PBI1

Michael McNamaraMSc MRACI C ChemPBI Consultancy Servicesph 03 94997193 mobile 0407713768michael.mcnamara@live.com.au

Reengineering Laboratory ProcessesTo Accelerate Business Output

Mini Workshop

Marcus Evans Conference: Advanced Laboratories, Melbourne September 2011

Reengineering Laboratory ProcessesMini Workshop - Learning Objectives

Review approaches to efficiency improvement Review their application to the laboratory environment Focus on 2 key tools

– scheduling in the laboratory– process mapping particularly value stream mapping

Apply these tools in a smaller group setting to a case study

Review as what has been learnt from the case study exercises as a larger group

“I hear and I forget. I see and I remember. I do and I understand.” Confucius

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Reengineering Laboratory ProcessesMini Workshop - Program

Overview of Efficiency Improvement– 3 Ps, Toolkit including lean Six Sigma and BPR

35 minutes

Case Study – Workgoup Activity– Applying the toolkit 35 minutes

Workgroup Review– What have we learnt 20 minutes

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The Laboratory EnvironmentA Quick Look Back

In 1970s in a laboratory do an assay to measure something – assay SOP and specification

An anlyst did what the supervisor told them to do In 1980s/1990s sees introduction or strengthening of

– Complex technologies and IT systems– HR Systems eg EEO, EBA, KPIs, – OHSE– Industry specific Quality Standards

eg GMP, GLP, FSANZ etc– General Industry standards ISO 9000, 9001 etc– Regulatory Standards eg ICH

Improvements in efficiency focussed on– People managment by KPI– New technology especially IT

Often these changing standards and environment left companies with complex inefficient business processes

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The Laboratory Environment The Scene Today

In 1990s/2000s focus on efficiency improvement through quality– ISO 9000/9001– TQM/JIT– Business Process Reengineering– Six Sigma– Lean Manufacturing– Lean Six Sigma/Lean Laboratory– Application of Advanced Statistical Approaches

Eg Multifactorial DOE experimentation– Industry specific approaches eg QbD in the pharma & biotech

industries5

2000

1998

1995

1994

28%23% 49%

26%28% 46%

27%40% 33%

16%31% 53%

30,000 application projects in large, medium and small U.S. companies since 1994.

Source: The Standish Group International, Extreme Chaos, The Standish Group International, Inc., 2000

SucceededChallenged Failed

Success in Introduction of New IT

Key Success Factors in Introduction of IT – Rank Order

1. Executive Support

2. User Involvement

3. Experienced Project Manager

4. Clear Business Objectives

5. Minimized Scope

6. Standard Software Infrastructure

7Source: The Standish Group International, Extreme Chaos, The Standish Group International, Inc., 2000

Introduction of New Technology& IT Systems

8 Change Management

Validation

New IT system New Business Processes

Integration

New IT system New Business ProcessesPlanning

Selecting or Customising IT System Reengineer Business Processes

Improving Laboratory Performance The 3 Keys – 3Ps

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•PEOPLE

•PROCESS

•PRODUCT

Improving Laboratory PerformanceThe First Law

Quality

CostTime

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PICK TWO !

Improving Laboratory PerformanceThe First Law – Revised

Quality

CostTime

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CHANGE THE SYSTEM TO IMPROVE ALL 3!

Improving Laboratory PerformanceChanging the System

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Outsource to lower costs

Improve efficiency of

existing workforce

Invest in New

Technology

Streamline Existing Process

New Existing

Bus

ines

sP

eopl

eE

nviro

nmen

tE

nviro

nmen

t

Improving the ProcessThe Toolkit -1

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Lean Six Sigma Lean Laboratory Business Process Reengineering

TQM

QFD

Advanced Statistics

DOE

QbD

Improving the ProcessSix Sigma – the approaches

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DMAIC DMADV (also called Design for Six Sigma

Used for improving existing processes Creating new product or process designs

•DEFINE (the problem) •DEFINE

•MEASURE (the current state) •MEASURE (CTQ Attributes)

•ANALYSE (cause and effect) •ANALYSE (DESIGN ALTERNATIVES)

•IMPROVE (or optimise process) •DESIGN DETAILS

•CONTROL (the future state) •VERIFY (BUILD PROTOTYPE)

Improving Laboratory PerformanceSix Sigma – the methods

5 Whys Accelerated life testing Axiomatic design Business Process Mapping Cause & effects diagram (also known as

fishbone or Ishikawa diagram) Check sheet Control chart Cost-benefit analysis CTQ tree FMEA Histograms Pareto analysis Pick chart Process capability Quality Function Deployment (QFD)

Quantitative marketing research through use of Enterprise Feedback Management (EFM) systems

Root cause analysis Scatter diagram SIPOC analysis (Suppliers, Inputs,

Process, Outputs, Customers) Stratification Taguchi methods TRIZ Statistical Methods (About 20 or so)

including Design of experiments

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Six Sigma – the 5 Whys (as used within Toyota for TPS)

My car will not start. (the problem)Why? - The battery is dead. (first why)

