Explore recent issues of Contract Pharma covering key industry trends.
Read the full digital version of our magazine online.
Stay informed! Subscribe to Contract Pharma for industry news and analysis.
Get the latest updates and breaking news from the pharmaceutical and biopharmaceutical industry.
Discover the newest partnerships and collaborations within the pharma sector.
Keep track of key executive moves and promotions in the pharma and biopharma industry.
Updates on the latest clinical trials and regulatory filings.
Stay informed with the latest financial reports and updates in the pharma industry.
Expert Q&A sessions addressing crucial topics in the pharmaceutical and biopharmaceutical world.
In-depth articles and features covering critical industry developments.
Access exclusive industry insights, interviews, and in-depth analysis.
Insights and analysis from industry experts on current pharma issues.
A one-on-one video interview between our editorial teams and industry leaders.
Listen to expert discussions and interviews in pharma and biopharma.
A detailed look at the leading US players in the global pharmaceutical and BioPharmaceutical industry.
Browse companies involved in pharmaceutical manufacturing and services.
Comprehensive company profiles featuring overviews, key statistics, services, and contact details.
A comprehensive glossary of terms used in the pharmaceutical and biopharmaceutical industry.
Watch in-depth videos featuring industry insights and developments.
Download in-depth eBooks covering various aspects of the pharma industry.
Access detailed whitepapers offering analysis on industry topics.
View and download brochures from companies in the pharmaceutical sector.
Explore content sponsored by industry leaders, providing valuable insights.
Stay updated with the latest press releases from pharma and biopharma companies.
Explore top companies showcasing innovative pharma solutions.
Meet the leaders driving innovation and collaboration.
Engage with sessions and panels on pharma’s key trends.
Hear from experts shaping the pharmaceutical industry.
Join online webinars discussing critical industry topics and trends.
A comprehensive calendar of key industry events around the globe.
Live coverage and updates from major pharma and biopharma shows.
Find advertising opportunities to reach your target audience with Contract Pharma.
Review the editorial standards and guidelines for content published on our site.
Understand how Contract Pharma handles your personal data.
View the terms and conditions for using the Contract Pharma website.
What are you searching for?
Lean assessment of a vaccine manufacturing facility
November 9, 2010
By: Mark Stesney
Vaccines Go Lean
By Mark Stesney
Maxiom Consulting Group
The application of Lean principles has been well documented and discussed through the years, and their use has resulted in billions of dollars in operational savings and improved corporate performance. These Lean efforts can take many forms, from individual projects focused on a single process or cell, to enterprise-wide initiatives encompassing many cross-functional processes or even products in a value stream. However, no matter what scope is appropriate, the core tenets of Lean still apply: delivery of value to the customer, elimination of waste (inventory, overproduction, extra processing, motion, transportation, waiting, and defects), and respect for people.
In applying Lean at companies within the life sciences industry, a large portion of the opportunities, and consequently the benefits, are found in the indirect activities rather than the direct areas. This can be attributed to the generally low amount of direct labor associated with the manufacturing of the products, whether biotechnology or chemistry based. Indirect areas such as quality assurance and control, IT, facilities and engineering bear a much larger portion of the overall burdened cost in these products.
To highlight this difference, the following case study is an example of an enterprise-wide Lean assessment focused on the indirect operations of a bulk vaccine manufacturing facility.
Background and Situation
A global vaccine manufacturer had recently constructed a new bulk vaccine manufacturing facility and was in the process of qualification and validation runs. The facility was designed with Lean tenets in mind to require 40% less direct manpower to operate than comparable facilities currently used for bulk manufacturing. Some of the features that were incorporated into the new design were: a single-direction material flow design, co-location of cross-functional groups, use of disposable technologies, and capacity sized to produce a single batch of output per day (i.e. the facility ‘rhythm’).
While the focus of the facility design had been to implement Lean improvements impacting direct labor and materials, very little thought had been paid to the impacts and corresponding Lean improvements in indirect areas. In preparation for commercial production, operations leadership initiated an additional analysis and improvement effort on the effectiveness and efficiency of other non-direct aspects of the new site. Specifically, the following questions were targeted for answers:
1)What will be the impact on the site’s indirect and support costs of starting up bulk production in the new “Leaner” plant?
