Live from WBF 2008-- Learning Japanese with Agnes

The Editorial Director of our sister magazine, Pharmaceutical Manufacturing, presented the morning keynote...Learning Japanese...How the Drug Industry is Mastering the Vocabulary of Toyota and Bridging the Manufacturing/IT/Engineering Divide Pharma is taking a crash course in 21st century manufacturing technology. Why? The industry is wasting $50 billion on manufacturing every year. There are pressures...boy, are there. Time to Market – generics mean a $100-billion loss in revenues over the next 10 years. Shrinking pipeline; $1-billion, 10-year timeframes typical Drug safety (Vioxx) Political change; stronger FDA The pharmaceuticals industry has a very low public opinion score...along with the oil companies, the tobacco companies, and the chemical industry. Even garbage collection has a higher public opinion score than pharma. So, we're taking action on the plant floor, and embracing Toyota Production System concepts Implementing Lean Manufacturing, Six Sigma and methods of the “Visual Plant.” Examples: Baxter, Novartis, BMS, Merck, AstraZeneca... Evaluating or using Process Analytical Technologies, advocated by Shigeo Shingo Adopting a Quality by Design framework, using PAT tools and SPC as advocated by Juran and Deming They’re also taking a new approach to QA  by implementing PAT or taking action earlier in the value chain, during drug development, by applying Design of Experiments and the concepts of Quality by Design to optimize a process before it is validated. Yet even Baxter, who has won several Shingo Awards, is embroiled in quality issues regarding Heparin...Case in Point: 2007 - Wins Shingo Prize for excellence in manufacturing 2008 – Recalls heparin batches due to QC issues at a Chinese contract manufacturing partner Yet, as a reality check...what other industry has inventory turns of 2? It is likely that we can improve upon this very long inventory cycle. What Other Industry Handles QC Like This? Between 49 and 88% of all drug processing time (an average of 69%) is spent on QC. But only 2% of that time goes to actual testing (the rest goes to sampling, batching, moving batches and documentation)* * Philippe Cini and G.K. Raju Reducing costs could save the Top 10 drugmakers nearly $8 billion/year* Sigma Level  DPMO  Defect %   Cost of Quality 1                      690,000  69          N/A 2                      308,537  31          30-40 3                      66,807    6.7         20-30 4                     6,210       0.6        15-20 5                     233         0.23       10-15 6                      3.4  0.00034       <10 * Philippe Cini Potential Savings from Lean, PAT and QbD Estimates for a typical Big Pharma company per product Short Term  Mid-Term  Long-Term Time to Market $240MInventory: $75 M Capital Costs: (generics)     $1.2 billion    Time to Market $225M       Cost of Quality:   (name-brand)  $1.5 billion PHARMA'S FUNDAMENTAL CHALLENGES Siloed, “data rich, information poor” IT, automation disconnected from each other and from  manufacturing Hierarchical, not  cross-functional PHARMA'S FUNDAMENTAL CHALLENGES continued... Risk-averse Still using 20th (or 19th) century technology Quality Systems aren’t in synch with global outsourcing trend What about coming together? How connected are IT, automation and manufacturing? Our survey says 59% of you think "communications problems exist..." while 18% say that you are "worlds apart..." and even a whopping 23% say you're "not on the same wavelength..." And is your organization doing anything to connect those groups? Our survey found that 41% said NO. 51% said YES. Charlie Gifford, Control Contributing Editor, blogger and columnist, said, " “…We must make the case to corporate IT, business and plant management that they must apply…standards such as ISA-88/95, OMAC, OAGIS, MIMOSA and OPC across the enterprise in a simple form…” *The Hitchikers Guide to Process, ISA/ANSI 88 Evangelists Needed...Open control standards are key part to the new IT and automation strategies driving industry leaders. We also did a very brief survey of 114 readers last week.Improvement is number 1.  Analysts agree that the industry, just within the past two years, has begun to pay far more attention to controlling costs. The top automation-related issues were process improvement methodologies, maintenance of validated system status, system change management, automated batch/recipe management, PAT implementation... Most of you indicated that it is cumbersome to access and analyze process and quality data. The vast majority of you manually examine QC and process data. Over 60% of you still have paper based documentation exclusively. What are Pharma's Top Complaints About IT and Control? Poor service for legacy systems • Lack of off-the-shelf connectors • Planned obsolesence of the equipment • Inability to access information from data when needed There are two new words that Pharma is still learning from Toyota and the Japanese: Jidoka – Using automation to empower operators (PAT is an example) Yokoten – Cross-functional knowledge transfer across the enterprise. This promises to be the toughest to implement. For more information, please visit