Efficiency Improvement in Manufacturing Processes
This company is part of a privately owned Portuguese pharmaceutical group with deep historical roots dating back to 1924. Over the years, it has established itself as a prominent figure in the pharmaceutical landscape, expanding its activities to encompass all facets of the industry.
Strategically located near Lisbon, its geographical position optimizes logistics, being just 20 minutes away from the region’s central hub. This privileged location has been a crucial factor in its global operations, as it is present in 27 countries where it is recognized as a leader in the pharmaceutical industry. This expansion is not only a result of commercial success but also stems from the ability to meet a diverse range of market demands and health regulations in different countries, continuously adapting to meet the expectations of an ever-evolving global market.
The core business of this company is to manufacture solid and liquid pharmaceutical forms, but what truly sets it apart is its flexibility and commitment to quality, as well as its ability to quickly adapt to the varying needs of clients, meeting tight deadlines without compromising on quality.
The mission of this company goes beyond mere pharmaceutical production, as it aims to achieve excellence through optimized processes, always striving for the most efficient, quick, and cost-effective production possible. Backed by a strong management strategy, this company emphasizes continuous improvement and efficient use of resources. With a clear goal to expand its global presence in the healthcare sector, it focuses not only on current operations but also stays alert to future opportunities, especially in emerging markets and growth areas.
Within the company, the composition and dynamics of teams are crucial for meeting objectives. Collaboration and integration across different areas of expertise are particularly important. As a multidisciplinary team, the following departments played integral roles in the project:
- Quality Control;
- Quality Assurance;
A diagnosis phase was conducted, and several improvement opportunities were identified:
- Increase efficiency in packaging – increase Overall Equipment Effectiveness by about 11 basis points
The analysis focused on the speed of the packaging machines, with the goal of accelerating this process through a blend of advanced technology and efficient working practices. The goal was to ensure the optimal speed of the machines without sacrificing accuracy and product quality.
- Improve quality control – reduce lead time
Focusing on improving quality control, the company optimized the quality control processes for raw materials (RM) and active substances (AS), thoroughly revising existing procedures. This effort aims to eliminate inefficiencies and comply with the highest international standards. Simultaneously, the strategy of reduced analysis seeks to simplify the analysis processes, reducing the complexity of analytical methods without compromising on the quality of results while maintaining the rigorous precision required in the pharmaceutical sector.
- Optimize warehouse space use – reduce idle stock
Optimizing warehouse space is a critical strategic challenge, with the primary goal of reducing idle stock. This initiative aims to optimize the management of available space, promoting more efficient organization and a more agile material flow. By focusing efforts on reducing immobilized inventory, the company frees up valuable warehouse space, improves responsiveness to market needs, and reduces storage costs.
- Reduce lead time for one of the clients from 90 to <60 days
The last point focuses on reducing the lead time for one of the clients, setting a goal to decrease the delivery time from 90 to less than 60 days. This initiative is vital for improving customer satisfaction, demonstrating the company’s commitment to efficiency and service agility. Shortening the delivery time improves the customer experience and, in turn, the company’s competitiveness in the market.
Based on the objectives mentioned above, various initiatives were implemented, with one of the project’s main focuses being the increase in efficiency in the packaging process.
One of the first initiatives implemented was the team meeting routines – Daily KAIZEN™️. This tool was implemented in 18 teams and involved daily sessions to discuss packaging process improvement. The goal is to identify small incremental improvements that, over time, result in significant operational efficiencies. This KAIZEN™️ tool develops teams and trains them for structured problem-solving.
A second initiative was to look into the downtime between changing production references. SMED was used to reduce it. This framework was applied to drastically reduce the time needed to change the setup of the packaging machines, identifying and eliminating all unnecessary tasks and designing a new standard operation for changeover, complemented by a continuous effort to adjust and optimize the packaging lines to maximize productivity.
In the context of optimizing quality control (QC) processes for raw materials (RM) and active substances (AS), a comprehensive review and redefinition of the procedures were implemented. A major change involved shifting the responsibility for raw material sampling from the quality control department to the warehouse. This move streamlined the reception process and simplified documentation, reducing administrative workload. Additionally, analysts and reviewers received training in various tasks, promoting greater flexibility and balance in the workload. Furthermore, workbenches were refined to maximize efficiency, and the sequencing of analyses was optimized, aiming for continuous and effective improvement in internal processes.
Regarding storage space optimization, the warehouse organization was restructured, using modern techniques to maximize the use of available space. This included implementing vertical storage systems and reconfiguring the layout to improve materials flow.