2)What will be the impact on the site’s overall cost structure of starting up production of the new product in the new plant?
3)What other opportunities exist for Leaning out the site’s cost structure in indirect areas?
Objectives and Scope
The project was structured with clear objectives that would help answer these questions. In addition, management was considering introduction of a new product into the facility, with a different set of requirements for equipment, testing, and processing. The four guiding objectives were then agreed upon:
1)Conduct a Lean assessment of site operations in indirect and support areas, to identify cost reductions over and above what has already been recognized.
2)Develop a “bottom-up” buildup of indirect costs per batch for operations in the new plant.
3)Understand the cost impacts and efficiencies resultingfrom introducing a new product into the new plant.
4)Identify other efficiencies to be gained through theimplementation of additional Lean concepts.
The scope covered bulk manufacturing operations of the current and new facility and indirect and support resources and operations — quality, planning, materials, and IT.
Assessment Approach
A two-part plan was developed to meet the client’s schedule for decision making. During Part One the team collected relevant information, conducting structured interviews with key staff members and preparing detailed reviews of the operations across the value stream, including product movement, staffing models and cost data. With the primary focus on indirect and support operations (QC, QA, engineering, facilities manage-ment, validation), the team developed an initial set of proposed modifications along with the potential benefits. During Part Two we further developed recommendations for improvement, establishing the business rationale for each, prioritizing the list, and developing a time-phased implementation plan (roadmap).
Figure 1: Current-State High-Level Value Stream Map – Current process is managed as a “push” of production from incoming materials through finished goods, often resulting in unused finished goods.
An important component of our analysis was an examination of the costs of production for a batch of vaccine when the new facility is operational. This analysis began with the identification of the set of activities, direct and indirect, necessary to produce a batch of bulk.
Several traditional Lean and operational excellence analysis techniques were applied. SIPOC (Suppliers, Inputs, Process, Output, Customers) maps were developed to document each of the major process steps. Current-state and future-state value stream maps (see Figures 1 and 2 below) were also created to identify opportunities for improvement. The complete study included analysis of several operating scenarios:
Figure 2: New Facility Future-State High-Level Value Stream Map– The future state map highlights the ‘pull based’ planning approach built on a standard daily input and output. This operating rhythm was used to analyze staffing and resource requirements of the indirect groups that support operations.
•Base Case: Current plan for facility including the improvements in direct costs
•New Facility Case: Base Case plus impact of other improvements resulting from new facility start-up identified during Lean assessment
•New Product Case: New Facility Case modified for discontinuation of old product and initiation of new product production in new plant.
•Other Case: New Product Case including impact of additional opportunities identified during the Lean assessment. These opportunities began as hypotheses identified through the initial interviews and data gathering. These hypotheses were then narrowed down to the final list, after the benefit for each was established.
Findings
Findings were developed for the three potential scenarios, and compared to the Base Case scenario to calculate overall benefits:
1.Efficiencies to be gained in indirect and support operations resulting from the startup of the new facility, including QC, QA, engineering, facilities management, validation, etc.,
2.Efficiencies to be gained as a result of a new product being produced in the new facility, and
3.Other efficiencies to be gained through the implementation of additional Lean improvements, in pursuit of an overall 15% cost reduction target.
The team also developed a Cost per Batch model to build up the analysis from base data and derive relevant conclusions. The model was used to analyze and compare each of the scenarios. A similar model structure was developed for each scenario, and the identified improvement opportunities for each scenario were applied to result in cost reduction calculations.
Scenario 1: Incremental indirect improvements fromoperating the new facility
The new and additional opportunities in indirect areas resulting from the Lean improvements in the new facility were:
•Reductions in product and environmental testingrequirements from facility improvements drives a requirement for less QC staff,
•Improved process controls are expected to result in fewer facility, equipment, and process deviations, and require less QA effort and staff,
•Reduction in engineering effort to support ongoingoperations,
•Reduced rejects due to new facility, equipment andprocess will reduce cost of goods manufactured, and
•Improved yields will reduce campaign lengths andmaterial costs.
These opportunities resulted in a 13% estimated reduction in controllable costs per batch, when compared to the Base Case (new facility with no indirect improvements).
