sku optimization

7/29/2019 SKU Optimization

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OptimizationofSKUCreationProcessandAdherenceImprovementthroughuseofWorkflow

Management

by

RichardJ.Gimlin

B.S.AeronauticalandAstronauticalEngineering,

UniversityofIllinois,2003

M.S.AeronauticalandAstronauticalEngineering,

UniversityofIllinois,2005

SubmittedtotheMITSloanSchoolofManagementandtheEngineeringSystemsDivisioninPartial

FulfillmentoftheRequirementsfortheDegreesof

MasterofBusinessAdministration

And

MasterofScienceinEngineeringSystems

InconjunctionwiththeLeadersforGlobalOperationsProgramattheMassachusettsInstituteofTechnology

June2012

2012RichardGimlin.Allrightsreserved.

TheauthorherebygrantstoMITpermissiontoreproduceandtodistributepubliclypaperand

electroniccopiesofthisthesisdocumentinwholeorinpartinanymediumnowknownorhereafter

created.

SignatureofAuthor__________________________________________________________________

EngineeringSystemsDivision,MITSloanSchoolofManagement

May11,2012

Certifiedby________________________________________________________________________

DeborahNightingale,ThesisSupervisor

ProfessorofthePractice,AeronauticsandAstronauticsandEngineeringSystemsDivision

Certifiedby________________________________________________________________________

BradleyMorrison,ThesisSupervisor

SeniorLecturer,LeadersforGlobalOperationsProgram

Certifiedby________________________________________________________________________

DonRosenfield,ThesisReader

SeniorLecturer,MITSloanSchoolofManagement

Acceptedby________________________________________________________________________

OlideWeck,Chair,EngineeringSystemsEducationCommittee

AssociateProfessorofAeronauticsandAstronauticsandEngineeringSystems

Acceptedby________________________________________________________________________

MauraM.Herson,Director,MBAProgram

MITSloanSchoolofManagement


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OptimizationofSKUCreationProcessandAdherenceImprovementthrough

useofWorkflowManagement

by

RichardGimlin

SubmittedtotheMITSloanSchoolofManagementandtheEngineeringSystemsDivisiononMay11,

2012inPartialFulfillmentoftheRequirementsfortheDegreesofMasterofBusinessAdministration

andMasterofScienceinEngineeringSystems

AbstractOverthepastseveralyearsandintotheforeseeablefuture,Amgenhasbeenexperiencing

substantialSKU/DFUproliferation.Formerly,AmgenfocusedprimarilyontheNorthAmericanand

otherdevelopedmarkets(lowtomediummix,hightomediumvolumes).Howevermorerecently,

expansionintoemergingmarketshasbeenafocus(highmix,lowvolumes).Consequently,thecomplexityofAmgensproductportfoliohassubstantiallyincreased.

MostoftheinternationalexpansioneffortstakeplaceattheBredapackagingfacilityinthe

Netherlands(ABR).HeretheInternationalOperationsteammanagesSKUlaunches,SKUrefreshes

(lifecyclemanagement)andSKUrationalizationforEuropean,AustralianandEmergingMarkets.

CurrentlytheInternationalOperationsLeadsmanuallymanageproductlaunchesusinga

combinationofMicrosoftExcel,andMicrosoftProject,alongwithvariousothertoolsanddatabases.

Alltoolsandprocessesusedaremanualorsemi-manual,laborintensiveandpronetoerror.

Thegoalofthisprojectwastobeginstreamliningtheseprocessesthroughtheimplementationofa

WorkflowManagementTool.Specifically,aproofofconceptfortheplanningportionoftheSKU

creationprocesswasthefocus.

Theworkstudiedhereresultedinfouroutputs:

1. DetailedprocessmapfortheplanningphaseoftheSKUcreationprocess2. URSdocumentforBlock1ofworkflowtoolanddraftdocumentsforBlock2andBlock33. DraftCommit-to-Launchprocessandassociatedchecklist4. Nearandlongertermplanforworkflowtoolimplementation

ThesisSupervisor:DeborahNightingale

Title:ProfessorofthePractice,AeronauticsandAstronauticsandEngineeringSystemsDivision

ThesisSupervisor:BradleyMorrison

Title:SeniorLecturer,LeadersforGlobalOperationsProgram

ThesisReader:DonRosenfield

Title:SeniorLecturer,MITSloanSchoolofManagement


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Thispageintentionallyleftblank.


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Acknowledgments

TheauthorwishestoacknowledgeDonRosenfieldandtheLeadersforGlobalOperationsProgram

foritssupportofthiswork.Furthermore,theauthorwouldliketothankhisthesisadvisers

DeborahNightingaleandBradleyMorrison,companysupervisorElsPasmooij,projectchampion

OlivierBocquet,andAmgenforsupportingthisresearch.

Finally,theauthorwouldliketothankhisfriendsandfamilyfortheircontinuedsupport.Iwould

neverhavemadeitthisfarinlifewithoutyou;muchofmysuccessIowetoallofyou.

.


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TableofContentsAbstract ..................................................................................................................................................... 3

Acknowledgments .................................................................................................................................... 5

Table of Contents ..................................................................................................................................... 6

List of Figures ........................................................................................................................................... 8

Chapter 1: Introduction ............................................................................................................................. 9

1.1. Amgen Background .................................................................................................................. 9

1.2. Motivation ................................................................................................................................ 9

1.3. Problem Statement .................................................................................................................. 12

1.4. Hypothesis .............................................................................................................................. 13

1.5. Scope Adjustment ................................................................................................................... 13

1.6. Actions Taken Overview ........................................................................................................ 14

Chapter 2: Project Rationalization .......................................................................................................... 15

2.1. A Dollar today equals a lot of dollars tomorrow .................................................................... 15

2.2. Failed Attempt to use Product Launch Delays as Rationalization ......................................... 17

2.3. Use of the Current Product Portfolio as an Example of financial benefit .............................. 18

2.4. Risk Reduction and Process Adherence ................................................................................. 20

Chapter 3: Methodology ......................................................................................................................... 23

3.1. Familiarization ........................................................................................................................ 23

3.2. Study Design .......................................................................................................................... 23


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3.3. Supplier Meeting .................................................................................................................... 24

3.4. Quantitative and Qualitative Process Review ........................................................................ 25

3.5. VSM Planning ........................................................................................................................ 26

3.6. Business Unit Reorganization ................................................................................................ 27

3.7. VSM Execution ...................................................................................................................... 29

Chapter 4: Output ................................................................................................................................... 33

4.1. Overview ................................................................................................................................ 33

4.2. Commit-to-Launch ................................................................................................................. 33

4.3. User Requirements Specification ........................................................................................... 35

4.4. Implementation Plan ............................................................................................................... 36

Chapter 5: Repeatable Process for Workflow Tool Implementation ..................................................... 38

5.1. Indirect Project Deliverables .................................................................................................. 38

5.2. Workflow Tool Implementation Process ................................................................................ 38

5.3. Continuous Improvement Cycle ............................................................................................. 41

Chapter 6: Conclusion ............................................................................................................................ 43

6.1. Summary ................................................................................................................................. 43

6.2. Next Steps ............................................................................................................................... 43

6.3. Future Work/Internship Ideas ................................................................................................. 45

References .............................................................................................................................................. 46


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ListofFiguresFigure 1. 1: Amgen's Market Mix .......................................................................................................... 10

Figure 1. 2: Forecasted SKU Growth ..................................................................................................... 11

Figure 2. 1: Demand Forecast Unit Product Lifecycle ........................................................................... 15

Figure 2. 2: Shifted DFU Product Lifecycle .......................................................................................... 16

Figure 2. 3: Revenue Increase due to Product Lifecycle Shift ............................................................... 16

Table 2. 1: Revenue Increase Example .................................................................................................. 19

Figure 3. 1: Study Design ....................................................................................................................... 24

Figure 3. 2: Business Reorganization ..................................................................................................... 28

Figure 3. 3: Stock Keeping Unit Lifecycle ............................................................................................. 28

Figure 3.4: Original Process Mapping .................................................................................................... 29

