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From Laggard to Leader: A Formula for Lean Success

Clarkston Consulting Director Robert Spector published an article in Pharmaceutical Manufacturing on lean management in the pharmaceutical industry. An excerpt of the article is below.

August 10, 2010 | Lean management continues to be one of the most prevalent business improvement approaches in the pharmaceutical industry. Successful application of lean leads to shorter lead times with improved quality and customer responsiveness, resulting in enhanced revenues, reduced investment and costs. Unfortunately, as evidenced by the lack of significant improvement industry-wide in the inventory turns metric (the measure of a company’s “leanness”) over the course of over a decade,1 the industry has not been successful in ensuring sustainable improvements from lean.

Why Lean Fails

What can pharma companies do to address this lack of progress and ensure their lean efforts are successful and sustainable over the long term? The place to start is identifying the root causes holding back progress. These consist of a lack of senior management commitment and involvement; an emphasis on driving cost reduction benefits (primarily in labor force reduction) over revenue enhancement and strategic benefits; and the siloed focus on application to manufacturing rather than across the enterprise.2

Addressing the Challenges

Addressing these challenges begins with gaining a clear understanding that lean is not just a “set of tools,” but a holistic operating system as illustrated by the Toyota Production System “house.”

The TPS House is a simple visual representation of the Toyota Production System to show that TPS is a structural operating system, not just a set of techniques. The analogy is of a house that is strong only if the roof, pillars and foundations are strong; all elements of the house reinforce each other — a weak link threatens the whole system. For lean to be successful, all elements must be implemented starting with defining clear goals, developing a solid foundation, implementing process improvement tools, and ensuring that people — who are at the center of the system — are fully engaged and driving continuous improvement.

To view the full article, visit Pharmaceutical Manufacturing’s original publication here.