Scenario 2: Introduction of a new product in new facility
The new product to be manufactured in the new facility is similar to the current one but utilizes higher-yield processes and requires less overall processing time. Additional anticipated opportunities identified were:
•Reductions in product testing requirements due tofewer required product related tests per batch (versuscurrent product) will result in an incrementally less need for QC staff,
•Reductions in environmental testing requirements from less environmental and water management testing effort will result in an incrementally less need for QC staff, and
•Reduction in deviations from shorter, less complexnew product batch record will result in an incrementalQA staff reduction.
These opportunities projected a 27% per batch reduction in controllable costs when compared to the Base Case (new facility with no other indirect improvements).
Scenario 3: New product in new facility with additional Lean opportunities implemented
This scenario combined the benefits of the new facility with the introduction of the new product, and also includes the additional following opportunities for Lean improvements identified across the operations:
•Balancing warehouse resources with seasonal activity,
•Better leveraging SAP automation through consistentsystem discipline and utilization across areas,
•Reduction in excess raw materials and components by eliminating zero usage and slow moving inventory,
•Reduction of unsold finished goods through betterplanning,
•Further yield improvements, and
•Restructure the planning organization.
These benefits projected a 29% per batch reduction in controllable costs when compared to the Base Case (new facility with no indirect improvements).
If all of the opportunities are realized, a potential 49% reduction in per batch costs is achievable. (There is some overlap with the initiatives so the benefits would not be totally additive.)
Critical Success Factors
To ensure success of the project we customized our methodologies to ensure two critical elements were in place. First leadership alignment on the business objectives, recommendations and implementation plans, and a structured governance group was key in guiding and driving the project. A steering committee consisting of senior client management was established to oversee the program, assign resources, provide direction, and resolve conflicts. Second, established improvement methods and techniques and experienced life sciences coaching and support resources were also critical. In this case, experienced life sciences consultants with a combination of operational excellence and vaccines/biologics operations expertise were able to quickly understand the client situation and adapt the established improvement tools to meet their needs.
Figure 3: Improvement Opportunity Roadmap
Next Steps
Seventeen individual improvement opportunities were identified through these scenarios. While many activities could theoretically be started immediately, the organization’s capacity to address them all was not possible. As a result, a roadmap (see Figure 3) was created to guide the implementation of identified improvements in four phases.
First on the roadmap is a group of opportunities that, due to their criticality, should begin immediately. These include restructuring the Supply Chain Planning organization, modifying the annual planning process to reduce unsold finished goods, and initiating programs to better control material supply quality to improve yields.
Next are opportunities that should begin as soon as resources can be assigned or freed up from other activities, including: simplifying batch records, better leveraging SAP and system capabilities, reducing excess raw materials and components, balancing seasonal warehouse staff, and optimizing campaign structure (reducing idle time).
Next, as operations at the new facility stabilize, other initiatives can be phased in, including reducing product testing, reducing environmental and water management testing, improving process controls, improving yields, reducing rejects and reducing engineering controls.
Finally, there are opportunities that can be implemented upon new product introduction to the facility, including further reduction of product testing, reducing environment and water testing and further simplifying batch records.
The application of Lean principles and techniques to improve direct areas also has benefits for the indirect areas. For life science companies, and specifically vaccines and biotech companies, Lean improvements to indirect areas can have as significant an impact as Lean improvements to direct labor and materials.
One key is to understand the value stream and the operational rhythm — in this case ‘one batch per day’ — and then understand and balance all of the support functions to support this rhythm of output. This assessment and complementary analyses identified the potential of an additional 49% reduction in per batch costs. By developing a detailed cost model as the baseline, the team was then, through the application of Lean principles and techniques, able to develop a plan to attain these benefits. Completing this assessment before initiating commercial production allowed the client to develop plans to improve the overall cost performance (direct and indirect) and long-term competitive advantages.
Mark Stesney is a practice manager in the Operations Practice at Maxiom Consulting Group (www.maxiomgroup.com). He can be reached at mstesney@maxiomgroup.com
Enter your account email.
A verification code was sent to your email, Enter the 6-digit code sent to your mail.
Didn't get the code? Check your spam folder or resend code
Set a new password for signing in and accessing your data.
Your Password has been Updated !