excellence (2010)
200x
201x
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The current phase of leading companies!
Large Scale Change
Process
 Large scale
transformation
processes focusing on
organizational set-up
 Innovations and changes
are driven by Senior
Management and Site
Leadership Teams
 Change pattern:
Unfreeze- Transition Refreeze
Operational
Practices &
Tools
Innovation
and Change
Management
Companywide Initiatives and Programs
 Companywide tool-boxes
 Common language and holistic view of
performance. Different initiatives cooperate
with each other
The
"Transformation"
Phase
Managerial
and HRbased
Practices
Training
Program
Coaching and teaching
 Coaching techniques as well as
leadership practices such as
Gemba are added to OPEX
training concepts
 HR gets more integrated into
OPEX
Source: Friedli et al. - Pathway to Operational Excellence (2010)
Quality
System and
Process
Control
9
Process Understanding
 More sufficient
techniques like real-time
controlling
 The foundation of
process understanding
has reached a reliable
level for the first time
Role of Leadership
 To solve problems and to improve
their daily work
 Improvements often struggle to
stay sustainable, payoffs are not
as high as expected
 Discussions about the role
function of operations leaders as
coaches and teachers got a key
issue
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Wyeth: Setting a Focus on Redefining Leader's Role
1
Source: Wyeth; Friedli et al. – The Pathway to Operational Excellence (2010)
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MerckSerono: Defining a Suitable Deployment Structure
Source: MerckSerono; Friedli et al. – The Pathway to Operational Excellence (2010) 11
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Example of an operational excellence iniative –
Right First Time by Pfizer 2003
The Right First Time (RFT) Strategy is key to achieving the PGM Mission:
“We will be the world's leading supply organization and an innovative and
powerful competitive advantage for Pfizer.”
RFT is a science-based approach that will have a dramatic impact on PGM (Pfizer
Global Manufacturing) business performance by transforming our competencies,
technologies and ways of working, thereby establishing PGM as the industry
benchmark in innovation.
RFT will be fully realized when PGM becomes an agile supply organization driven
by highly capable processes and a diverse team of highly engaged colleagues
The target of Right First Time is to enhance the effectiveness of processes
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RFT: The 5 priorities
Relentless
Process Focus
colleagues/
culture
performance
Performance Measures
Automation
Value Stream Mapping
Behaviour of Leader and Values
Communication
Method 1
Knowledge Management
process
understanding
organisational
initiatives
RFT Organisation
Performance of Suppliers
Communities of Practice
paradigm shift
Archival Knowledge Storage
Process Analysis Techniques (PAT)
Six Sigma methods
IT Systems (Catalyst and PharmInvestigator)
Launch of new products
13
Risk Assessment
Manufacturing Science
Process Capability
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Right First Time Organization
Sponsors
RFT is virtual!
RFT directly
reports in the
line functions!
Overall Strategy
PGM RFT Leader
Global Communication
& Leadership
RFT Area Leaders
Local Communication
& Leadership
RFT Leaders
on Site Level
Local Initiatives
Communication
Training
Local Metrics
14
BB + GB + YB
Implementation
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RFT Methodology
Topic
Method 1
Method 2
Green Belt
Method 3
Black Belt
Method 4
Incidence
dissolve simple deviations
dissolve deviations
dissolve variations
Problem
Involved
Persons
Necessary Skills
effectiveness & efficiency
individual initiative or
teamwork
basic knowledge of tools
for problem solving
effectiveness & efficiency
teamwork
Green Belt
Specialization in
methodology
effectiveness & efficiency
interdisciplinary teams
Black Belt
standardized and certified
training supervisors
Special reason
General reason
Complexity
Specific Tools
yes
no
low







