ACTIVITY: ethical drug manufacture
TASK: high-volume, cost-effective production of quality-critical pharmaceuticals
SIZE: 450 employees
OUTSTANDING FEATURES: re-engineering, working patterns, employee motivation, continuous improvement, changeovers
With a few notable exceptions, the pharmaceutical industry is not renowned for world-class manufacturing. This started to change when a history of protected markets and comfortable pricing came to an end in the early 1990s, not only in the UK, but around the world. For manufacturers, the party abruptly ended when the costs of inefficiency could no longer be added to the price charged to the consumer.
Keith Powell, director of manufacturing operations at US drug giant Eli Lilly's Basingstoke plant (the company has 25 globally), remembers all too clearly the situation he inherited upon taking up the job in 1993.
With urgent cost-cutting the order of the day, a wave of redundancy had just taken out 17% of the workforce - including his predecessor.
Yet the core problem remained. Massive inventories combined with low productivity and a workforce heavily reliant upon temporary labour to yield poor service levels: in a make-to-order environment, only three-quarters of orders were despatched on-time. For 'on-time' read a fairly comfortable target: the week in which they were planned for despatch.
Powell's plan: stabilise, then streamline, then re-engineer. Stabilisation called for reaching MRPII Class A status, achieving a consistent quality record, and focus strongly on improving the on-time despatch record. This phase came to an end in February 1996, with the recognition that the steady progress Class A status had indeed been completed - a journey which saw not just the award itself, but the accolade of an internal Eli Lilly award in respect of its consistent 98% despatch reliability rate.
Today, two years into an aggressive streamlining and re-engineering programme, even this achievement pales into insignificance. The re-engineering project, christened Project World Class, has delivered between £2.5 million and £3 million of savings to the bottom line, reckons Powell - and 'there's no end to the project in sight'. The source of these savings are various: efficiencies have been boosted by an innovative working pattern, for example, where operatives work 12-hour shifts for four days, and then take four days off. With equipment operating continuously around the clock, seven days a week, 'there's been a huge boost in output'.
No stone is left unturned: a team of 17 full-time employees was hard at work on the re-engineering project at the time of the judges' visit; their office a mass of flow charts and diagrams 'We use an assignment in Project World Class as a development tool for employees,' says Powell. And for some people, he adds, the secondment leads to a virtually permanent continuous improvement role: one operative returned from the project as the plant's slicker-changeover SMED co-ordinator. 'He was saving so much, it no longer made sense for him to work on production tasks,' says Powell.