Process and operational excellence synergies

a Novartis company

Process and Operational Excellence synergies: key drivers for cost savings

Marcelo Costa

SCM World Webinar 2013

2 Process and Operational Excellence synergies | SCM World Webinar 2013

About this presentation

The material presented today is an adaptation of the practical

experience of a Continuous Improvement Program integration

into an established Process Engineering department which

supported a Pharmaceutical Packaging Operations plant to

boost its objective of increasing productivity


Contents

1) Introduction

2) Continuous Improvement Deployment

3) OEE, Losses Tree and Process Improvement Cycle

4) Packaging Optimization Approach

5) Throughput Time Approach

6) Cost Savings Approach


Contents

1) Introduction







Introduction

The case study presented today is about an oral solid plant...

Global pressure

Local pressure

COGS Headcount Service level No Global approach for continuous

improvement ....

Pricing pressure Generic players Long production lead-times, low-level

agility No local approach for continuous

improvement in place ....


Excellence

Optimization

Prevention

Stabilization

Reactive Action

Continuous Improvement – The Dilemma

a long but sustainablejourney ahead...

straight to big wins!

Operational Process Performance

Build-up in excellenceSustainable gains

Short term focusContingency (quick

wins)


Key Challenges

Scenario

Objective

Challenges

Increase plant capacity

How would we justify the investment making it sure we got the right equipment?

How much extra capacity could we find if we had less losses?

What problems could be resolved by bringing together people from different teams?

Increasing volume forecast Products insourcing to

increase supply flexibility and allow Interco transfers

OEE did not meet capacity needs, FTE reduction pressure

OEE

Productivity

Capacity


Contents

1) Introduction







Continuous Improvement Deployment

Process Engineering

Focused Improvement

AutonomousMaintenance

PlannedMaintenance

Training andEducation Office TPM

Site Continuous Improvement

DRIVEProject

OEE/ PRODUCTIVITY –– THROUGHPUT TIME –– COST SAVINGS

New In place


Integration towards Business Goals

OEE/ PRODUCTIVITY THROUGHPUT TIME

Reinforce OEE as main tool for systemic Capital Asset freeing up

Identify the main causes of non-productive time

Accurate standards for costing Output, material and headcount

optimization Product allocation and sequence

Address the gap between bulk

production and packaging

Reduce bulk holding time

impacts

Synchronise support processes

COST SAVINGS

Capital projects & new technologies

Generate opportunities for costing savings with attractive payback periods within pilot areas as well as the entire organization

Process Engineering Continuous Improvement

Goa

lsEn

able

rsK

ey D

river

s

OEE, performance metrics and standards for product costing

Packaging Development: harmonization of specifications, materials optimisation and operational improvements

Yearly budget: OEE TGT, utilization, and optimized product line allocation definition

Fine planning: best product sequence to minimise the number of difficult changeovers

Cost savings portfolio management across the site Capital projects for Innovation & Technology

enhancement

Total Productive Maintenance (TPM)

Focused Improvement Pillar focused on identifying losses, performance indicators, actions prioritization and losses reduction

Autonomous, Preventive Maintenance and E&T Pillars focused on restore of basic machine conditions, preventive plans and staff training

Leadership on production lead time reduction and other continuous improvement initiatives

New In place


Contents

1) Introduction







OEE

KPI to measure the overall ‘health’ of the Manufacturing Operation

The key enabler to increase capacity, through making maximum productive use of the asset capacity and resources

OEE deployment:

Should I measure and improve the OEE of all work centers?

Identify the constraint operations of the plant, because bottlenecks limit the throughput of the entire system

Improvement to any of the other operations is of no benefit to the total process

Actual Process output

Target Process outputMaximum potential output


Losses Tree

Losses Attack & Elimination

Unscheduled downtime

Set up

Effective Uptime

Adjustment

Breakdown/Failure

Speed Loss

Minor Interruptions &

OthersFree up capacity

out of existing facilities and

personnel staff

Unscheduled downtime

Set up

Effective Uptime

Adjustment

Breakdown/Failure

Speed Loss

Minor Interruptions & Others

Standard Speed Increase

Losses Tree is a systematic approachto priority-set loss elimination

Losses Attack & Elimination

Increase availability by reducing speed loss, stoppages and changeover

time

Standard Speed Increase

Reduce Effective

Uptime by increasing maximum

validated speed

Losses Tree is used to create transparency on the major areas of non-productive time

Losses Definition

Losses Identification

Working teams(Priority Teams)

Application of Root Cause Analysis ToolsCAPDO, PM Analysis5 WHYs, 4M’s, etc.

