Jason Dunklee05.10.10
Is Operational Excellence Relevant in Pharma R&D?
What OE practitioners need to know
By Jason Dunklee
Lean, Six Sigma and other methods under the umbrella of Operational Excellence (OE) have been traditionally applied to pharmaceutical manufacturing operations. More recently, they have been applied to administrative and service functions with great success: reduced cycle times, fewer quality issues and faster flow of information, as well as cultures of continuous improvement. Why haven’t we heard much about OE in R&D? Are the benefits that OE can deliver even of interest to R&D, such as shortening time to filing, increasing project throughput with the same resources, or reducing costs of clinical trials?
R&D presents a “technical” challenge to OE practitioners and forces them to revisit the fundamental principles of OE. We shall discuss four of the greatest challenges.
Understanding Value in the Eyes of the Customer
One of the core tenets of OE is to understand the value that the activity delivers in the eyes of the customer. This requires a) knowing who your customer is, b) identifying the value delivered the customer, and c) finding some way to quantify that value. Defining value in these terms is challenging for internal R&D organizations because they are typically not considered revenue generators. By expanding our definition of customer, however, we can consider the commercial business unit, patients, shareholders or even the FDA to be the customer, because R&D is an essential step in the overall process of bringing a product to market. What do these customers want? For the purposes of OE, let’s consider value creation in R&D to be the generation and integration of knowledge that most quickly leads to a safe, efficacious and marketable product.
Maximizing Value Creation and Eliminating Waste
The goal of this OE tenet is to improve activities that create value while eliminating activities that do not create customer value. The challenge here lies in differentiating value-creation vs. wasteful activities. For example, failed experiments are often as useful as successful ones. Alternatively, some have tried to distinguish “useful” knowledge from “non-useful” knowledge, considering “useful” knowledge that which would lead to a marketed product. Since most lead candidates never make it to market and significant “indirect” learning and discovery occurs during the course of developing successful products, is most R&D waste? Definitely not. For these types of scenarios, we often introduce a third category of “business value-added,” which designates activities which are required to operate the business. As such, they cannot be completely eliminated, so the objective instead becomes to conduct them as efficiently as possible.
Making Core Processes Efficient, Controllable and Sustainable
Here the objective is to improve the core processes that generate value. The challenge in R&D is to identify the recurring processes with predictable inputs and outputs. What “flows” in R&D? Let’s start by looking at the end-to-end product development activities that create the value described above. At first glance, product development appears project-based rather than process-based, i.e. temporary in nature with a clear start and end point. However, it turns out that the entire multi-year product development process is the core value-creating process in R&D, which should be the focus of OE improvement efforts.
Building Awareness and Managing Resistance to Change
As stated above, OE has traditionally been targeted at commercial operations. Therefore, there is limited awareness within R&D of the techniques and the benefits that OE offers. Additionally, a commonly cited fear against implementing new structure, business best practices and operational improvements is that the core innovative spirit of “Research” will be constrained. These concerns are real and must be taken into account.
Where do improvement opportunities lie in R&D? At a high level, there are two types of processes occurring in R&D that we can target:
The end-to-end product development process, which generates and integrates knowledge into a safe, efficacious and marketable product
R&D programs coordinating people, knowledge, requirements, processes, decisions and learning are complex and exhibit many of the same opportunities observed in other complex, cross-functional business processes. These include improving hand-offs between functions/individuals, ensuring availability of the right information at the right time, questioning “legacy” systems, and working on the right activities at the right time. The most relevant OE tools and techniques include value stream mapping, cycle time reduction, streamlining handoffs and risk-based decision-making.
The operational activities and processes that support core product development process
There are many supporting operational activities occurring within R&D functions that are ideal candidates for improvement. Some of these include clinical trial management, lab activities and documentation. The most relevant OE tools and techniques include eliminating waste, one-piece flow, visual management and standardization.
Where should we start? Some argue the real opportunity lies not in making tactical improvements to supporting activities, but rather in improving the creation of value at the program level. Others contend that is too “big” and risky for the first OE effort — you’re better off starting small and building momentum through early, visible successes. Neither is right or wrong, but the approach should be carefully thought out.
Given the challenges discussed above, it is clear that bringing the fruits of OE to bear in R&D is not an easy task. Before embarking here are some tips from the field.
- Minimize “jargon”: Adapt the language and approach to that of the scientists or simply use “common-language” descriptors (e.g. “innovation workshop” instead of “kaizen event”).
- Engage and empower the people closest to the activities: Worker buy-in is essential for all successful Lean efforts.
- Fast innovation cycles: 60-90 day “sprints” are most effective in driving OE improvements. “Sprints” encourage intensive effort, speed to results, iterative learning and frequent improvement cycles.
- Ensure and communicate that innovation will not be compromised: Focus on how OE can remove administrative rework, handoff inefficiencies, and other time-wasters to enable creative minds to focus on the research and discovery activities they like to do.
By improving the core processes that deliver value, OE can help R&D organizations reduce time to major milestones, increase project throughput and reduce operational costs to ultimately become more viable and competitive. In short, the answer to the question is a resounding “Yes!” OE is relevant in R&D: the challenge lies in the execution!