Figure 3. 5: Modified Process Map ........................................................................................................ 30

Figure 3.6: High Level Current State Mapping ...................................................................................... 30

Figure 3.7: Final High Level Process Mapping ...................................................................................... 31

Figure 3.8: Detailed Process Map .......................................................................................................... 32

Figure 4.1: Commit-to-Launch Checklist Part A ................................................................................... 34

Figure 4.2: Commit-to-Launch Checklist Part B ................................................................................... 34

Figure 4.3: Workflow Tool Interface Example 1 ................................................................................... 35

Figure 4.4: Workflow Tool Interface Example 2 ................................................................................... 36

Figure 4.5: Block 1 Implementation Plan ............................................................................................... 37

Figure 4.6: High Level Implementation Plan ......................................................................................... 37

Figure 5.1: The Continuous Improvement Cycle ................................................................................... 42

Figure 6. 1: Block II and Block III ......................................................................................................... 44


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Chapter1:Introduction

1.1. AmgenbackgroundAmgendiscovers,develops,anddeliversinnovativehumantherapeutics.Itistheworldslargest

biopharmaceuticalcompany,employeesapproximately17,000peopleworldwideandis

headquarteredinThousandOaks,California.Abiotechnologypioneersince1980,Amgenwas

oneofthefirstcompaniestorealizethenewsciencespromisebybringingnovelmedicinesfrom

labtomanufacturingplanttopatient.Amgentherapeuticshavechangedthepracticeof

medicine,helpingmillionsofpeopleinthefightagainstcancer,kidneydisease,rheumatoid

arthritis,bonedisease,andotherseriousillnesses i.Amgenpioneeredthedevelopmentofnovel

productsbasedonadvancesinrecombinantDNAandmolecularbiology,andlaunchedthe

biotechnologyindustrysfirstblockbustermedicines ii.Amgenhas10principalproducts;

Aranesp,Enbrel,EPOGEN,Neulasta,NUEPOGEN,Nplate,Prolia,Sensipar,Vectibix,

andXGEVA.Keyfinancialhighlightsfrom2011includetotalrevenueof$15.6billion,product

salesof$15.3billionwithanR&Dexpenseof$3.2billion iii.

AmgenBreda,thecompanysEuropeandistributioncenter,islocatedinTheNetherlands

betweentheportsofRotterdamandAntwerpandclosetoairportsinTheNetherlands,Belgium,

andGermany.Thesitehousescommercialoperationsthatassembledevicesandlabel,package,

anddistributeproducttoEurope,NorthAfrica,andtheMiddleEastiv.

1.2. MotivationOverthepastseveralyearsandintotheforeseeablefuture,Amgenhasbeenexperiencing

substantialStockKeepingUnit(SKU)/DemandForecastingUnit(DFU)proliferation.Formerly,

AmgenfocusedprimarilyontheNorthAmericanandotherdevelopedmarkets(lowmix,high

volumes).Howevermorerecently,expansionintoemergingmarketshasbeenafocus(high

mix,lowvolumes).Thismarketsegmentationismostnotablewhenlookingatrevenueversus


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productmix.TheNorthAmericanmarketisresponsibleforapproximately80%ofcompanytotal

salesrevenueand75%oftotalpacksales.HowevertheNorthAmericanmarketisonly

responsiblefor10%ofAmgenstotalSKUs.Contrastingthis,theinternationalmarketis

responsiblefor20%ofcompanyrevenueand25%oftotalpacksales,butcontributes90%ofthe

companystotalSKUcount.Torres,KhanderiaandSmithexplainindetailtheimpactofthisSKU

proliferationandsuggestpotentialwaysofhandlingthesedifferentmarketsthroughSupply

ChainSegmentation v

ThisincreaseinSKUshasbeeninresponsetocompanyinitiativestogrowinternationally.Asthe

NorthAmericanmarkethasmatured,thecompanyhasbeenforcedtorelyoninternational

marketstoincreasecompanyrevenues.Consequently,thecomplexityofAmgensproduct

portfoliohassubstantiallyincreasedasAmgenhasexpandedabroad.Overaperiodofeighteen

months,Amgenwilllaunch128newproduct/countrycombinations.Figure1.1 Error!

Reference source not found.belowisasnapshotofAmgensNorthAmericanandInternational

Markets.

Figure1.1:Amgen'sMarketMix

vi

MostoftheinternationalexpansioneffortstakeplaceattheBredapackagingfacilityinthe

Netherlands(ABR).HeretheInternationalOperationsteammanagesSKUlaunches,SKU


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refreshes(lifecyclemanagement)andSKUrationalizationforEuropean,AustralianandEmerging

Markets.CurrentlytheInternationalOperationsLeadsmanuallymanageproductlaunchesusing

acombinationofMicrosoftExcel,MicrosoftProject,alongwithvariousothertoolsand

databases.Alltoolsandprocessesusedaremanualorsemi-manual,laborintensiveandproneto

error.Thelegacyofthesemethodologiescanbepartiallyattributedtotheformerfocusonlow

mix/highvolumemarkets.WhenfocusingonamarketsegmentthathasfewerSKUs,this

methodologywasadequate.However,asinternationalmarketexpansionhascontinued,these

oldmethodologieshaveincreasinglybecomeburdensomeandtimeconsuming.Figure1.2

depictstheSKUgrowthfrom2010forecastedinto2013.

Figure1.2:ForecastedSKUGrowth


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Thegoalofthisinternshipistostreamlinethelaunchprocessesthroughtheimplementationofa

WorkflowManagementTool.Suchatoolwillhelpdriveprocessdiscipline,identifyglitchesand

processdisconnects,providelineofsightvisibility,referencesinglesourcesoftruthandhelp

reduceworkload.Specifically,aproofofconceptfortheSKUcreationprocesshasbeen

developedandimplementationinitiated.AseriesofstepswereexecutedtodefineaUser

RequirementsDocument.Additionally,arepeatableprocesshasbeendevelopedforexpanding

thisWorkflowManagementToolintoadjacentsub-processes.

Inshort,Amgenssuccessinnewmarketsiscreatingadditionalcomplexityinitsoperations.To

addressthiscomplexity,processstandardizationisbeingimplementedinmanydepartments.To

helpdrivethisprocessstandardizationinInternationalOperations,aworkflowmanagementtool

isbeingdevelopedandimplemented.

Inthisdocument,theimplementationofaforementionedworkflowwillbediscussed.First,

projectrationalizationwillbedeveloped.Withbackgroundinformationinplaceandahypothesis

totest,theprojectmethodologywillthenbeintroduced.Theimplementation(orgoing-forward)

planwillbepresentedfollowedbythedevelopmentofarepeatableprocessforimplementinga

workflowmanagementtool.Finally,adiscussionoftheresultsandprojectwrap-upwillclosethis

document.

1.3. ProblemstatementTheinitialproblemstatementforthisinternshipwastodeterminehowbesttoimplementa

workflowmanagementtoolforAmgensInternationalOperationsTeam.However,astheproject

unfolded,itbecameclearthatthescopeoftheoriginalproblemstatementwasmuchlargerthan

anticipated,andwasmuchmorecomplicatedthanjustimplementingaworkflowtool.Therefore

overtimeamorespecificproblemstatementevolved:Howtoimplementaworkflowtoolin

phasesovera12to18monthperiod,whichpieceoftheSKUcreationprocesstobeginwithand

howbesttodefinetheprocessstepfortheworkflowtoolinthechosenphaseoftheproject.


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Effectivelytheoriginalproblemstatementwasdecomposedintomultipleones.Thisinternship

endedupfocusingononlyaportionoftheoriginalproblemstatement.

1.4.Hypothesis

Twohypothesesarepresentedhere.Thefirstisspecificallyaddressedinthisdocument:TheSKU

creationprocessisnotadequatelydocumentedandsubjectmatterexpertsdonotunderstand

howtheirtasks/rolesimpactothers.Thesecondhypothesiscouldnotbeaddressedinthetime

permitted.Insteaditispresentedheretohelpestablishthefoundationoffuturework:A

workflowmanagementtoolwillincreaseprocessvisibility,reducetheamountoftimeittakesto

createanewSKUandhelpdrivethecontinuousimprovementcycle.