Evaluating Results

Monitoring Results

Sustain counter measures

to avoid reoccurrences

Roll out

New Technologies (e.g. feeders)

Blister OptimizationBulk in-process control

(e.g. tablet hardness)Packaging material

enhancement

Machine capability


Improvement ProjectsDefined in the yearly budget during

capacity planning OEE TGT

Losses Trend AnalysisFocused on identifying the outliers and

preventing recurrence according to losses prioritization

Continuously Periodically

OEEMonitoring & Evaluation

Losses TreeCorrection & Prevention

Daily Operations Meeting

daily task accountability,team board

Weekly Performance Meeting

top problems and solutions, action tracking

Yearly OEE Target

Monthly Performance Review

overall plant performance

project management

Yearly OEE Review

Achievement of OEE TGTMaintenance of OEE TGT

Process Improvement cycle

1st wave 2nd wave 3rd wave


Contents

1) Introduction







Packaging Optimization Cycle

Product Allocation

Capacity Assessment

Product Design

Capital Projects

Process Improvement

Leveling of packaging lines and bottleneck analysis Operations utilization assessment and OEE TGT calculation

Process Improvement Cycle

Rationalization of packaging machine set ups

Blister optimization Packaging materials harmonization

Capital projects for productivity increase5

4

1

2

3


1) Capacity Assessment

L6

L5

L4

L3

L2

CAMBE FACILITIES FULL CAPACITY [ % ]DISPENSING tons/year 64%SMALL DISPENSING tons/year 66%MIXING tons/year 66% L1GRANULATION 300kg tons/year 65%GRANULATION 30kg tons/year 72%TABLETING mio/year 84%CAPSULING mio/year 65%COATING 300kg tons/year 88%COATING 30kg tons/year 37%BLISTERING mio/year 88% Little room for shifts increaseCARTONING mio/year 95% No room for shifts increase

655

10863

88316265

4264

6315

41758

208171

51

7055584

159654

USED CAPACITY

WORK CENTER

Bottleneck analysis to define working areas of process improvement:

1st Level

2nd Level


Lines Utilization and OEE TGT definition:

OEE calculated in order to achieve Target Utilization:based on previous year lossesnext year volume demand

OEE challenged for:stretching Target Utilization redefining an achievable OEE

(should still be a step change)

1) Capacity Assessment

Working groups must be defined according to:Bottleneck lines (higher

utilization) to be prioritizedpareto losses stratification output increase projects

(products with higher contribution to utilization)

1 2


Achievement of OEE TGT: Identify process improvement projects ensuring sustainable problem solving

2) Process Improvement

CA P

DHigh minor stoppages,

further analysis revealed several short

adjustments

Focus group

Causes:• Bulk clogging• Wrong unclogging

procedure leading to feeder tubes damage

• Unstable bulk process control (height)

• Vibration system not working

• Occurrence of damaged plugs

Actions:• Revised preventive

plan according to new findings

• Revised spare parts list

• Bulk troubleshooting• OPL training

23,4 down to 17,6 %15,4 down to 8,0 %

How much extra capacity could we find if we had less

losses?

Feeding System as the main cause


2) Process ImprovementMaintenance of OEE TGT: KPIs actively used to generate reactive and preventive actions

Overview

WHO WHEN StatusBlisterf lex Linha 2: Tivemos problema de quebra de rolamento e desgaste das guias lineares

O conjunto encontrava-se danif icado devido a soltura das esferas do rolamento linear

Alteração da task list de manutenção Marcos Abra

30-mar-12 CONCLUDED

Cartopack Linha 2: Quebra de TaliscasAs taliscas se quebram devido o blister ter comprimento mínimo estipulado, e caso haja alguma diferença entre as mesmas ocorre o enrrosco e consequente quebra

Alteração do formato das guias de blister ( R$ 8.000,00) Marcos Abra30-mar-12 ONGOING

Blisterf lex Linha 6: Tivemos problema de quebra da mola de retorno da faca de corte.

