Case study

Improving Operational Efficiency in the Pharmaceutical Industry

The Company

The company operates within the pharmaceutical industry, producing drugs and health products, and employs around 400 people. The organization is active in various pharmaceutical areas, including solids, liquids, and packaging, maintaining a strong presence in both national and international markets.

The Challenge

Before implementing the improvements, the company faced several critical challenges, particularly related to operational efficiency and the level of service offered to customers. Among the main problems were supplier delivery times, which exceeded 35 days, negatively impacting planning and compliance with agreed delivery deadlines.

The average stock coverage was over five months, with an outstanding value exceeding 5 million euros, particularly in lower-volume, slow-moving items. Additionally, there was a high value of WIP of approximately 366 thousand euros across the production chain.

All materials, including raw materials and packaging materials, were purchased after each customer order. The overall service level performance was below expectations, especially for the company’s top five customers. In addition, there was the lack of a structured continuous improvement culture and a systematic approach to problem-solving.

The Approach

To address these challenges, the company implemented a series of strategies and methodologies, including:

1. Daily Process Monitoring and Problem-Solving Routines: Implementing daily monitoring routines and visual management to improve transparency and the effectiveness of problem-solving across all teams.
2. Gemba Walks: Implementing routines for on-site visits by top management to identify improvement opportunities directly at the workplace.
3. Setup Time Reduction: Reducing the reference changeover time on pilot machines by applying SMED (Single Minute Exchange of Die) methodologies.
4. Productivity and Service Level Improvement Teams and Workshops: Creating teams focused on improving productivity and service levels, with workshops dedicated to KPI analysis and countermeasure implementation.
5. Daily Kaizen: Implementing Daily Kaizen in all teams, achieving an average success rate of 97% in final audits.

Results

The results achieved with the implementation were significant:

• Service Level Improvement: The service level improved from 64% to 93%, resulting in an estimated impact of over 500 thousand euros annually.
• Setup Time Reduction: Setup times on pilot lines were reduced by 50%.
• Supplier Lead Time Reduction: There was a 24% reduction in supplier delivery times.
• Increase in Overall Productivity with quantified benefits exceeding 550 thousand euros per year.

These improvements reflect a substantial increase in operational efficiency and in the level of service offered to customers, demonstrating the effectiveness of the methodologies implemented by the company to overcome the initial challenges.