1.5. ScopeadjustmentDuringthecourseoftheinternship,twoeventshappenedthatchangedthescopeoftheproject.

First,itwasdiscoveredthatthecurrentprocessdocumentationwasinadequatetosupportthe

developmentofaworkflowtool.Specifically,theprocessasdocumenteddidnotreflectthe

mannerinwhichworkwascompletedonadailybasis.Second,theoriginalorganizationsplitinto

multipleentities.ThismeantthattheSKUCreationprocess,whichoriginallyhadbeencontained

withinoneorganization,nowstretchedacrossmultiple.Theprocesscanbesplitintothree

sections;Strategy,PlanningandExecution.ThenewRegionalOrganizationsnowownthe

StrategyandPlanningportionsoftheprocessandtheSiteBasedOrganization(ABR)owns

Execution.

Toaddresstheseitems,aValueStreamMappingexercisewasaddedtothescopeoftheproject

tocaptureadequateprocessdefinitiontosupportdevelopmentoftheworkflowtool.

Furthermore,withthesplitintheorganization,itwasdecidedthattheproof-of-conceptshould

focusonthePlanningportionoftheSKUcreationprocess.Finally,asanoutcomeoftheVSM

exercise,anewCommit-to-Launch(CtL)processwasproposed.Partofthisprocesswasthe

creationofaCtLchecklistthischecklistwasaddedtothescopeoftheworkflowtoolproject.


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1.6. ActionstakenoverviewEarlyon,significanttimewasspentlearningandattemptingtounderstandtheprocessesas

documented.LateraprojectteamwasformedandVSMexerciseswereconducted.Duringthe

VSMexercise,adequatedetailwascapturedtodocumentthePlanningportionoftheprocess.

MultipleprojectswereinitiatedbasedontheoutcomeoftheVSM,andaspreviouslymentioned;

thecreationofaCtLchecklistwasaddedtothescopeoftheproject.Usingtheresultsofthe

VSM,adetailedprocessmapwasdeveloped.Buildingonthis,theUserRequirements

Specification(URS)andCtLchecklistweredrafted.TheURSwasreviewedinternallybyAmgen

personnelandexternallybytheserviceprovider(McErnest).Furthermore,aquotefromthe

serviceproviderfortheworkflowtoolhasbeenreceivedandtheprocurementprocesshasbeen

initiated.TheCtLchecklistiscurrentlybeingpilotedwithinemergingmarketswithfull

implementationanticipatedinthefirstquarterof2012.

Thisinternshipresultedinfourprojectoutputs:


Chapter2ofthisdocumentpresentsprojectrationalization.TheninChapter3,project

methodologyisdiscussed.Withthatasabasis,thespecificdeliverablesarediscussedinChapter

4.InChapter5,arepeatableprocessissuggestedforworkflowtoolimplementation.Finally,in

Chapter6,wesummarizetheprojectandproposefutureareastofocusadditionaleffort.


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Chapter2:ProjectRationalization

2.1. AdollartodayequalsalotofdollarstomorrowGenerallyspeaking,aproductlaunchedintoamarketfollowsawellbehavedprofilethroughout

itslifecycle.Inthebeginning,sometimeafterdevelopmentandregulatoryapproval,theproduct

hasnosales(becauseithasnotbeenlaunchedyet).Oncecountryspecificapprovalhasbeen

receivedandthecommercializationprocessiscomplete,aproductisthenlaunchedintothat

countryandsalesgraduallyincreaseovertimeforthatcountryspecificDemandForecastUnit

(DFU).SalesgrowthcontinuesfortheDFU,buteventuallyhitsaplateau.Saleswillthenremainat

thisplateauleveluntilpatentprotectionrunsoutorsomeotherproductfortheailmententers

themarketplace.Atthispoint,iftheDFUwasleftalone,itwouldfollowsomenaturalpathof

salesdecrease.However,DFUsaremanagedatthispointintheirlifecycles,andareobsoletedin

amannerthatbestfitsthespecificsituation.Figure2.1belowisageneralrepresentationofthe

typicalDFUProductLifecycle.

Figure2.1:DemandForecastUnitProductLifecycle

Underthesecircumstances,itisofparamountimportancetolaunchaproductintoamarketas

soonaspossible.Oncepatentprotectionislost,productcanquicklyloseupto90%ofitssales

revenuevii.BydelayingthelaunchofacountryspecificDFU,thecompanystandstolosea

substantialamountofrevenueoverthelifeofaproduct.Additionally,ifthecompanycould

launchtheproductearlier,itwouldstandtogenerateadditionalrevenueoverthelifeofthe


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product.Bymovingthelaunchdateforwardbysomearbitraryunitoftime,theupdatedproduct

lifecycleprofilewouldlooklikethatseeninFigure2.2.

Figure2.2:ShiftedDFUProductLifecycle

Therefore,thetotaladditionalrevenueforaproductDFUwouldbeequaltotheareabetween

thesetwoproductlifecyclecurves(thisignoresthetimevalueofmoney).Thiscanbefurther

simplifiedbyrealizingthatthetotalareabetweenthesetwocurvesisequaltotheunitoftime

multipliedbytherevenueperunitoftimeintheplateauphaseofaDFUslifecycle.

Consequently,thevalueofthisadditionalrevenueissimplyequaltotherevenueperunitoftime

attheplateauperiodtimestheunitoftime.Figure2.3illustratesthis.

Figure2.3:RevenueIncreaseduetoProductLifecycleShift


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2.2. Failedattempttouseproductlaunchdelaysasrationalization

Inanefforttorationalizetheimplementationofaworkflowmanagementtoolandthepotential

valueitcouldbringtothecompany,averylaborintensivereviewofproductlauncheswas

initiated.Inthisreview,productlauncharchiveswerescrubbedtofindwhichproductswere

launchedlateandhowlatetheywerelaunched.Theoriginalideawastousefinancialdatafrom

salesinconjunctionwithlaunchtimelinesstoquantifytheimpactofproductdelays.However

thislogicwasflawed.

Thebiggestissuewiththislogichastodowiththeframeworkinwhichitisset.Avastmajority

(estimatedatgreaterthanninetypercent)oftheseprojectlaunchdelaysareactuallyduetothe

commercializationprocess.Whathappensisthecommercializationgrouptargetsaparticular

datetolaunchnewDFUsintotheirmarkets.Theinternationaloperations(IO)groupisthen

responsibleforexecutingproductlaunchesaccordingtothistargetdate.However,asthedate

approaches,delaysinlaunchprocessstepsoutsidethecontrolofIOcan/dohappen.Examplesof

thisincludedelaysinreceivingmarketingauthorizationorcountryspecificpricingagreements.

Thereforethecommercializationgroupwillchangethetargetlaunchdate,andIOadjuststhe

planaccordingly.

Oneconversationbetweenavicepresidentandaseniormanagercharacterizesthissituation

verywell.Whenthevicepresidentinquiredifallproductlauncheswereperplanfortheyear,the

seniormanagerresponded,Alllaunchesareperplan,butsometimestheplanchanges.

SincetheproposedworkflowtoolwillbeusedbyIOtomanageproductlaunchesandthe

aforementionedproductlaunchdelaysareduetoprocessstepsoutsideofIOsrealmof


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influence,theoriginalargumentrationalizingtheproduct(namely,theintroductionofthe

workflowtoolwillincreaseproductlifetimerevenue)isnotvalid.

2.3.Useofthecurrentproductportfolioasanexampleoffinancialbenefit

Asecondquantitativeattemptwasmadetorationalizetheimplementationoftheworkflow

managementtool.Thistime,thecurrentproductportfoliowasusedasanexampletodetermine

thetotalincreasetoannualrevenueassumingadecreaseintheproductlaunchtime;andhence

anincreaseintotalproductlifecyclesales.Hereaonemonthimprovementtoproductlaunch

timeisusedasanexample.