Why? - The alternator is not functioning. (second why)

Why? - The alternator belt has broken. (third why)

Why? - The alternator belt was well beyond its useful service life and has never been replaced. (fourth why)

Why? - I have not been maintaining my car according to the recommended service schedule.(5th why, a root cause)

Why? - Replacement parts are not available because of the extreme age of my vehicle. (sixth why, optional footnote)

I will start maintaining my car according to the recommended service schedule. (solution)16

Lean Laboratory(derived from Lean Manufacturing)

Lean Laboratory Principles Improve the process Identify and map the value stream, streamline the process Make value flow, create pull and eliminate non-value add

– Improve sample and test scheduling prioritise samples (customer must start dates then FIFO) smooth sample flow optimise resource use Level the load & mix (often the critical step)

– Eliminate waste – Manage performance

Two key activities in lean laboratory (80% of the cost & efficiency gains)– Process improvement – Test Scheduling

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Improve the ProcessBusiness Process Reengineering - 1

fundamental re-thinking & radical re-design of organisation or business

Redesigns the way work is done– to better support the organisation's mission, improve

quality and timeliness and reduce costs. – Focus on integration of business units eg laboratory– Develop a well-integrated business

starts with a high-level assessment of the organisation's mission, strategic goals, and customer needs.

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Business Process Reengineering -2

Basic questions are asked (Define) eg,– Does our mission need to be redefined?– Are our strategic goals aligned with our

mission? – Who are our customers?

focuses on the business processes (Measure)– how resources are used to create products

and services that meet the needs of particular customers or markets19

Business Process Reengineering -3

Re-engineering systematically identifies, analyzes, and re-designs an organization's core business processes (Analyse and Improve)

Aims to achieve dramatic improvements in cost, quality and time

Defragments and streamlines overall process Can be applied to whole of organistaion or

specific business units – in the context of a holistic view of organisation

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Business Process Reengineering – Process Maps

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Process Map Type Purpose Positives Negatives

High-Level Process Map or Flow Chart

Perspective, big-picture, Systems

Management, Quality Manual, good for adding metrics

not enough details

Low-Level Process Map or Flow Chart

Sub-processes, small-picture

Understanding flow, procedures, details

unclear responsibilities, Not SIPOC, alternative flow

Cross Functional or “Swim Lanes” Map

Responsibilities HR, job descriptions, job training, procedures

alternative flow

Document Map or SIPOC Map

Data management Document and record control

not enough activity detail

Activity Map or Value Stream Map

Process Improvement granular details good for work instructions and procedure writing

OK for training and communications

Work Flow Diagram Training, communications More realistic great for training and communications

Rendered Process Map Training, communications Most realistic great for training and communications

Originally published in 2009 by Bizmanualz, Inc. under the title Seven Types of Process Maps – Part I

Process Maps – High Level Process Map -

22Originally published in 2009 by Bizmanualz, Inc. under the title Seven Types of Process Maps – Part I

Order

Production (JIT)

Cash

Process Maps – Low Level Process Map A/R Cycle

23Originally published in 2009 by Bizmanualz, Inc. under the title Seven Types of Process Maps – Part I

Legend

Process Maps Cross Functional Map (Swim Lanes Map)

24Originally published in 2009 by Bizmanualz, Inc. under the title Seven Types of Process Maps – Part II

Value Stream Map

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Value Add step

Clearly Wasteful step

Possible Waste Step

4+1= Total Steps + Value Add Steps

Originally published in 2009 by Bizmanualz, Inc. under the title Seven Types of Process Maps – Part II

Process Maps – Low Level Process Map

26Originally published in 2009 by Bizmanualz, Inc. under the title Seven Types of Process Maps – Part I

Legend

The Toolkit Work Flow Diagram

27 Originally published in 2009 by Bizmanualz, Inc. under the title Seven Types of Process Maps – Part III

Business Process Reengineering - Process Analysis Checklist

Reduce handoffs (one person handles as many tasks as possible)

Centralize data (single point for holding data, minimise data entry)

Reduce delays /eliminate wait steps (streamline workflow)

Free resources faster Combine similar activities Use rendered maps to sell changes28

Business Process Reengineering Example

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Simplified schematic outline of using a business process approach, exemplified for pharmaceutical R&D:

1. Structural organization with functional units

2. Introduction of New Product Development as cross-functional process

3. Re-structuring and streamlining activities, removal of non-value adding tasks

Lean Laboratory Schedule Levelling – Define

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majority of the workload (85-95%) is driven by 2-3 products.

Product A and C same product family, same tests and could be tested together at the same time.

Product B accounted for 19% of the sample volume but not 19% of the labs workload only 2 very simple tests, A and C needed 9 tests.

