In the past five to six years, a number of biopharmaceutical organizations have developed internal operations excellence programs
to drive performance improvement in all parts of the supply chain. How succesful have these programs been? Most recently,
at our Biopharmaceutical Operations Excellence Consortium meeting (
http://www.tefen.com/bio/) held on June 5, at Amgen (Thousand Oaks, CA), we set out to answer that question. Over 40 participants from 15 companies
attended and through workshops, presentations, and surveys conducted during the meeting we were able to gauge the state of
operations excellence programs in the industry, identify what has worked and what hasn't, and judge where these programs may
go in the future. As part of the meeting, Tefen conducted a survey on operations excellence programs and received responses
from 11 companies.
WHAT THE COMPANIES ARE DOING
The results of the survey indicated that the programs are primarily focused on achieving improvement in cost, quality, and
cycle time. Over 80% of the respondents said that their programs have been in place for less than three years. According to
the survey, the number of full-time resources dedicated to operations excellence ranged from one to 20. The survey also showed
that most programs are designed around Lean concepts, with a much smaller number incorporating elements of Six Sigma.
STATE OF OPERATIONS EXCELLENCE
Unfortunately, the results of these programs have not been stellar. About 66% of respondents admitted only marginal success
in meeting management expectations. Several themes applied to most of the companies driving these programs, which helped us
understand the current state of operations excellence in the industry. Some of these themes included:
Evolution Versus Transformation
In many cases, the programs were not initiated as a top down, "big bang" initiative—typical of the GE or Motorola school of
thought. These programs are small in scale, with only a handful of individuals driving projects close to the production floor.
Although these initiatives can enable cultural and performance improvement on a localized basis, they can struggle in gaining
momentum for higher-level, cross-functional projects that have more significant organizational benefits, and offer suboptimal
utilization of resources and project selection.
Figure 1. Success of current operational excellences programs—the management perspective
Starting with Manufacturing
Most pharmaceutical companies began their operations excellence programs in the manufacturing area, probably because most
of the methodologies were developed in other manufacturing industries. Nevertheless, more successful organizations have applied
these tools more broadly and included quality, supply chain, and engineering. A focus on research and development (R&D) is
still missing, however, because of political and cultural challenges. Nonetheless, R&D related improvements are high on the
list of priorities for senior executives (see Manufacturing: BioPharmaceutical Operations Roadmap 2007 in the April 2007 issue
of BioPharm International).
There is a Lack of Business Imperative
Although management supports these programs, there is a feeling that a business imperative is not yet there to make these
programs transformational rather than incremental. The threats of direct competition, price controls, stricter regulatory
requirements, and biosimilars are on the horizon, but the companies have not felt the need to act in anticipation of these