Chemistry lessons

As the food industry seeks to improve its efficiency in all areas of operation, there is much it can learn from other business areas. Here, Carmen Doran, Global Operational Excellence Champion, and Domingo Traver, Head of Supply Chain Excellence and IQP for Novartis Pharma Technical Operations, tell us about their company’s progress in implementing these processes.

“What has made the Lean and Six Sigma thinking successful is the combination of the technical process improvements, cultural aspects and a clear strategic direction which fosters, for all involved, a passion to strive for operational excellence.”
-Carmen Doran

As Global Operational Excellence Champion, Carmen Doran supports all 23 sites for Novartis Pharma's technical operations as well as the global support functions, by providing a systematic training and certification programme across the organisation. This aims to foster a culture of operational excellence (internally referred to as IQP: innovation, quality and productivity). She comments that operational excellence in Novartis Pharma covers a wide range of topics, tools and techniques, which allow flexibility in identifying the best approach for a specific problem or opportunity.

"The philosophies of Lean and Six Sigma represent a way of thinking and looking at a problem in order to understand the root cause(s) and then solve the problem in a sustainable manner," she explains. "This approach is different to the traditional management styles focusing on short term 'quick fix' solutions rather than on identifying the problem correctly and ensuring the solution is effective and sustainable long-term. We try to use this approach across all areas of the business."

Initially set out as two different methods, Lean and Six Sigma are very much interlinked and constantly evolving, a development that Doran notes to be present in Novartis Pharma technical operations. She explains how previously projects would solely use Lean and focus on reducing waste, or would apply a Six Sigma approach to reducing variability. "The Lean philosophy is to have flow through the process and to do this, you need to have processes you can rely on. A stable and reliable process is then the foundation for continuous improvement. So Lean and Six Sigma go hand in hand to achieve operational excellence.

"We look at the flow of value all the way through our processes down to the customer, whoever the customer may be; in our case, this is ultimately the patient. If we look at some of the supporting functions like HR, we've been applying the Lean and Six Sigma way of thinking to these processes, going through the steps of identifying the problem, understanding the customer needs and root causes of the problem and then finding the solution which matches to those. By doing so, we are for instance ensuring the improvement and sustainability for recruitment processes where the benefiting customers are actually both the employee and the business.

"We apply the same approach in non-manufacturing environments as we do in production. It's a natural progression that we need support functions aligned to the new way of working and thinking in manufacturing. Like a lot of companies, Novartis started to apply these methodologies and philosophies in the manufacturing area first, and now the ideas are spreading to the rest of the business. In manufacturing it's very easy to see the processes and to work on the processes because that's what is right in front of your eyes. In other business areas, some of the work we do focuses on simply making the process transparent," explains Doran.

As a global IQP champion at Novartis, Doran explains how she has a lot more requests to provide Lean support than she has time for; these come from people who have heard about Lean through their colleagues or through seeing the benefits themselves. In order to accommodate what Doran explains as a "pull system" for IQP support, Novartis has its IQP champions across the world, operating different skills in different areas and matching the business needs with the company's resources.

"We often use an external pair of eyes on a process. That external view may come from another internal function, another manufacturing site or a global function. Novartis has a strong network of people across the globe, all with different backgrounds, but all working on Lean and Six Sigma in a rather unified manner. They are capable of implementing various problem-solving tools and methodologies in projects and of linking them together to create a culture leading towards operational excellence," she explains.

Pharma technical operations has successfully handled some natural resistance to change and to the use of these new processes thanks to strong leadership endorsement, although Doran admits that there are still some people who are coming round to the idea. Enthusiasm for a new project, she points out, is often created upon seeing the results. If a person working on a project has enjoyed it and demonstrated good results, then others can judge for themselves.

Expansion

As a global company, Novartis Pharma Technical Operations has sites located across the US, Europe and Asia. Prior to taking up her current role, Doran worked in the company's recently opened Pharmaceutical Operations site in Singapore. She explains that there are variations in the take-up of Lean Six Sigma across different locations, but not always in the way you might think. "The difference for us in terms of adoption is not necessarily the culture but the maturity of the site. When you have a site which has been around for 50 years where you have people with a lot of history at that site, then it takes a different approach for them to change their way of thinking than if you have a brand new site like Singapore. For them, everything is new.

"We can show them results from other sites, and there isn't that resistance to change because they understand how it works together in the overall business model. So rather than people's cultural differences, adoption depends on the lifecycle of the site," says Doran.

In order to meet the challenges that often accompany such implementations, she calls upon the company's network of IQP champions: each site has a single point of contact for all best practice sharing. "If I have a site in China that needs some input from a site in the US, they can directly contact the local IQP champion and ask about the results and learnings."

Communication between the multiple sites is essential, and is facilitated by the central IQP team. Doran places most emphasis on the power of speech and interactions between people, and explains that although Novartis publishes its IQP project results on the internal website and in newsletters, most results are seen from the effects of a strong network. Monthly teleconferences with IQP champion networks, ad hoc teleconferences and regular meetings focus on the challenges facing the site, the successes, their goals and what's in store for the future.

"Although the sites are on the same journey, they're all at different stages, but they're all looking for alignment through our operational excellence scorecard. We have a very clear strategic direction for operational excellence in Novartis Pharma Technical Operations which allows all of the sites to move in the same direction. That's one of the reasons we've been successfully able to turn those challenges along the journey at a site into something that has been enjoyable and rewarding."