Ocorreu a quebra da mola por fadiga Criação da Task list de manutenção para facas Marcos Abra30-nov-11 CONCLUDED

Cartopack Linha 6: Ocorreu um furo na mangueira de sucção do vácuo na formação de cartuchos

A mangeira se desgastou por f icar em contato com a chapa de proteção do equipamento

Criação de um ponto de apoio para f ixação da mesma

Tiago Lessa 15-jan-12 CONCLUDED

JANCAPDo

Result CommentsCheck Analyse PlanDo

MTBF - PACKAGING

22,04

37,77

48,45

33,05

20,36

38,6944,31

82,6877,08

46,86

71,71

44,42

37,00

22,04

33,7236,89 44,71

41,17 42,6940,00

35,21

35,78 36,98

40,43 43,1843,56

44,42

0

10

20

30

40

50

60

70

80

90

PY10 PY11 Jan Fev Mar Abr May Jun Jul Aug Sep Oct Nov Dez YTD TGT12

MTB

F (hou

rs)

MTBF MTBF Accumulated

WHY? Losses tree review, countermeasures and improvement ideas - action plan, follow-up and feedback

WHO? Process improvement associate, line technicians and operators

WHAT? Dashboards and line boards (OEE & weekly planning, TPM)

WHERE? Line

WHEN? Weekly according to defined meeting calendar

HOW?

1 2 4 5 6 7 8 9 11 12 13 14 15 16 18 19 20 21 22 23 25 26 27 28 29 30

Line 1Line 2Line 3Line 4

Monthly Performance Review

Weekly Performance Meeting

2nd and 3rd W: Line prioritization according to deviations from targets - Trigger Root Cause Investigation when required (30min)

Management teamWorking Groups Working Groups

1st W: Visualization of relevant information directly on the shopfloor (10 min each line)

4th W: Follow-up according to was planned during weeks 2 and 3 (20 min)

5th W: Review performance, feedback about counter measures and recognize main issues

AreaWeek 1 Week 2 Week 3 Week 4 Week 5


Implement countermeasuresand follow up

Remove dust and dirt on and around the equipment to ensure basic GMP rules and enable inspection

Identify and inspect: Flaws Basic Conditions Hard to access areas Sources of contamination Safety Lubrication points Surrounding area

Cleaning

Inspection

Countermeasures

Abnormalities mapping

Flaws, Basic Conditions and Safety abnormalities

identified and recorded

Establish the basic

conditions to maintain

equipment performance

23

4 1

Autonomous Maintenance: Establishing simple and quick mechanisms for addressing and solving problems

by everyone, before they occur Enabling people to work and think at the same time!

SC - Sources of Contamination

HRA - Hard to Reach Areas

Hard to Reach AreasSources of Contamination

A

B

E

E

DCB

0

0

A

0

C

H

0

D

0

0

0

G

0 00

D



Basic Principles of GMP: Avoidance of cross-contamination and mix-ups

HSE Risk Identification: elimination of safety failures


One Point Lesson: preventing errors through knowledge

spreading

Correct vs. Incorrect:variable data assembling

Correct vs. Incorrect: embossing station set up


3) Product Allocation

Set up stratification:A: simplified cleaningB: A + form/ sealing exchangeC: full cleaning w/o tooling exchangeD: C + form/ sealing exchangeE: blister format change

Optimize packaging lines thru reducing tooling format changes:

– set up downtime– material losses– operators patience...

