A Roadmap to Continuous Improvement through Collaborative Partnerships
Genentech
Murat Necef Principal Business Process Excellence Lead
Brian Ziskie Head of Global Facilities Procurement for North America
www.sig.org/eval A Roadmap to Continuous Improvement through Collaborative Partnerships
Brian Ziskie & Murat Necef 3/12/15 Genentech at a Glance
Founded more than 35 years ago, Genentech is a leading biotechnology company that discovers, develops, manufactures and commercializes medicines to treat patients with serious or life-threatening medical conditions. Personalized Healthcare is a key element of our research and early development strategy. We're focused on tailoring treatments to specific diseases and patients and identifying which patients are most likely to respond.
Fast Facts • Founded in 1976 • Became a member of the Roche Group in March 2009 • Headquarter in South San Francisco, California for all Roche pharmaceutical operations in the United States • Over 14,500 employees • Genentech sells approximately 40 products in the US • US Pharmaceutical sales were $17.4 billion in 2014* • gRED has approximately 20 new molecular entities in clinical development
*15,822 CHFm; average exchange rate 0.91. 3 ©2014, Genentech There is a Burning Platform… To reduce total cost of ownership we need to develop a world-class supplier network
• With the principle of challenging and helping them to improve
• Ensuring that our Key Suppliers understand that having Lean Capabilities is requirement as a partner Supplier of Genentech
• Drive the Message to Suppliers that continuous improvement and innovation is an expectation as a Strategic Partner
• Most companies seem to focus on price- squeezing their suppliers instead of partnering with them on continuous improvement initiatives 4 Supplier Lean Process Model
Partner
Deliver Educate Results
Execute Collaborate
5 Global Facilities Procurement Strategy to Value – Supplier Lean Training Program
• Enables Genentech to collaborate with our Suppliers to leverage their innate expertise and knowledge to drive out waste from current practices to ensure sustainable cost reductions
• Ensuring that our Key Suppliers understand that having Continuous Improvement capabilities in their organization is an expectation as a Genentech Strategic Partner Supplier
• Provides a structured way to embed the continuous improvement mindset as the way our company does business for both our Strategic Partner Suppliers and Category Managers
6 Benefits of Supplier Lean Training Program
Improved working realtionships between Suppliers & Category Managers BPE
Builds capabilities in Category SUPPLIER Managers and Suppliers to drive LEAN innovation TRAINING STRATEGIC PROGRAM CATEGORY PARTNER MANAGERS Allows Suppliers to apply learnings SUPPLIERS with other customers
Ensures Genentech has customer of choice standing with Key Partner Suppliers
The goal of Supplier Lean Training Program is to drive and deliver enhanced value through partnership and collaboration with selected Strategic Suppliers
7 Supplier Lean Training Process
8 The Process for Identifying Opportunities and Selecting Projects
Identify Supplier Identify/Prioritize Scope and Define Improve Process Monitor Results Project Projects Opportunities Issues
. Identify Suppliers . Identify/Quantify . Understand Current . Measure, Analyze, . Comparisons to • Strategic Improvement State Improve & Control Control Data • Business/Financial Opportunities . Process Flow . Discover Problems . Key Performance • Customer Satisfaction . Translate Opportunity . Generate Business . ID Root Causes Indicators (KPIs) Areas into Project • Operational (Process) Case & Problem . Develop Solution(s) . Action Items for . Prioritize Value Levers Ideas Statement Follow-up . Implement Solution(s) . Prioritize Project Ideas . Desired Outcome based on Impact & . Benefit Analysis Effort . Define . Assign Project Ideas to Project Sponsors for Chartering
Build Capability Thru Lean Training & Project Execution 9 Supplier Lean Members 2014 Results
Supplier Lean Program partners with key Strategic Suppliers to enable the best Level 0 procurement performance in our industry Initiative Charter via identifying & eliminating waste utilizing Lean Six Sigma (LSS) methodology
Level 1 Charters Supplier Level
Level 2 Charters Affinitized Issues
Level 3 Project Charters
10 The Focus of Lean and Six Sigma
Lean and Six Sigma share many similarities, but have a different focus:
• Lean focuses on system efficiency by improving work flow and process stability. – Eliminate waste throughout the system to increase speed and lower cost – Deliver value to the customer.
• Six Sigma focuses on improving process effectiveness through variation reduction. – Improve the yield and quality of processes and products. – Improve quality for the customer.
