Reducing waste

NGP gathers some of the industry's leading experts to discuss the importance of Lean and Six Sigma in pharmaceutical manufacturing. With ESP, SherTrack and 3P Partners, a DL Shumar & Associates Company

What are your definitions of Lean and Six Sigma? How do they differ from each other?
Liam O'Brien. Lean relates to best practice, procedures and processes that optimise resources and give results in the fastest possible way while achieving cost reductions. It has a particular focus on eliminating waste and non-value add activities. Six Sigma is based on statistical analysis; it includes a project methodology and project organisational structure for expeditiously achieving the goal of efficient, high quality (low defects) production. Lean Six Sigma (LSS) combines both Lean and Six Sigma and translates into a process, which is both responsive and capable of achieving high quality consistently.

Debra Shumar. Lean is described as a method to reduce or eliminate waste in those processes that do not add value to the final product being produced. Six Sigma is a method to reduce variation of products, improve capability, to help reduce defects in manufacturing, development and service organisations. Both have very specific structured approaches to improve customer satisfaction by efficiently delivering the right products at the right time, in the exact quantities with repeatable and measurable results.

Both disciplines differ in the way in which inefficiency and problems are solved. The key is in learning which tool is used and in what situation. Lean is used for the reduction of wasteful activities usually in a production environment. The use of such tools and techniques include pull systems, leveling, Kanban, quick changeovers, value stream mapping, small lots, and transportation and logistics. Six Sigma uses a defined methodology called DMAIC (define, measure, analyse, improve, control) to reduce the variation within processes, measurement, fit and timing, which causes defects and in turn creates waste. Both disciplines are vital to any organisation's continuous improvement strategy. Depending on the emphasis of the organisation's strategy for improvement both tools can be used to improve any process or product needing improvement.

Alfred Sherk. Lean is an approach for the fundamental examination of an organisation's processes necessary to execute its mission. This focus on process stems from the understanding that every process has a capability limit. Lean drives efficient operations by eliminating low value activities and reengineering high value creation processes to improve their capabilities. Performance breakthroughs derive from innovations in the underlying processes for delivering value. For example, Ford's assembly line innovation in the early 20^th century transformed manufacturing, while Apple's iPod (built on the digitalisation of sound) transformed the music industry. Six Sigma is a data-driven methodology for improving process capability as measured by key performance indicators (KPIs). Six Sigma methods help define what is important (value added) about a process, and what changes bring processes closer to their underlying process capability limits. Six Sigma brings a deep appreciation for the impact of variation on the execution of processes.

What are the potential advantages and challenges involved in implementing Lean and Six Sigma in pharmaceutical manufacturing?
AS. Process innovations in pharmaceutical manufacturing are burdened by the realities of regulatory filings and control. Significantly changing the underlying pharmaceutical manufacturing process is challenging and risky. However, innovations in the enabling processes (such as the order-to-fulfilment process) for manufacturing offer great potential for important improvements in end-to-end manufacturing time, agility and responsiveness to changes in demand. The complexities of pharmaceutical's underlying manufacturing processes create challenges for conventional Lean and Six Sigma methods and tools. Effectively mastering this process complexity is a critical success factor for breakthrough performance gains.

LO'B. The advantages of LSS in pharmaceutical manufacturing are much the same as in any other industry - reduced cost, improved quality, more consistent product, elimination of non-value-add activities, reduction in recalls and customer complaints, and rationalisation of the supply chain. A particularly significant one for the pharmaceutical industry is the potential to reduce the life cycle for drug development in terms of time and cost.

The LSS methodology provides a mechanism for improvement, trouble shooting and problem solving and allows performance to be monitored, measured, trended and reviewed. Since LSS uses statistical analysis to address root cause and problem resolution, it fits in with the culture and modus operandi of the drug development community, which uses statistical techniques for all aspects of drug development and testing. Though these principles are well accepted throughout the broader pharmaceutical community, pharmaceutical manufacturing remains prone to the 'quick fix' approach to solve the immediate problem.

The existing quality assurance and regulatory culture and practice appear to support Six Sigma with annual product reviews, corporate standard procedures for corrective action and preventive action and a significant effort applied to statistical analysis of critical parameters and trends within manufacturing. However, since these tend to be islands of activity without much joined up thinking and are often perceived to be necessary activities to satisfy a regulatory or quality requirement, the opportunity to effectively use these existing activities as part of a real process improvement effort is often not fully utilised. LSS offers a methodology for incorporating these activities in a process improvement effort that is fully integrated with manufacturing as well as quality and regulatory.

