תעשיית מדעי החיים נמצאת תחת לחץ הולך וגובר של תחרות להוריד מחירים ובה בעת להמשיך לספק את התרופות וההתקנים הרפואיים היעילים ביותר לשוק, בתנאים של פיקוח הולך ומתהדק. לחצים מאסיה, ממוצרים גנריים ומהשוק הרווי אילצו את מרבית החברות לבדוק את מבנה העלויות הפנימיות שלהן בתחומי הייצור, איכות, מכירות, שיווק, מחקר ופיתוח וברשתות הכלליות שלהן. Tefen עבדה עם חברות מדעי החיים המובילות בעולם וסייעה להן לשנות את התפעול שלהן כך שיהיה יותר מהיר, יציב וחסכוני - והתוצאות מדברות בעד עצמן. הפרויקטים הביאו לצמצום של 30 אחוז בעלויות התפעול בתקופה של שלוש שנים, לירידה של 50 אחוז בזמני ביצוע ולשיפור משמעותי במכירות.
The continuous introduction of new technologies and drugs, aging populations, increased healthcare issues awareness, attention to care and quality of life and a new focus on effectiveness of treatment across all national health care systems have all been contributing to an ever increasing costs pressures from payers around the developed world. These pressures have been materializing in numerous ways such as increased centralization of purchasing processes, consolidated buying groups, and an overall sensitivity to healthcare economics-related value propositions.
Under these conditions, competitive pressure on prices is growing, which makes product price a key factor when coming to consider options. The impacts on the Life Science and pharmaceuticals industries are significant: generics become ever more attractive, decision making is done more and more at the administrative and the financial side and the unprepared vendors finding themselves in a difficult position trying to justify their products’ value adding properties. All of this puts a renewed focus on optimizing the competitive bids and Tender management process.
Over the past years it has been shown that a proactive, structured approach to tender management can yield high-level of results, even when challenged with fierce competition conditions. Tefen’s own approach to tender management in such situations is based on three pillars:
1 - Develop and implement tools to support tender execution
Using a number of structured tools can significantly increase the effectiveness of the tender process. These tools include
2 - Perform business intelligence activity, supported by specific tools, within a regular process
Business Intelligence is a regular and critical process for gathering information and defining the commercial strategy. The process aims to answer questions such as:
Using the tools described above, these questions can be answered and support account managers in forecasting the issuance of new tenders, understand intra-organizational influences within the client, optimize the product/price mix offered to each account and to ensure actual sales fall in line with established tenders.
3 - Develop and implement commercial structured approach
Matching the right set of activities at each of the tender phases – pre-tender, the tender itself and post-tender, is key for execution and to maximize winning chances. For example, planning and ensuring resources are available to support and coach physicians at the post-tender phase is crucial to mainlining long-term relationships that will improve the odds of securing the next Tender.
A lack of cohesion between supply and demand can manifest into significant costs for companies as out-of-stocks, excess inventory and over discounting multiply. With the addition of complexities such as new product introduction, promotion, packaging changes or demand variance, the need for aligned Sales and Operations Planning (S&OP) is vital to sustaining profitability. Companies who embrace a proactive S&OP gain a visibility and agility to improve delivery performance and pricing management, whilst streamlining inventory and increasing revenue foresight.
The value of S&OP may be deciphered by considering whether your company experiences the following problems:
Tefen’s approach to S&OP is to create a harmony between our clients’ sales and manufacturing functions. This process differs from traditional planning methods, moving away from daily or weekly planning reviews. Instead, planning reviews are arranged on a monthly or annual frequency, involving higher level management. Within this arrangement, critical knowledge of demand and operations is represented, giving a well rounded horizon from which a planning strategy may be formed. Having input from higher level management will also ensure that the formulated planning will remain in line with the business strategy, be it profitability, productivity, lead times, etc.
Our S&OP process also involves a thorough redesign and implementation of a demand and supply review process, each of which is handled independently.