Inthisanalysis,thetimevalueofmoneywasonceagainignored(cashflowswerenot

discounted).Furthermore,itwasassumedthattheexampleproductportfoliohadalifeoften

years.Inthisanalysis,twoextremevaluesweredeterminedforonemonthsrevenue;a

minimumandmaximumvalue.Theminimumvaluewasfoundbylookingatthemostrecent

monthssales.Thisisanacceptableminimumvaluebecauseeachproductintheportfolioisat

variousstagesinitslifecycle.Somewillbeinthelaunchphase,somewillbeintheplateaustage,

andsomewillbeapproachingobsolescence.Thereforethisvalueisreasonablyconsidered

acceptableasaminimum.ThemaximumwasfoundbytakingthemaxmonthlysalesofeachDFU

withintheavailabledata.ThisisconsideredamaximumbecauseallDFUsexperienceanoversell

atsomepoint.Inadditiontothis,countryspecificproductsoccasionallygetreplaced;i.e.,the

DFUsgetswappedout.Therefore,somedouble-dippingundoubtedlyhappenedwhile

undergoingthisanalysis;i.e.,twomaximumswerecountedinthetotalfora

country/product/dosagecombination.

Theresultsofthisanalysiswerequiteprofound.Therangeofvaluesdeterminedforthe

increasedrevenueoverthelifeofthecurrentproductportfoliowas285to564milliondollars.

Conservativelythisrepresents300milliondollarsofrevenueoverthelifeofthecurrentportfolio.


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Onceagain,assumingatenyearlifeofaproductportfolio,aonemonthreductionintheproduct

launchprocesswouldrepresenta30milliondollarincreaseinannualrevenue.Justaoneday

improvementintheproductlaunchprocessforeveryproductcurrentlyintheportfoliowould

representonemillionadditionaldollarsinannualrevenue.

Toillustratethismethodology,asimpleexampleisgiven.InTable2.1below,animitation

productportfolioisgivenwithsixmonthsoffinancialdata.Todeterminetheminimumvaluefor

eachproduct,themostrecentmonthsfinancialdataiscaptured(highlightedinyellow).To

determinethemaxvalue,themaximummonthsrevenueoverthelifeoftheportfolio(here,

onlysixmonthsarerepresented)iscaptured(highlightedingreen).Bysummingtheminandmax

values,yougetarangeofrevenuesoverthelifeoftheproductportfoliothatcouldberealizedif

aonemonthimprovementintheSKUcreationprocesswasrealized$5000to$7700here.

Thereforeaconservativevalueforthetotalpotentialrevenuerealizedinthisexamplewouldbe

$5,000(orthesummationoftheminimumvalues)overthelifeoftheproductportfolio.

Table2.1:RevenueIncreaseExample

MonthlySales

Product Jan Feb March April May June Min Max

A $1,000 $900 $1,000 $2,000 $600 $1,000 $1,000 $2,000

B $0 $0 $0 $0 $100 $300 $300 $300

C $400 $300 $200 $100 $0 $0 $0 $400

D $700 $700 $600 $700 $700 $700 $700 $700

E $100 $0 $0 $0 $0 $0 $0 $100

F $200 $200 $100 $300 $400 $100 $100 $400G $2,000 $1,700 $2,300 $3,000 $1,000 $2,100 $2,100 $3,000

H $300 $300 $300 $200 $200 $300 $300 $300

I $0 $0 $0 $0 $200 $500 $500 $500

Total $5,000 $7,700

However,onceagain,theinitiallogicwasflawed.Althoughthisanalysisisbelievedtobecorrect,

thetoolthatistobeimplementedwillbeanoperationstool.Generallyspeaking,IOlaunches

productsontime.However,targetlaunchdatesareassignedbythecommercialization


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organization.ThereforeanyresultingefficienciesgainedfromthistoolwouldresultintheIO

launchprocessbeginninglaterandstilllaunchingontime.Thereforetheincrementalvalueofthe

toolwouldhavetobequantifiedonacostsavingsbasis;increasingthebottomline,notthetop.

Althoughthevalueofreducingtheoveralltimerequiredforthecommercializationprocessis

substantial,itfallsoutsideofthescopeofthisproject.Thereforethisanalysiswithitsinitially

flawedlogicismentionedheretohighlightpotentialareasforfutureimprovementandincreased

revenues.

2.4. RiskreductionandprocessadherenceAftertwofailedattemptstoquantitativelyjustifytheproject,qualitativerationalizationhasbeen

completedasajustificationtoimplementtheworkflowmanagementtool.Aspreviously

mentioned,literaturesourcesquotesubstantialtimesavingsintheexecution(orlaunching)of

projectsviii.OnearticlebyReijersandPoelmansisofparticularinterest,because25different

workflowtoolsimplementedinto13differentcompaniesarestudied.Generallyspeaking,

implementationoftheseworkflowtoolswasviewedaspositivewithsomeexamplesshowing

reducedprocesstimesbyupto50%ix.Thistimesavingsitselftranslatestoacostsavingsand

henceanincreaseinnetearnings.Unfortunately,thecompanydoesnotdoactivitybasedtime

accounting,soitisimpossibletoaccuratelyforecastthesavingsassociatedwithareductionin

productlaunchtimes.Nevertheless,acostreductioninDFUlaunchtimewilltranslatedirectlyto

areductionincost.

Furtherrationalizationincludestheneedtodevelopandadheretostandardprocesses.Itiswell

documentedinmanufacturingenvironmentsthatasyouconsistentlyrepeatastandardprocess,

thereissubstantiallearningandareductionintheamountoftimeittakestocompletethe

process.T.P.Wrightintroducedtheconcepttotheaerospaceindustryin1936x.Sincethen,


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learningcurveshavebeenappliedtoalltypesofworkfromsimpletaskstocomplexjobswith

processtimereductionsofupto96%xi

AlthoughprocessdocumentationexistthatdefinesprocessesexistatAmgen,itisbutonewayto

getthejobdone.Infact,eachemployeehadadifferentwaytocompletetheirwork.Although

similarthemesexisted,noonefollowedthestandard.Partofthisisbelievedtobeduetothe

confusingnatureoftheprocessdocumentation.Furthermore,asyougainexperienceina

position,theabilitytoskipstepsthatmightnotseemnecessaryisdeveloped.Thereforethe

thoughtisthatbyputtingaworkflowtoolinplacebasedoffastandardprocess,youforcepeople

toadheretoit.Thisinturnwilldrivelongtermlearning,processefficienciesandreducesthe

risksassociatedwithmultipleworkingmethods.

Eventualautomationoftheworkflowtoolalsoaddsvalue.Asthephasedimplementationgoes

forward,theworkflowtoolwillbepluggedintoexistingsystemssuchasSAP.Byautomating

thetoolinsuchafashion,youwillcreateanenvironmentinwhichasinglesourceoftruthexists.

Multipledocumentsmanagingthestatusofaprojectwillnolongerexistandemployeeworkload

isreducedduetotheremovaloferrorpronemanualmicromanaging.Lineofsightvisibilityalso

becomesapossibility.Byintegratingsimplevisibilitydisplaysanddashboards,onecaninstantly

identifywheredelaysinaprojectareoccurringandfocusonthem.Furthermore,processsteps

pronetodelaycanbeidentifiedforprocessimprovementactivity.

Finally,seniorleadershiprecognizestheneedtoadheretostandardprocedures.Intwoseparate

instances,differentvicepresidentsmadestatementsdirectlytothispoint.Thefirstsaid, We

needtodothingssystematically,methodologicallyandconsistentlythiswillallowyoutofocus

onquality,whichwilldrivecostdown.Thesecondsaid,Togetbetterweneedtobealittle

moreconsistentinhowwegetthingsdone. Bothofthesestatementssupportthe


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implementationofaworkflowmanagementtool.Thistoolwillhelpstandardizework,drive

adherencetoprocessesandultimatelydrivethecontinuousimprovementcycle.

Inthenextchapter,weshalldiscussmethodologyandhowtheprojectwasexecuted.