Note: Lean and Six Sigma aim to improve quality and reduce cost to satisfy customers. 11 What is Lean?
• Focuses on speed increase and waste elimination.
• Uses tools to analyze the process flow and wait times of each activity in the process.
• Identifies activities that add value and eliminates those that do not – Activities that increase lead time and cost do not add value. – These activities are referred to as waste.
“Quality is free, if we do it right the first time” – Right First Time.” – Wayne McCarty, Director of Manufacturing, Boeing 777
12 The Basic Objective of Six Sigma
Cost of Poor Quality is 25% to 40% of Sales 1,000,000 Revenue
100,000
10,000 Average Company 1,000 Cost of Poor Quality is
100 <1% of Sales Revenue DEFECTS MILLIONPER
10 Best-of-Class
1 2 3 4 5 6 7 SIGMA QUALITY LEVEL SCALE OF MEASURE
13 Is “99% Good” Good Enough?
“99% good” results in: • 20,000 lost articles of mail per hour • Unsafe drinking water for almost 15 minutes each day • 5,000 incorrect surgical procedures per week • Two short or long landings at most major airports each day • At least 200,000 incorrect drug prescriptions each year • No electricity for almost 7 hours per month
14 DMAIC Methodology
DMAIC is a structured methodology within Six Sigma. It is used to identify and eliminate defects in existing data driven processes.
DEFINE MEASURE ANALYZE IMPROVE CONTROL
D Define: Which process will be improved? What is the problem or defect?
Measure: How often does the problem occur? What is the current M performance?
A Analyze: When, where, and how does the defect happen?
I Improve: What must be done to correct the process? How do we do it?
C Control: What must be done to avoid a recurrence of the defect?
15 Supplier Lean Program – Training Curriculum
Training Title Duration What High Level Overview of Lean Six Sigma DMAIC Lean Six Sigma 1 day Methodology and Introduction of some process Foundations improvement tools through fun exercises. DMAIC Kaizen 1 day Overview of Kaizen Facilitation and Planning Facilitator Training Overview of Kaizen methodology for quick improvements Introduction to Kaizen 2 hrs. and identification of 8 Types of Waste Training
5S Training 1.5 hrs. Overview of 5S Process and potential benefits
Mistake Proofing Overview of Mistake proofing practices including the value 1 hr. (Poke Yoke) regarding quality, speed & cost Overview of A3 Chartering Methodology including how to put A3 Project Chartering 2 hrs. together Business Case and Problem Statement including a Charter Building exercise.
16 Keys to Success
17 Sponsorship
18 How to Effectively Sponsor Change
. Clarify Intent
. Sell “The Dream”
. Align the Organization Build the Sponsor Spine Cascade the Change . Build Commitment Manage Resistance Manage Adaptive Capacity
. Realize Desired Results
19 One Team Workshop
20 One Team Workshop:
1 Day Workshop hosted by Procurement and Business Process Excellence with Strategic Supplier Partner
Attended by Key Employees from Genentech and Strategic Supplier Partners
High Level Strategic View on Taking Performance to the Next Level
Workshop Focus on Driving Innovation (Collaboratively)
21 Developing “One Team” Behaviors:
Creating a shared vision for the relationship and defining what success would look like
Reflecting on the successes, challenges and learnings as a team and identifying opportunities and challenges ahead
Better understanding the perceptions share of each others’ cultures and what it feels like to be in each others’ shoes
Defining a set of expectations and guiding principles for the relationship
22 Visual Learning
In order to identify the high value ideas for Genentech, it was critical to find ways to drive active participation during the Lean Training Workshops. In order to accomplish this, we utilized Visual Learning to drive increased participation and ideas.
23 Celebrate Success
24 Supplier Recognition Awards Ceremony:
Provides Recognition for Suppliers participating in Supplier Lean Program
Creates Friendly Competition between Strategic Suppliers
Rewards and Recognizes Outstanding Suppliers in area of Innovation
Sends the Message that Innovation is Important
25 Results: Case Studies
26 GPP Supplier Lean 2014 Results by the Numbers
Genentech and Roche Suppliers participated in the Supplier Lean Program in 2014
million in cost savings enabled as a result of Supplier Lean Training Initiatives
Genentech, Roche and Supplier Employees trained in Lean principles
Supplier Lean Workshops facilitated (SSF, Basel and Italy)
Continuous Improvement ideas generated
Projects initiated 27 Results: Case Study One
28 Supplier Lean Initiative Project Outcome from Genentech Strategic Partner Supplier (Project duration 4.5 Months)
Financial Results
$279,800 $43,400 $461,200 Hard Efficiency Inventory Savings Savings Reduction
Non-Financial Outcomes
• More engaged stakeholders • Inventory levels optimized to usage • Future state controls • Automation to support service (VSR+) • Expanded JIT capabilities • Streamlined SMI work-areas 29 Project Review - Reflections • What worked well?