AB

CD

E

Find the right balance, useful rules:

• high output machine same blister size, low blister per package ratio, high volume products

• low output machine high mix, low volume, but evaluate “A or B” items allocated to ensure beginning of the month production

Scenario 1: 1 blister format

(h) # averageSet Up A 252 234 1,1Set Up B 54 32 1,7Set Up C 10 6 1,6Set Up D 226 91 2,5Set Up E 0 0 0,0

541 363 1,7Set Up Losses Tree: 14,8%

Scenario 2: 2 blisters format

(h) # averageSet Up A 252 234 1,1Set Up B 54 34 1,6Set Up C 10 5 2,0Set Up D 113 45,5 2,5Set Up E 273 45,5 6,0

701 364 2,6Set Up Losses Tree: 19,1%

• Lines with same embarked technology

• B2 with 1 blister format, B1 with 3 blister formats

• B2 with a favorable product mix

• As result, B2 capacity is almost 3 times higher than B1

Blister format


Cartoner output is the mandatory output of the entire line

180 blisters minute

90 cartons minute

divided by 2 blisters carton

Before

divided by 1 blister carton

180 blisters minute

180 cartons minute

After

Example:

10tablets

per blister

3blisters

per carton

Before

15tablets

per blister

2blisters

per carton

After

4) Product Design

Blister Optimization:Reduce the number of blister per finished good (SKU):

– increase output– reduce material consumption

Secondary and Tertiary materials

A B C54 x 30 x 12054 x 44 x 120


5) Capital Projects

Project: semi-automatic case packer

Capital Projects for productivity increase

Elimination of manual handling (reduction of one extra end-of-line FTE per shift)

Evaluation of material specification complexity

Evaluation of operational issues

Harmonization: From 3 Folding

Boxes to 1 FB From 3 Shippers to 1

Optimization: FB positioning into

SB according to Case Packer working sequence

How would you justify the

investment, and make sure you got

the right equipment?

Project: full packaging line (primary and secondary)

Replacement of old-fashioned primary machine which required 100% manual inspection of blisters

Elimination of manual packaging line (10 FTEs per shift)

Insource of alu x alu products

Evaluation of material specification complexity

Evaluation of operational issues

Harmonization: Products from 6 blisters

stacking to 4 Allocation to lines with

same blister format

Optimization: New blister insertion

system for high blister stacking products


Packaging Pilot Lines results

Line 4: first TPM line

+68%OEE: 30 to 50%

+80%Output: 1.500 to 2.700 packs/h

+47%OEE: 26 to 39%

+56%Output: 900 to 1.400 packs/h

Line 5: start up in Feb, first line with Early Management approach


Packaging Area results

OEE and productivity:

+23%

OEE: 40,8 to 50,1%

Productivity: 0,39 to 0,49mio packs/ FTE

+24%

Blister Optimization:

• 27 SKUs completed represent a significant improvement in sustainable packaging versus the packaging solutions that before existed

Cost savings

USD 201.200

Material reduction

3,3 tons aluminum (lidding material)7,7 tons PVC | 12.9 tons PVdC (forming material)

Packaging weight reduction

SKUs specific: -9% for Trilax c/12 (3,6 tons/year);-5% for Doxuran 30 FCT (1 ton/year)

GHG emissions transport

1,0 ton CO2e (from natural material only)

Other savings

Waste reduction, improved packaging lead-time and energy avoidance


Contents

1) Introduction







Throughput Time

Elapsed time from material issue to Quality release of finished product

buffer

Scenario

Objective

Improve systematically the planning process

End-to-end visibility

Not stable production planning

High TpT numbers Increasing

High inventory levels Increased complexity

(e.g. batch re-analysis)


Process Flow Study and Areas of Opportunity

Setor Pontos Críticos Documentação Fluxo ProcedimentoChegada defasada das documentações (produção, embalagem e CQ) xGargalo no acúmulo de documentação (tempo ocioso X picos de demanda) xStock Out, interrompendo o fluxo de trabalho xFluxo inadequado na Informação da data de validade do lote xTempo excessivo para o encerramento dos desvios e ocorrências xDemora dos outros setores na correção dos documentos xPreenchimento incorreto da documentação - Sandoz xPreenchimento incorreto da documentação - Terceiros xRevisão da doc muito abrangente, não permitindo uma análise profunda pelo setor acarretando na passagem do erro para o próximo revisor x

