Operation & Production at Wyeth - Coursework Example

Wyeth Case Study – Operation and Production Name: Lecturer: Course: Date: Table of Contents Table of Contents 2 Introduction 3 Report 1: Summary report from Kamarck to Kouba 4 Background 4 Directions for achieving desired goals 5 Report 2: Directive letter from Kouba to site leaders 6 Summary of challenges at hand 6 Workforce Capability 6 Culture and cultural conflicts 7 Resistance to change 7 Power realignments 8 Issues with communication and uncertainties 8 Proposed directions 9 Organisational culture change 9 Leadership transformation 9 Creation of new business models 10 Strategic alignment 10 Effective communication strategies 11 Diagnostics assessment 11 Organisational learning 11 Report 3: Recommendation report from Montreal site MD to Kouba 12 Report 4: Recommendation report from Montreal site QH to Kouba 15 Conclusion 19 Reference List 20 Introduction Organisations create dominant operational transformations over time, which can be reliably evaluated using instruments that are based on competing values framework. Certain strategies form certain priorities, assumptions and values, which predominate when a corporation with global bases address challenges and adjust in accordance to the changes. The dominant organisational cultures can help organisations to remain stable, consistent, flexible and adaptable in confronting the challenges presented by the changing environment, during the process of operational transformation (Cameron 2009). In the case study, Wyeth faces generic competition, declining sales and a shift in the regulatory landscape. The company’s situation had changed dramatically towards the end of 2008, after learning that its major competitor was planning to launch a version of its drugs, almost 3 years before the expiry of its patent. Hence, the company had to come up with an aggressive strategy to counter the effects of the changes. In respect to the company’s global manufacturing plants, the company found that it had to make significant changes to deliver a portion of its savings, as it couldn’t achieve such objectives using traditional and incremental approach to cost savings (Oliver et al. 2009). Therefore, there is a need to transform the way the company behaved and thought across its network of manufacturing sites. In the case, Wendy Kouba has just taken over from Mike Kamarck to implement operating efficiencies throughout the global Wyeth network of sites. Four reports present an analysis of the case. These include a summary report from Kamarck to Kouba briefing the objectives at hand, a directive letter from Kouba to site leaders, and two recommendation reports from site MD to Kouba and from site QH to Kouba. Report 1: Summary report from Kamarck to Kouba Background In 2007, the pharmaceutical industry experienced difficulties in many area, including plummeting profit margins, prevalent consolidations, drying up of product pipelines, greater investment in research and development for new drugs and lack of patent protection on a global scale, due to lack of international patent support (Oliver et al. 2009). This was aggravated by the growing competition. For instance, in December 2007, the company made a discovery that a rival company called Teva would introduced a generic for Wyeth patented drug called Protonix, whose support was, however, to end in 2010. The drug was a major revenue earner for the company. In addition, two of the company’s major revenue-generating drugs, namely Effexor and Premarin that accounted for approximately $3 Billion of the company’s annual revenue, were approaching the end of their patents. At the same time, the mounting pricing pressures in the pharmaceutical industry also made the company’s products less competitive (Oliver et al. 2009). Based on this background, it was decided that Wyeth should cuts its operating costs by some 25 percent to retain its competitiveness in the industry. In 2008, the company’s pharmaceutical operations strategy consisted of 25 production facilities globally, each with broadly ranging leadership, culture and technological capability (Oliver et al. 2009). Despite the operational excellence (OE) program used in the company, where by each site had certain project-based improvement capabilities, there was no strategic coordination or vision. Additionally, the site network was broad while at the same time each site was run as an independent entity that competed with other sites to generate the next megahit drug. Additionally, the site manager’s motivation pattern was not consistent, with focus on selling drugs just to fill the factories and to stop running idle. There was also no consistent process-improvement authorization from corporate as they were basically told to get something done (Oliver et al. 2009). The site manager’s relationship with the corporate was mainly at ‘arms-length’, adversarial and impersonal which in turn generated lack of coordination. Directions for achieving desired goals While a highly ambitious and aggressive goal of reducing the operational costs by some 25 percent persists, there is a need to make sure that high quality standards and high supply standards are maintained. At the same time, there should be a commitment towards carrying the goal in a manner that would ensure that the company builds its capability to