For the demand review, the primary objective is to forecast the sales of each product line. This forecast is a collective agreement between stakeholders from marketing, sales and even product development. Consideration of factors such as new or deleted products, competitors or market conditions ensures the best possible forecast accuracy is achieved.
Given a reliable demand plan, a supply review may now plan accordingly. The objectives of this review is to consider the potential for temporary capacity bottlenecks or under-utilization and ensure staffing planning is aptly distributed; predominantly delivering a high level capacity plan. This review is also capable of producing a procurement plan. Essentially the goal here is to ensure optimal resource utilisation.
Finally, an S&OP review will assemble to address any imparity between the demand and supply plans. A single, published plan is created, which examines forecasted demand revenue and the associated planned production cost, stock levels and purchasing projections, financials (budget versus actual) and productivity and utilisation performance.
It is more important than ever to streamline supply and operations processes to gain competitive advantage. An effective S&OP processes can provide improved visibility across the supply chain; this provides increased control of product and inventory management, better targeted promotional planning and enhances revenue foresight.
Manufacturing effectiveness heirs an apparent significance in the Life Sciences sector as it fundamentally dictates both quality and delivery performance. The term embodies a vast scope of methodologies, which are primarily designed to streamline the processes which add value to the customer and remove processes which lack any customer value. The importance of this subject matter is heighted as internal drivers and competition increase the pressure for improved performance. Subsequently, manufacturing effectiveness is a paramount industry-wide subject for improvement.
The advancement of manufacturing effectiveness requires a comprehensive understanding of a current state performance, as well as a tangible vehicle to deliver the needed change. Key performance requirement is the removal of complexities and clarifying issues’ root causes to subsequently design focused change solutions. It is this specificity which also facilitates a perpetual manufacturing effectiveness, as the most significant process inhibits are always apparent, so that they may be the subject for improvement for immediate benefit.
Given our specific wealth of experience in this field, Tefen has established a proven success record in providing services including:
Alongside decades of experience within the Life Science sector, our Tefen experts may draw upon a bank of additional methodologies to advise clients on how to gain increased customer value, greater flexibility for growth or cost reduction or better operational reliability.
At the same time, Tefen recognises that at its pinnacle, manufacturing effectiveness ought to be a self- driven mechanism, where improvement may be recognised and leveraged at any level within an enterprise. When change for self improvement is instigated both at a physical and cultural level, true manufacturing effectiveness is achieved. Our methodologies facilitate this end by implementing a paradigm shift so that all available resources are aligned to deliver a manufacturing excellence focused on adding sustained customer value.
A common hurdle at the Life-Sciences industry is the optimization of laboratories’ processes. One misconception is that it is impossible to gain the same benefits from application of Lean approaches in lab environment as achieved in manufacturing. QC departments are often perceived as having numerous steps along its value stream and acting like a brake whereas manufacturing as the accelerator. This makes it more difficult to achieve the balance required and reduce lead-times, while at the same time boosting reliability and quality of products.
Certainly Quality Control is vital in any Life-Sciences company to ensure that raw materials are suitable for use and the end product is meeting the highest quality standards required. QC typically is involved throughout the entire product life-cycle development process and has to focus on testing products and materials to deliver results in the most efficient way in terms of cost and speed.
Our diagnostic benchmarking encompassing the assessment of site’s priorities, practices and performance allows customized recommendations for the specific objectives and constraints of each company. In addition, Tefen has gathered a detailed benchmark data set on practices and performance from over 60 labs (pharmaceuticals, biotech, biopharma, and more) covering over 120 metrics, which helps to drive performance improvements. This type of experience and data can be a valuable tool, not only in short-circuiting the errors made by others, but also in building a viable, compelling and less risky case for change.
Tefen’s Lean quality programs are utilizing elements of Lean and Six Sigma to streamline processes within the labs, e.g., resource planning and scheduling, layout design amongst others. We help QC operations to synchronize their organization and operation with production, to pull the product right through the entire value chain, minimize setup times and process queues, eliminate waste through streamlining processes and changing the layout, as well as designing organizational structure to encourage continuous improvement. The latter for example, can include standard management routines, clear accountability for improvement, visible leadership on the lab floor, clear KPIs, etc.
