There is no doubt that lean manufacturing solutions do work, however, implementation is not a one shot deal – rather it is an ongoing process of continually striving for improvement. While there obviously has to be an emphasis placed on quality, once it is attained the focus must shift to sustaining quality through fostering a culture of continuous improvement. Toyota recently learned this lesson the hard way.
The Toyota production system has been the touchstone for almost every lean manufacturing system attempted over the last few decades. But in late 2009 and early 2010, Toyota found themselves recalling almost 9 million cars due to quality issues. The final cost to the company is projected to be in the neighborhood of $5 billion. As a result, customer loyalty slid, and people began questioning lean manufacturing itself – wondering whether the inevitable result of all that waste reduction and emphasis on flow is compromised quality.
The consensus among analysts is that Toyota’s production, in fact, became less lean. Toyota, whose inventory turns fell dramatically from the 1990s to 2008, became too focused on growth, and lost sight of their goals of quality and continuous improvement. Management, it seems, forgot that lean manufacturing implementation is a continuing journey and that culture is key. There is a lesson for the pharmaceutical industry here as well.
The pharmaceutical industry – as well as its pursuit and implementation of lean manufacturing solutions – is currently in flux. The industry has been attempting to embrace lean manufacturing since about the 1990s, often with less than glowing success. Today the industry is faced with the ongoing dilema of how to sustain quality while simultaneously dealing with increasing complexity on several fronts. Much of this complexity stems from cost-cutting measures such as the use of contract manufacturing organizations (CMOs), a practice that requires managing multiple complex external relationships. This means that the implementation of lean manufacturing solutions must also be ongoing to match the flux in the industry—a journey, if you will.
On that journey towards a full and successful implementation of lean manufacturing solutions, here are 2 of the many obstacles pharmaceutical companies must overcome:
- Adoption of a holistic approach – Pharmaceutical companies have generally taken a cafeteria approach to lean manufacturing implementation, picking and choosing the parts that suited them. This approach has led to minimal improvement, at best. Additionally, most of the pharmaceutical industry is compartmentalized, with each segment clinging to its own range of territory and operations to the exclusion of others. A holistic approach that would meld all areas into one functioning entity, as well as encompasse the entire process and product flow is needed.
- Managing knowledge – Manufacturing must be viewed as an integral part of the entire pharmaceutical value chain, just as it is in other industries. However, the industry has historically placed an emphasis on the role of R&D and innovation, leaving manufacturing to take a back seat. Prior manufacturing knowledge must be integrated throughout the product life cycle so that manufacturing’s participation can move upstream.
Bikash Chatterjee, President of PharmaTech Associates offers this assessment: “I think we are very, very early in our journey of Lean. . . . It’s a journey. Toyota has been doing this for over 40 years, and even they stumbled”. That’s precisely why lean manufacturing consultants can play such a vital role in assisting the pharmaceutical industry to regain their edge. Just as Dante needed his Virgil to reach the top, pharmaceutical companies need their smart consultants to prosper.
To learn more about how lean manufacturing strategies can streamline your business and improve your bottom line, visit Smart Lean Manufacturing.