quality as foundation for opex and the possible role of big data
TRANSCRIPT
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QualityasFoundationforOPEXandthepossibleroleofbigdata
SanFrancisco,21.09.2015
Prof.Dr.ThomasFriedli
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Structure
Introduction1
QualityManagement/FDAQualityMetricsInitiative2
OperationalExcellenceandQuality3
SystematizingImprovementsusingData4
SummaryandOutlook5
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10HotTopicsinPharmafromanOPEXPerspective
OM:OperationsManagement;CI:ContinuousImprovement
ShiftfromTooltoCulture
CICulture
KnowledgeManagement
ManagingComplexity
OPEXLeadership
QualityMetrics
OrganizingOPEX
OPEXMaturity
OPEXinNetwork
BenchmarkingtheQuality.Org.
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ADefinitionofOperationalExcellence
TheITEM‐HSGdefinesOperationalExcellenceasaphilosophydirectinganorganizationtowardscontinuousimprovement!
Itisthebalancedmanagementofcost,qualityandtimefocusingontheneedsofthecustomer
Itcomprisesstructural&behaviouralchangestosupporttheneededactivitiesthebestwaypossible
TobesustainableithastobepushedbyTopManagementandtobedesignedtoengageeverysingleemployee
OperationalExcellenceisnotonlyaboutperformance,itisalsoaboutthewayanorganizationachievessuperiorperformanceandabouthowit
continuouslyimprovesitself!
TheSt.Gallen understanding
Source:Friedli et.al.(2013),LeadingPharmaceuticalOperationalExcellence
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TheSt.Gallen OPEXandthe“SandConeModel”
Source:Friedli et.al.(2013),LeadingPharmaceuticalOperationalExcellence
Source:Ferdows/DeMeyer (1990),JournalofOperationsManagement
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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)
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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%
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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%
Source:InstituteofTechnologyManagement(ITEM‐HSG),UniversityofSt.Gallen
+13%
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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%
Source:InstituteofTechnologyManagement(ITEM‐HSG),UniversityofSt.Gallen
+17%
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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%
Source:InstituteofTechnologyManagement(ITEM‐HSG),UniversityofSt.Gallen
-13%
-13%
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Structure
Introduction1
QualityManagement/FDAQualityMetricsInitiative2
OperationalExcellenceandQuality3
SystematizingImprovementsusingData4
SummaryandOutlook5
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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
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“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
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Dowemeasuretherightthings?
Airline Operations Room Cleaning Operations Production
TypicalMetrics
Minutes/m2On-Time departure
OEE
Source:InstituteofTechnologyManagement(ITEM‐HSG),UniversityofSt.Gallen
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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
Source:InstituteofTechnologyManagement(ITEM‐HSG),UniversityofSt.Gallen
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FDADraft Guideline– Suggested Metrics
Lot Acceptance Rate
Product Quality Complaint Rate
Invalidated OOS Rate
APR or PQR on Time Rate
Source:DraftGudiance “RequestforQualityMetrics”fromJuly2015
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Structure
Introduction1
QualityManagement/FDAQualityMetricsInitiative2
OperationalExcellenceandQuality3
SystematizingImprovementsusingData4
SummaryandOutlook5
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QualityasfoundationforOperationalExcellence
Quality Management System is based on OPEX and structured along different levers
Source:InstituteofTechnologyManagement(ITEM‐HSG),UniversityofSt.Gallen
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OPEXandQuality
A high OPEX performance indicates a high overall Quality system performance
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OPEXandQuality
OPEX high performers have a high Quality Effectiveness, Efficiency and a very good Quality Culture
Source:InstituteofTechnologyManagement(ITEM‐HSG),UniversityofSt.Gallen
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Structure
Introduction1
QualityManagement/FDAQualityMetricsInitiative2
OperationalExcellenceandQuality3
SystematizingImprovementsusingData4
SummaryandOutlook5
Introduction1
2
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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
…
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ProductionSystem
Com
ponents
ProjectExample II/III– Mappingof PSagainst DBDataFieldsfrom OPEXBM
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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
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Example“SmartServices”Definition
SmartServices... ...areofferedasacombinationofphysicalanddigitalservicesonthebasisof connectedproducts
...are data‐based,i.e.theremustbeacomponentofdatauseinthedeliveryoftheservice
...are alsoknownasandinclude remoteservices,remotesupport,teleservices,e‐services,conditionmonitoringetc.
Definition
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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
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Structure
Introduction1
QualityManagement/FDAQualityMetricsInitiative2
OperationalExcellenceandQuality3
SystematizingImprovementsusingData4
SummaryandOutlook5
Introduction1
2
5
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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!