Managing Efficiency in a Quality Organization

Industrial Management Consulting
Industrial Management Consulting

In today’s business environment, a quality organization that focuses strictly on compliance while ignoring inefficiency will not succeed. Operational challenges such as cost reduction, cycle time reduction, improved efficiency, Right First Time, and schedule adherence are recognized as imperative issues. In response to high pressure on manufacturers to improve their value added contribution, the life science industry has progressed to a more efficient and competitive industry in recent years. Many companies are leveraging Lean and Six Sigma

3, 4, 5, 6

as the main umbrellas to host a range of various operation excellence and cost reduction initiatives. However, while manufacturing and packaging remained the major focus, quality operations have yet to garner the same attention. Traditionally, the quality function has been reactive with limited visibility to future needs of the business. Resources are typically added as a result of increasing backlog and cycle time. More recently, laboratories have been engaged in operational excellence initiatives, while QA has, for the most part, been left behind.


This article discusses efficiency management throughout the quality operations including QC laboratories and QA operations. In addition, it outlines how Par Pharmaceutical has addressed operational excellence in its quality operations and how it improves its cost effectiveness and enhances its compliance value added contribution to manufacturing and packaging operations at its Spring Valley, New York site.


QC Operational Excellence Journey


The journey for operational excellence in quality operation began with QC laboratories. Par, a developer, manufacturer and marketer of generic drugs, and cResults, an operation consulting firm, initiated an improvement program in mid -2006. The goal was to provide Par’s supply chain with the highest service level and quality in a cost-effective manner. The project team, leveraging lean 3, 4, 5, 6 techniques, performed an assessment to identify opportunities for improvements and develop a detailed road map for improvements. The assessment also included the establishment of QC time standards that were used to quantify the expected benefits of the proposed improvement plan and became the foundation for efficiency tracking and a long-term capacity planning tool. During the assessment key building blocks (Figure 1) were outlined to achieve operational excellence and were identified and implemented in the following phase.

(Click image for larger version.”Figure1″)

The continuous improvement initiatives included the following key projects:

* Establish accurate standards and develop a resource planning tool: To become more proactive and balance the workload between the various labs in response to product mix changes and volume fluctuation. The standards are used to project laboratory workload based on incoming samples and better prepare for peaks in sample volume. This helps reduce overtime and overall resource requirements. This tool is used for cost allocation, budgeting and long-term resource planning.

* Improve our campaigning and overall efficiency:

The benefit of campaigning in manufacturing and packaging has been long established and similar efficiency gains can be obtained in a laboratory. This initiative provided improved business processes supported by a computerized tool to view the upcoming stability samples, and improved communication with manufacturing to enhance finished good samples visibility to allow both stability and finish good labs to improve their campaigning and overall execution. The two labs are working as one cohesive and efficient unit while maintaining 100% compliant performance – meeting the scheduling needs of supply chain and the stability program.

* Centralized media to reduce set-up and to focus our analysts more on the science:

Establish a new role as a QC technician that focuses on preparing media and mobile phase for the analysts. This does not just improve the efficiency of the analyst and reduce the number of set-ups, but also increases consistency and eliminates waste regarding media disposal. The new system includes a request form submitted by the QC analysts that generates the demands for a specific type of media to be prepared. A QC technician than prepares the required media and mobile phase based on the requested forms, hence allowing the analyst to focus on the science, the test methods, and other value added activities.

* Improve our layout to reduce walking distance:

The team used Value Stream Mapping


and other work flow analysis techniques to determine that the walking distance within the lab was excessive and caused inefficiencies created by lab supply location, workstations, instruments, and business processes. The project team came up with a new layout that includes instrument relocation, new Kanban

1, 2

system for the labs supply, relocation of offices and other working areas. The Kanban system helps maintain inventory levels of lab supply, and is used as a signal sent to deliver a new shipment of lab supply as material is consumed. The Kanban system was used for the common media. Once the level of media was reduced to 20% of the total volume indicated by a mark, the QC technician would replenish this specific media by preparing an additional 50L. The implementation of the new layout resulted in 25% reduction in overall walking distance. The total walking distance per year was about 5,000 miles prior to the layout changes.

* Establish tools/computerized systems:

The additional MS Excel communication spreadsheets help improve the lab’s visibility in terms of API needs based on the production plan, sample due date, sample availability, and expected arrival dates. This information also helps to improve the lab prioritization and reduces set-ups by improving samples campaigning. It minimizes expediting samples, which reduces the Raw Material Lab’s backlog and improves its service level. Furthermore, the labs performance is tracked and reported, and sample cycle time and efficiency information is recorded to provide the needed visibility. The new measurement system helped drive accountability and ownership of the lab personnel.

