quality as foundation for opex and the possible role of big data

QualityasFoundationforOPEXandthepossibleroleofbigdata

SanFrancisco,21.09.2015

Prof.Dr.ThomasFriedli

2 ©ITEM‐HSG

Structure

Introduction1

QualityManagement/FDAQualityMetricsInitiative2

OperationalExcellenceandQuality3

SystematizingImprovementsusingData4

SummaryandOutlook5

3 ©ITEM‐HSG

10HotTopicsinPharmafromanOPEXPerspective

OM:OperationsManagement;CI:ContinuousImprovement

ShiftfromTooltoCulture

CICulture

KnowledgeManagement

ManagingComplexity

OPEXLeadership

QualityMetrics

OrganizingOPEX

OPEXMaturity

OPEXinNetwork

BenchmarkingtheQuality.Org.

4 ©ITEM‐HSG

ADefinitionofOperationalExcellence

TheITEM‐HSGdefinesOperationalExcellenceasaphilosophydirectinganorganizationtowardscontinuousimprovement!

Itisthebalancedmanagementofcost,qualityandtimefocusingontheneedsofthecustomer

Itcomprisesstructural&behaviouralchangestosupporttheneededactivitiesthebestwaypossible

TobesustainableithastobepushedbyTopManagementandtobedesignedtoengageeverysingleemployee

OperationalExcellenceisnotonlyaboutperformance,itisalsoaboutthewayanorganizationachievessuperiorperformanceandabouthowit

continuouslyimprovesitself!

TheSt.Gallen understanding

Source:Friedli et.al.(2013),LeadingPharmaceuticalOperationalExcellence

5 ©ITEM‐HSG

TheSt.Gallen OPEXandthe“SandConeModel”

Source:Friedli et.al.(2013),LeadingPharmaceuticalOperationalExcellence

Source:Ferdows/DeMeyer (1990),JournalofOperationsManagement

6 ©ITEM‐HSG

TheSt.Gallen PharmaOPEXDatabase

Industry PharmaceuticalNumber of Production Sites

299 (Total) 217 (Formulation & Packaging) 58 (API) 24 (Biotech)

Number of Companies

124 (Total)including eleven companies of the Top 20*

Content – Scope Enabler Implementation andPerformance Metrics (KPIs)

Content – Modules Total Productive Maintenance (TPM)Total Quality Management (TQM)Just-In-Time (JIT)Effective Management System (EMS)

7 ©ITEM‐HSG

TotalProductiveMaintenance(TPM)TPM enabler TPM performance

36%

55%

2003

Today

Overall Equipment Effectiveness (OEE)

25%

18%

2003

Today

Unplanned Maintenance

We emphasize good maintenance as a strategy for increasing quality & planning

We continuously optimize our maintenance program based on a dedicated failure analysis

We rely on vendors for all of our equipment

We have a housekeeping checklist to constantly monitor the condition and cleanness of our machines and equipment

+25%

-33%

Conclusion The implementation of the TPM enabler category has only slightly increased over the last decade

However, key components like Preventive Maintenance and Housekeeping did have a significant positive impact onthe overall TPM performance

-30%

+53%

Source:InstituteofTechnologyManagement(ITEM‐HSG),UniversityofSt.Gallen

+17%

+13%

8 ©ITEM‐HSG

TotalQualityManagement(TQM)TQM enabler TQM performance

1%

2%

2003

Today

Complaint Rate Supplier

1%

0.57%

2003

Today

Complaint Rate Customer

A large percentage of equipment on the shop floor is currently under Statistical Process Control (SPC)

We regularly survey our customer’s requirements

Quality is our number one criterion in selecting suppliers

We use mostly suppliers that we have validated

Conclusion Over the last decade pharmaceutical companies have made significant efforts to intensify business practices impacting the quality of

output

This explains the performance improvements pharmaceutical companies have achieved in the field of TQM

+100%

-43%

+50%

+33%

+25%


+13%

9 ©ITEM‐HSG

Just‐In‐Time(JIT)JIT enabler JIT performance

4

5

2003

Today

Raw Material TurnsWe are continuously working to lower set-up and cleaning times in our plant

We have managed to schedule a big portion of our set-ups so that the regular up-time of ourmachines is not effected

We use a pull system (Kanban squares, containers or signals) for production control

We deliver to our customers in a demand-oriented JIT way instead of a stock-orientedapproach

+33%

Conclusion

The OPEX benchmarking database exhibits an increasing emphasis on JIT activities as a result from companies’ higher JIT awareness

Looking at the performance of the overall sample, a significant improvement with regard to the continuous reductionof overproduction, unnecessary inventory and inconsistencies by creating a pull production can be measured

+34%

95%

97%

2003

Today

Service Level - Delivery

+3%

+200%

+50%


+17%

10 ©ITEM‐HSG

EffectiveManagementSystem(EMS)EMS enabler EMS performance

3.0 days

7.7 days

2003

Today

Training Days

10%

4%

2003

Today

Unskilled Employees

Our production site has an exposed vision and strategy that is closely related to our corporate mission statement

Our manufacturing managers know exactly what the most important criteria formanufacturing jobs are

Our employees continuously strive to reduce any kind of waste in every process

We have implemented tools and methods to deploy a continuous improvement process

+25%

Conclusion A deeper look at the EMS enabler category reveals that only little efforts have been made to improve EMS

The St.Gallen Operational Excellence Model also uses KPIs to operationalize the EMS performance. Although several improvements have already been achieved, there is still big room for improvement