– Supplier Lean provided structured approach to train Suppliers/Category Mgrs. – Great collaboration among crossfunctional groups: Procurement, BPE, Business Partners and Supplier – Genentech Executive & Supplier Management Executive Sponsorship – Process and data-driven discussions and analysis – Project team had clear sight of future state; results-oriented
• What are lessons learned?
– Stakeholders resistance to change: Procurement approach to influence the business – DMAIC is an effective strategy for improving processes – The importance of focusing/prioritizing our problem to a manageable level – Not having SOPs and clear documentation can lead to inefficiencies 30 Results: Case Study Two
31 Challenges with Supplier Performance
• Inefficient Work Processes
• Excessive Expediting Requirements
• Lack of Clear Roles & Responsibilities
• Customer Satisfaction Issues
• Labor Efficiency Challenges
Create Planning Scheduling Parts Execute Work Notification 32 Mitigation - What are we going to do about it?
Work Work Initiation Execution Bullwhip Effect
Future State Fix inputs such as Priority of Work, Parts & Resource Availability
Current State High Effort to Fix issues, too late, too costly, drives frustration & blaming
How to Improve: Focus on Leading Indicators P1 Notification, Planning Accuracy, Parts Tracking 33 Roles Rationalization Proposal Current Process Proposed Process
Planner and Planning Scheduler
Scheduling
Planner and scheduler Sub Contract Chiefs & Assistant Chiefs Scheduling
Executing Engineers
Chiefs & Assistant chiefs Procurement desk – New Parts Order role with procurement focused tasks Expediting
Parts Logistics Engineers Parts Runner (Low Skilled)
34 Kaizen Workshop
. 24 Potential Solutions in 4 Key areas: Parts Tracking Work Order Notification Work Order Backlog Planning Accuracy
. 15 Targeted Solutions ($2 M annual savings realized)
. Roles rationalization identified for improving efficiency
. Wrench time measured and used to increase efficiency, which improved on-time Work Order completion % and lowered costs
. Lowered Work Order backlog and improved customer satisfaction 35 Results: Case Study Three
36 Process Improvement Employee Time Clocks
Problem Action Taken Results 1 Analog time clock located in 7 Biometric time clocks installed An estimated gain of over 1700 B54 at startup. throughout campus value added hours per month
BEFORE IMPROVEMENT AFTER IMPROVEMENT
Average gain of 27.5 value add minutes Over 1700 NVA hours per month per employee per day 37 Process Improvement Project: Warehouse Workload Balancing Kaizen
Problem Action Taken Results The night shift had Company staffed 4 employees After the analysis, the data showed approximately 28 employees on the night shift in the that the workload for the 4 performing a variety of tasks. Warehouse to perform a variety employees on the night shift in the We wanted to understand the of tasks. These tasks were not Warehouse were not properly distribution of work to ensure properly balanced between the balanced between the employees that the workload was employees resulting in an resulting in an inefficient workforce. balanced properly between the inefficient workforce. The workload was balanced, employees. headcount reduced by 2, which resulted in a $120,000 annual savings. BEFORE IMPROVEMENT AFTER IMPROVEMENT
The distribution of tasks among the night crew was not A analysis of the individual tasks clearly showed that the clearly understood or evenly distributed. workload was now more evenly distributed. 38 Supplier Lean Training Initiative: Key Take Aways
Sponsorship at all levels within Business Process Excellence, Procurement & the Suppliers is key to success
Resource commitment by Supplier Executives to work on improvement and waste elimination
The building of Lean capabilities ensures employees can solve problems for themselves and sustain the improvements
Involvement and collaboration with the business partners to ensure we are solving ‘real’ business problems
Early-on holding people accountable for follow-through using monthly reviews and dashboards to ensure everything is on-track.
39 Doing now what patients need next
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A Roadmap to Continuous Improvement through Collaborative Partnerships
Speakers:
Brian Ziskie Murat Necef Genentech Genentech 760-529-3552 650-270-0134 [email protected] [email protected]
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