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Chapter3:Methodology

3.1. FamiliarizationThefirstseveralweeksofthisprojectwerespentunderstandingtheproblemstatementandthe

organizationitwasimbeddedin.Duringthefirstweek,substantialtimewasspentunderstanding

ABRReadinessandphase1oftheproject.Twodayswerespentwiththeformerprojectowner

reviewingprocessdocumentationandtrainingmaterialthathadbeendeveloped.Withthisasa

knowledgebase,IbeganjobshadowingtheInternationalOperationsLeads(IOLs).Thegoalwas

togainadeeperunderstandingoftheirdaytodayactivities.Thiswasespeciallyimportantsince

thetooltobeimplementedwasmeanttostreamlinetheirworkanddriveprocessadherence

intotheirworkstatement.

Inthissametimeframe,aseriesofmeetingswereestablishedwithkeystakeholders.These

meetingsinvolvedpersonnelfromawiderangeofsupportorganizationsincluding:Information

Systems,SupplyChain,Planning,ProductDevelopment,Finance,CustomerService,Human

Resources,Regulatory,Quality,ProjectManagement,InternationalCommercialization,

Productionandmanymore.Thegoalofthesemeetingswastowidenthebreathofbackground

knowledgeoftheorganizationfortheprojectandtoacertainextent,gaintheirbuyinforthe

workflowtoolproject.Someofthesemeetingsservedasarubberstampofsupportbytheless

impactedorganizations.Othermeetingsweremoreinvolved,discussingthedetailsoflocal

supplychainstrategy.Inonemeeting,thedetailsofapreviousinitiativeandreasonsforits

failurewerediscussed.Finally,thesemeetingsservedasabasisforthecreationofasteering

team.Allofthisinputwasdrasticallyimportantasthesestakeholderswereeitherresponsiblefor

runningaparticularorganizationortheSMEsdirectlyresponsibleforcompletingprocesssteps

duringthecreationofanewSKU.

3.2. StudydesignVeryearlyintheproject,astudydesignstructurewasinstituted.Theprojectwasbrokenupinto

threestages:Understandingtheproblem,rationalizingtheproject&creatingaplan,and


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executing&implementing.Understandingtheproblemlargelyfocusedonthefamiliarization

pieceoftheproject.Rationalizationandcreatingaplannaturallycamenextandlookedatthe

potentialvalueofimplementingaworkflowtoolandhowtogoaboutit.Executingand

implementingfocusedongettingtheprojectdone.

Atthebeginning,anticipatedstepsforeachstageoftheprojectwerelisted.Ateachstage,the

expectedoutcomeandanticipatedrequiredresourceswerelisted.Asoneacademicprofessor

commonlymentionedinclass,thiscreatedtheopportunitytobesurprisedandincreasedthe

learningpotential.Aftereachstageoftheprojectwascompleted,theactualoutcomewas

comparedtotheexpectedoutcomeandforthcomingstageswereupdatedaccordinglyto

incorporatethisnewknowledge.Figure3.1belowsummarizesthisstudydesign.

Figure3.1:StudyDesign

3.3. SuppliermeetingAfterapproximatelysixweeksoffamiliarization(andotheractivities)ameetingwasheldwith

thepreviouslyidentifiedpreferredsupplier.ThisparticularsupplierwasasmallBusinessProcess

ManagementConsultingfirmspecializinginworkflowmanagementsystems(McErnest)andhad

beenselectedpriortotheprojecttoimplementtheproposedworkflowmanagementtool.


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Duringthismeeting,tooldetailswerediscussedanddefinitionrequirementsreviewed.Themost

importantpointtocomeoutofthemeetingwastheneedtoimplementtheworkflowtoolin

phases.Upuntilthispoint,thescopeoftheprojecthadseemedoverwhelming.Duringthis

meeting,itbecameapparentthattheprojectneededtobebrokenupintophases,andtheinitial

implementationoftheworkflowtoolshouldbewithasmallpieceoftheoverarchingprocess

withalimitednumberoforganizationsinvolved.Theaforementionedstudydesignwasupdated

toincorporatethisinformationandthenextstageoftheprojectinitiated.

3.4. QuantitativeandqualitativerocessreviewEarlyoninthefamiliarizationprocess,itbecameevidentthatalthoughtheSKUcreationprocess

wasdocumented,itdidnotnecessarilycapturethewayworkwasdone.Qualitatively,the

processesdidnotreflectthemannerinwhichworkwasexecuted.EachIOLhadsubstantial

SubjectMaterExpert(SME)expertiseandaccordinglyhadapersonallycustomizedwayof

executingthecreationofanSKU.Therefore,theprocessasdocumentedwasbutonewayof

gettingtheworkdone.

Althoughthisindividualismwasobservedearlyinthefamiliarizationprocess,itwasmoredifficult

toquantifyorcaptureinamannerthatcouldbeeasilycommunicated(beyondthevague

statementthatemployeesdontfollowstandardwork).Eventuallyamethodologytoquantify

thisindividualismwasidentified.Duringphase1ofABRReadiness,aprocessstepchecklisthad

beendeveloped.Thischecklistincluded167requiredstepstocreateanewSKU.Usingthis

checklistasabaseline,eachIOLwasaskedtobucketeachstepintooneofthreecategories:A

highlevelmilestone,trackedatthehighestlevelwithintheorganizationforeachSKUcreated,an

IOLleveltasktrackedandcompletedbyanInternationalOperationsLead,oraSubjectMatter

Expert(SME)leveltaskthatneededtobecompletedattheSMElevel,butnotnecessarily

trackedattheIOLlevel.


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AftertwoIOLsreviewedthischecklistandprovidedtheirinput,only30ofthe167requiredsteps

werecommonlybucketed.Inotherwords,137ofthe167stepsweregroupedintoconflicting

categories;meaningthattheIOLsdidnotagreeonwhowasresponsibleforeachstepandits

importancewithintheSKUcreationprocess.Thisreviewprovidedaquantifiablebasisforfurther

processdevelopment.ThereforetheaforementionedstudydesignwasupdatedandaValue

StreamMapping(VSM)exerciseforthetargetedportionoftheSKUcreationprocesswasadded

totheprojectplan.

3.5. VSMplanningInitiallytherewassubstantialresistancetoconductingaVSMexercise.Variousstakeholdersfelt

thatifaVSMwasconducted,itwouldmeanallthepreviousworkthathadbeencompletedto

documentandstandardizetheirprocesseswouldbescrapped,effectivelythrowingawayayear

ofwork.Theaforementionedmethodologytoquantifytheprocessdocumentationdeficiencies

providedinitialleveragetogainsupportfortheVSMexercise.Furthermore,togainbuy-in,the

VSMwassoldasaprocessvalidationexercise.Wewouldvalidatetheexistingprocessas

opposedtorecreatingwhathadbeenpreviouslycompleted.SpinningtheproposedVSMinthis

mannerhelpedtogainsupportattheworkinglevelwithintheorganization.Finally,asteering

teamwascreatedtooverseetheprojectatthesiteleadershiplevel.Includedamongthisteam

wasthesiteleader,DirectorofQuality,DirectorofInternationalSupplyChain,andDirectorof

InformationSystems.Thissteeringteamwasinstrumentalinremovingroadblocksduringthe

entireprojectandsecuringresourcesfortheVSM.

Withthenecessarysupportinplace,planningfortheVSMbegan.Theauthorspastexperience

conductingValueStreamMappingsuggestedthattheexercisewouldtakeuptotwoweeksin

duration.Thisexperiencecamefromtheaerospaceindustry,executingwhatwasreferredtoasa

VisualVSM.Agooddescriptionofthevaluestreammethodologycanbefoundin Learningto

SeebyMikeRotherandJohnShookxii.


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Itquicklybecameapparentthattheorganizationdidnothavethenecessaryresourcesto

supportaveryextensiveVSM.Thereforeanabbreviatedmethodologyspecificallytailoredto

thiscompanywasused,andathreedayexercisewasscheduled.Detailsofthemethodologywill

bediscussedbelow.

WiththeVSMscheduled,SMEsacrosstheentireValueStreamwereidentifiedforparticipation.