+157%

-60%

+25%


-13%

-13%

11 ©ITEM‐HSG

Structure

Introduction1




SummaryandOutlook5

12 ©ITEM‐HSG

TheHistoryofQualityManagement

Ancienttime

Medievaltime

Beginning of20th century World War II 1960s 1970s 1980s 1990s until 2000

Antiquity "Guilds" Taylorism, management Shewhart et al. Quality

assurance

• Integrated quality assurance,

• company‐wide quality control, quality circles

System norms (ISO), TQM (awards)

Awards, IQMIntegrated, sustainablemanagement

Egypt, pyramids, measurement

Norms, masters, companions

Work sharing, quality control

Random testplans

Precaution, defect avoidance in production

Other areas (R&D, Sales) improvements

Quality management,

generalmanagement

Top managementintegration, integration in management

Global reach, integration in society and environment

Short form:

Quality are the properties as measured against needs and expectations.

Quality of a unit is the „degree to which a set of inherent characteristics fulfils requirements“.

ISO 9000 (2008):

Source:Seghezzi (2003)

Technically oriented perspective Customer- & Stakeholder oriented perspective

13 ©ITEM‐HSG

“The independence of quality control from production is considered fundamental.” – WHO GMP for Pharmaceutical Preparations*

**Situation in Pharma Plant: both department rather work against each other than cooperating in order to attain their individual targets and KPIs

“On-time-delivery and other manufacturing KPIs are not my business” statement of a quality representative

“Without manufacturing there is no quality to control or assure” statement of a manufacturing department representative

Manufacturing Department Quality Department

*Source:“WHOExpertCommitteeonSpecificationsforPharmaceuticalPreparations”Section17.2.WHOtechnicalreportseries;908,2001:Geneva,Switzerland

**Source:ProjectExamplefrom2015

QualityandManufacturingtoday

14 ©ITEM‐HSG

Dowemeasuretherightthings?

Airline Operations Room Cleaning Operations Production

TypicalMetrics

Minutes/m2On-Time departure

OEE


15 ©ITEM‐HSG

Questionstoask! Do you measure and manage the system including

business or single dimensions?

Has your metrics been designed as sum of all KPI’s used somewhere anyway or was there a guiding logic?

Do you take into account both main dimensions:

«doing the right things» = efficacy / added value «doing the things right» = efficiency


16 ©ITEM‐HSG

FDADraft Guideline– Suggested Metrics

Lot Acceptance Rate

Product Quality Complaint Rate

Invalidated OOS Rate

APR or PQR on Time Rate

Source:DraftGudiance “RequestforQualityMetrics”fromJuly2015

17 ©ITEM‐HSG

Structure

Introduction1




SummaryandOutlook5

18 ©ITEM‐HSG

QualityasfoundationforOperationalExcellence

Quality Management System is based on OPEX and structured along different levers


19 ©ITEM‐HSG

OPEXandQuality

A high OPEX performance indicates a high overall Quality system performance

20 ©ITEM‐HSG

OPEXandQuality

OPEX high performers have a high Quality Effectiveness, Efficiency and a very good Quality Culture


22 ©ITEM‐HSG

ProjectExample I/III‐ Objectives

Semi automated benchmarking procedure for site priority setting

Operationalisation of Production System and St.Gallen OPEX DB fields

Identification of required site priorities based on data analysis

…

24 ©ITEM‐HSG

ProjectExample IIII/III– ImpactAnalysis

Pr 1 Pr 2 Pr 3 Pr 4 Pr 5

Pr 6 Pr 7 Pr 8 Pr 9 Pr 10

Pr 11 Pr 12 Pr 13 Pr 14 Pr 15

Pr 16 Pr 17 Pr 18 Pr 19 Pr 20

25 ©ITEM‐HSG

Example“SmartServices”Definition

SmartServices... ...areofferedasacombinationofphysicalanddigitalservicesonthebasisof connectedproducts

...are data‐based,i.e.theremustbeacomponentofdatauseinthedeliveryoftheservice

...are alsoknownasandinclude remoteservices,remotesupport,teleservices,e‐services,conditionmonitoringetc.

Definition

26 ©ITEM‐HSG

Example“SmartService”‐ ImpactValue

Proposition

Service provider CustomerValue Creation

Value Capture

Results:Performance

0%

25%

50%

75%

100%

01020304050

Percentileofcom

panies

Reactiontime[h]

Reactiontime Thankstosmartservices,thereactiontimehasbeendecreasedsignificantly.Thisisespeciallytrueforpreviouslylongreactiontimes.

Inthe25th percentile,reactiontimehasbeenreducedfrom24hto3h.

Solutiontime Theaveragesolutiontimetoproblemshasbeenevenmoredrasticallyreduced

Inthe25th percentile,solutiontimehasbeenreducedfrom48hto8h

Insights

0%

25%

50%

75%

100%

020406080100120

Percentileofcom

panies

Solutiontime[h]

WithoutsmartservicesWithsmartservices

WithoutsmartservicesWithsmartservices

24h 3h

48h 8h

28 ©ITEM‐HSG

Summary&Outlook

Quality Organizations have to be analysed using a systemic approach.

The evaluation on individual KPI level has to be avoided

Current initiatives like FDA Quality Metrics brings Quality and OPEX closer together

The research of the University is showing the positive impact of Quality on overall OPEX performance

Data becomes more and more mandatory for informed decisions about improvements on all levels of the organization

Quality is the foundation for superior OPEX performance!

Data can drive the next generation of systematized improvements!

quality as foundation for opex and the possible role of big data

Documents