Quantifying Operational Excellence in the Life Science Industry (Part 2 of 2)
Quantifying Operational Excellence in the Life Science Industry – continued
In Part 1 of this blog, I discussed Key Metrics for Quantifying Operational Excellence.
The life science industry, encompassing pharmaceuticals, biotechnology, and medical devices, plays a critical role in advancing healthcare and improving the quality of life for individuals worldwide. In this highly regulated and competitive sector, Operational Excellence (OpEx) is crucial for organizations to thrive. But how can OpEx be quantified in the complex and ever-evolving landscape of life sciences? This blog aims to explore the concept of OpEx within the life science industry and provide insights into quantifying its impact.
What Does ‘Excellent’ Look Like?
OpEx metrics should be developed based on stated company goals and objectives, and performance should be measured against the following Key Performance Indicators (KPIs), at a minimum:
- Overall Equipment Effectiveness (OEE): OEE is a comprehensive metric that measures the efficiency and effectiveness of equipment utilization. It considers factors such as equipment availability, performance, and quality to provide insights into operational efficiency and productivity.
- Cycle Time: Cycle time measures the duration it takes to complete a specific process or task. Tracking cycle times helps identify bottlenecks, optimize workflows, and streamline operations for improved efficiency.
- First-Time Right (FTR) Rate: The FTR rate measures the percentage of tasks or processes completed correctly the first time, without the need for rework or corrections. A high FTR rate indicates process reliability, reduced waste, and improved overall efficiency.
- Batch Reject/Scrap Rate: This metric measures the percentage of batches or units that do not meet quality standards and are rejected or scrapped. A low batch reject rate is an indication of robust quality control processes and efficient production.
- Changeover Time: Changeover time refers to the time it takes to switch from producing one product or batch to another. Minimizing changeover time improves production flexibility, reduces downtime, and increases overall equipment utilization.
- Compliance Rate: Compliance rate measures the organization’s adherence to regulatory requirements, industry standards, and internal policies. It includes metrics such as the number of regulatory inspection findings, audit observations, and corrective actions.
- Customer Complaint Resolution Time: This metric measures the time it takes to resolve customer complaints from the initial reporting to resolution. A shorter resolution time indicates a customer-centric approach, effective problem-solving, and improved customer satisfaction.
- Supplier Performance: Tracking supplier performance metrics, such as on-time delivery, product quality, and responsiveness, helps ensure a reliable supply chain and minimizes disruptions. Strong supplier performance contributes to overall OpEx.
- Employee Training and Development: This metric assesses the investment and effectiveness of employee training and development programs. It includes metrics such as training hours per employee, percentage of employees participating in training, and employee satisfaction with training programs.
- Cost of Quality: The cost of quality measures the total cost incurred due to quality issues, including prevention, appraisal, and failure costs. Monitoring and reducing the cost of quality over time indicates continuous improvement efforts and efficient quality management practices.
Real World OpEx Examples
Two very different examples of OpEx impact on a manufacturing facility come to mind. In the first case, the client was a startup looking to produce a drug substance in support of cancer therapies. This client was preparing for regulatory inspection and approval of their first product and had started pre-commercial manufacturing at their well-equipped, state-of-the-art facility. CAI was asked to provide an Operational Readiness (OR) assessment of two of their workstreams – Quality Control and Supply Chain. What started as an OR assessment quickly became a combination of OR and OpEx – because the client had never created process flow diagrams or performed value stream mapping of for batch processing. When all the Supply Chain elements were value stream mapped, it was clear that speed to patient for their critical product could be improved and waste in terms of time and resources could be greatly reduced. Although this client did not have an OpEx department (or budget), adoption of the resulting assessment recommendations coordinated improvement activities, reduced their cycle time, and identified resource constraints that were impacting productivity. The willingness of the client to support OR and OpEx activities using external support to supplement and train their limited internal resources was a big win for the client – they expect regulatory approval for commercial manufacturing in Q323.
The second example is not from a client experience, but from my last pharmaceutical manufacturing role prior to becoming a consultant. I was managing a newly created Remediation Team, started to address observations derived from a regulatory audit. The Remediation Team and the OpEx Team naturally ended up working on many of the same issues and I had the opportunity to observe what OpEx practices brought the most success. The company OpEx activities utilized the following ten strategies:
- Committed resources, trained in 5-S, Six-Sigma, and Lean
- An OpEx budget for resource and capital expenses
- A process for identifying and approving OpEx projects
- A project template for the standardization of all OpEx projects
- A project tracker, physically posted in a location that could be viewed by all employees
- A requirement to include front-line personnel in every project
- A requirement to report on task completion / roadblocks
- A requirement to quantify the waste reduction in dollars (in collaboration with the OpEx team)
- A quarterly management review of OpEx results
- Senior management sponsorship for each OpEx project
Regardless of where a life sciences company is in its manufacturing journey, it is essential for organizations to achieve sustainable success and deliver innovative and safe products or services. Product quality and speed to patient are paramount.
By developing organizational goals and objectives and identifying key metrics across compliance, quality, efficiency, innovation, customer satisfaction, risk management, and employee engagement, manufacturing operations can gain valuable insights into their performance and identify areas for improvement. Ensuring company-wide involvement and awareness of OpEx activities – fully sponsored by senior leadership will lead to successful implementation and completion of OpEx projects.
If you missed Part 1 of this blog, follow the CAI LinkedIn feed for a conversation about Key Metrics for Quantifying Operational Excellence.