All in all the main objective is to optimize “flow” and “pull” to suit the needs of organization by eliminating delays caused by bottlenecks, and responding immediately to the trigger of the subsequent process thus producing results when and only when needed.
There are numerous benefits of Lean labs, such as improved productivity with reduced costs and lead times, minimized rework and unnecessary tests, culture of continuous improvement to sustain business benefits and many others. All of these directly impact the bottom line and advances the joint efforts in quality, productivity, and effectiveness.
Strict regulatory requirements and the challenges of staying competitive in a fast-changing environment are not only raising the demands on sales, production and administrative functions, but also on Quality Assurance departments. The QA team is now expected to keep control of quality, costs, reliability and speed, while also complying with regulations. In order to achieve this, Quality Assurance must become a proactive process which ensures that product manufacturers adhere to specific standards and strive to continuously improve results and eliminate errors. The goal is to create products to be “fit for purpose” and “right first time” bringing prompt and effective operational performance which still observes all statutory requirements.
In fact, many in the industry struggle with this challenge, as support functions, such as Quality Assurance, are increasingly tied up with administrative activities, reducing the time to be spent on the shop floor preventing issues and directly adding value to the end customer. However, this trend also provides us with opportunities for optimizing and better organizing QA activities.
Quality is now frequently included in Operational Excellence transformations. To ensure the sustainability of QA success, it requires optimization of process reliability and efficiency. We advice our clients to acknowledge the need to streamline their operations improve flow and operational speed, while minimizing unnecessary tasks in which time and resources are wasted.
Organizations should structure themselves around the key processes that add value to patients and users. Tefen’s methodology and experience of QA process optimization can generate a quality culture across a Life Science organization and help to overcome the challenges faced. Tefen shows how Lean practices should be applied in an organization’s structure and processes to encourage continuous improvement.
The holistic approach from Tefen starts with a diagnostic benchmarking stage, which assesses three key factors: a site’s strategic priorities, performance and practices. This then allows us to formulate customized recommendations for the specific objectives and constraints of each company, giving valuable insight into what other organizations with the same issues have done to improve their areas of low performance.
1 - Strategic Priorities
Before any structural changes are made, it is crucial to specify the priorities of each site. Conducting specially designed interviews gives us an understanding of the drivers, constraints and overall philosophy, with its principles and trade-offs. This then enables us to define high-level targets for cost, quality and delivery metrics. Once site priorities have been set, a process/function matrix is used to prioritize the key business processes within the scope. Processes are prioritized according to their impact on quality and drivers, such as workload per department, cost, lead-time, customer value etc.
2 - Current state: Performance and Practices
An analysis of current practices at the site and their impact on performance forms the foundation for any change and is crucial to the success of the program. Workshops are used to identify the process steps, inputs and outputs, and to clarify accountabilities. These processes are mapped, focusing on the most critical QA processes. Customers, outputs, suppliers and inputs are specified for each of the processes and subsequently, each of the process steps is categorized as either value adding, non-value adding or required for sustainable business. The aim of all this is to establish the impact of practices on quality and to quantify the performance in terms of lead-time, FTEs or other costs, before benchmarking performance levels with other sites in the industry. At this stage it is essential to invest time on site to develop root causes and agree action plans with the teams.
3 - Future State
For an organization to be successful it should have a clear vision designed to maximize value to the customer. At this stage, each of the mapped processes is analyzed, in close cooperation with the teams performing these activities, to determine the optimum measures for process streamlining and removal of any waste and NVA activities.
Benchmarks and best practices are brought in, assessed and incorporated where suitable to improve QA activities. Once the processes have been streamlined, the structure can be designed to enhance their output. Roles, responsibilities, accountability and interfaces are redesigned whilst taking into account existing knowledge and skill levels. A training plan is designed to enable speedy and effective transition. When the projected benefits of the improved processes have been quantified, new performance targets are set and KPIs introduced to monitor and promote the effectiveness and reliability of each process.
