Thought Leader

Realigning from the company from within to keep up with the ever-changing vitality of pharma manufacturing has been no mean feat for Novartis’ Steve Dreamer.

“Part of the reason we’re successful is that we’re consistent, we do the same thing every time and it’s very predictable”
-Steve Dreamer

Steve Dreamer always knew that achieving his desire to change the way in which pharmaceutical management operated would be painful, but as he discovered, with much pain comes much gain.

“We started off in the US in implementing some of our operational excellence programs and we proved that they worked there, so then we brought them over to Europe,” says Dreamer, who is Global Head of Pharma Engineering for Novartis. “There was some skepticism up front as to whether this would this really work or if this just an American way of doing things; Europeans often like to have 100 percent of the answers before making a decision.”

“We were able to move very rapidly in the US on some of our implementations and they recognized that and admired it, saying, “Well how do we get our people to think differently? What can we do so that they can adopt some of these 80/20 type thinking so that we can move forward as well?”

Collaboration
One of the key ways in which Novartis developed their process teams to bring about a change in managerial direction was to put the quality control laboratories within the process team. The traditional thinking would be for the quality control laboratories to be standing alone, as a separate group, but Dreamer argues that by combining the two, there is an increase in open communication and an improvement in quality.

“What the agencies are really looking for is to be able to solve these problems collaboratively, not the previous confrontational type arrangement. As we try to collaborate with the agencies, this builds a level of trust and comfort, so by doing that and showing that these changes are accepted by the agencies, that helped open up communication,” he says.

The people and the processes within manufacturing take primary importance for Dreamer, rather than the equipment and the materials, the other two elements he believes to be detrimental to the manufacturing process. People and processes are the more sustainable elements, and the parts where the most opportunities for improvement lie.

“When there’s a new technology on the market, people often buy this, thinking it to be  ‘cool technology’: it runs faster and makes things prettier. They implement it and then they forget about the other elements. So it may be a fast piece of equipment but if the materials don’t allow you to run fast you don’t get any gains; if the process is of upstream and downstream of that new piece of technology, and if they aren’t in line, you don’t gain anything, and certainly if the people aren’t on board you certainly don’t gain anything either.
 
“So we always look at those for elements to make sure that things are in sync. When we look at an improvement we try not to look at just a silo or unit operation, we try to look at what’s the impact of the business. So if we want to change the business we look the process of material and the operations that are going to impact the business, and then we look at the roles of the people, and then finally the people that are in those roles. So we always follow that formula and it seems to work,” says Dreamer.

There is no specific formula for the model of these iterations. Originally, the changes that came in the traditional way did so via a person joining, changing the organization, bringing in new people, and then letting them pick the process. However, this system was simply not efficient enough for Novartis, who have instead decided to flip the process around.

Management change
“We do this on a local scale, as well as on a global scale. There’s a change management program that goes with it, which makes aware of how uncomfortable the change is going to be, so we take people through this training and we support them.

“The most important thing of all of this is the leaders that we’re trying to develop them as coaches, not as managers. We don’t want people that are going to go out and tell their operators and workers what to do. These people know better than anyone how to make medicines, so what we want to do is coach them and that helps them through the transition,” he explains.

Novartis’ structure can be described as the creation of a much flatter level of management organization: the company has laid out various places in which people with specific qualifications are needed, and then increased the management responsibility to ascertain educational decisions as to the positioning of these people. Dreamer explains that if this is done in the right way, then management are able to take a step back, and the operations should be able to successfully run independently.

“If you don’t address the process first,” says Dreamer, “If you just go in and try to do cultural training, you don’t gain anything. I’ve had a lot of people ask, “We don’t want to change our processes. We just want to change the culture.

“I’m not convinced that simply changing the culture will work because, although you may change people to think differently, they don’t act differently. So by changing the process they have to act differently and that forces them into a new way of thinking. Then you get a culture change. We try to follow that step and if you do that in the right way and you remove the ways from processes and people working with this new process they can’t drift back to the way it used to be. You’ve eliminated all the different levels of management.

“In some of our sites we had eight levels of management. Today on all of our sites we’re at three levels. There’s one or two still at four and they’re moving to three levels. When you get to that point you’re never going to come back in and add layers, so you only hire the people that can work within this new framework and we’ve done that for 18 sites now quite successfully,” he says.

Target 2010
Successful is certainly an accurate word in which to describe Novartis’ management change, with a full implementation of a lean structure almost in place. Dreamer attributes this to the managerial adoption of a “top-down vision”. “You can’t just sell – people go out and do lean or people go out and do improvements. They’ll walk different directions so you have to bring it together; they want something to work towards so we try to put this vision in place. We call it ‘Target 2010, The Toyota of Pharma’, which is a five-year plan. We put it in place in 2005 and it’s running through 2010, and we never wavering from the program.

