How to Make Improvement Programs Work

A true visionary leadership is required to drive the progress of operational excellence programs in biopharmaceutical organizations
Nov 01, 2007
Volume 20, Issue 11

Marc Puich
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 ( 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.


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.


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

Figure 1. Success of current operational excellences programs—the management perspective
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.

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 challenges.

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