One of the primary objectives of a lean manufacturing system is to identify and eliminate areas of waste. Because waste costs money, everytime a pharmaceutical manufacturer can improve production processes, thereby reducing or eliminating waste, they increase the company’s profitability. Please note that we are not referring to ‘waste’ in the usual manner’, but rather as it relates to the lean manufacturing process – that is:
- Unnecessary human motion
- Inefficient product conveyance
- Under-utilization of space
- Poor use of talent
- Unnecessary waiting
- Excess inventory
Let us examine the last three related items: over-production, unnecessary waiting, and excess inventory. All three of these forms of waste are generally products of the traditional “push” system. Since lean manufacturing utilizes a “pull” system, we will begin by contrasting the two different systems of manufacturing.
The beginning point for traditional manufacturing is the manufacturing process itself. Taking a simplistic view, companies operating in the “push” method simply keep producing, and pushing the product on down the line. They do not consider whether the demand or need for the product is in the next step of the manufacturing process, or customer demand at the end. Because of this, you have over-production, people waiting for other people to catch up, inventory piling up, and marketing expenses to create an artificial demand for the over-supply of product.
Lean manufacturing, on the other hand, operates on a pull model in which no more product is produced until the succeeding (or final) step requires it. That is, the amount of product that is produced at each stage is dependant on demand at the next stage. It’s like a vending machine filled with candy bars, potato chips, and mints. Customers buy what they want, when they want, in the amounts they want and when the serviceman comes around to refill the machine, he only replaces as much of his product as the empty slots require. In this way, consumer demand drives how much of each item is replaced, and essentially ‘pulls’ the product from the producer to the consumer.
Over-production is another common form of waste with the traditional push model. Higher production is always touted as a good thing, but higher production means nothing if there is no demand for the product. Otherwise, it simply represents the amount of money tied up in producing the product.
In order to determine whether higher production is in fact good or bad, the proper metric must be used – a schedule adherence metric. When the planned quantity, which exactly meets the demand of the next step, has been produced, then 100% schedule adherence has been achieved. The goal of lean manufacturing is to produce only as much as is needed at the exact time it is needed, thus eliminating wasteful overproduction.
Unnecessary waiting indicates an imbalance between processes, and can easily be the result of over-production within the process. Waiting often stems from batch sizes that are too large, another form of overproduction caused by neglecting pull principles. Two of the most valuable tools in identifying and eliminating waste in the form of unnecessary waiting are value stream mapping and CT/TT charts.
Excess inventory, generally a result of overproduction, is another form of waste that lean manufacturing solutions can help reduce or eliminate. Due to the fact that missing sales in the pharmaceutical industry is more detrimental than in other industries, excess inventory isn’t always as costly. Even so, the issue should be addressed because of the huge amounts of resources – both personnel and equipment – involved in converting raw materials to final products, and the fact that having too much of one drug usually has a negative inverse effect on another.
A manufacturing process from which waste has been eliminated is more efficient, as well as more profitable. Knowledgeable lean manufacturing consultants agree that one of the very first steps in lean manufacturing implementation is to identify, reduce, and then work toward eliminating waste.
To learn more about how lean manufacturing strategies can streamline your business and improve your bottom line, visit Smart Lean Manufacturing.