DS. As pharmaceutical companies are challenged to reduce their costs in an effort to help reduce the overall healthcare costs to businesses and individuals and have a sustainable business model, implementing these two methods within an organisation is vital. Utilising Lean and Six Sigma can help a company prevent, reduce or eliminate recalls due to errors in the manufacturing and business processes. Realising or acknowledging where the organisation is truly performing at is the challenge of leading the implementation of such tools and techniques. Leadership's involvement at all levels within the organisation is important for constancy of purpose and success. If the entire organisation is not engaged, then creating a culture of improvement will become another flavour of the month exercise. People will revert back to their comfort zones and all monies spent will be lost.

What tools and techniques can pharmaceutical companies use to ensure a smooth roll out of Lean and Six Sigma in their manufacturing operations?
DS. It may not be thought of as a tool but communication will be the most important attribute of behaviour throughout the organisation for a smooth roll out. Communication must be open and free across the organisation. Gathering proper data from assessments to determine the effectiveness and efficiency of the performing organisation will be critical. Engaging all employees by using teams that are cross functional and implementing one or two departments at a time will give the best opportunity to gain those necessary first wins for overall success. Report outs with weekly updates on projects, measuring results and sharing success and miss cues with all employees of the organisation is important, so that it is apparent that the process is moving forward with success.

AS. Advances in predictive analytics and digital plant modelling provide important new capabilities for understanding and improving manufacturing process capability. Our research has shown that the enabling processes for manufacturing operations are usually the limiting factor for overall performance capability. Furthermore, predictive analytics enables the use of the very efficient Lean pull process in complex operations. Innovations in these enabling processes should significantly improve a pharmaceutical company's capabilities, especially in emerging markets with less predictable demand.

The analyse phase of the Six Sigma DMAIC (define, measure, analyse, improve and control) process is the most problematic in tackling complex facilities. Advanced digital plant modelling provides the vehicle for thoroughly analysing a facility's capabilities and accurately evaluating the impact of process changes with no operational risk. It provides a system's view of pharmaceutical manufacturing operations rather than just addressing manageable sub-processes.

LO'B. There are many tools and techniques than can be utilised, but for LSS it is important to note that for many people it is a very different methodology and a very different way of working. The biggest challenge can be achieving the mindset change that is required for LSS to succeed in the organisation. The rollout out of the programme must be well communicated to employees and fully supported by senior management. Training for success is of paramount importance as LSS can be misused for processes that are not well defined and hence can become burdensome. Its most important to identify and prioritise the key projects in your organisation that will improve performance in achieving compliance, waste elimination or process productivity.

How do you see Lean and Six Sigma developing in the pharmaceutical industry in the future?
AS. The leading pharmaceutical companies are embracing the culture of operational excellence as reflected in the growing appreciation of Lean and Six Sigma. We expect that the re-examination of core business processes will lead to step-changes in process capability for those companies that can master complexity and execute systematic changes in their core processes. Other industries that operate globally can provide useful insight into the nature of valuable process changes. Strong and engaged leadership is essential for identifying and adapting cross-industry advances to achieve competitive advantage in their own operations and markets.

LO'B. In these challenging times, pharmaceutical organisations cannot afford to ignore LSS. Expectations of customers, regulators and shareholders have grown and the industry must respond quickly to improve productivity, work more efficiently and implement changes to remain productive and profitable. To achieve the benefits of LSS, organisations will have to leverage from the existing quality and regulatory culture within the industry as well as incorporating more recent initiatives such as process analytical technology, quality by design and more extensive use of computer technology as a quality tool.

LSS can be employed across almost all aspects of the pharmaceutical business. For many, especially manufacturing, it has already proved itself in cost reduction and process optimisation but its application across areas such as research and development, quality management, human resources, financial, and sales and marketing remain relatively untapped. As a result of the flexibility of the application, LSS has placed itself firmly into the day-to-day operations and will be here to stay for many years to come.

DS. Lean and Six Sigma are structured disciplines with tools and techniques to drive sustainability and profitability. They are not the only answer to moving the industry forward but for pharmaceutical companies to continue they must become more efficient at all phases: R&D, clinical trials, production and sales and marketing. Becoming more efficient in the R&D process and potentially reducing the time to clinical trial, costs can be reduced significantly. Building a culture of sustainability with everyone focused on continuous improvement using the methodologies of Lean and Six Sigma will separate the competition significantly.

The Panel:

Liam O'Brien is a leading manufacturing execution system (MES), process and automation solutions specialist within the life science industry. In a career spanning more than 30 years, he has had extensive commercial and project management experience. Liam is also a founding member of ESP, which specialises in implementation of MES.

Alfred Sherk is the founder and CEO of SherTrack, provider of innovative, predictive analytic solutions for synchronising supply with demand. He is a past member of the Technical Advisory Board for Michigan State University's Graduate School of Business and is a limited partner in North Coast Technology Investors LP.

Debra Shumar is President and Founder of 3P Partners, a DL Shumar & Associates Co. LLC. 3P Partners provides innovative approaches, services and software solutions in quality, cultural transformation, Lean and Six Sigma management, and supply chain risk management for improving business, operational and workplace performance.