| Over approximately the past decade, the | | | | Inventory turns can be a reliable indicator of a |
| pharmaceutical industry has haltingly attempted to | | | | company's success in implementing lean |
| embrace lean manufacturing. A manufacturing | | | | manufacturing. If a company is improving processes, |
| philosophy with the goals of reducing waste and | | | | then the trend of inventory turns over time should |
| boosting productivity would certainly seem to be a | | | | reflect that. The data, however, seems to indicate |
| good partner for this industry. But the results, so far, | | | | that over last decade there hasn't been any |
| have been less than dazzling-although this does not | | | | significant improvement in this area. |
| have to be the case. | | | | Consider this, though. In the 1980's the electronics |
| Up until fairly recently, the pharmaceutical industry | | | | sector in the US appeared to be moribund. But now, |
| has enjoyed healthy profit margins. That and the | | | | owing in large part to the adoption of these solutions, |
| burden of meeting regulatory mandates have led the | | | | IBM, HP, and Dell have re-assumed their former role |
| industry to resist change and concentrate on | | | | of global leadership in the industry. As evidence, HP's |
| maintaining the status quo. But with cost pressure | | | | inventory turns improved at an average rate of 6.9% |
| increasing (especially with respect to regulatory | | | | from 2000 to 2009. |
| compliance), product pipelines dwindling, and | | | | Obviously, a lean manufacturing system does work. |
| competition from generics growing, the picture is | | | | And it can work in the pharmaceutical industry with |
| changing. | | | | the right implementation. |
| Even with a focus on quality, the pharmaceutical | | | | The task for the pharmaceutical industry, then, is to |
| industry has failed to keep up with other sectors in | | | | effect an industry-wide adoption of lean |
| improving manufacturing efficiency and productivity. | | | | manufacturing coupled with consistent application of |
| So the time for an ardent, unreserved commitment | | | | lean manufacturing techniques. Up to now, consistent, |
| to successfully implementing lean manufacturing | | | | committed adoption has been sporadic and isolated. |
| techniques appears to be now. | | | | Next, companies need to take a comprehensive view |
| A 2006 study involving more than 1,500 | | | | of lean manufacturing implementation and look at the |
| pharmaceutical manufacturers yielded some | | | | supply chain as a whole and not concentrate solely |
| eye-opening results. More than 50% of the | | | | on improved manufacturing operations. Without this |
| respondents indicated that their companies have | | | | broader focus, improvements will continue to be |
| implemented, to some degree or other, lean | | | | limited. |
| manufacturing solutions. But less than 50% of those | | | | Finally, it is critical that management call on the |
| have been satisfied with the results. The chief | | | | expertise of pharmaceutical consultants with |
| impediment to a successful and thoroughgoing | | | | experience in and knowledge of lean manufacturing. |
| adoption of lean practices was a perception that | | | | This way a host of failure factors can be avoided, |
| efficiency- and productivity-boosting techniques | | | | including lack of leadership buy-in, imprudent |
| developed in the auto industry can not really be | | | | cost-cutting, poor product selection, and |
| implemented in the pharmaceutical industry. | | | | less-than-optimal execution. |
| Now, it is true that lean manufacturing has been | | | | The fact that the pharmaceutical industry has lagged |
| more widely implemented in the industry during the | | | | behind others in a thoroughly successful |
| past few years. Evidence of this can be seen in the | | | | implementation of lean manufacturing solutions can, |
| growing number of case studies, articles, and | | | | played right, prove to be a huge plus. That's because |
| conferences focusing on it. But, overall, the | | | | the opportunity now exists for us to learn from the |
| pharmaceutical industry has shown few signs of | | | | mistakes and assimilate the successes of other |
| substantial progress. | | | | industries. |