Today’s world is moving at great speed in all directions, putting enormous pressure on organisations to be able to remain close to their customers and be even faster to satisfy and anticipate their needs and deliver products that are even more customised. This forces companies to increasingly shorten their strategic planning cycles. However, some industries, due to project constraints or market specifications, continue to plan their strategy over longer periods of time, which may even reach 10-year periods. One such example is the pharmaceutical industry which, due to the time required for the development and testing of new medicine, must go through longer strategic cycles than most industries.
KAIZEN™ in the Pharmaceutical Industry
Continuous Improvement in this industry is an excellent example of what can be done to reach Operational Excellence and Excellence in Innovation and Sales at the same time. One of Kaizen Institute's pharmaceutical clients is an example of a company that is highly focused on Continuous Improvement, having implemented a program called Best in Class (BIC) internally. This programme was created as a result of the big changes that the pharmaceutical market had been suffering and the impact that Continuous Improvement can have on all business processes.
In order to be successful, the Continuous Improvement programme requires the engagement of teams, managers and top management. Low operational efficiency and low production capacity, when compared to the results expected in 2012, have triggered an unstoppable improvement movement that, even today, continues to be a benchmark case in this industry. The aim of the programme is to transform the company into one of the key players in the business of generic medicine in terms of operational efficiency, product quality, customer service and, not least important, employee satisfaction.
Planning to improve
In recent years, the market in which the company in question operates has been suffering some big changes, including administrative price reductions and the implementation of highly competitive pricing and profitability system, leading to a 50% reduction in the average value of generic medicines. The BIC programme helps to discuss processes on a daily basis, namely through greater material and operational cost control, implementing improvements that make the operation more effective and agile in terms of responsiveness to the market.
In this context, people engagement is essential to ensure cultural change and adaptation to new paradigms. All teams are focused on customer needs to create routines that promote communication, sharing and identifying opportunities for process improvement. One of the differentiating factors for the success of the programme is related to the capacity to plan and implement improvements. For that purpose, and aligned with the strategy, every year the company brings together a group of people from Top Management to Operational Management, for a strategic review of the objectives achieved and the planning of improvement activities for the next cycle. This is possible through the successful utilisation of the X Matrix methodology and the alignment of the entire organisation. The transparency of strategic objectives and the participation of the entire management team contribute to the commitment to achieving the proposed results. It is definitely an excellent way to track the path to be followed and reach the company's true north.