Thesteeringteamwasutilizedtosecurethenecessarypersonnelfortheexerciseandwhen

necessary,findsuitablealternatives.OncepersonnelwereidentifiedfortheVSM,one-on-one

meetingswereconductedtorapidlybringpeopleuptospeedontheproject.Aprojectteamwas

createdbasedonthisgroupofpersonnelandweeklystatusmeetingswereheld.Finally,the

BusinessProcessManagementofficewasbroughtintoprovideoversightfortheprojectand

visibilityacrosstheentiresite.

3.6. BusinessunitreorganizationWhileplanningfortheVSMwasunderway,abusinessunitreorganizationthataffectedthe

projectwasinstituted.Figure3.2belowillustratestheorganizationalsplit.Thesingular

organizationwassplitintomultipleones;effectivelyseparatingthesupplyanddemandportions

ofthebusinessforinternationalmarkets.Theproductdemandportionofthebusinesswas

reorganizedintogeographicallybasedregions;eachregionbecameanindependentorganization

ledbyadirectorwhoreporteduptoavicepresidentatthecorporatelevel.Theproductsupply

piecenowbecamethesoleresponsibilityoftheoriginalsiteandreportedtoadifferentvice

presidentatthecorporatelevel.Thissplitintheorganizationmodifiedthefocusoftheproject.

Figure3.3isadepictionofthelifecycleofanSKU.TheSKUiscreatedduringthelaunchphaseof

theproductlifecycle.SalesgrowovertimeuntiltheSKUeventuallyplateausduringthelifecycle

managementphase.Towardtheendoftheproductlifecycle,theSKUexperiencesdeclining

sales(forwhateverreason)andiseventuallyobsoleted.


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Figure3.2:BusinessReorganization

Figure3.3:StockKeepingUnitLifecycle

Thegoaloftheinternshipwastocreateaproof-of-conceptfortheSKUcreation(orlaunch)

process.Thecreationprocesscanbebrokendownintothreephases;strategy,planningand

execution.Intheoriginalorganization,allthreephasesoftheSKUcreationprocesswhere

containedwithinasingularbusinessunit.However,withthechangeintheorganizational

structure,thestrategyandplanningportionsoftheprocessnowresidewiththeregionalunits


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andtheexecutionpiecewiththesite.Furthermore,withtheorganizationalsplit,thisproject

migratedwiththeteamthatformedRegion1.Therefore,thepotentialscopefortheproof-of-

conceptwasnaturallylimitedtothestrategyandplanningportionsoftheSKUcreationprocess.

EventuallyitwasdecidedtofocusontheplanningportionoftheSKUcreationprocessduring

theVSM.Thereasoningwastwofold.First,thestrategyphasewasviewedasamatureprocess.

Second,itwasbelievedthattheworkflowtoolwouldhaveagreaterimpactifusedduringthe

planningphaseoftheprocess.

3.7. VSMexecutionAthreedaymappingexercisewasconducted.Thefirstdayfocusedonthecurrentstateprocess.

Aspreviouslymentioned,theas-documentedprocesswasusedasabaseline. Figure3.4isahigh

levelviewoftheoriginalprocess.

Figure3.4:OriginalProcessMapping

Largebannerstylecopiesofthismapwereprintedout,andtheteammodifiedtheas-

documentedprocesstoreflecthowworkwasactuallycompleted.Attheendofthemorning

sessiononday1,thepictureinFigure3. 5wastaken.Inshort,theprocesswasnotaccurately

capturedinAgmensdocumentation..


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Figure3.5:ModifiedProcessMap

Withthisasabackdrop,itwasdecidedtostarttheafternoonsessionofday1withafreshpiece

ofbutcherpapertodocumentthehighlevelcurrentstateprocess.Figure3.6istheresultofthe

afternoonsessiononday1.

Figure3.6:HighLevelCurrentStateMapping


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Onday2,theteamstartedbyidentifyingpotentialimprovementopportunities,commonly

referredtoasKaizans.TheseKaizanswerethenrankedinorderofimportanceandabilitytobe

executedinshortorder.Notethatonlychangesthatcouldbeimplementedinshortorder(less

thanamonth)wereconsideredinordertoenabletheoriginalprojecttostillbecompleted

withinthegiventimeframe.WiththeseKaizansinmind,theafternoonsessionofday2was

utilizedtocreateahighlevelfuturestate. Figure3.7isapictureofthefinalhighlevelfuturestate.

Figure3.7:FinalHighLevelProcessMapping

Themorningsessionofday3wasutilizedtofurtherdevelopthefuturestatemaptoidentifyall

thedetailedprocessstepsimbeddedinthehigherlevelmap.Thefinaldetailedmappingcanbe

seeninFigure3.8.Theafternoonsessionofday3wasusedtodevelopsolutionstotheidentified

Kaizansand/orcreatetheirassociatedactionplans.Finally,areportouttotheleadershipteam

wasconducted.

MostoftheseKaizansandtheirassociatedactionplansfalloutsideofthescopeofthisproject,

excepttonotethattheywerecompleted.OneoftheKaizanswasaddedtothescopeofthis

project:thedevelopmentofaCommit-to-Launch(CtL)checklist.Thistaskwastakenonbythe


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author,becauseitwasbelievedtobeanintermediatesteptothecreationoftheworkflowtool.

Thistopicwillbecoveredinmoredetailinthenextchapter.Anotherinterestingimprovement

ideawastheintroductionofacomplexityratingsystemfortheSKUcreationprocess.Each

proposedSKUwouldberatedfromonetothreestarsbasedonitscomplexity.Thestarratingin

turnwoulddictatethelevelofgovernancerequiredduringtheprocesshighlightedbelow.

Additionally,thestarratingwouldbeutilizedforcapacityplanning.Higherratedstarsrequired

moretimeandresources,soonlyacertainnumberandcombinationofprojectscouldbe

handledatatime.

Figure3.8:DetailedProcessMap

Nextwewillpresentspecificprojectoutputsthatresultedfromtheworkconductedonthis

internship.


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Chapter4:Output

4.1. OverviewDuringthecourseofthisproject,therewerefourprimaryoutputs.Thefirstisthe

aforementioneddetailedprocessmapthatwasaresultoftheVSMexercise.Thesecondwasthe

creationofaCommit-to-Launchprocess.ThethirdwasthedevelopmentofaUserRequirements

SpecificationDocumenttodefinetheproposedproof-of-conceptforaworkflowtool.Thefourth

isanimplementationplandetailinghowtocontinuethedevelopmentoftheworkflowtool.The

latterthreeshallbebrieflydescribedhere.

4.2. Commit-to-LaunchDuringtheVSMexercise,oneoftheKaizansaddedtothescopeofthisprojectwasthe

developmentofaCtLchecklist.Withthesplitintheorganization,thenewentitiesneededa

formalwaytohandoffwork.ThereforetheCtLprocesswasconceived.Thisprocessconsistsof

twoprimarycomponents:theCtLchecklistandaformalagreementbetweenaregionandthe

sitetocommittoanSKUlaunch.

Theformalagreementisverystraightforward,andthereforewillnotbediscussedanyfurther

otherthantonotethatitispartoftheprocess.TheCtLchecklistontheotherhandsubstantially

overlappedwiththedevelopmentofthedetailedprocessmap.Inshort,theCtLchecklistis

simplythatachecklist.Itconsistsoftwoparts;PartAandPartB.PartAvalidatesthe

assumptionsfromtheStrategyphaseoftheSKUcreationprocess.PartBdealswiththeprocess

stepsassociatedwiththePlanningphase.Eachchecklistitemhasared/yellow/greencheckbox

toindicatethestatusofeachstep.Redindicatesthatthechecklistitemisbehindschedulewith

nogo-forwardplan.Yellowindicatesthatthechecklistitemisbehindschedule,buthasago-

forwardplan.Greenindicatesthatthechecklistitemisonschedulewithnoissues.Eachchecklist

itemalsohasasmalltextfieldtoentertaskspecificinformationthatisimportant.Figure4.1and

Figure4.2arerepresentativeexamplesofpartAandBoftheCtLchecklist.Inthese,allchecklist


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itemsaregreen,exceptforlocallabeling,whichisyellowandindicatesitisbehindschedule,but

hasago-forwardplan.

