Keeping it Lean

NGP talks to four industry experts about the applications of Lean and Six Sigma in pharmaceutical manufacturing.

“We need to understand and embrace Quality by Design principles from product conception onwards”
-Ian Cox, JMP

What are your definitions of Lean and Six Sigma? How do they differ from each other?
Ian Cox. Both are examples of leveraging a key idea; namely that any system of production has the potential to generate data that can be used to drive improvements to that system. From this perspective, the difference between Lean and Six Sigma is just a difference between the kind of data on which they tend to focus – Lean deals primarily with transactional data (What stuff is where? How long has it been there? Where does it have to go next?), whereas Six Sigma tends to focus on what might be called physical data (What is the stoichiometry? What is the blend time? What is the friability?). Clearly both kinds of data are important.

Erik Tieleman. I think businesses should not be interested in questions like these. It is not about the methodologies or their differences, but about impactful business applications – how to create sustainable (financial) results with Lean and/or Six Sigma?

Lean and Six Sigma are both great toolkits to pull from when tackling on-time delivery and working capital in supply chain, cycle time reduction and throughput improvement in manufacturing, better milestone attainment in new product introduction, improved quality testing and results in labs, faster process and product validations in engineering. 

Executed correctly, both can be effective approaches to productivity and improvement.
The (over)emphasis on the methodology (“doing the things right”) should shift to a focus on how to organise for productivity and improvement (“doing the right things”). This has more to do with execution and making things happen, than with a conceptual discussion on methodologies.

Harry Clark. Both prevent waste. Both design customer-centric ‘quality’ into a product/process. Lean prevents waste across the entire operation. ‘Waste’ is defined in this context as that portion of any activity that is not intrinsic to adding value to the end customer.

Six Sigma prevents waste, defined here as variability in products and processes. Products must be fully understood and characterised. Associated manufacturing processes must be understood, capable and in control. Sources of variability must be anticipated. Such risks to product integrity must be identified and mitigated. Six Sigma is associated intrinsically with product quality.

Lean eliminates waste across execution activities (inventory levels, labour utilisation, capacity planning, layouts, etc.), which is critical for but ancillary to the delivery of a Six Sigma quality product. Lean can be characterised as execution efficiency.

Manufacture of defective product is a key waste. Preventing such waste is the goal of Six Sigma, and describes where Lean and Six Sigma philosophies merge.

Steffen Himstedt. We mainly see Lean and Six Sigma projects as a focus on added value and quality. This generally involves adjustments of organisational structures, as well as reducing the complexity of the decision-making processes. In contrast to a greater number of consultants who primarily focus on such organisational aspects – with minimum IT effort – Trebing & Himstedt regard IT as a key enabler for successful project implementation.

An essential element of Lean and Six Sigma is a continuous learning and improvement process. In order to support this process, direct feedback about variations and disruptions in the production process is necessary. Our experience is that display boards and reports that are not generated in real time slow down the learning process. Modern operator cockpits with real-time information from various sources, which are aggregated and visualized in KPI and displayed on mobile devices such as Blackberries or on production hall displays, achieve much better results.

What are the potential advantages and challenges involved in implementing Lean and Six Sigma in pharmaceutical manufacturing?
HC. Implementing Six Sigma around a ‘design space’ philosophy is massively beneficial. Traditional CMC approaches do not sufficiently demonstrate the relationship between product attributes and product quality. Six Sigma approaches will identify, understand, manage and mitigate risk and ensure the development of product that is genuinely fit for purpose.

Six Sigma enables quicker time to market. Submissions reflecting ICH recommendations mean faster NDA approvals. Each increases the commercial window for patented products.

Lean improves efficiency, reducing costs and increasing available working capital. Margins can be maintained and research levels sustained whilst increasing the affordability/availability of safe and efficacious drugs for new markets. Through, for example, ‘5S’, Lean helps make organisations safer places in which to work and, by unit reduction in energy and material costs, more environmentally friendly.

The most meaningful variable in effectively implementing Six Sigma and Lean is the extent of senior-level commitment.

IC. The word “potential” is important. The advantages of using data to manage the risk inherent in all production are well understood (faster, cheaper, higher quality, enhanced predictability, greater agility, to name a few), There are specific nuances in pharmaceutical manufacturing depending on the therapeutic area, technology base, supply chain, competitive situation and so on.

Making this potential real has two key aspects. One is that, for powerful and relevant data to be available, we need to measure the right things with the right frequency. The second is that, like it or not, people are ‘part of the system’. So the challenge lies in leveraging both useful data and the contextual scientific, medical and engineering knowledge in people’s heads. Bringing these two ingredients together is the best, even the only, way to promote the data-driven discoveries needed to fuel both Lean and Six Sigma. Overcoming these challenges will be multi-faceted, but an important influencing factor is the persistence of the idea that a validated manufacturing process is sacrosanct, and therefore not legitimately the subject of improvement.

