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LIFESCIENCELEADER.COM 39 JULY 2014 record the learning and coaching ses- sions and measure subsequent activities." For example, rather than merely record- ing that a manager and employee met for a coaching session, Merck measures whether their learning is progressing, using a skills matrix divided into novice, intermediate, and expert categories. The goal is for employees to progress to the point they can teach each skill within their matrix. Plateaus in progress are normal, Kennedy points out. "Managers need to recognize when learning has stopped and set a differ- ent challenge to help employees learn in a different direction. The manager's job is to send them back when necessary to relearn elements. Learning occurs by doing. "People, in general, like to learn and to solve problems. Continuous improvement really means investing in people." By directing the energy of people in ways that make continual, incremental improve- ments, companies can increase productiv- ity and build more engaging environments. "I've never seen a piece of equipment improve itself," he points out. Since Merck's commitment to continu- ous improvement some four years ago, the benefits have rippled throughout the com- pany. The line-item fill rate has increased from 82 to 97.5 percent. Inventory has been reduced 10 percent by shortening lead times for business, financial, and physi- cal processes. Merck's product flow and velocity have increased in four key supply chains, which led to double-digit growth in emerging markets each year. Even employ- ee engagement has improved 15 percent. "Most importantly," Kennedy says, "we've built a measurable skills base in scientific problem solving that is being deployed and improved daily." Achieving continuous improvement doesn't happen overnight, Kennedy stress- es. Committing to a process of continuous improvement requires a mindset that is focused on excellence and efficiency and that refuses to accept the status quo. To gain the benefits, organizations and indi- viduals must actively try to improve. As Kennedy says, "Companies build cultures over a long time, formed by rigorous adher- ence to the same thing, again and again." L doses at once, excluding them from pur- chasing the larger quantities the industry more often provides. In addition to better serving small mar- kets, enabling single-piece flow helps expose problems in the process flow. Supply chains that are capable of providing single units tend to be more efficient than those that can only supply larger quanti- ties, he says. The benefits, which include limited inventory, fresher ingredients, and longer effective shelf life at the end-user level, are comparable to those of just-in- time delivery. The connecting challenge in this scenario is to scale down batch size to a one-month supply, and then a one-week supply, and eventually a single dose. SCIENTIFIC PROBLEM-SOLVING SKILLS To achieve continuous improvement, lead- ers must do more than provide a vision and issue a connecting challenge. They also must actively implement the needed changes and ensure those changes actually are made. "They can't merely announce a change, confirm that their people are trained, and assume the change will hap- pen," Kennedy says. "They must not del- egate their authority." Ideally, "leaders will set challenges so peo- ple stretch, learn, and improve. A challenge too far above current capabilities may be demotivating, but I have found that people are extremely motivated when they have a good purpose and a definite challenge." THE LEARNING IS AS IMPORTANT AS THE OUTCOME Developing problem-solving skills and a continuous improvement mindset requires coaching. Management throughout the organization is responsible for coaching. "Skills are different from knowledge," Kennedy points out. Training can provide skills, but it needs to be augmented by practice for it to become most valuable. Training also must be directed toward the company's goals. Aligning learning with organizational goals is key, because improvements don't arise from learning for learning's sake. To help ensure alignment between train- ing and organization objectives, "We targeted for improvement, the basic ques- tions are the same: "What are you trying to achieve? Where are you now? What's preventing you from getting the results you want? What did you try last, and what did you learn? What are you trying next, and what do you expect to happen? When can we see results?" Importantly, Kennedy cautions that not every experiment will work. "Success requires a strong focus on scientific meth- ods. People are expected to hypothesize, design a test, and run the experiment. Continuous improvement occurs in an environment in which people practice, fail, learn from their mistakes, and try again. It occurs by making incremental, small steps in a routine, regular fashion." LEADER-DRIVEN Lasting improvements must be driven by leaders. At Merck, senior leadership sets a challenging, but ultimately reachable, long-term vision. To achieve it, the com- pany develops smaller goals with clearly identified steps that connect to that vision. Because these goals are smaller and near- er-term, the vision becomes achievable. The primary goals are not only to make an improvement but also to obtain the learn- ing that accompanies the efforts, thereby building from previous attempts. The situation can be compared to the space program in the 1960s. The program that began with the launch of a small satel- lite spurred the nation's leaders to envision the landing of a man on the moon by the end of the decade. NASA approached the challenge scientifically, one step at a time. First, launching a man into space, extend- ing human time spent in space, and learn- ing to maneuver the space capsule, before leaving Earth's orbit and, in 1969, landing men on the moon. In the pharmaceutical industry, the vision may be a bit more earth-bound but none- theless challenging. One goal, for example, may be to achieve single-piece flow on customer demand. As Kennedy explains it, "Patients and customers don't buy batches at one time; they buy doses or courses of treatment." Sometimes their personal situ- ations or economics require that they buy single courses of treatment or even a few 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 2 0714_Pharma_Manufacturing_Merck.indd 2 6 / 2 3 / 2 0 1 4 2 : 5 6 : 3 0 P M 6/23/2014 2:56:30 PM