The relevance of the Lean approach to pharma is at first most evident when applied to manufacturing. In high-value areas where
one output becomes an input for the next phase of the process, streamlining, standardization, and cross-functional coordination
offer a solution to chronic problems such as long cycle times and excess inventory. By standardizing processes and platforms,
Lean efforts can increase the productivity, efficiency, and flexibility of a global supply network. But inventory management
poses special challenges. "Too much inventory" is not necessarily a bad thing when the inventory is a lifesaving drug. Moreover,
stock-outs in the early, high-margin days of a blockbuster drug must be avoided at all costs. But this is not true of all
products. Having large stores of expired products is costly; so is wasting capacity on low-demand, low-margin products. Lean
programs aim to optimize global capacity and inventory while ensuring an uninterrupted supply of needed medicine.
Reducing Waste in Clinical Supplies Management
Many of these principles also apply to sales and marketing, where excess inventory and waste takes the form of unused research
data, idle sales aids in the car trunks of sales reps, a large number of reviews in the process of developing commercial materials,
or downtime of the sales force during visits to physician offices.
Although success of R&D is driven by innovation, other underlying processes are also critical—and lend themselves to Lean
optimization. Many activities in drug discovery, development, and life cycle management are repeated, such as protocol review
and approval, clinical study data processing, or medical review of sales aids. Lean can standardize and speed up these common
processes, and at the same time make it easier for scientists to create customized development pathways for individual compounds.
While waste shows up typically as excess inventory in manufacturing, it can also take the form of masses of unused data in
R&D and, later, in sales and marketing. These functions tend to front-load activities in an attempt to compress time lines.
In R&D, this includes pre-ordering clinical supplies for future studies, conducting drug-drug or food-drug interaction studies
before proof of concept, and commissioning large market research studies many years before filing.
Given the high failure rate of drug development, much of this work and capacity ends up as waste. Lean reduces this waste
by focusing attention on experiments and investments that lower the risk of programs, rather than on executing a standardized
new product development path with stage-gate checklists and undifferentiated investments. By embracing a "fail fast" approach
to drug development and customizing the path to each compound, scientists and managers can become more thoughtful in how they
evaluate risks, make decisions, and use resources.
Seven Types of Waste in the R&D Process
Lean's Five Key Steps
Leadership is integral to successful Lean efforts—especially in the pharma industry, where only senior management has an end-to-end
view of the whole system and the authority to drive transformation. The most effective approach is a tailored, top-down model
followed by broader, bottom-up engagement. Once leadership has communicated its vision for a new business system, employees
from throughout the organization should be encouraged to engage, understand, challenge, and come forward with their own ideas
for adding customer value, continuous improvement, and greater levels of efficiency and effectiveness.
Other guidelines include:
Start with strategy When beginning a Lean transformation, focus on strategically relevant projects. Many pharmas make the mistake of applying
Lean techniques to administrative processes such as regulatory approval—an area that is notoriously slow and bureaucratic.
But these redesign efforts tend to be slow. Teams are often large and cumbersome; the effort takes months, and the end result
is only a shorter cycle time with fewer sign-offs. Applying the same effort to sales and operations planning, for instance,
could make a lasting impact.
Set ambitious goals Lean programs must be far-reaching to be transformative. Don't settle for only incremental or continuous improvements. Aim
for high-value, high-impact projects that drive major improvements in performance, as these will help build momentum across
the organization. To help prioritize, make sure that every activity either fulfils a customer need or shortens time to market.
Don't try to do everything at once, however. Keep scale small at first, then build on the Lean capability and expand the footprint.
Broad-scale project proliferation can exhaust an organization before value is realized. Pharma doesn't have time for this.