SH. In pharmaceutical manufacturing, highly inflexible processes run within regulatory limits. This costs a lot of money, creates rigid decision-making processes, and inhibits innovation. Classic Lean subjects are reduction of material stocks, cycle times and waste. Under ever-increasing cost pressure, companies are forced to strike a balance between compliance and flexibility at a reasonable cost. Lean and Six Sigma, as well as PAT – smartly implemented – can be catalysts for a new structure in pharmaceutical manufacturing.

Another field for Lean projects is the integration of production and laboratory processes. In most pharmaceutical companies, elementary value potentials, especially in asset utilization or yield, are underachieved because of the existing organisational separation of production and laboratory processes. That is why, together with SAP and partners, we started the Perfect Laboratory initiative as part of SAP’s Perfect Plant Initiative, in which we use the optimisation potential of laboratory processes that are highly integrated into the production. The goal is to reduce cycle times of laboratory samples, to integrate laboratory personnel directly into the production and to reduce interfaces and paper workflow through electronically supported processes.

ET. There are specifics in pharmaceutical manufacturing (product or process validation, regulatory approval, quality systems, outsourcing) but let’s face it: The challenge is, as in any industry, to apply it right (selective, tailored to the business context), to get leadership truly involved, to accelerate the pace of change.

Many senior executives are frustrated that their (Lean, Six Sigma) improvement programs do not gain the necessary speed nor the impact they need, nor do they meet the desired return on investment.

Executives face challenges like: how to rally my team around the need for change? (shared view on current reality); are we working on the right things? (focus); how to get there? (roadmap); what organization do I need? (roles and responsibilities); is my team able to deliver? (execution skills); are we seeing it clearly? (potential) .

Lean Six Sigma programs should support these leaders in getting transparency, focus, priorities, fact-based decision-making, on-time execution, a clear plan, implementation skills and sustainability of results.

It is the lack of oxygen (O2) that causes current Lean Six Sigma programs to not make traction. O2 is the respirator of improvement: ‘organisation’ and ‘operating System’.

Lean and Six Sigma contain ‘know-how’. O2 contains ‘know-what’.  True Lean Six Sigma Programs have both in place.

What tools and techniques can pharmaceutical companies use to ensure a smooth roll out of Lean and Six Sigma in their manufacturing operations?
ET. Successful organisations have clarity on the Big ‘Y’ and the Big ‘WHY’ (Subject of Change). Successful leaders are personally involved and attach themselves to this change, empowering people, having daily involvement, setting standards and making people execute against these standards (Prerequisite of Change). Successful leaders test their thinking with data and challenge their teams on popular beliefs, untested hypotheses and paradigms, and effectively execute on their thinking (Window of Change). Successful organisations are building improvement capability, the Vehicle of Change, not only by introducing Lean and Six Sigma, but more importantly by implementing a clear performance architecture (Organization*Operating system = O2).

Organisations and leaders that execute these things well are winners; they work on the right things. Lean and Six Sigma are then great execution methodologies to do the things right the first time.

IC. What ends up in manufacturing is, of course, that which development and scale-up can deliver. So the ultimate, but often inconvenient, answer is that we need to understand and embrace Quality by Design (QbD) principles from product conception onwards. The two challenges mentioned above remain, and the difficulty of meeting them rises by at least an order of magnitude for several reasons. The pragmatic answer for products already in manufacturing is to invest in systems that can be used to store, structure and analyse data in the most streamlined way, and to promote a culture in which all stakeholders can contribute to making discoveries that have business value.

An obvious requirement is that the value of such discoveries must more than offset the cost and effort of making them. Typically, transactional systems do not structure data in a way that supports discovery, and users have an understandable resistance to unfriendly or complex analysis software that does not fit their needs, or that makes too many assumptions about their capabilities given they may well be using data in this way for the first time.

SH. Well-concerted, purposeful application of IT tools can support Lean and Six Sigma projects significantly. We have designed and built such ‘manufacturing cockpits’ in numerous Lean projects. At a global pharmaceutical company aiming to become the ‘Toyota of the pharmaceutical industry’, significant success could be achieved within the scope of a Lean initiative in the packaging division. Large information displays keep workers constantly informed of quality and performance figures. Seamless integration of ERP/MES and LIMS into manufacturing is key.

In order to achieve this aim, a lot of information must be gathered from separate IT systems. In numerous Lean projects, we have built up manufacturing cockpits that aggregate the relevant information and provide it in an intuitive way. In this case, the Trebing & Himstedt SAP MII Best Practice solution for overall equipment efficiency (OEE) is also suitable, although many experts do not use OEE as key performance indicators (KPI) for Lean projects in order to avoid an incorrect focus on utilisation optimization. But more important is the interpretation of the single OEE factors and the analysis of the causes of disruption. Automatically generated KPI can provide full transparency and help to effectively and objectively evaluate possible measures and their effects. In this way, improvement processes can not only be monitored with minimal effort but also implemented much faster, and the respective saving effect can be rendered transparent.

