Case Studies

Health Sciences Operations: Process Standardization and Automation to Meet Customer Expectations

Global Pharmaceuticals Firm
United States

Project Background

Changes in the healthcare industry demanded improved capabilities from pharmaceuticals companies. Customers wanted flexible ordering options, shorter cycle times, new packaging, increased service support—and lower prices. The company’s new ERP upgrades promised to enable this new flexibility, increase productivity, and deliver sustainable cost reduction. But it was late, over budget, and delivered mediocre gains. Rapid turnover was only exacerbating operational issues.

Various initiatives including workflow implementation, lean Kaizen events, and robotic process automation (RPA) technology made little headway on improvement to meeting the demanding new customer expectations. Internal automation teams and citizen developers were starved for automation opportunities and use-cases. One team leader learned about The Lab’s process standardization and discovery templates and arranged a meeting.

Project Overview

Project Sponsor: Senior Vice President, Operations

Client: Pharmaceuticals Firm

Implementation Results
  • Operating cost: down 34%

  • Customer service issues: down 50%

  • Line-item fill rate: up 30%

  • Break-even point: 7 mos.

  • ROI (12 month): 4x

Client Description, Project Scope, Objectives

The company is the U.S. subsidiary of a Top 3 global pharmaceuticals industry firm. Nearly 5,000 employees oversee research, development, manufacturing, sales, and distribution. The improvement effort focused on supply-chain operations, including sourcing, order management, production, distribution, and customer service—involving 3,000 employees.

The Lab’s 8-week, Phase I analysis effort documented the end-to-end workflow for all 3,000 employees. Operational efficiency and employee productivity were evaluated at the work activity level (~5 minutes each). Over 400 opportunities for innovation and continuous improvement were documented. These required no new core technology or equipment.

The 8-month Phase II implementation effort was able to increase productivity, compress cycle times, improve customer service and deliver cost reduction. Line item order fill rates improved by 30 percent. Avoidable contacts to the customer service center were cut by half.

Initiative Objectives:
  • Improved customer service

  • Lower operating expense

  • Process standardization, automation

Project Scope:
  • Customer service
  • Order management
  • Production scheduling
  • Materials management
  • Returned goods

Overview: Phase I, Analysis and Discovery

Within eight weeks, The Lab’s standardized process map and discovery templates enabled documentation of all major end-to-end (E2E) business processes for 3,000 supply-chain employees. More than 85 percent of their work activities (approximately two minutes each, or less) were documented. The templates enabled this detailed mapping while requiring only one hour per week of any subject matter expert’s (SME’s) time.

Next, The Lab’s advanced analytics models mined, compiled, and generated insights for the maps from internal client data: event logs, org charts, volumes, cost-center data, and much more. The Lab’s external data provided benchmark comparisons, best-practice comparisons, and automation use-case comparisons. Coordinating and reconciling the E2E maps with both internal and external data resulted in maps that could easily be directly reviewed, refined, and validated by thousands of the supply employees—even with the company’s overseas divisions in Europe and Asia.

Analysis & Discovery, Phase 1 Assets & Deliverables:

All major customer-facing and internal end-to-end business processes documented at nano-scale detail

  • 200+ process-standardization opportunities identified
  • 150+ automation candidates identified
  • 75+ advanced analytics and KPI use-cases identified
    • Performance measurement dashboards
    • AI/ML opportunities
    • Ad Hoc analysis: operational, strategic

Phase II: Standardization Implementation

Improvements implemented throughout the plant ranged widely in scope. These included seemingly insignificant, mundane changes like converting free-text fields in software applications to multiple-choice (standardized), drop-down menus. Other changes were larger and impossible to ignore—like revising the storage of work-in-progress.

However, the most valuable opportunities involved standardizing selected knowledge-work business processes as rigorously as the operations on the shop floor. Examples of these high-payback processes included:

  • Production scheduling
  • Unplanned maintenance
  • Capacity management
  • And more

Once these work activities were standardized, many could be automated by migrating them to existing systems: ERP, CRM, scheduling, and others.

Improvement Examples: Service and Distribution Standardization

The Lab implemented over 140 process-standardization opportunities and 30-plus automation candidates to increase service, productivity, and efficiency. Examples:

Service-based customer segments.

This strategy had been discussed for years – The Lab’s process maps and automations helped finally make it a reality. Regional segmentation was replaced with a three-tier system based on the scope of services required by customers. The low tier wanted only bare bones, low-cost, order-to-cash process services. The top tier wanted complex services: coordinated production of packaging and products, including collaborative inbound logistics and material management.

Packaging simplification.

Real time advanced analytics identified new ways to standardize packaging stock keeping units (SKUs). Needless over-specialization indicated low usage, even obsolescence, for most existing, customer spec’d SKUs (85 percent). Process improvement for packaging design and sourcing reduced vendors, customers’ excess variety, and eliminated two-thirds of SKUs. Cost-cutting opportunity came in the form of reduced packaging inventories and simplified packaging line operations.

Production scheduling standards, discipline.

Senior executives routinely disrupted daily, optimized production schedules—often to favor their personal accounts and related comp. Real-time visibility for ad hoc schedule disruptions by senior executives—and reduced unplanned disruptions by 70 percent. Once things calmed down, advanced analytics, enabled deep scrutiny. Most existing standards for bills of material, production labor, machine rates, etc., were overly complex and outdated. A lean redesign of standards, combined with scheduling process improvement revealed an extra 10 percent of “hidden” plant capacity.

The Lab Makes it Easy

Organization-friendly engagement design

At The Lab, we’ve spent three decades refining every aspect of our transformation engagement model. We’ve made it easy for clients—from the C-Suite to the front line—to understand and manage the initiative:

  • Minimal use of client time: One to two hours each week, maximum.
  • Measurable benefits: Typical 12-month ROI is 3x to 5x.
  • Pre-built templates and tools: Process maps, data models, bots, and more.
  • U.S.-based, remote delivery: Nothing is ever outsourced or offshored.

Designed to reduce risk, increase success

Since 1993, The Lab has led the industry in eliminating risk for our clients. Whether your engagement involves a handful of bots or wall-to-wall transformation, we make it easy to do business with us:

  • Fixed pricing and clearly defined scope
  • Early-out checkpoints and options
  • Money-back guarantees

Book your demo today

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