Novartis Pharma is certainly not alone in facing these challenges. The pharmaceutical industry has been dogged by pressures to reduce costs in light of the recent economic crisis. "We could focus on cost, but the better way is to focus on the speed and the agility of the processes," explains Doran.

"One of the biggest concerns for all pharmaceutical companies is the speed at which they are able to adapt to change. A lot of our processes can be improved, and maybe we haven't had the challenge that some of the faster-moving consumer industries have had in terms of reaction to market requirements. Those companies who can respond quickly to the market needs by being flexible and reducing their cycle times, both in manufacturing and in development, will be the ones who can overcome these challenges."

Added pressures come from the highly regulated nature of the industry. "None of us would want to take medicine if it wasn't highly regulated," says Doran. However, she notes that the pharma industry must also recognise that it is not alone in terms of the level of regulation it must undergo, pointing to the aerospace industry as facing similar challenges. To combat these concerns, she points out that there are opportunities to collaborate more closely with regulatory agencies such as the FDA, which welcomes positive changes.

"At the end of the day, what I feel has made the Lean and Six Sigma thinking successful for us is the combination of the technical process improvements, cultural aspects and a clear strategic direction which fosters, for all involved, a passion to strive for operational excellence," she concludes.

Making it happen

Domingo Traver Head of Supply Chain Excellence and IQP at Novartis Pharma Technical Operations talks about the satisfaction he derives from the successful implementation of Lean and Six Sigma in the pharmaceutical supply chain.

Healthcare markets around the world are rapidly evolving and pharmaceutical companies need to be prepared to address these changes. For example, regulators and payers are becoming more challenging while patients are taking a more active role in their disease management. All of this affects the pharmaceutical business, where increasing efficiencies can support the future growth.

As Domingo Traver explains, rather than reinventing the wheel, it makes sense for pharmaceutical companies to draw lessons from what their counterparts in other industries have already done. He describes how the processes of Lean and Six Sigma – pioneered by Toyota and Motorola respectively – have taken hold within Technical Operations organisation at Novartis Pharma, where he is Head of Supply Chain Excellence and IQP.

“The idea was first that we implement Lean to reduce waste in our processes, and then apply Six Sigma to reduce variability; it’s a two-step process,” he explains. “We have implemented the Lean phase, and in certain areas, such as quality assurance, we have also begun to apply Six Sigma. For example, Lean has been implemented in the different operational units, it is now time to link all of these units together. IQP is the internal name: innovation, quality and productivity for the operational excellence or continuous processing program.”

In his role at Novartis Pharma, Traver looks after logistics and IQP, as well as leading the multimarket network for supply chain. He points to the fact that the current level of regulation and quality control within the pharmaceutical industry has a direct impact on the development and implementation of new efficiency processes. While regulation is necessary to ensure the safety of the end products, Lean and Six Sigma can additionally help to support the overall processes.

“For example,” Traver points out, “existing procedures may show that a particular process takes eight hours. By understanding your internal processes and applying Lean techniques, you will be able to demonstrate improvements and hence reduce the time required. Lean, therefore, challenges your current processes and technologies while at the same time making them more efficient.”

Another challenge can lie in implementing such changes across an entire organisation, which is why the Technical Operations unit at Novartis Pharma started with several pilot programs. After the successful implementation of these pilots, the initiative has now been rolled out across global functions, such as supply chain.

Creating change

Prior to taking up his current position, Traver was Functional Champion IQP for Novartis PharmOps Spain, where he was principally in charge of deploying IQP and aligning IQP efforts with the global Technical Operations vision and strategy. He was leader of the Lean – POO (Process Oriented Organisation) project that ended with the implementation of the new organisational structure in Barbera in May, 2007.

“It was a very interesting project, because it included two elements,” he recalls. “One was the pure implementation of Lean Six Sigma – hence, applying the techniques and helping the teams understand what these techniques mean and how to use them. The other element was about POO, which was aimed at changing the organisation’s culture and mindset in regard to how people approach business operations. Among others, this included a change in management tools as well as business understanding.

“We used the Kotter model, starting with the ‘burning platform’. This allowed us to see how people behaved differently after POO had been initiated a number of weeks previously. This was really exciting to me, as you could see how the organisation as a whole had improved .

“You have different people behaving in different ways; for example, some may be afraid of change. Generally, there will always be 10 percent of people who are quite change resistant. However, you can manage these 10 percent by demonstrating how the other 90 percent benefited from new processes and a new culture. I was very happy that despite the challenges we managed the turn-around.”

Traver feels that Lean and Six Sigma have a strong future within the pharmaceutical industry, as well as in other industries. He points out that there are many areas in which these concepts are yet to be introduced.

“Lean Six Sigma helps us to improve our processes and to reduce variability. It is really helpful in many industries, and yet there are parts of the world that still have not taken advantage of it. So I would say overall that there is a lot of future in this yet.”

The Kotter model

In 1995, Harvard Business School professor and change management guru John Kotter published a book entitled Leading Change, within which he outlined his now well-known eight-step change process.

1. Create sense of urgency
Open an honest dialogue about what's happening in the marketplace

2. Form a guiding coalition
Set up strong leadership by gaining support from key people

3. Create a vision
Help people see for themselves what you're trying to achieve

4. Communicate the vision
Talk often about and apply your vision as much as possible

5. Remove obstacles
Check continually for barriers to change

6. Create short-term wins
Give your people an early taste of victory

7. Build on change
Keep looking for improvements

8. Anchor change in your culture
Make sure change is embedded in every aspect of your organisation