Using Operational Excellence Techniques to Understand and Solve Business Problems

by | Feb 15, 2012 | Industry, Life Sciences & Medical, Operations & Business Management

Jim Cahill

Chief Blogger, Editor

Pharmaceutical and biotech manufacturers, like other process manufacturers, are under constant pressure to improve the performance of their business—product quality, safety, plant efficiency, and throughput.

Emerson’s Michalle Adkins, a senior consultant on the Life Sciences industry team, shared details of an Operational Excellence (OE) program that she and her fellow consultants have developed. She notes that often the biggest stumbling block for manufacturers in OE improvement projects is the requirements definition and economic justification to initiate these projects.

A critical part of the OE program is to create a detailed plan with a solid business case to identify the activities, technologies, and workflows required for the improved performance sought. Michalle and the team are trained in Lean Six Sigma, defined as:

…a synergised managerial concept of Lean and Six Sigma that results in the elimination of the seven kinds of wastes/muda (classified as Defects, Overproduction, Transportation, Waiting, Inventory, Motion and overProcessing) and provision of goods and service at a rate of 3.4 defects per million opportunities (DPMO) using a DMAIC (Define, Measure, Analyze, Improve, Control) structured approach.

The OE study process follows a DMAIC approach. In the Define phase, the team works to understand the business problem(s) that the manufacturer faces. Once the problems are understood, the potential benefits for resolving these problems can be defined (both quantitative and qualitative), which is the Measure phase. In Analyze, it is critical to understand the root cause for the underlying problems and evaluating and determining the actual requirements, which mitigate these root causes. Once evaluated, these requirements for mitigation can be implemented in the Improve phase. In the Control phase, the new and improved state can be evaluated and compared to the prior state to document the actual tangible and intangible improvements made.

Michalle noted that it is frequently the case that the consultants are provided a list of requirements without given a clear understanding of the source of those requirements. They have even received requirements from the manufacturer based on how they think a system should function, not necessarily based on a solution to business problems with quantifiable benefits. Solutions are better designed to meet business needs when the time is taken to understand the problem and the root cause, which drives specific requirements.

When this is clearly understood and the benefits of resolving a particular issue can be articulated, the benefits can be used to justify the scope during scrutiny for project value engineering. Of course, most of what is done is to jump to the Improve phase by implementing the perceived requirements without drilling down, in the Analyze phase, to root causes for business problems. With this Lean Six Sigma solution process, both the solution provider and the manufacturer have a better understanding of why a particular requirement is important and how it will help the business. In addition, as part of the Control phase, defining a control plan with metrics for gauging both project success and ongoing business improvement is beneficial for both the manufacturer’s and the solution provider’s ongoing business.

As part of the OE program process, several tools from the Lean Six Sigma toolbox are used as appropriate to the specific situation. These tools can include process mapping, value stream mapping, benefits analysis, software & hardware architectures, solutions options analysis, and prototyping. A part of this process may include prototypes or models and assumptions to reflect the future state. In the Analysis phase, the tangible benefits are quantified and potential intangible benefits that impact critical performance criteria are acknowledged. Options generated from the study are estimated in terms of costs to attain the future state. The project implementation is evaluated for the various options based on estimates and benefits analysis information. From this process, a study report is produced that summarizes the requirements and recommendations for improvements to meet business goals.

If you have specific questions for the OE consultants, send them a note on their Ask the Experts page or leave a comment below.

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The opinions expressed here are the personal opinions of the authors. Content published here is not read or approved by Emerson before it is posted and does not necessarily represent the views and opinions of Emerson.