The speed of the packaging machines was also a key analysis aspect, to increase the speed of this process through a mix of advanced technology and efficient working methods. The goal is to ensure the optimal speed of the machines without sacrificing accuracy or product quality.
In terms of reducing lead time and focusing on a more agile and efficient supply chain, the company worked closely with one of its main clients to significantly reduce the waiting time from production to delivery. This involved optimizing internal processes and more effective coordination with suppliers. To achieve this goal, it was necessary to implement improvements in internal processes, from production to distribution logistics, optimizing each step to ensure faster delivery.
Finally, the company adopted a development program for employees, including training, career progression opportunities, and recognition of exceptional performance, aiming to increase motivation and ensure they have the skills and knowledge necessary to face future challenges.
The case study showcases impressive results in process optimization, highlighting significant improvements in several key areas.
Improving the packaging process significantly increased the company’s operational efficiency. A substantial reduction of 54% in setup time contributed to decreased downtime and increased production, which, in turn, allowed the company to respond more promptly to market demands and improve its flexibility in switching between different products. Furthermore, another improvement achieved a 27% reduction in setup time, making the process more agile. This additional efficiency not only reduced operational costs but also increased manufacturing capacity, significantly enhancing the company’s ability to meet the diverse needs of its clients.
There was an improvement in the speed component of the OEE (Overall Equipment Effectiveness). The optimization initiatives implemented significantly increased equipment efficiency and productivity, with a 16% increase in overall efficiency, translating into a seven percentage point advance in OEE. This progress reduced resource waste and increased equipment utilization, contributing to better production capacity. Additionally, there was a 28% increase in OEE, equivalent to a ten percentage point increase, marking a substantial transformation in productivity. This improvement optimizes equipment utilization and enhances the final product’s quality, showing the positive impact of optimization strategies on operational efficiency and product quality.
The 41% reduction in quality control lead time for raw materials considerably impacted the production cycle, significantly speeding up the workflow from reception to production. This improvement raised operational efficiency and allowed the company to respond more quickly and effectively to market demand changes. Also, the reduced waiting time for the production start contributed to a more agile and efficient supply chain, reinforcing the company’s ability to maintain a production pace aligned with customer needs and expectations.
Resource optimization in the quality control team substantially improved efficiency and operational effectiveness. The significant reduction in the number of analyses and the time needed to conduct them decreased the workload. It allowed the team to focus on strategic tasks, adding greater value to the company’s operations. Similarly, the release of time (equivalent to 815 annual hours) promoted a more efficient allocation of resources. This change enabled the team to focus on development and innovation projects and considerably improved the company’s ability to adapt to new challenges and explore emerging opportunities.
Efficiency in the use of warehouse space improved substantially, as evidenced by a 39% reduction in the number of non-rotating positions. This improvement is a clear indicator of more effective inventory management, which not only optimizes internal logistics but also contributes to a reduction in storage costs.
Implementing a continuous improvement culture within the company positively and comprehensively impacted employee engagement and productivity. A more dynamic and innovative work environment was cultivated by encouraging the team to participate actively in improvement processes, promoting team motivation.
In summary, this company is an inspiring benchmark for other entities, especially those seeking to transform operational processes and improve corporate culture. This can lead to sustainable success and a leadership position in the market.
The approach it adopted went beyond the mere implementation of technical improvements by establishing a new paradigm in how the company perceives and faces the challenges of the pharmaceutical sector. The ability to achieve tangible efficiency and productivity improvements while retaining high-quality standards shows a rare balance between operational agility and technical rigor, which is paramount for a company to perform smoothly.
Through a series of focused initiatives, the company improved efficiency in critical areas such as packaging, quality control, and warehouse management and fostered a corporate culture that values innovation and employee engagement. The drastic reduction in changeover times on the lines and the increase in overall equipment efficiency are proof of the success of these operational improvements. The significant decrease in quality control lead time and warehouse space optimization demonstrates effective management and intelligent resource utilization.
Beyond the impressive quantitative results, what stands out in this case study is the cultural shift that touched every level of the organization. It began with the adoption of a continuous improvement philosophy, fostering an environment where innovation isn’t just encouraged but also seamlessly integrated into the daily routines of all employees. This aspect is particularly relevant for other companies seeking to improve processes and inspire employees to be proactive agents of change.
This company demonstrated that true transformation comes from combining effective operational strategies with a genuine commitment to people development and promoting a culture of excellence. This success story offers valuable lessons on embracing change, continuously adapting, and keeping employees at the center of the improvement journey.
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