Lean Six Sigma as a Performance Multiplier

by Jay Armstrong

Internal and external issues are significantly escalating pressure on the pharmaceutical industry to improve their output of drugs, while managing costs.  This is a difficult balancing act, as there are shrinking drug pipelines, an imminent patent cliff and the emergence of generics as an alternative to the traditional drug manufacturers.  Additionally, R&D productivity and spending have declined, even as new global markets are emerging with substantial, unmet therapeutic needs.

You can’t improve a process if you do not understand the variables and factors that impact it. The industry must now try to find ways of improvement while meeting product, customer, regulatory and efficiency demands. Lean Six Sigma has been used by some of the world’s most successful companies leading to savings of billions of dollars, striking increases in speed and capacity and achieving better customer relationships.

Lean Six Sigma focuses on a smaller number of critical projects to ensure higher profitability and faster solutions. Organizations traditionally face two potential scenarios – First, there is an already existing process that is working reasonably well – this requires the application of “DMAIC” – Define, Measure, Analyze, Improve and Control.  Motorola and GE were early adopters and powerful champions of DMAIC.  Indeed, their dramatic cost savings and improvements can be directly traced to the adoption and embedding of these principles.  In the second instance, an organization may have no process at all.  This situation requires a distinctly different path – DFSS – Design for Six Sigma.  This process utilizes the IDOV strategy – Identify, Design, Optimize and Validate.  This thinking is a radical departure from traditional lean Six Sigma solutions in that quality is essentially designed into the process during its creation. DFSS has attracted the interest of the FDA, because it closely mimics “Quality by Design” (QbD)

One way that a pharmaceutical company is able to do this is referred to as an “Open Innovation Strategy.”  Open innovation distances itself from traditional R&D, wherein the company itself owns and manages the entire R&D process chain, rather than leveraging outside help to stimulate innovation. R&D in an open system assumes that even the most capable organization needs to identify and work alongside external companies as a means to enhance innovation.  Thus, pharmaceutical companies have been seeking to work with universities, hospitals government, private research institutions, and biotech companies to enhance their innovation processes.

To be able to optimize the benefits of Lean Six Sigma, it is important that the work in all areas of the organization utilize the same mind-set. There is data indicating that significant benefits can be realized by including non-manufacturing activities, since these are only about 70% efficient.    As General Electric continued to develop the Six Sigma system originally created at Motorola, they realized that the potential of Lean Six Sigma was far greater than the current applications on their manufacturing processes. This ensures that the root causes for variation or bottle necks are truly eliminated and not just moved along in the system. Sadly, even though the pharmaceutical industry is highly regulated to ensure that the companies meet all the requirements from regulatory agencies, many core processes are not meeting the requirements of today’s market.  The arduous process of drug development as a prime example. One potential solution to the business issue and challenge of high costs and long time lines for product development is the use of Six Sigma. Companies implement Six Sigma for a number of reasons and some of the main targets when implementing Six Sigma in the R&D organization include decreased costs, decreased time to market and improving the process and product quality.

When starting implementation of Six Sigma the entire organization needs to be evaluated to see where to start the implementation work. During this process it is important to be open-minded and think out of the box to ensure that an area with great potential is chosen to start with. The initial successful implementation work will send out a message (to all the company staff) and facilitate future work.

Lean Six Sigma thinking has evolved far beyond its traditional manufacturing roots and is now recognized as  a cogent driver for operational excellence and competitive advantage.  We believe that substantial and sustainable cost and time savings, as well as quality improvements can be realized through a broad and deep application of Lean Six Sigma principles and tools.

Jay Armstrong holds certification as an ASQ Six Sigma Black Belt and advanced degrees from Stanford, University of Pennsylvania, Johns Hopkins in fields such as Biotechnology, Management, Biomedical Technology. He holds certificates in Project Management, and Decision/Risk Management. He has led workshops in employee coaching, designing and fundamentals with led to eight Kaizen events, and five discovery events. He was the leader in launching of the process workshops for clinical trials, and developed and led a clinical trials E-2-E work-stream which identified 10 clinical process area improvements. He is responsible for leading of five R&D process-improvement teams in delivering major cycle time, cost, and resource reductions of up to 80%, leading to $11M savings.