Controle de devolução de lotes de bulk para a Produção no caso de retrabalho xStock out (quebra da programação) xProgramação Embalagem: não recebe bulk no momento programado xMaterial sem custeio (financeiro) xFluxo inadequado na Informação da data de validade do lote xErros na configuração da documentação (PDF), ex: número de dígitos menor que o necessário xInexistência da FT xFalta de material na linha: estrutura incorreta xFalta de material na linha: baixa performance da linha de embalagem xFalta de material na linha: sem material para reposição da linha no estoque xFalta de material no estoque acarretando mudança na programação xFalta de material na linha: erro na pick list, quantidade reservada errada xFechamento "virtual", acarreta em um esforço extra de liberação parcial, ajuste de saldo xDescrição do código do material incorreto (IFT com estrutura) xMaterial na secundária incorreto (tamanho, tipo de bula ou cartucho) em relação à estrutura xSecundária tem que realizar reconciliação do documento da primária antes do apontamentoAguardar reconciliação do documento da primária para apontamento xReconciliação de documentação: falta de campos assinados xReconciliação de documentação: divergência na quantidade de material xMaterial em QT na hora do apontamento xAluminio Impresso em QT na hora do apontamento xEstrutura do produto não "respeita" a alocação xDocumentos com o mesmo tipo de grandeza porém cada um com uma unidade diferente ex: kg e g xAjuste de estoque: fluxo financeiro xFalta de ferramental xAjuste de estoque:diferença entre a necessidade e o tam do lote padrão do cliente xAtraso na geração do documento mestre (produtos novos ou alterações) xFalta de material na pesagem: erro na pick list, quantidade reservada errada xAjuste de estoque:diferença entre a necessidade e o tam do lote padrão do cliente xErro na quantidade/ falta de material na pick list x IFP xAusência de MP dentro da área de pesagem (pick list correta) xEPI adequados para situações ou produtos novos xMP vencida (no momento da reserva estava ok) xMP com problemas de qualidade xAjuste de estoque: fluxo financeiro xMaterial sem custeio (financeiro) xCusteio incorreto do produto (refazer processo IFS) xFalta de material "não consumível" ex: sacos plásticos, lacre xFalta de fração no pallet (pesagem, granulação, mistura) xInserção de dado incorreto no relatório (equipamento mistura) xPerda de material pelo operador ou perda de material no bin xDocumentação: erro de transcrição xDocumentação: etiqueta, pesagem, assinatura xStock out (quebra da programação) xErros no preparo das "soluções" xErro na transcrição de informação (documentação CQ) xErro no input de dados (HPLC) xFalta de reagentes xOrganização: MP analisadas junto com a ser analisadas etc... xImpressão do método em toda a análise (perda de papel) xStock Out, interrompendo o fluxo de trabalho xPerda da documentação xOSS identificada apenas na reconciliação da documentação xGargalo de documentação no fechamento do laudo

Assuntos que deveriam ser vistos antecipadamenteErros operacionaisErros em documentos (treinamento, mudança no doc, etc)OrganizaçãoFluxo entre clientes (internos ou externos)Planejamento/ ProgramaçãoFinanças

GQ

Embalagem

Produção

CQ

Staging Bulk Prod. QC Packaging QA

Wastedoes not add any value

to a product

Incidental activityWork that does not directly add customer value, but which is currently necessary to maintain

Value-added activityWork that directly increases the value of the product

Areas of Opportunity

1. Production Flows2. Administrative Flows3. Material Flows4. Documentation

43%54%

3%

Brainstorming


Synchronisation between end of manufacturing and packaging Optimised sequence of orders - “packaging point of view”

(pacemaker)

1. Production Flows

Production Control

Monthly planning

Dispensing

I I I

Granulation Tableting Packaging

Packaging

Production Control

Monthly planning

oxox

oxox

Dispensing Granulation Tableting

II I

before

after

- pacemaker process, monthly demandscheduling

Lead Time = WIP /

ProductionRate


Collaborative Planning Process with weekly reports and reviews• at SKU level – what, when, who and why!