HC. Fundamentally, the output of a manufacturing operation is its manufactured product. The quality of that output is only as good as the degree of understanding about that product that has been generated, and the uses to which that knowledge have been put.

So, in research-led and technology-led manufacturing companies, the place to begin to apply Six Sigma and Lean is in late discovery/early development – the ‘design’ phase, where design space definition is commenced. The tools and techniques are typically those found in the Design for Six Sigma (DfSS) toolkit, from practices such as Functional Analysis, Fault Trees, Failure Mode and Effects Analysis and Taguchi/Design of Experiments at the front end to the routine application of Process Controls (PAT and Statistical Process Control) and the wider Lean toolkit (Kanbans, 5S, SMED, Value Streams. etc.) in commercial volume manufacturing.

Neither Six Sigma nor Lean are principally technical challenges. Successful implementation must understand the nature of the ‘change’ challenge that each represents.

How do you see Lean and Six Sigma developing in the pharmaceutical industry in the future?
SH. In today’s situation of the general economic downturn and the pressure existing in pharmaceutical manufacturing, Lean and Six Sigma methods must prove that they are sufficiently flexible to meet these new requirements. Lean and Six Sigma do carry the stigma of not being flexible enough. In addition, global collaboration and supply chain processes between pharmaceutical companies and their suppliers need to be mapped. This calls for new ways to be established, with the seamless, integrated application of IT tools.

HC. There are three compelling reasons why Lean and Six Sigma will pervade the pharmaceutical sector.

In the current economic and political climate insurers and public health bodies/agencies are increasingly focused both on reducing the prices paid for drugs and on increasing their availability. For research-led life sciences companies maintaining profit margins at levels that will sustain their missions to enhance wellbeing and quality of life through innovation, the singular conclusion is an unambiguous need to exorcise waste and cost from their operations.

Regulatory approaches will evolve further in this direction. With the currently non-binding recommendations and guidance in ICH Q8, ICH Q9 and ICH Q10 prompting the adoption of best practices in R&D, commercialisation and manufacture, the deployment of Lean and Six Sigma will simply represent a pragmatic response to this regulatory challenge.

Principally, patient safety and wellbeing are paramount. Lean and Six Sigma represent the best available approaches to mitigating product and therefore commercial risk. We live in an increasingly litigious age, with several examples of such failures in our collective memory. A marketed product that cannot be demonstrated to be fully characterised, understood and manufactured to the requisite quality is unacceptable.

IC. The application of Lean or Six Sigma (or both) in manufacturing is a necessary and useful band-aid. But as personalised medicine takes root and the QbD agenda is pursued more aggressively, it will gradually force the convergence of Lean and Six Sigma. Ideas like Design for Six Sigma, Lean Product Introduction and Kansei Engineering will also be assimilated within QbD, and the means to efficiently explore a complex design space will become even more important and valuable than it is now. Using data this way is certainly a grand challenge to the pharmaceutical industry, and there are many diverse aspects culturally, organisationally and systemically. But we should draw some comfort from the fact that the semiconductor industry has been working this way for 30 years, and the resulting benefits are many and obvious.

ET. With eroding gross profits, higher R&D spend to find treatments for untreated disease states, regulatory bodies that drive evidence-based medicine and governments and insurance companies that want to contain healthcare spend and reimbursements, the case for productivity is clear.

It becomes imperative to have a comprehensive and integrated operating system to manage productivity on a structural basis. This operating system is about having transparency about performance, being clear about how you manage performance (process), how you evaluate performance (metrics), how you are organised for managing performance (roles and responsibilities), and last but not least. how your people are driving performance consistently (behaviour).

All work is process and processes are unstable and not well connected. Leaders need to rethink how to design the operating system, a way of working that makes people more engaged, more effective, more productive and happy. Lean and Six Sigma continue to be important toolkits to tailor solutions for pharmaceutical companies.

Ian Cox works in the JMP Division of SAS as the European Marketing Manager for JMP. He worked for Digital and Motorola in the 1980s and has consulted on how best to use data for more than 20 years. He is co-author of Visual Six Sigma – Making Data Analysis Lean (Wiley, in press).

Erik Tieleman is a seasoned Master Black Belt, and held operational leadership positions in supply chain, (external) manufacturing and business excellence within General Electric and Johnson & Johnson. Tieleman made organisations and leaders successful in chemical, pharmaceutical, medical device, healthcare and nutritional businesses, and earned their trust in delivering results.

Harry Clark is the Managing Director of SI Associates. Following his postgraduate degree at Liverpool University, he joined General Motors, spending several years in the automotive and transportation sectors before working with PERA Consulting and subsequently joining SI.

As Founder and Managing Director of Trebing & Himstedt, Steffen Himstedt is an active member of the OPC Foundation, ISPE and the PROFIBUS Organization. In the business area of manufacturing integration, Trebing & Himstedt is implementation partner for SAP manufacturing solutions and provides best practices based on SAP MII (KPI monitoring, machine/production data acquisition, electronic work instruction and quality management).