Drug Manufacturers Pursuing Operational Excellence But Still Lagging Behind Other Industries, Surveys Say

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A new survey conducted by Pharmaceutical Manufacturing magazine, sponsored by Invistics Corp., reveals that pharmaceutical manufacturers are making great strides in the pursuit of operational excellence, but that some issues -- such as a disconnect between top management and the plant floor -- may be inhibiting further improvements.

The pharmaceutical industry has begun to embrace the principles of the Toyota Management System, the Japanese reinterpretation of concepts first advanced by Deming, Ford and Shewhart. More and more drug companies are taking a systematic approach to improving the way that they develop, manufacture and distribute drugs.

To track these trends, Pharmaceutical Manufacturing magazine recently surveyed more than 100 top manufacturing professionals from within the industry. The survey, detailed in May’s issue of the magazine and sponsored by Invistics Corporation, suggests that drug manufacturers have achieved significant improvements in the area of operational excellence, though most such programs are in their early stages, and some may have sizable challenges yet to overcome. These findings were confirmed by a related survey conducted by Invistics in March.

Among the encouraging trends in the magazine’s survey:

  • Most respondents describe their facilities’ operational excellence programs as closely aligned with their companies’ corporate missions and overall business goals
  • For the most part, respondents say, they are getting clear key performance indicators (KPIs) from management
  • Manufacturing teams are viewed by most respondents as being critical to improving efficiency and performance.
  • More companies appear to view plant and equipment maintenance “strategically”
  • Companies are working continuously to reduce set-up times and have already achieved positive results

Other findings in the survey, however, suggest potential trouble spots:

  • While 56% of respondents, overall, believe that top management views their facilities as profit centers, 44% think that management sees them as cost centers.
  • Customer input may not be as integral a part of the overall improvement process at drug manufacturing facilities as it is in other industries
  • Nearly half of the respondents note a need to motivate continuous improvement from the plant floor-level up.
  • Most respondents say that their facilities and organizations aren’t tying manufacturing employee compensation to plant efficiency and product quality improvements that they make on the job.
  • Cross-functional training and product development appear to be issues for some companies; several respondents note a lack of communication between R&D and manufacturing
  • Respondents cite “process innovation” and “reducing product prices” as low in their company’s priority lists.

Invistics’ survey of more than 100 pharmaceutical manufacturers confirmed some of the same findings while pointing to the need to boost results from performance improvement initiatives and technologies already in use. Less than half of the respondents in the March survey reported satisfactory results from initiatives like Lean and Six Sigma or technologies including ERP and inventory optimization.

Performance improvement, they say, is hampered by limited skills and training, lack of visibility into plant floor performance, a lack of metrics to motivate change and a lack of tools to manage variability. Manufacturers blamed excessive variability in products, processes and customer demand for creating customer service issues and difficulties in scheduling. Almost 90% said variability negatively impacts performance, often leaving them expediting orders, running out of products that they need or having more inventory than they want.

Both surveys delved into many other critical issues that drug manufacturers must address if they are to bring their facilities up to par with the operating standards already achieved in other industries:

  • What strategies are being used to reduce manufacturing costs and assess customer needs
  • Whether or not manufacturers are meeting specific quality and service improvement goals such as using statistical process control (SPC) to reduce process variance, improving the quality of raw materials, or reducing scrap and lead times
  • How well organizations are managing workforce integration, cross-functional product development and preventive maintenance

Pharmaceutical Manufacturing's survey is the first installment of a work in progress that will be updated and improved regularly. Results of the survey, and interpretation of what it all means for pharmaceutical professionals, can be found in the magazine's May issue, or on http://www.PharmaManufacturing.com. For information on the Invistics survey, visit http://www.invistics.com.

About Pharmaceutical Manufacturing and PharmaManufacturing.com

Pharmaceutical Manufacturing, published 10 times annually, is the only publication dedicated to meeting the needs of pharmaceutical manufacturing professionals and executives to improve product quality, boost efficiency and productivity, speed time to market, and stay up to date on industry best practices. PharmaManufacturing.com, the magazine’s online resource, features news, analysis, white papers, expert advice and other timeless resources for the pharmaceutical manufacturing community.

About Invistics

Invistics helps manufacturers in highly variable, asset-intensive industries such as pharmaceuticals achieve operational excellence in an often overlooked, yet core, element of their supply chain—production operations. Built on Lean and Six Sigma principles, its manufacturing performance optimization solution, Invistics MachSix™, is specifically designed to redefine complex plant-level tradeoffs between inventory costs, customer service, production throughput, and cycle times. Companies can use the MachSix methodology and software to identify and manage sources of variability while breaking down organizational silos. Invistics customers have achieved dramatic, sustained results including over 99% on-time deliveries, an average reduction of 50% in inventory and reduction in cycle times by more than half. MachSix integrates with, and enhances ERP, Supply Chain and manufacturing execution applications by providing more accurate data while accounting for variability and improving visibility into plant floor operations. To learn more about Invistics, visit http://www.invistics.com or call 800-601-3456.

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Agnes Shanley
PUTMAN MEDIA
630-467-1301 410
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