4 - Implementation Roadmap
The roadmap should translate all these recommendations into a tangible and explicit work plan to enable a complete, timely and successful implementation. This includes detailed work streams, responsibilities, timescales, and resource requirements. The roadmap should clearly illustrate the exact route to be followed by the organization, in order to achieve the desired future state. It is imperative that the quality leadership and management teams agree and sign off on the roadmap to guarantee a successful implementation phase.
The sourcing and management of suppliers is crucial for sustaining profitability as they essentially dictate a major proportion of an organization’s variable costs. A supplier becomes part of the foundation upon which a product is built; therefore it is essential that suppliers share similar business objectives / strategy. When selecting a supplier, one must consider attributes such as:
Price should not always be the leading attribute while choosing a supplier.
This selection of the ‘best fit’ supplier can be a difficult choice to justify; also as this process must undergo continuous appraisal, it can require substantial resource. The task of managing suppliers is also crucial; forging supportive relations with suppliers can assist in minimising cost whilst retaining good service.
Tefen’s approach to supplier sourcing and management considers traditional procurement methods to be passive, where responding to requisitions or other unexpected requirements from the business are deemed to be reactive actions. Our strategic sourcing methodology differs from the norm, where sourcing teams conduct analysis of supplier markets and only recommend suppliers who may deliver solutions which meet pre-defined and agreed business needs. We also use roadmaps for supplier technologies, so that full knowledge of forthcoming opportunities is collected, allowing clients to capitalise as early as possible.
Commanding leverage with suppliers is pivotal when deal making, however the ability to create leverage is key to gaining competitive advantage. Tefen moves away from fragmented supply order and instead uses a holistic approach to supplier sourcing and management. This allows us to ask the question, are X products from supplier A more advantageous than Y products from supplier B. Leveraging bulk buying value or reduced logistics cost all accumulate to significant cost savings.
Management of suppliers is also a continual process, which should be subject to continuous review. Tefen uses contracts as tools to mitigate the risks that suppliers may pose, which are embedded with contingency. Stable products are coupled to long term arrangements whilst developing volatile products typically see short term, flexible deals. We also provide sustainable strategies to follow-up supplier performance, to prevent supplier relation losses.
The current, reactive nature of supplier sourcing and management is changing. A more thorough understanding of supplier markets and associated technological advancements is required. With Tefen’s experience in this field, we can implement and inject the necessary pace into this function to ensure that the best suppliers are selected to reflect your specific business needs.
A firm’s supply chain is the vehicle through which materials and products are moved from the source to the customer. A good supply chain design can become an effective strategic weapon for competitive advantage and adversely, lacking an optimised supply chain network design can place a structural stranglehold on costs as well as a reduced agility to react to changing market demands. In addition, given the variance of products, customers and facilities, it thus becomes vital to continuously review the network design for potential savings.
A network design covers a vast scope of business and may be manipulated to solve any one of the following business problems:
A conventional method to network design focuses mainly around operations and geographical layout; Tefen’s approach expands on this methodology and presents a more strategic outlook to capturing any opportunity between distinct operational units, whilst ensuring that customer demand be fulfilled. By analyzing up to date labor cost, legislative and tax policy, logistical costs and inventory requirements, Tefen can help companies design efficient networks, ensuring potential savings are not missed.
Tefen recognizes that there is no satisfactory one-size-fits-all solution. Our methodology systematically models the network design exercise on four tiers: suppliers, factories, warehouses and customers. We consider multiple ‘what if’ parameters and iterate different scenarios and designs to ensure the optimum design is chosen. Whilst we do use tested mathematical models to assist with network design, it is the combination of our experience with the client’s input, which delivers a tailor-made network design tool for your specific needs.
As companies consider a reconstruction of their network design, they have the opportunity to reconsider the various benefits and trade-offs associated with alternate constructs. This heavily quantitative and qualitative exercise, addressing the number and locations of these facilities is a critical factor in the success of any supply chain. Essentially, Tefen not only provide the first design solution, but also implement a vehicle which is self sustaining and can provide ongoing benefit, itself.
