The Pharmaceutical Industry and Lean

As companies consider applying Lean in their industry they face the challenge of determining how it will work in their environment. Part of the difficulty is much of the information available is from other industries. This lack of information can cause confusion on how they can apply the Lean Principles. For example, a major method of improvement in the manufacturing industry is eliminating large batches. When manufacturing discrete items, the idea of making a batch smaller is challenging, but easy to envision. A batch in other industries such as food preparation and pharmaceuticals brings a whole other set of issues.

In the pharmaceutical industry, the first thought is reducing the size of the blend. The blending of pharmaceutical products is highly regulated and any change to blend size requires significant testing and many levels of approval. Thus, some companies that associate Lean with reducing batch size believe that Lean won’t work in the pharmaceutical industries.

The question is how you can apply a strategy that has its roots in the car industry in the Pharmaceutical industry?

Here is the approach that one pharmaceutical company is using. Like many companies going Lean for the first time, there were many concerns about the benefits they could achieve. The senior team put their faith in the hands of their Lean champion and Kaizen Institute Lean Advisors to take them on the Lean Journey.

Step 1: Define Value

The key in all industries is to follow the Lean Principles. The first of which is to define value. The pharmaceutical company’s value is to blend components in the right quantities to produce a quality product for their clients. This is the science of their job. As with most applications of lean the science of the job is not the area of opportunity. The opportunity for improvement lies in between these steps.

Step 2 Value Stream Mapping

Once the value was determined it was time to value stream map the processes. We started from the receipt of the components through to the packaging process. Like most non lean processes each area operated in silos with each department being concerned with their own schedule and productivity. Their goals were to meet their schedule and keep their employees busy.

The lead time identified by the current state map was around 250 days for one of the product families. The team identified many areas where significant inventories of partially finished product (WIP) were stored. Analysis indicated that less than 5 days of lead time was caused by the original size of the blend. What the team found was that there were nine completed blends waiting to be made into tablets. There were weeks of finished tablets waiting to be packaged. Reducing the size of the blends was a small opportunity compared to the other in process opportunities. Inventory causes many incidental activities as well as impacting cash flow. In the pharmaceutical industry, there are some added impacts. For example, if these inventories are kept too long, extra testing is required tying up valuable lab hours. In some situations, much of the inventory needs to be destroyed when kept too long.

Step 3 Create Future State

The next step was to create a future state for the process. This involved the application of the 3rd and 4th principles of Lean, The creation of flow and pull from the customer. To create flow it was important to tie the processes together. In the first pass the goal was to only have a week of material in between each processing step. Although this is not the perfect future state, it brings us to principle number 5, seek perfection.

Sometimes a company or the employees feel they have failed when they don’t achieve a perfect future state on the first pass. The goal in the first 3 to 6 months is to get significantly better. In this case, the lead time will improve by over 100 days or close to 50%. What company wouldn’t be pleased with a 50% reduction in all their lead times?

To achieve this reduction in inventory, the team had to set up a kanban system. It’s a fairly simple system, when the customer needs to be replenished the product is packaged from a small supermarket of product. This creates an opening in the tablet area and they draw a batch of blended material which sends a signal production control. Production control sends a request to the dispensing area. Dispensing gathers the components and puts them in a FIFO lane for the blending area to work on.

Step 4 Implementation

This process was implemented in two weeks, initially with the extra inventory as a safety stock. The safety stock was quickly reduced until they reach their first target. This allows the employees, and some of the management, to understand the process and to be comfortable that it will work.

There are still cultural barriers to overcome. The employees feel nervous with their safety net reduced. There are questions about what to do when you complete the work before the end of the shift. It is easier to just produce a few more thousand tablets than find some other value adding work for the employees. These are common concerns and are only eliminated as the employees see that Lean works in their industry. They have already taken the first and most critical step which is to try.

They are on their way to achieving major gains in the first 3 to 6 months.

• 50 % reduction in Lead times


• 20 to 30 % reduction in storage space


• The elimination of an offsite storage facility


• Reduced changeover times


• 90 to 100% reduction in retesting

Does Lean work in pharmaceuticals?
Without a doubt it does.