* Create additional Key Performance Indicators (KPI) and a dashboard to help measure our progress:

The new dashboard measures the efficiency by lab, the expected weekly workload ,and other KPIs such as cycle time and compliance-related metrics. This allows the lab, during its weekly management meeting, to discuss staffing allocation, expected bottleneck and to be proactive and more effective.


Key to the success of this initiative was a strong project team consisting of bench chemists and lab management. Buy-in at all levels was imperative to drive change.


The project team created a continuous improvement communication board which provides each lab with improvement program key activities and the ability to track progress via chart.


Some of the key achievements of the 6 months of implementation were:


• More than 20% efficiency gain in the QC labs, which translates into major cost reduction/avoidance (i.e., reduced temp; over time). More than 1 million dollars per year in total savings compared to the previous year.


• Raw materials backorder was greatly reduced due to reengineered business processes and improved visibility.


• Walking distance was reduced by 25% (~1,250 miles per yr.)


• Improved on-time delivery and delivery consistency (i.e., NO Backlog due to lab performance).


• Planning standards, scheduling strategy and Dashboard became the core of the continuous improvement infrastructure.


Figure 2 outlines the major increase in lab efficiency in terms of throughput to reduce backlog. Once the backlog was substantially reduced, the efficiency improvement was leveraged to reduce overtime, reduce temps and overall cost.


The ROI for these outstanding improvements was less than 6 months including internal and external cost.


This tremendous success story has made Par QC the role model for the entire site and the journey toward operational excellence continues. Today, the Par QC operational excellence team meets weekly to review the dashboard and make decisions to best meet its customer service expectations.


QA Operational Excellence Journey


Once the QC laboratory journey commenced, the other quality operation organization, QA, was chartered to improve its performance as well. QA is often inaccurately viewed as inefficient by other departments and as a strictly cGMP function that adds no significant value to the business. Indeed, when it comes to managing efficiency, the QA operation presents a real challenge. QC is closer to a manufacturing function that basically produces test results. However, for many years QA was predominately a compliance organization; its existence was associated with the cost of doing business. Although QA is intended to be independent as per the FDA requirement, that independence should not prevent them from improving efficiency and reducing cost. In fact, improving QA efficiency by removing waste and removing non value added activities can be used not only for cost reduction but perhaps more importantly to enhance the quality standards by providing more resources that formerly performed non-value added activities and focus their effort on areas presenting a greater compliance risk.


The project team has taken a slightly different approach than with the QC laboratories and selected to establish a software tool to obtain the information which then can be analyzed and used for improvements. This approach was mainly chosen due to the lack of visibility and information availability on the daily activities and output of the QA Group. While manufacturing, packaging and QC information usually are captured in the ERP/LIMS or other home grown systems, QA information is relatively limited.


Par, with assistance from cResults and ERD software, implemented a software tool called Compliance Manage Efficiency (cME). This tool provides the platform to manage all QA activities such as audits, inspections, clearances, batch record release, equipment, swabs, and QA standards. The innovative approach supported by cME begins with (1) identifying specific activities performed by QA techs (i.e., batch record review, audit, clearance, and general activities), then (2) associate an expected duration for each of the defined activities. Once the activity is performed, QA techs record the information leveraging tablet PC/desktop and compare the actual duration to its standards. With the information available from cME, the project team is now able to measure QA efficiency and cycle time and provide the needed visibility to its management. Developing trends and inefficiency root causes by various events/incidents are recorded and reported on a regular basis. With the information now available, the operational excellence team has the ability to:


* Identify and quantify opportunities for lean six sigma projects by measuring deviation from standard and trends/differences/variability in actual performance.


* Continuously measure the impact of ongoing six sigma and lean projects, so benefits can be measured and corrective actions can be taken. The batch record release was identified as one of the first areas to focus on as it affects the overall supply chain cycle time. The improvement team focused on data collection leading to the following areas:


* What is the Right First Time (RFT) (by area/product)?


* What is the QA review cycle time?


* What is the Mfg./Pkg. response time to correct documentation errors?


* What are the main delays/pending issues causing Batch Record delays?


* What is the impact of investigations/CAPA closure on the Batch Record release time?


* What is my reviewer’s efficiency?


* What is the RFT by QA tech, and what leads to the variability between QA techs?


* What are the causes for time losses for my reviewers* What are the value added reviews/stages throughout the release process?


* What is the breakdown of the documentation errors?


In addition, the building blocks for an optimized batch record release were identified (Figure 3), and with the use of cME platform, the team has managed to address the root causes for documentation errors, delays such as investigation/Corrective and Preventive Actions (CAPA), waiting for QC results, communication issues, inefficiencies. The improvement team effectively made the needed enhancements in the areas of training, visibility, ownership and accountability by both manufacturing/packaging and quality and increased overall awareness to improve the overall batch record release. A key improvement in manufacturing and packaging response time for documentation correction was the printing and providing a formal document for correction with the visibility of when the batch record was reviewed, what were the errors/clarifications, what are the categories, which areas these errors are associated with as it is tracked throughout the system. This has improved response time for corrections by almost 20%.