yes
no
mid-high
Method 1 and
 capacity index
 frequency diagrams
 Gauge R&R
no
yes
very complex
Method 2 and
 hypothesis testing
 regression analysis
 design of experiments
 recurring failures,
loss of production
 loss of revisions
 return maintenance
 glass particles in
sterile products
decrease rejects
improve flow
efficiency
interdisciplinary Teams
Green and Black Belts
standardized and
certified training
supervisors
no
no
mid-high
Method 3 and
 value stream
mapping
 value analysis
 establish flow
 cell design
 standard work
 failure proofing
 5S + Visual
Workplace
 setup reduction
 total productive
maintenance
 material flow (Pull)
 expected value flow
 capacity problems
 OEE-improvement
 high stocks
 cycle times
Examples
problem definition
process mapping
cause & effect
brainstorming
timing diagram
pareto diagram
control diagrams
 accounting
 quality deviations
 bottlenecks in
production
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Agenda
1
Models & Patterns of OPEX programs
2
The Cultural Challenge
3
Summary
16
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The Key influencing Factors for a sustainable
Implementation of OE
Linkage to daily job
Plant Identity
Project Selection
Understanding of
OE initiative
Integration of
corporate
initiatives
Sponsor
Commitment
Training
Site Leader
Project Portfolio
Mgt.
Mgt. Engagement
Understanding
Interplay
General Plant
Culture
Implementation of OE
into the Organization
Project Mgt.
OE leader
Knowledge Mgt.
Usage of OE
language
Plant Mgt. of OE
Problem – Method
Matching
Identity of OE
program
Communication
17
Belt Selection
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Circle of Key Influencing Factors
Heritage
Corp. commitment & support
1
6
Management
Commitment
Culture
5
2
Integration
Structure
4
3
Processes
People
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Operational
Excellence
Culture
6
Integration
5
4
Processes
People
3
Structure
Management Commitment
1
2
Basic Categories of Model
Corporate Commitment / Support
Culture
Integration
Structure
Processes
People
Management
Commitment
Site Culture/Background
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„Tension Lines“ for Evaluation of Sites
Extreme 2
Extreme 1
hinders a
sustainable OE
implementation
fosters a
sustainable OE
implementation
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I. Site Culture / Background
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Site Culture / Background
Management Style
Command &
Controlhierarchical
Functional and
hierarchical
barriers lead to
islands/silos
Problem orientation leads to
cross-functional
discussions
23
Open, culture of
discussion, flat
hierarchy, Process
Management
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II. Corporate Commitment / Support
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Corporate/OpU Resources for OE
No Corporate/OpU
resources available
Corp./OpU
resources
available
in case of
emergency
Corp./OpU
resources
available on
request
Corp./OpU resources
available- when
they are needed
OE Aligned/Supportive of Site Objectives
No link
Linked, but not
always to the
most critical
objectives
Indirectly
linked
to objectives
25
Linked to main
strategic objectives
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Engagement of OpU/Corporate Support People
Not engaged
Low number of
site visits
Average number
of site visits
26
Highly engaged, high
number of site visits
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III. Management Commitment
27
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Commitment of Site Managing Director
Low Commitment
Focus on
mimimal
fulfillment of
OE-objectives
Shows Support
for OE projects
High Commitment,
proactive promotion
of OE
Partly involved
in Site Strategy
Setting
Fully involved in Site
Strategy Setting
OE Site Leader
Not involved in Site
Strategy Setting
Delivers inputs
for Site Strategy
Setting
Relationship between Site MD and OE Leader
Contradictory, Not
the same agenda
Different
positions on
several strategic
issues
28
Different
positions on
several tactical
issues
Complementary,
completly aligned,
synergistic
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Commitment of Site Leadership Team (SLT)
Not engaged and
commited
Minority of the
SLT engaged
and highly
commited
Majority of the
SLT engaged
and highly
commited
Managed as a
relevant
Initiative
Managed as an
important
initiative
Engaged and highly
Commited- engaged
with projects
Management of OE
Managed as metoo
initiative
29
Managed as an
integrated, strategic
initiative
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Understanding of Middle Management
OE seen as unrelated
to them
OE seen as
technicalsomewhat
narrow focus
OE seen as
important but
not necessarily
for them
OE seen as strategic
and vital to their
success
In most cases
member of SLT
Member of SLT
Level of OE Project Sponsors
Middle
management
or lower
Partially
member of the
SLT
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Communication
Communication
doesn`t reach
shop floor level
OE only mentioned
Communication
at
takes place on
some dedicated
all levels
events
Structured and well
executed
communication
strategy
OE and Plant Objectives
No link
Linked to less
important
objectives
Indirectly
linked
to objectives
31
Linked to main
objectives and part
of
a clear site vision
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Black Belt Selection Criterias
Selection criteria
is availability of
person
Selection
criteria is
capability
Selection
Criteria is
interest
Selection criteria
is leadership
potential
Green Belt Selection Criterias
Selection criteria
is availability
Selection
Criteria is
interest
Selection
criteria is
capability
32
Selection criteria
is leadership
potential
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IV. Structure / Organization
33
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Available Working Time of Site OE Leader for OE
almost 0%
less than 50%
more than
50%
100%
Organizational Integration of OE at Site
Integrated in
existing
Function:no sitewide level OE role
Created a new
dedicated position
for OE & also
embedded in functions
...
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OE Steering Committee
no SC
Only formal
existence of SC
Single members
of SLT are
engaged in the SC
SLT leads SC
Achievements
are
communicated
with posters
There is a team
event for each
successful
closure of a
project
Achievements are
celebrated
systematically
OE Achievements
There is no
celebration of
achievements at all
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V. People
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Understanding of OE on Shop Floor Level
Technical
methodology not
seen as applicable
at shop floor
Makes daily
work easier
and more
efficient
helps to solve
single
problems
focus on support of
competitiveness
Spread of Projects over Organization
Limited to one
function
Spread to
most
functions
Limited to few
functions
37
Spread to
all functions
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Training (1) Workforce Knowledge of OE
No
OE specific
trainings
Adequate
number
of green and
black belts
50% trained
in basic understanding of OE
100% trained in
basic understanding
of OE
Training (2) Role of Training
Seen as technical
and project related
Mainly seen as
technical, but also
engagement
Seen as an
enabler for
engagement
related
38
Seen as means to
start
a change of
mindset
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VI. Process
39
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OE Project Engagement
projects are only
started with
pressure from
outside
projects are
regularly started
from inside and
finished in most
cases
projects are
regularly
started, but
often lose
momentum
projects are started
regularly from inside
and get finished on
time
Standardization of Project Management- Include capture of
business benefits
No defined process
not explictly
defined processsome benefits
identified
Key Projects
chartered &
benefits
captured
40
Disciplined project
management across
Site- advanced benefits
captured
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Project Selection
Reactive
Awareness of
business needs
drives most
projects, project
pipeline is well
filled
Most projects
started reactive,
in single cases
they were
generated
proactive
Proactive by real
business needs
Knowledge Exchange
Systematic use
of Know How
Exchange
Re-invent the
Wheel
Unsystematic
use of Know
How exchange
There’s no real
team work in
our OE activities
Results are
achieved because
of the efforts of a
few
Replicate & improve
is our DNA
Team Work
41
Results are
achieved because
of a real team
effort
Results are achieved
because of a real team
effort and excellent
coaching
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VII. Integration
42
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Link to Daily Job
OE as burden
to daily job
neutral
towards
daily job
OE as support
of daily job
OE as improvement
of daily job
Aligment of OE with other operations initiatives
Managed as
contradicting activities
Managed as
separate
activities
Managed as
complementary
activities
Black Belts feel
responsible for
outcomes
Black Belts and
Green Belts feel
responsible
Managed -fully
integrated
Sense of responsibility
There is no sense
of responsibility
43
People closest to
the job take over
responsibility for
improvement
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Two sites compared
Site A
Site B
Corporate Commitment / Support
Structure
Corporate Commitment / Support
Culture
Culture
Integration
Integration
Processes
People
Structure
Management
Commitment
Processes
People
Management
Commitment
Site Culture / Background
Site Culture / Background
Good level for sustainable OE implementation achieved
On the way
Room for improvement
Low level
44
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Agenda
1
Models & Patterns
2
Example
3
Summary
45
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Some generalized conclusions concerning OE!