CtL part A:Assumptions Validation for CtF

Product

Strength Which Strengths being Launched?

Label Changes Country Label?

PackagingConfiguration(Primary andSecondary)

Changes to Packaging Configuration Specify the packaging specification

numbers

Device TrainingCommitment

Device Training CommitmentUpdate.

Label, Leaflet, CartonLanguage

Changes?

SKU strategy Any changes? Describe.

MAH Who is MAH in country? WhichAmgen Entity? Updates?

Artwork

Artwork Existing? Special Requests?

Mockups/Samples

/Specimen

Where Mockups created/submitted? Where Samples required/submitted? Where Specimens required/submitted?

Quality

Method Transfe r Upda te?

RegistrationTesting

Update?

Import Testing Update?

Site Inspection Was it completed? Update?

Brand Protection Amgen Standard? Special Requests?

Local Labeling Local Labeling required? Distributor

audited?

Stability/ClimateZone

Special requirements? Different Zones?

Additional Labeling Changes? Describe.

Supply Chain

Supply Chainupstream

Description of DS, DP, FDP process.

Supply Chaindownstream

(Distributor / LSP /

Transport Lane)

Changes?

RSLTSL

RSL Expected? Changes? TSL Expected? Changes?

Supply Strategy Changes to Strategy?

Cold Chain Changes?

Key Milestones

Date Filed DD-MMM-YYYY

Est. Approval DD-MMM-YYYY

First Shipment MMM-YYYY

5 Year Volume/Revenue (per year) Forecast

Peak Sales ($)

Peak Volumes (units)

Overall Country Revenue($)

Figure4.1:Commit-to-LaunchChecklistPartA

CtL part B:Additional information

IOL

Verify Demo

Pack

Requirements

Demo Packs Required by the Country?

(Y/N)

If so, plan in place to supply them?

(Y/N/NA)

Endorsement:

Conceptual buy-

in by ROT

Conceptual buy-in by of Execution

Project Plan by ROT (Y/N)

Launch Strategy Creation of Artwork at Risk?

Printing at Risk? (Brief Description)

IOPM

Transition Plan

Endorsed

Transition Plan Required? (Y/N)

If so, is it appropriately endorsed? (Y/N)

Resources

Committed

Are all resources to support SKU

creation execution in plan place? (List

Y/N)

Risk Evaluation/

Assumptions

Complete? (Y/N)

(Brief Description )

Project Plan

Complete

IOPM Project Plan Complete and in

Place? (Y/N)

Planning & Production

Technical BOM in Place (Y/N)

Line and Capacity ReviewSite Planning: Complete? (Y/N: Brief

Description)

Verify Manufacturing

Equipment Changes

PD: (Brief Description)

System Setup

IS System Setup Plan in

Place

(Brief Description of Plan)

Finance Setup Plan in

Place

(Brief Description of Plan)

Price Setup Plan in Place(Brief Description of Plan)

Commercial SKU Setup

Complete

(Y/N)

Regulatory

Expiration and

Manufacturing Date

Format Verified?

Complete? (Y/N)

Variation Status ApprovedComplete? (Y/N)

CMC Revisions

List all open revisions w/ associated

change control identification.

Which variations are included?

Which variations are pending (not

included)?

Additional Regulatory

Requirements

(Brief Description)

Misc

Validate Distribution

Model

TPM: ISC Selection and transportation

. (Brief Description)

Quality

Product Specification RTE, Photostability, etc. provided

by PQL.

Verify Control

Document Changes

Complete? (Y/N)

List applicable documents

Figure4.2:Commit-to-LaunchChecklistPartB


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4.3. UserrequirementsspecificationTheURSdocumentservesasafoundationtobringtogethermultidisciplinarysystem

requirementsintoasingledocumenttosupportsystemdesign,construction,commissioning,

qualification,validationandongoingoperation/maintenance.AUserRequirementisacondition

thatmustbesatisfiedinorderforasystemtomeetitsintendedpurposefromtheperspectives

ofallstakeholders.Inshort,itdefinestherequirementsoftheworkflowtool.Threeofthese

documentswerecreated;thefirstwassubmittedtotheserviceprovider(McErnest)andthe

othertwoweredraftscreatedforuseduringfuturedevelopment.

BasedontheURSsubmitedtoMcErnest,multiplemockupsoftheproposedworkflowtoolwere

created.Figure4.3andFigure4.4andtwoexamples.Furthermore,aquotewasreceivedfrom

theserviceproviderandapurchaseorderinitiated.

Figure4.3:WorkflowToolInterfaceExample1


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Figure4.4:WorkflowToolInterfaceExample2

4.4. ImplementationplanFinally,animplementationplanwascreatedtoproposeatimelineonhowtheworkflowtool

shouldbeputintoplace.Figure4.5capturestheimplementationplanforBlockI.Figure4.6is

thelongerrange,broaderscopeimplementationplanfortheentire(currentlyproposed)

workflowtool.


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Figure4.5:Block1ImplementationPlan

Figure4.6:HighLevelImplementationPlan

Note:thisimplementationplanwas/ishighlydependentonhiringareplacementProject

Managertocontinuetheworkthattheauthorbegan.Anydelayinhiringareplacementwill

resultinaslidetothisproposedschedule.

Inthenextsection,weexploreindirectprojectdeliverablesanddeveloparepeatableprocessfor

workflowtoolimplementation.


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Chapter5:RepeatableProcessforWorkflowToolImplementation

5.1. IndirectprojectdeliverablesThedeliverableforthisprojectwastocreateaURSdocumentdefiningaworkflowtoolforthe

SKUcreationprocess.Inordertoachievethisgoal,severalsub-deliverableswereaddedtothe

scopeofthisproject.Asdescribedinthepreviouschapters,alloftheseagreedtodeliverables

werecompleted.Namely:


Inadditiontotheseidentifiedprojectdeliverables,therearesomeindirectbenefitstothe

organization;twooftheseshallbediscussedhere.Thefirstisthecreationofaprocessfor

implementingaworkflowtoolwhichcanbeusedinthefuturetoexpanditsfunctionality.The

second,longertermbenefitisthenewabilitytodrivethecontinuousimprovementcycle

throughtheuseoftheworkflowtool.

5.2. WorkflowtoolimplementationprocessAlthoughastudydesignframeworkwasusedincompletingthisproject,nospecificprocessfor

implementingaworkflowtoolwasfollowed.Duringthefamiliarizationprocessofthisproject,

significanttimewasspenttryingtofindaguideonhowtoimplementaworkflowtool

unfortunatelynothingwasfoundandtheprocessforimplementationturnedouttobeoneof

discovery.Somehelpfulhintsdidcomefrom ProjectPortfolioManagement.

Usingthead-hocpathfollowedtocompletethisprojectasabasis,thefollowingprocessis

proposedforcontinuedimplementationofthecurrentworkflowtool(orimplementationofa

newworkflowtoolinadifferentorganization):


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1. ProjectFamiliarization(68weeks)a. Spendthefirsttwoweeksfamiliarizingoneselfwiththeorganizationandtheprocess

thatistobeimplementedinaworkflowtool.Ifaspecificprocesshasyettobe

identifiedforworkflowtoolimplementation,allowanadditional2weeksfor

selection.Note:thisstepisnotnecessaryiftheprojectmanagerisfamiliarwiththe

organizationandprocessinquestion.

b. Duringthefollowingfourweeks,inadditiontothefamiliarizationprocess,establishasteeringcommitteeandprojectteam.Note:thisstepisnotnecessaryifanactive

projectteamandsteeringcommitteeareinplacenoneedinreinventingthe

wheel.

i. Theprojectteamshouldbearepresentativemixofallrolesthattheworkflowtoolwillinterfacewith.

1. Holdweeklyorbi-biweeklyprojectteammeetings.ii. Thesteeringcommitteeshouldconsistofateamofseniorleadersthatcanremoveanyunexpectedroadblocksandenabletheprojectteamtobe

successful.