2. Administrative Flows


packagingroom

3. Material Flows Bulk pallets in parallel to packaging rooms:

bulk operator left the pallet in any open position

Buffer not organized according to lines product allocation

Too many time wasted searching from the right bulk batch

No visual management if a batch was left behind

before after

Bulk pallets in line with rooms: bulk operator places the pallet in the correct line according to the product allocation

Packaging material from Staging to be placed according to bulk position and priority

Reduced time to search for materials even if product prioritization has been changed

Clear visual management of all batches


4. Documentation

Finished good data-sheet simplification

As is After Improvement Result D%

Checking items 13 8 - 5 - 38,5%

Page numbers 11 4 - 7- 63,6%

Pages per year 13.200 4.800 - 8.400

before after


TpT Results

Series1400600800

100012001400160018002000

PY ACT

Wor

king

Pro

cess

(k U

SD) -40%

Series1950960970980990

10001010102010301040

PY ACT

Volu

me

(k b

ulk

units

)

5%

-67%

TpT: 85,6 to 27,9 days

On time % (orders released on TGT): 30 to 71% +136%

What problems could be resolved by

bringing together people from different

teams?


Contents

1) Introduction







Costing Savings Approach

DRIVE is a global program that focuses on tracking and reporting of cost improvements initiatives


COGS reduction

0

1

2

3

Total Bulk

2.4329079754601

2

Total Bulk

2.1510238686945

5

Total Bulk

2.1339848916122

1

Total Bulk

1.6873129406468

0.2818841067655

740.0170389770823

4320.4466719509654

06

Manufacturing Breakdown

Baseline Short-term(2012)

Short-term(2013)

Mid-term(2015)

0

1

2

3

Pack 0.43594968

1162924

Pack 0.38706721

8898024

Pack 0.37643397

0874471

Pack 0.29115743

9577295

0.0488824622649002

0.0106332480235531

0.0852765312971762

Packaging Breakdown

0

1

2

3

TPC2.86885765

662305TPC

2.53809108759257

TPC2.51041886

248668TPC

1.97847038022409

0.330766569030474 0.02767222

51058961 0.531948482262583

Product Cost Evolution

• API Price negotiation• Yield Factor increase• Opadry scrap reduction• Reduced Coating

processing time

• Batch size increase • New API supplier

• Forming foil: new supplier under development

• Lidding foil: 21 microns to 25• Leaflet: New Supplier BID2012


Bulk Production

What: automatic CIP detergent re-fillingWhy: “always had been done” manually by 2 operators

Maintenance

What: calibration station for up to 8 equipment simultaneouslyWhy: speed up calibration task previously done one after other

Initiatives across areas (1 of 2)

Logistics In-bound

What: optimized layout and material flow layout for sampling Why: QC analysts spent much time searching for materials to sample

IT

What: 2S (Sort + Set in order) in Data Storage for 100% of associatesWhy: TechOps used to pay USD 95k for data storage (almost 1 Tb) and storage quota was almost exhausted


Initiatives across areas (2 of 2)

UtilitiesWhat: Energy Management based on PDCA methodologyWhy: offset production growths, pursue energy cost savings whilst reducing CO2 emissions

500 600 700 800 900 1,000 1,100 1,20026,000

27,000

28,000

29,000

30,000

31,000

32,000

33,000

20122011

2010

20092008

2007

Energy Trend: Production vs. Consumption

mio SDU

Ener

gy in

GJ

Trend before EM*

*EM = Energy Management started in mid 2010 Trend first 2 yrs.Trend after 2 yrs.


Takeaways

Do not wait for a Global approach to start your journey into Excellence• but having a global support would spare you a lot of stress

Do not copy and paste Continuous Improvement programs to your organization• it must be devised based on your needs and adapted to your company’s culture

Do not ask your staff “what can we do better?”• give them a standard framework to focus on the process and results – What to

do and When to do It

Do not work harder, work smarter• priority-set loss elimination

Do not only rely on a few well-intentioned people to sustain your journey• drive accountability through company’s Values and Job descriptions

Bad apples can jeopardize your Excellence journey• Leader’s job is to make sure things are working - no pain no gain


Thank you!

For further feedback, questions and suggestions please contact

[email protected]

+49 39203 71-6762

Presentations & Public Speaking

Process and operational excellence synergies