Figures 4, 5 and 6, outline some of the information that became available to the project team. The unavailable hours by QA tech (Figure 5) help the management team to assess the overall activities performed by QA tech beyond the direct tasks in order to further enhance the effectiveness of the QA team by streamlining meeting structure and frequency and providing more training if shown as below the corporate guidance.


The pie chart (Figure 6) is used to identify the errors made on the batch records and provide the team with the ability to analyze the root cause and prioritize the effort to improve the right first time documentation. Other valuable information includes cycle time by QA and cycle time to correct errors by manufacturing and packaging. Other charts that are used routinely are right first time by area and efficiency by QA techs.


The top of figure 5 provides the team with all the efficiency losses related to activities such as training, breaks, meetings etc., while other charts show where the QA tech time is spent.


The QA efficiency calculation in Figure 5 is done by establishing standards for QA activities and measuring the earned hours during the shift based on activities completed vs. the overall hours in a given shift as follow:• Earned Hours = S All Activities Performed *Standard time to perform these activities• Available Hours = Available direct staffing hrs – S All the planned unavailable activities (i.e., meetings, training) QA Efficiency = (Earned Hours/Available Hours) * 100%


The project team is able to review all the activities and their value added contribution by comparing actual vs. standards, and in the process of changing frequencies, the content of the QA activities to reduce the non-value added activities performed by the QA techs.


At the end of this journey, cME provides a continuous improvement infrastructure to improve the value added compliance by the QA team.


The key paradigm shift is the view of QA as a production entity that produces reports, batch records, and audits, so that metrics may be established for each of these activities.


The key items for efficiency management that were established as the root causes and the building blocks for efficiency improvement during this journey were:


* Improve visibility and provide real-time Key Performance Indicators to detect trends and potential issues.


* Increase ownership and accountability.


* Provide accurate and factual quantification for all QA activities by process mapping, identifying the value added vs. non-value added.


* Have clear expectations, and standards for each of the QA activities to ensure ample time is being spent where needed.


* Establish a continuous improvements platform.


The above key root causes were identified and targeted by the QA improvement team and some of the key achievements of the 3 months of implementation were:* Errors in batch records documentation were reduced in the month of August by 29.7% compared with the month of June. * Response time of Manufacturing to correct errors was reduced by 18.7%.* Reviewer efficiency is up more than 10% based on earned hours vs. available hours.* Par is also challenging many traditional QA activities via cME’s visibility to value-added/non-value-added activities (i.e., reduce excessive reviews, enhance clearances and audit frequencies and content).


(See Figure 7)



The increased pressure on cost and overall efficiency improvement is continuing and in light of some of the recent news related to right sizing from industry leaders, these trends will continue. Our industry is required to increase its manufacturing and quality value-added contribution to the bottom line. Both QC and QA are complicated areas in which to manage efficiency and require a detailed and innovative approach supported by computerized tools that enable managing quality operation efficiencies. Par answered the challenge given by its executive leadership and demonstrated that efficiency improvement is no longer a vision in quality operation – it is now a reality.


What Is Next?


As the journey for operational excellence continues, Par intends to further leverage its robust compliance management efficiency software (cME) to continue the effort of eliminating Non-Value-Added activities performed by QA techs, refine the frequencies of these activities and their contents. Leveraging risk-based approach will further enhance the non value-added activities and improve the overall focus of the quality organization. Using automation, Process Analytical Technologies (PAT), and Electronic Batch Records will further improve efficiency, real time detection capabilities, and shorten the response time to the developing trends.


The goal is to reach the highest level of value added compliance contribution to the business.n


About the Authors:Mr. Joe Barbarite is the Vice President of Quality Assurance and Compliance at Par Pharmaceuticals, located at One Ram Ridge Road in Spring Valley, New York.Mr. Rafi Maslaton, President, cResults, has more than 16 years of diversified experience in operations, manufacturing engineering, information systems, and business management issues for fortune 500 firms. Prior to joining cResults, he served as COO of Sparta Systems, the maker of TrackWise, overseeing the complete project life cycle for clients. Mr. Maslaton has managed projects for Fortune 500 clients such as: Abbott, Amgen, Baxter, Bausch and Lomb, Bayer, Centocor/OBI, C.R. Bard, Eli Lilly, Fort Dodge, Genentech, J&J, Novartis, Par, Pfizer, Pharmacia, Roche, Sandoz, Shire, Schering-Plough, Teva and Wyeth, Agere Systems, Alpha Industry, Anadigics, HADCO, IBM, Intel, Lucent, Motorola, Nortel Network, Philips, Raytheon, and Siemens.The authors co-led the operational excellence efforts at Par Pharmaceutical.



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