The vision of Life Science Leader is to help facilitate connections and foster collaborations in pharma and med device development to get more life-saving and life-improving therapies to market in an efficient manner. Connect, Collaborate, Contribute
Issue link: https://lifescienceleadermag.epubxp.com/i/338402
INSIGHTS LIFESCIENCELEADER.COM JULY 2014 38 PHARMA MANUFACTURING MERCK'S CONTINUOUS PROCESS IMPROVEMENT By G. Dutton Continuous improvement doesn't just depend upon Lean principles and/or zero-based budgeting. It depends upon people inspired by a culture that values learning, promotes problem-solving skills, and strives toward big goals by making small improvements every day. G A I L D U T T O N Contributing Editor Merck's Continuous Process Improvement E very outcome can be obtained through a process and, hence, improved," says Craig Kennedy, senior VP of supply chain management at Merck. "And once it starts, it never stops." Unlike episodic initiatives, continu- ous improvement is grounded in a broad vision guided by concrete goals through a series of incremental steps. Consequently, these small, sequential challenges lead to long-term improvement. Merck embraced a process of continuous improvement after years of implementing Lean initiatives that yielded periodic improvements. With Lean, Six Sigma, Kaizen, Agile, total quality management, and other process improvement approaches, after an initial surge, results sometimes slipped back- wards to baseline levels. That's because, like most companies, Merck focused on costs, outcomes, and big goals. Once the desired results were achieved, the compa- ny turned to other projects. "That approach was not focused on the human capability to make continuous improvement part of the culture," Kennedy says. "Unless you do this, methods ultimately will fail and even slip backwards." One part of the problem, Kennedy elab- orates, was that "we tried to improve unstable processes. We focused on Lean as a promise to gain efficiency and achieve results significantly different than we had at the time." The steps to ensure continu- ous improvement — scientific problem solving, coaching, leader involvement, and daily application — weren't fully addressed. START WITH A CHALLENGE One of Merck's continuous improvement challenges was to improve its line-item fill rate for its top products. As Kennedy says, "We set a very high standard for line-item fill rate. To be considered a suc- cess, each line item must be filled exactly with the quantity the customer requested and be delivered exactly when the cus- tomer requested, and this must be verified by the customer. We were filling tens of thousands of items that were shipped to 200 markets each month with high sched- ule adherence, but it wasn't translating to high service in the eyes of the customer. Therefore, with stability as a first goal, we focused on deliberate improvements. We worked through one variable at a time, adjusting through experiments and learn- ing along the way. Each effort was guided by a clear sense of purpose and challenge," Kennedy says. For example, in his previous role as a plant manager, "Our overall goal, which we achieved, was to produce 1.4 million vials per week, 95 percent of the time." Initially, Kennedy recalls, fill rates fluctuated from about 700 vials to 1.2 million vials per week on any given line. He slowed the lines until each produced a consistent number of vials each week and could maintain that con- sistency for about a month. Once the first goal was achieved and maintained, the goal increased, and any issues that could prevent reaching that goal were addressed. By the end of the year, each line had met the goal of filling 1.4 million vials per week, and the issues that had prevented filling so many vials consistently in the past had been resolved. Continuous improvements can be made in other areas, too. For example, Merck has a high level of customer service because it addressed its ability to fill orders on time and in full. "A systematic program of continuous improvement addressed issues and improved our customer service scores by more than 10 percent in one year. For the past nine months, 95 percent of orders, globally, are filled on time and in full, as verified by the customer," Kennedy says. At the same time, costs were reduced. This approach works throughout orga- nizations because, regardless of the area @GailLdutton 0 7 1 4 _ P h a r m a _ M a n u f a c t u r i n g _ M e r c k . i n d d 1 0714_Pharma_Manufacturing_Merck.indd 1 6 / 2 0 / 2 0 1 4 1 2 : 5 9 : 3 9 P M 6/20/2014 12:59:39 PM