Overview of the KAIZEN-Lean approach:

Assessment:
This would be a 5 day event where the KI Lean Advisors Team would conduct a top level view of the Value streams in the departments. From this assessment the following outputs will be delivered.
The assessment will also Support the establishing the overall KAIZEN-Lean Strategy.

Delivery:
The delivery part of the plan will be in 3 phases which link to the 3 stages of Team Maturity

• Dependence. During this phase, KI Lean Advisors will assume the position of Senior Project Manager for the First Value Stream Team. The team will be led through the EVSM process whilst being trained in to delivery it in future.


• Cooperation: During this phase the first Value Stream team will have gone through the full EVSM cycle and will have completed their basic training. They will be ready to lead the next EVSM event under guidance from the KI Lean Advisors Team.


• Partnership: During this phase the internal Lean team will be fully trained and able to drive the KAIZEN-Lean implementation plans independently.

Enterprise Value Stream Mapping™

KAIZEN INSTITUTE LEAN ADVISORS (KI Lean Advisors) Promotes Lean as a strategy and a way of thinking that creates more value by eliminating activities that are considered waste. Our approach is to focus on end-to-end 'system-level' improvements (as opposed to 'point improvements'). Improving the end-to-end system-level work will dramatically improve your bottom line results and better service the needs of your patients and clients. In order for a process to reach its full potential it is important to initially understand what is happening from a system perspective (end-to-end).

We must transform the selected Value Stream(s) - from request of the service to the actual delivery of that service. If you don’t focus on the end-to-end process you will make ‘point improvements’ and create what we call ‘Exciting Chaos’. This ‘Exciting Chaos’ will inhibit the process from reaching its full potential and could ultimately undermine the success of the organization. With our innovative methodology, we eliminate the risk of obtaining only minimal results and ensure your success both culturally and technically.

The selected Value Stream(s) will be analyzed from a System perspective and all processes, activities and data will be identified and captured.

The Current State Map
The Current State Map will identify:

• Total Turnaround Time of the patient or specimen (total time required to fulfill a service from end-to-end); all value and non-value added activities.


• Delays or wait times between n activities.


• Client demand rates; critical measures such as quality


• Flow of information (documents, data, filing).

The Future State Map
A Future State Value Stream Map will be created of the end-to-end system with a focus on:

• The improvement of Flow,


• A reduction in re-hospitalization (rework).

This system approach will effectively “design out” the non-value added activities which we would term waste. The Future State helps employees lock into the desired vision and direction for the organization.

Implementation Plan
In order to achieve the Future State Map, the team creates a three to six months Implementation Plan that systematically details how the waste is going to be eliminated. KI Lean Advisors will focus the team on developing a realistic plan, utilizing existing resources, staff and information systems to achieve the Future State. The plan will be within the scope and control of the organization.

The detailed Implementation Plan identifies:

• The tools required


• Where they are required


• When they are required,


• Who is responsible for applying these tools


• The expected impact on the end to end processes and organization

The team will also establish metrics current and future to ensure that all activities identified in the implementation plan are aligned and deliver the expected future state. The Implementation Plan eliminates the opportunity for creating point improvements and avoids ‘Exciting Chaos’.

A major outcome of this Lean Transformation initiative is the creation of an environment that is patient/client focused, where services are provided in a timely fashion, at least cost and with the highest quality. To achieve this, the team must create an environment where significantly more can be accomplished with your current work force and physical assets.

In order to ensure that the training activity fully supports the Lean Transformation process, one or two value streams per hospital will be selected to pilot as part of the training. When participants learn about Enterprise Value Stream Mapping, we will then walk the chosen Gemba (the workplace) and they will effectively learn as they directly participate to adapt and apply the mapping of their value streams. The only way to ensure ‘learning’ and transfer of knowledge is by applying the concepts and tools to their unique situations. This method allows them to gain knowledge, confidence and or course pride in what they are learning in a way that training alone cannot do.

The other advantages of this method of training is that others will be able to ‘see’ the changes the team make and this will be extremely important in moving towards a new culture and way of thinking for the organization. This method will bring an immediate ROI from the teams efforts and the staff and customers will be positively affected by the improved service both with the increased speed of service and the reduction in the everyday stress of their jobs.