An Overview of Lean and How to Adopt Lean to Biotech Manufacturing

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1 An Overview of Lean and How to Adopt Lean to Biotech Manufacturing ISPE 16th Annual Vendor Night Exhibit Show March 1, 2007 Dr. Fadel Hamed Process Owner, Operational Excellence Training and Methodology Genentech Inc.

2 Presentation Objective Provide an overview of Lean Introduce the 5 Principles of Lean Review the 7 Wastes Discuss how to adapt Lean to Biotech

3 Let s Start with a Baseline

4 Genesis of the Toyota Production System Interchangeabl e Parts Eli Whitney Standard Costing Model Variety Mass / Batch Alfred P. Sloan Jidoka S. Toyoda Assembly Line Time & Motion Division of Labor F. Taylor Waste Elimination System Synchronizatio n Mass Production Henry Ford Supermarket Replenishment Systems Quality E. Deming J.M. Juran TOYOTA PRODUCTION SYSTEM Taiichi Ohno Employee Partnership P. Drucker Just - In - Time K. Toyoda

5 Toyota vs. Lean- The Dinner Story Lean is the elimination of anything not absolutely required to deliver a quality product or service, on time, to our customers.

6 Some Common Opinions about Lean It s a factory thing Our business is different We tried something like it before It won t work here We are already Successful without it It s an excuse to take our jobs away from us Zero inventory Zero Defects Is this Part of Lean Cuisine!

7 The Five Principles of Lean Specify value in the eyes of the customer Identify the value stream and eliminate waste Make value flow at the pull of the customer Involve and empower employees Continuously improve in pursuit of perfection

8 Lean is Customer Focused Lean People Customer Process Strategy

9 Value Added Activity An Activity that changes the size, shape, fit, form, or function of material or information (for the first time) to meet customer demands and requirements. Non-Value Added Activity Those activities that consume time or resources, but do not satisfy customer demands and requirements

10 The Seven Wastes (Muda) There are (Seven + 1) Types of Waste Defects Over production Transportation Waiting Inventory Motion Non-Value Added Processing + People

11 What is a Value Stream INFORMATION FLOW SUPPLIERS Sales & Marketing R&D Engineering Order Entry & Planning Operation Finance CUSTOMER MATERIAL FLOW

12 Balancing Push and Pull TAKT KANBAN The rate at which end product or service must be produced and delivered in order to satisfy a defined customer demand within a given period of time. A small card, or other visual cue, that regulates Pull in the production system by signaling upstream production and delivery.

13 Empowering Employees If we, as leaders, believe that our competitive success is directly related to the output of our employees, then we are bound to the effort to maximize the innovative potential of value driven opportunities for our organization Ralph Larsen CEO J&J

14 Continuous Improvement Goal: Elimination of Waste JIT Continuous Improvement Standard Work Goal: Customer Satisfaction Visual Factory Standardizing Sorting 5S Shining Sustaining Storage

15 Lean and Capacity The capacity of this process is here! Where is the Capacity of This Process? DEMAND PROCESS STEP Understanding The Constraints Is Crucial To Plan Meaningful Actions

16 Removing Defects May not Solve Demand Issues = capacity consumed by defects DEMAND PROCESS STEP Identifying your Constraint is Key to Success

17 Stand Alone Lean and DMAIC Activities Enable us to Attack Variation and Waste Suppliers Procurement Process Development Lean HR Supply Chain Operations Finance 5S Quality Lean CIT Distribution Global Initiatives Customer Service Customer Lean DMAIC Integration Creates a value chain to our Customers and Shareholders Suppliers Supply Chain Quality Procurement PD Operations CIT Distribution Finance Materials Support HFF/FOF Global Initiatives Customer

18 Lean in Biotech What Purists Say zero defects Zero lot size Zero set ups Zero lead time Zero handling Zero breakdowns Zero surging Zero Inventory What is Real Zero re-occurring and major defects Optimized Lot size to meet demand Reduce Setup time to enable efficient flow Remove NVA and White Space to Focus on VA Handling between ops is minimized Control unplanned downtime Planned Predictable performance Minimum inventory needed to support business strategy

19 Some Final Thoughts

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