A shifting landscape forces Life Sciences and Pharmaceutical R&D organizations to embrace change to accommodate this shift. Tefen segments this change into five main external points:
Internal issues are also hampering performance in R&D, causing problems such as schedule delays, quality issues and unplanned costs. Many companies are able to define a strategy but struggle with implementation, due to a lack of productivity within R&D. The tight schedule and the demanding environment create a series of quality problems and also impact the overall performance of the R&D flow. As for the lack of use of tools such as Design to Cost, Quality Function Deployment and Value Engineering products end up costing more than originally planned.
Costumer commitments are often broken due to the complexity of managing several projects with varying knowledge gaps, making it difficult to predict when a project will be completed satisfactorily. Products end up in the field with components that do not meet specifications or with specifications which were not fully investigated, generating high service and maintenance costs and when design reviews and gates are not carefully managed the development team is faced with many changes that delay the R&D process.
Tefen’s methodology relies on five important steps which start by building a coherent product strategy in order to fulfill unmet medical needs and provide a steady, balanced revenue stream for the company and a technology roadmap that exploits current and emerging technologies to deliver products that the market needs.
Secondly, the optimal IP licensing strategy should be outlined. It can be too expensive to conduct all development in-house, yet risky to allow external partners to own intellectual property. A clear strategy and well managed partnerships is critical.
Following the optimal IP licensing strategy is the implementation of excellent development processes. Complexity in organizations, processes and legislation can extend time-to-market, jeopardize launch dates and exceed budgets.
Since as much as 80% of a product’s cost is set at the development stage with little ability to reduce it during its commercial life, Tefen’s approach is to embed a ‘Design-for-χ’ philosophy to make the specifications meet the needs of all internal costumers and not just focused on the end costumer as well as encourage a culture where innovation is seen as a drive towards practicality and manufacturability.
Finally, managing the R&D project portfolio is important to ensure investment decisions are made systematically and strategic alignment exists across development initiatives.
Overall, Tefen’s approach involves developing structured processes and Key Performance Indicators that facilitate effective portfolio and pipeline evaluation decisions, establish accurate and comparable data-based information to ensure fact-based decision-making and resource allocation.
While the trend for changing organizational culture and design to improve customer focus and effectiveness of the value chain is still on-going across the Life Sciences industry, organizations are still trying to figure out how to create this desired “Lean” culture across their sites and which organization design would suit their needs the best. At Tefen, the notion of organizational structure and culture make up a part of the most important pillars of our business excellence solutions, alongside operational improvement, transformation capability and strategy of operations for Life Sciences industry.
With a help of deep and broad knowledge of our industry experts and close Partner engagement, we provide our clients with a fresh perspective as well as both hard and soft benchmark data from more than 80 Life Sciences sites worldwide. Using our proven diagnostic methodologies and best practice data we not only aid our clients with understanding the attributes of different structures and finding the best one for them, but also run focused projects to implement cultural and organizational change and drive tangible performance improvements straight from the shop floor.
One of Tefen’s most common recommendations for Life Sciences sites, is the implementation of a PCO – Process-Centric Organization. Our industry experience shows traditional functional organization is a root cause of poor on-time delivery, confusion and low morale. A PCO organization is split along the value streams (by product or product group) with value stream leaders being accountable for end-to-end delivery to the customer and with access (where possible through line reporting) to all resources required to achieve the delivery. At the same time activities detached from day-today activities sit in functional centers of excellence (such as Finance, Procurement and others).
Such a PCO structure allows the site benefit from the following: 1) streamlined processes eliminating duplication and waste; 2) organization aligned with the customer, enabling consistent on-time delivery; 3) empowered employees taking decisions at the closets level to the actual operation, resulting in quicker problem solving; and, finally 4) improved flexibility thanks to value stream leaders owning end-to-end resources and ensuring they meet ever changing customer needs. Therefore, a Process-Centric Organization will serve customers better, add more value throughout, increase employee satisfaction, and reduce costs.