Focus exclusively on A and C (80-90% of the labs workload) - the main priority of the site

Process Map - approval and release activities carried out after the batches were fully tested is significant part of effortRef: http://bsm.ie/blog/andrew-harte/improving-lab-performance-six-sigma

Pareto Analysis – Sample workload

Lean Laboratory Schedule Levelling – Measure

31Ref: http://bsm.ie/blog/andrew-harte/improving-lab-performance-six-sigma

Product A spread of times centred around 11-15 days

Corresponded to target cycle of 15 days. 66% of samples met the 15 day target /33% late. Vast bulk of the resources were occupied by test

x The results of test x were required by a separate

department to proceed with their process. Laboratory heavily resourced test x to test every

sample every day – inefficient variable workload Eg Day1 five analysts might test 12 samples

Day 2 test 4, (67% drop in productivity) Strategy needed to level resources without

increasing cycle times ie control the numbers tested each day.

Fig 2: Product A Cycle Times (Jan - Apr)

Lean Laboratory Schedule Levelling – Analyse

Data Analysis: Daily: 1 and 17 samples per day average of 7. Weekly: 25 to 45 samples per week average of 36. Weekly incoming workload much less volatile (coefficient of

variance 0.2 versus 0.6). Predictability per week is good ie approximately 36 samples. Weekly control is possible therefore develop a weekly testing

pattern the weekly average rate for each test was determined. The number of samples for each test would be different as

Product A received some tests that product C did not and vice versa.

32Ref: http://bsm.ie/blog/andrew-harte/improving-lab-performance-six-sigma

Lean Laboratory Schedule Levelling – Improve

Strategic Approach Adopted: A fixed, weekly repeating pattern of tests Testing at the weekly average every week

i.e. testing at the weekly rate. Every test would be run every week. Samples would be tested in FIFO (first in first

out) order

33Ref: http://bsm.ie/blog/andrew-harte/improving-lab-performance-six-sigma

Lean Laboratory Schedule Levelling – Standard Tasks

Design standard roles that make good use of resources– Define the combination and

sequencing of tasks based on people who are productive because they organize their work well, rather than because they move fast.

Do a design on paper with a team, then try, refine and deploy

-Involve analysts in an iterative process to design productive roles that meet the requirements of your train or rhythm wheel

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Lean Laboratory Schedule Levelling – Control

35Ref: http://bsm.ie/blog/andrew-harte/improving-lab-performance-six-sigma

Set Analyst Roles Standard Tasks covering:• The activities required for the test role.• The best order in which to complete them.• Clear break targets.

KPI’s (key performance indicators)• printed and posted weekly • before six sigma lean lab project 66% of samples were tested inside

the 15 day target time. • After project target was changed to 10 days, and all samples within

target • An average lead time of 8 days.• There was an annualised 3.9 fold return on investment for the project

Lean Laboratory Schedule Levelling the Outcome

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The Critical Step Change Management

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Change management

Consolidate gains

Improvement initiative

• Poor Change management is cause of > 70% failures of improvement projects

Reengineering Laboratory ProcessesTo Accelerate Business Output

Questions and Comments

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Reengineering Laboratory ProcessesTo Accelerate Business Output

Workgroup Activity

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Reengineering Laboratory ProcessesMini Workshop - Program

Overview of Efficiency Improvement– 3 Ps, Toolkit including lean Six Sigma and BPR

30 minutes

Case Study – Workgoup Activity– Applying the toolkit 40 minutes

Workgroup Review– What have we learnt 20 minutes

40

Reengineering Laboratory ProcessesTo Accelerate Business Output

Workgroup Discussion

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Workgroup Discussion – Exercise 1 Scheduling Talking Points

Testing Lab Organisation structure

Quarterly rather than monthly scheduling

Multi-skilling inappropriately applied to analysts revise approach

Priorities are first customer definition then FIFO42

Workgroup Discussion – Exercise 1 Scheduling

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Workgroup Discussion – Exercise 1 Scheduling

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Workgroup Discussion – Exercise 2 Process Map Talking Points

Overall organizational relationships and roles QA and OHSE and customer relations

simplification using multi-skilling OHSE advisor approval (currently OHSE

manager only approves – so cut him out) Direct analyst/coordinator contact with

customer for re-sampling requests Parallel reviews with Analyst OHSE and QA

to renew SOPs following revalidation etc 45

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Michael McNamara Biography

Formed PBI in 2009 as a consultancy focussed on improving management processes with a special interest in innovation

Improvements to laboratory management – increasing output by 30% – with a 10% reduction in cost

Clients include companies from start ups to large multinationals located in Australia, Europe and the US

Client Industries include biotechnology, pharmaceuticals, agriculture, consumer goods, defence and aerospace

Qualifications: BSc (Hons) Melbourne, MSc LaTrobe, Grad Dip Pharm Sci & Drug Reg Melbourne, Grad Cert Tech Mgmt APESMA LaTrobe

Over 20 years senior management experience in multinational agriculture, biotechnology and pharmaceutical companies

Specialist in management of innovation at all phases of product lifecycle– from research and product concept– through to product launch and lifecycle management

PBI47

Michael McNamaraMSc MRACI C ChemPBIph 03 94997193 mobile 0407713768michael.mcnamara@live.com.au

Reengineering Laboratory ProcessesTo Accelerate Business Output

Miniworkshop