Business Transformation in a global US based pharmaceutical company

The Ask:

A global pharmaceutical company had seen its conversion costs of tabletted products rise by approximately 45% over the previous three years. The high cost structure was a result of broken processes, excess effort and unnecessary complexity. The goal was to reduce the cost of conversion by 25%.

The Approach

The approach used was to:

• Conduct an Operational Assessment
• Construct process maps of:
  • the procurement process;
  • the local planning and scheduling processes;
  • the demand assessment process;
  • the batch record process; and
  • the production processes and key sub processes.
• Conduct a LEAN operating model review using benchmarking against industry best practise looking at:
  • downtime;
  • changeovers;
  • reject products
  • material flow;
  • capacity utilisation; and
  • raw material supply.

The output was a quantification of non-value-adding versus value-adding activities and to demonstrate the compelling case to alter the conformance standards to further reduce cost.

The Toolkit

• Process mapping tools;
• Interviews with key staff;
• Lean operational review;
• Benchmarking;
• Introduction of KPIs;
• Quantification of NVA/VA activities;
• Quality standards review;
• Assessment of performance improvement potential; and
• Outline project plans to realise benefits.

The Challenges:

• Customer service reliability had fallen from the previous year;
• First time quality was decreasing while adhering to high conformance standards;
• Customer complaints had increased;
• Manufacturing lead times were longer than necessary and were failing to meet Customer Demand Times;
• Failures in raw materials supply regularly shut down manufacturing despite the company maintaining high levels of inventory.

Implications

• Market share was not achieving the expected growth; and
• Profitability had fallen.