1. Holdmonthlysteeringcommitteeteammeetings.2. VSMandpreparation(5weeks)

a. Onceprojectandsteeringteamsareinplace,beginpreparationforaVSMforthetargetedprocess(4weeks).

i. SecureVSMfacilitator(s).ii. CreateVSMA3.

1. Note:AnA3isaone-pageproblemsolvingapproachusedtogettotherootcauseofanissue xiii

iii. Secureroom,audiovisualandanyotherrequiredfacilitiesresources.iv. SelecttargetVSMdate.


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1. Note:datemustbefarenoughouttogiveadequatetimeforpreparationactivities;fourweeksshouldbeanabsoluteminimum.

v. SecureVSMparticipants.1. Utilizesteeringteamasnecessary.

vi. ForVSMparticipants,whoarenotpartoftheprojectteam,holdone-on-onemeetingsforprojectfamiliarization.

vii. ConductanynecessarytrainingpriortoVSMexercise.1. Projectteammeetingsareagoodvenueforthis.

b.LastminuteVSMpreparation(2days)

i. Ideallynothingcomesup,butinreality,prepareforsomethingunexpectedtohappenlastminutebeforeyourVSMactivity.

c. ConductVSM(3days)i. LearningtoSeexivisagoodresourceforthosewithnopriorVSMexperience.Otherwise,utilizeyourfacilitator.

ii. OnlyselectKaizensforimplementationthatfitwithinyourworkflowtoolimplementationtimeframe(i.e.,dontbaseyourfuturestatefor

implementationonaKaizenthatwilltakeayeartoimplement,ifyouplanto

havetheworkflowtoolinplacesixmonthsfromnow).

3. CreatedetailedprocessmappingbasedontheresultsoftheVSM(2weeks)a. ThiswilldirectinputtotheURSdocumentfortheworkflowtool.

4. Create/updateURSdocument(4weeks)a. Createdocument(2weeks).b. Internalreview(1week).c. Serviceproviderreview(1week).

5. Workflowtooldevelopmentbyserviceprovider(4months)a. Respondtoanyinformationrequestbyserviceprovider.


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b. Developtrainingmaterials(1month).c. Trainworkflowtoolusers(1month).

6. Workflowtoolpilotandimplementation(6weeks).7. Updatethisprocessbasedonbestpractice(12days)

Note:Steps5and6werenotcompletedduringthisprojectandarelistedhereasprocess

implementationsuggestions.

5.3. ContinuousimprovementcycleAsmentionedatthebeginningofthisdocument,thegoalofthisinternshipwastostreamlinethe

launchprocessesthroughtheimplementationofaWorkflowManagementTool.Inthenear

term,thevalueofthisprojectcomesintheformofprocessstandardization.Throughtheuseof

theVSMmethodology,inconsistenciesandprocessdisconnectswereidentified.Furthermore,as

thetoolisimplemented,itwillhelptodriveprocessdisciplineaslineofsightvisibilityiscreated

andallstakeholdersbegintofollowthestandardprocess.

Longerterm,therealvalueofthisprojectwillcomefromareductioninworkload.Althoughthis

reductioninworkloadwillnotbeimmediate,theworkflowtoolhelpstocreateaframeworkfor

continuousimprovement.Initially,workloadwillgoupalittleaspersonnellearnandadaptto

thisnewtool.However,asemployeesgainexperiencewiththeworkflowtool,thiswillhelpdrive

processadherence.Asprocessadherenceincreases,rightfirsttimewillalsoimprove.With

improvedprocessvisibility,theabilitytoidentifyareasforfutureprocessimprovementwill

increase.Andastheseareasofimprovementareacteduponandimplementedwithinthe

workflowtool,thecontinuousimprovementcyclewillbeginalloveragain.Figure5.1isasimple

depictionofthiscontinuousimprovementcycle.


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Figure5.1:TheContinuousImprovementCycle

Inshort,therearemorebenefitstoimplementingtheworkflowmanagementtoolthanthose

thatareimmediatelyobvious.Althoughprocessstandardizationandimprovementisthenear

termfocus,therealvalueofthisprojectcomesfromthelongertermindirectbenefits;namely,

theintroductionofatoolthatcreatesaframeworkforthecontinuousimprovementcycle.


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Chapter6:Conclusion

6.1. SummaryTheoriginalmotivationforthisresearchprojectwasthegrowthofAmgensproductofferings

andtheincreasedsystemcomplexityassociatedwithalargernumberofSKUs.However,during

theinternshipitwashypothesizedthattheSKUcreationprocesswasnotadequately

documentedandsubjectmatterexpertsdidnotunderstandhowtheirtasks/rolesimpacted

others.Throughasystematicapproach,namelyValueStreamMapping,weprovedthatthe

processwasnotcorrectlydocumentedandthatnumerousstakeholdersdidnotunderstandhow

theirworkimpactedotherswithintheorganization.Althoughseniorproductmanagers

understandwhatworkneededtobecompletedandwhenitneededtobefinished,SMEsdid

not.Furthermore,manuallymanagingtheSKUcreationprocesswasquitecumbersome.

Onceourfirsthypothesiswasproven,theprojectthenshiftedintocompletingtheoriginally

(alongwithafewnewones)defineddeliverables.Theprojectresultedinfourprimaryoutputs:


6.2. NextstepsGoingforward,severaltasksneedtobecompletedfortheprojecttobeasuccess.First,itisthe

authorsbeliefthataBusinessProcessOwnerneedstobeinputplacefortheSKUcreation(and

otherABRReadiness)process(es).Currently,BPOsarenormalemployeeswhodedicatetheir

sparetimetomanagingandupdatingprocesses.Thisisnoteffective;theBPOshouldbeafull-

timepositioninwhichtheindividualssoletaskismanagingbusinessprocesses.


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Second,theaforementionedCtLprocessshouldbefullyimplementedassoonaspossible.With

thecreationofmultipleneworganizations,thereneedstobeasmoothhandoffprocessforthe

SKUcreationprocesstheCtLprovidesthis.

Next,andmostcriticaltothisproject,istheimplementationoftheworkflowtoolproof-of-

conceptinMay.Severaltasksneedtobeaddressedfortheimplementationtobesuccessful.

First,anewProjectManagerneedstobeidentified(andpotentiallyhired).Oncetheyare

adequatelyfamiliarizedwiththeproject,theywillneedtoworkwiththeserviceproviderand

developtrainingmaterialsforAmgenpersonnelandinstructthemonhowtouseit.Assoonas

theproofofconceptisavailable,itwillneedtobetestedandpiloted.Aftervalidationis

complete,thePoCwillthenbereadyforimplementation.

Finally,itissuggestedthatonceBlockIimplementationhasbeencompleted,thePMfollowthe

processdefinedinchapter5forBlockII(AsseeninFigure6.1below)andsoforth.

Figure6.1:BlockIIandBlockIII


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6.3. Futurework/internshipideasFurtherinthefuture,Amgencouldbenefitfromconductingotherinternshipsattheir

internationalpackagingfacility.Twohypotheseswerepresentedhere;however,thesecond

couldnotbeproveninthegiventime.Afollowonprojecttothisonecouldcontinuethe

developmentoftheworkflowtoolandexpanditintothesurroundingprocesses.Evenfurther

intothefuture,Amgencouldsponsoraprojectthatwouldincorporatethistypeoftoolatthe

globallevel.Thisinternshipsgoalwouldbetocreateprocessmethodologystandardizationand

todrivethecontinuousimprovementcycleatagloballevel.

Finallyanequallyinterestingtopicthatwouldmakeanexcellentprojectisananalysisonhow

Amgendeterminestheirfinisheddrugproductinventorylevels.Currently,Amgenonlytakesthe

fixedcostofproductionintoaccountwhendeterminingoptimalproductionruns.Byneglecting

holdingcost,theyaregeneratingsub-optimalinventorylevels.Therefore,theproposedproject

wouldbetoevaluateallinventorylevelsattheABRsiteanddoanEOQanalysisonthe

manufacturinglotsizeplanningprocess.


46/46

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