“Often in large companies each year they come out with a new flavor, but we’re trying not to do that. We have a vision as to what we want the supply chain to look like and we work towards that bottom up. We enable the people, we give them the tools, we describe what processes we want and we let them work. They start at the low level site-by-site and we start connecting it together, adjusting the people as we go.

“Some of these new supply chain techniques are not learnt in university. Nobody else in the industry has done it, so you have to create the people and that takes time. You have to bring them along, educate them, and sometimes you have to change people as well, but eventually we work towards that vision. We have measurements along the way that we look at: throughput time, customer service levels, productivity and overall asset effectiveness. We monitor those and you advance in one area, and then you work in the other area. All of those things have to line up well in order to really achieve that vision,” he explains.
 
However, the implementation of Target 2010 does not necessarily mean a rigidity of the system, because of course with learning, change becomes necessary. “One of the things that we always tell our people is identify 80 percent of it and go. 20 percent of it you’re going to have to figure out along the way. If we tried to get all 100 percent we’ll never get anywhere. So somebody asked the other day, “Okay, 2010 is next year. What’s the next vision?” We don’t know. We’re comfortable in saying, “I don’t know” because when we get there we’ll figure out the next step. If we start thinking about it now there’s still opportunity over the next year to realize certain improvements and we may forego something if we try to do it too soon,” he explains.

By the end of 2009, the vision for Novartis’ next plan is due to be implemented. Rather than a master plan, like the one implemented in 2005, this time round they are opting for a step-by-step proposal, allowing them to continue learning on the way. The established values of Novartis’ traditional structure are steadily being replaced to encompass a learning organization, and change the culture in which managers think, encouraging them to be positive of the changes and inspirational as to what the next steps should be.

Continuous manufacturing
Another policy that Dreamer is championing is continuous manufacturing. He explains how the advantages of this creations of a lean structure is to reduce overall throughput time end-to-end, from the first chemical step all the way through distribution.

“In some cases, for major products, we’ve been able to go from 550 days down to 200 days. If continuously manufacture, you conceivably go from 200 days down to 35 days or less, and it’s not just changing existing batch processes and connecting them together in a continuous way, but it’s changing the chemistry.

“One of the advantages is that it should be significantly less capital investment. We combine all of the steps of the drug product together into one manufacturing step and, because you put stuff in one end of the pipe and you get tablets out the other, you can control quality better. You don’t have all of these intermediate tests that you have to deal with. No other company has done this. It’s a 15-year journey for us: we’re in pilot now this year and we’re starting to see some progress with it that makes us believe it’s going to be real,” he explains.

The move to lean and the push for continuous manufacturing are coalescing that vision, which is displaying the innovation part of the process. Dreamer notes a Lean program already in place, Innovation Quality Productivity (IQP), which focuses on the quality removing variability from our processes. He explains this to be the typical six sigma, whereas the innovation part of pharma to be a little more difficult.

Innovation
“We’re innovative in the products that we develop, but we don’t want to have operators running around the plant being innovative and trying new things. Part of the reason we’re successful is that we’re consistent, we do the same thing every time and it’s very predictable. There’s no room for innovation in the way you make the products. However, if you can redesign the whole process, innovation can make a difference there and we believe this might be a strategic advantage for us in the future.

“Innovation in the pharmaceutical industry is producing products that solve disease issues in a different way: it’s the overall health of it. Is it important to have innovation in the way you make the product? We’re not in the business because we make the product. We’re in the business of healing, of solving unmet medical needs. That’s the innovation part and that’s where the industry really should focus on making the product.

“We should be able to make it with the highest quality, with the fastest time, and with the lowest cost, and if innovation can help drive that then we will look at it, but innovation in making product brings probably not a lot of benefit to the customer in the end. Ultimately, they’re going to get a tablet and they won’t know if innovation took place in there, not like an iPod or other devices that a consumer would see. So for us, innovation is improving quality, reducing cost, or being more responsive to market demand, but the real innovation for pharmaceutical is in the patient healthcare,” Dreamer concludes.

As Head of Novartis’ Global Pharma Engineering and Innovation Quality Productivity, Steve Dreamer is responsible for providing technical and project management for major capital investments, and for building operational excellence capability for the TechOps organization to achieve Target 2010, The Toyota of Pharma Vision by embedding Lean, process oriented organization and other re-engineering processes.

“We have a vision as to what we want the supply chain to look like and we work towards that bottom up”
-Steve Dreamer