For the initialization of OE an outside (e.g. corporate) support and
pressure is mandatory!

Next will be to gain the management commitment to OE at each
site!

Project Selection has to be aligned to real needs from the beginning to
ensure acceptance for OE!

To make OE sustainable a broad engagement of people has to take place –
OE can‘t be ordered!

Structural/organizational measures can enforce the impact and help to
communicate the importance of OE!

Make use of quick wins to bring in actively more people!

Communication is key – but communicate the right things!

Training is not only enabling people on the tool side of OE but also an
important means to gain understanding and to implement a common
language throughout the organization!
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Future State: The „Integrated Operations System“ phase
Continuous Improvement
 Innovations and
changes occur
continuously on
different level.
 Senior Management and
Site Leadership Teams
give direction and
ensure the conditions.
 Change pattern:
 Freeze – Rebalance Unfreeze
Operational
Practices &
Tools
Innovation
and Change
Management
New Training Concepts
 Focus on understanding,
but also on applying,
leading and teaching.
 New concepts like "Learn
Factories" and "Study
Tours" partially replace
older lecture sessions
The
"Integrated
Operations
System" phase
Quality
System and
Process
Control
Managerial
and HRbased
Practices
Training
Program
Source: Friedli et al. - Pathway to Operational Excellence (2010)
Beyond the Tools
 Bundled under one umbrella program
Continuous improvement is seen as a specific
mindset to challenge daily routines on every
level of the company
47
QbD and CoDevelopment
 Upstream integration
 CoDevelopment products,
processes, and equipment are
developed simultaneously and
linkages are addressed to gain
further improvements
Decentralized brain, and
leaders become teachers
 Leaders become coaches
and teachers
 Work line operators are
expected to run reactive
root cause analysis and to
pro-active challenge their
standardized work
routines
 The decentralized brain
starts to spread its impact
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The need for integration in next-level OPEX approaches
 Align all intended initiatives with your corporate strategy and communicate the
“why” of the initiative !
 Establish a comprehensive reference model of your production system !
 Establish a support structure on site level !
 Establish a comprehensive management system for the improvement activities !
 Establish a standardized process for the selection of improvement projects !
 Establish a high level committee at the site !
 Be precise about what kind of "Management Commitment" is needed !
 Form a community of practices for Operational Excellence with outside experts
and corporate management personnel !
 Make sure that most of the available time of the people with responsibilities is
spend where the action is and not behind their desks !
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Our 2nd OPEX Book "Pathway to Operational Excellence"
 The follow-up to our first OPEX Book in 2006
 Bringing together academia's research and
companies' experiences in one book
 Leading company representatives describe and
explain their OPEX programs in-depth, discuss
successful practices and challenges
 For example:
 Pfizer
 Wyeth
 Novartis
 Genentech
 MerckSerono
 Book Structure:
I. Introduction
II. Starting Point of Our Journey
III. Maps and Experiences
IV. Exploring the Landscape
V. Redefining the Destination
Visit: www.opexbenchmarking.com
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Prof. Dr. Thomas Friedli
Managing Director
Chair of Production Management
Dufourstrasse 40a
CH - 9000 St. Gallen
www.tectem.unisg.ch
www.globalmanufacturingnetworks.com
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