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Using Operational Excellence to Drive Sustainability

Overview and Case study

Craig Seyfried Sr. Director WyethISPE Annual Meeting Nov. 11, 2009

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Session Objectives• Discuss the Scope of Sustainability• View One Company’s Approach using

Operational Excellence• Estimate Potential Benefits – to

Product, Cost and the Environment

We don’t give ourselves enough credit as an industry !

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Sustainability means satisfying multiple concerns..…

….Able to be Maintained ….Maintaining ecological balance

– Operational – Improvements in operations and support that allow capacity gains while maintaining or improving

quality– Financial- A cost structure that can survive in the face of

increased pricing pressure and maintenance of profitable margin in all regions of the world

– Environmental- Processes that minimize environmental impacts thru energy efficiency, waste elimination and overall carbon reduction

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“Climate change is the greatest humanitarian challenge of our time….”*

• Over 300 million people impacted resulting in hundreds of thousands of deaths per year

• 99% of those dying are in developing countries least likely to affect climate change

• Total economic costs is over $125 billion per year and rising

“…Now that we know we must act…”*

* Kofi Annan - Global Humanitarian Forum Report - May 2009

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Our approach has been limited to date

• Only 17 % have a comprehensive strategy for combating climate change

• Most of the efforts to date - 94% - have been in building design and energy supply

• 62 % of us have improved energy efficiency over our global operations….and will continue to give this a high priority

• Government Regulations and Compliance will drive most (90%) companies climate change agendas*

“Company target setting is motivated by market forces not scientific requirements..”**

•Countdown to Copenhagen a report for the Economist Intelligence Unit 2009** Carbon Disclosure Project - The Carbon Chasm 2009

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There are Three Platforms for addressing Sustainability Challenges

• Technology• Mitigation• Adaptation

....and the use of Operational Excellence (OE) as a process methodology for improving sustainability encompasses all three

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Scope of the Initiative - Wyeth

• Sales of ~$22 Billion• 47,000+ employees • 28 Plants / 20 Countries and Puerto Rico• Major Product Lines in…

– Pharmaceuticals and Biopharmaceuticals– Vaccines– Consumer and Animal Health– Nutritionals

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Our Story (Wyeth) Begins in 2007

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Aspire high; blend technical & organizational change;build capability and let your line leaders own and drive it

Our Approach: Three Key Levers

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Deliver Savings & Continuous Improvement

Cost and Quality PerformanceDesign 25% operational cost

improvement by end of 2009

1111

3333 Create operational capabilities, behaviors, and mindsets to ensure sustainable, continuous improvement

Maintain and improve our quality and compliance performance

2222

1&21&21&21&2

3333

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Implementation Includes Three Types of Initiatives

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Diagnostics Cover Multiple Work Streams and Data

Savings opportunity ranges from 15 - 40% per site

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Our ability to adapt and change manufacturing helps create value Our ability to adapt and change manufacturing helps create value to the business and competitive advantage through improved to the business and competitive advantage through improved

quality, speed, cost efficiency and carbon reduction. quality, speed, cost efficiency and carbon reduction.

Transformation Results as of Sept .2009

50 Mini TransformationsFinalized and More Than

80 Underway

25% Operational Run Rate Improvement

Designed by Year-End

17 Sites Have Implemented Standard Site

Structure

More Than 100 Mindsets and Behaviours Trainings

Across 16 Wave I/II Sites

No Compromises in Quality and

Supply Outcomes

7 Standardization Projects in

Process Across Sites

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Transitioning to Sustainability:

Time

Per

form

ance Transition

Step change via mini-Ts

Sustained gains via continuous improvement

5 Requirementsn Continuously assessing against:

Original and new challenges

Desired future state

n Aligned team of local leaders: Setting targets for continuous

improvement

Staying highly visible

Engaging line leaders

n Incorporating targets into key systems:

Performance

Succession

Planning & budgeting

n Strategically communicating achievements & instilling pride

n Driving engagement & behavior change

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Significant Savings Already Achieved

• ~ $250 M savings commitment against a stretch target of $150 M for 2009 budget

• ~1200+ headcount reduction in 2008

• Additional headcount reductions in 2009

• ~60 site mini-T teams coached in early stages of the transformation

• Frontline is engaged in change and new leaders have emerged from the floor

Program has exceeded expectations

250

2009(Committed)

2010(Expected)

Cost Savings$ M

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Potential Impacts on Sustainability

• Operational - 25 % efficiency improvement Translates to billion of units additional mfg. capacity • Financial - $ 575 million /yr in cost reductions The equivalent of 1 major new drug each year

• Environmental – potential reduction of 15-40% energy consumption equates to a reduction of 200-500 k tons/year of GHG emissions

Avoids investment of over $150 mil for renewable energy generation capacity

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Conclusion• To achieve overall Sustainability and meet the global CO2

reduction targets we have to think broader about the solutions

• OE is ideally suited as an approach because it is holistic in nature

• Need to routinely calculate environmental benefits and capture

CO2 e savings as part of project justifications • Transform mindsets toward more sustainable design of

processes and supply chain

Biotech Case Study

Now let’s see how it can be done………

Thank You!

Acknowledgement to OE Team Lead - Wendy Kouba

Presented by Craig SeyfriedSr. Director International Operations

WyethCollegeville, PA, 19426

484-865-3016 seyfriec@wyeth.com

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Typical Biotech Environmental Considerations*

Table 15.1 Water/Materials usage for therapeutic proteins for a composite “typical” process.

MATERIALS kg/kg Protein

Glucose 200 - 400

Salts 200 - 300

Water 10,000 - 20,000

Acid/Base Buffers 100 - 200

Urea 0 – 1,000

Organic Solvents 0 - 200

Hazardous Solvents 0 - 5

KEY CONSUMABLES

Chromatographic resins 2 - 10

Filters 10 - 20

Membranes <1

TOTAL CONSUMABLES ~ 10 - 30

*ACS Draft Chapter 15. Environmental Considerations in Biologics Manufacturing

Sa V. Ho, in “Green Chemistry in the Pharmaceutical Industry”, Dunn, Wells, Williams (Eds)

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Typical Biotech Environmental Considerations*

*ACS Draft Chapter 15. Environmental Considerations in Biologics Manufacturing

Sa V. Hoin, “Green Chemistry in the Pharmaceutical Industry”, Dunn, Wells, Williams (Eds)

Microbially-Derived Proteins mAbs from Cell Culture

A Highly

Optimized, Large-Scale

Typical “Composite”

Process

Optimized Large-Scale

Highly Intensified, Large-Scale

kg per kg API

Water Usage <1000 15,000 4500 1500

Salts + Buffers 1 400 300 100

Consumables (solid wastes)

1 20 4 2

Organic Solvents

~0 100 (alcohols, may involve some

hazardous solvents)

8 (alcohols)

8 (alcohols)