continue improvement. The company needs real transformation across the company’s global network of manufacturing sites. Achieving total transformation of the Wyeth needs systematically transforming behaviour and thought processes of the leadership across the company’s network of manufacturing sites. There is also a need for significant changes in the manner in which each individual at the site works. To achieve these, several recommendations are further made. A holistic approach that focuses on three primary elements should be implemented. The three include operating system, which makes technical changes through adoption of the elements of Six Sigma and Lean Management. Second, there should be focus on management infrastructure. These include formal processes, structures and systems for operating system that is managed to attain business objectives and to deliver outcomes. What is critical in management infrastructure is the concept of where and how leader spend their time. It should concern lean leadership where truth lies and to get the leaders out of their offices while centred on supporting and engaging individuals on the floor. The third element comprises behaviours and mind-sets, which drives continual improvement culture by doing two things. These include building the organisation’s capability through just-in-time approach to learning. The learning should further be integrated with engagement of the hearts and minds of individuals in the manufacturing site (Cameron 2009). In using the holistic model, deep technical change is blended with cultural change to enable the sites to operate with tools and approaches that trigger breakthrough improvements. Report 2: Directive letter from Kouba to site leaders Summary of challenges at hand Workforce Capability Getting the right team to implement the strategy was supposed to be a critical success factor to the deployment of mini-t’s in the 16 first-wave sites. The capability of the workforce influenced the capacity to successfully implement the strategy. Hence, although Wyeth’s strong workforce in the sites has talented and highly proficient individual, this is not all as they are also a risk factor to successful implementation of the strategy and the gateway to its success. As stated by Nielsen et al. (2008), where an organisational pursues multifaceted strategies, the strategy is bound to fail unless the whole workforce understands the strategies and has the required skills and talents necessary for the execution of the strategy and when they are highly motivated to achieve the goals. Culture and cultural conflicts Organisational culture is a vital success factor for deployment of mini-t’s in the 16 first-wave sites. The existing organisational factor was hostile in implementing mini-t’s successfully. Organisational culture that supports the implementation of strategy should be able to display clear and open communication, integrate with the workers’ interest, as well as show acceptance for innovative ideas (Leidner & Kayworth 2006). Cultural conflicts exists due to the diversities in Wyeth’s global manufacturing sites at organisational and national levels, leading to the intersection of departmental and organisational values embedded in the use of certain strategies (Cameron 2009). Hence, despite the fact that the site leaders play a critical role on deployment of mini-t’s in the 16 first-wave sites, Wyeth’s ingrained cultures determine with the strategy would be executed successfully (Pennypacker 2008). Resistance to change Executing the strategy at the 16 Wyeth sites involves introduction and management of the strategy to address the organisational objectives. In turn, it reflects the need for significant levels of change to the various sites. From the case, it is clear that the changes that Kamarck proposed have met with resistance from the site leaders and the employees. Many of the quality heads at the sites were afraid to use Lean Management since it was associated with fewer people, fewer steps and fewer greater risks (Oliver et al. 2009). Hence, cognisant that it could take months to alter processes because of compliance and regulatory issues, some Quality Heads were of the perception that the Lean process would not meet aspirations specified by the senior leadership, such as continued supply of medicine of high quality while reducing operating costs by 25 percent. Every system is often biased towards the individuals who created it because the values and beliefs of the design team are reflected in their creation (Vaugahn n.d.). As stated by Markus (1983), the three key things that lead to such resistance include situations in the departments, due to factors that are unique to them and which the change threatens to overhaul. Second, the resistance may originate from problems that are intrinsic in the strategy, such as those viewed to have poor designs. Lastly, the resistance may result due to the interaction between the features of individuals who need to implement the strategy (Yang et al. 2008). For instance, Harry Gill, who is the site manager at Puerto RIck, Guayama and Aida Cruz complained about the 'mini-ts' as having certain forms of mechanisms and rules, which made up a system that they could all apply. Power realignments As reflected, Wyeth is vulnerable to power realignments, since it only seeks to involve the senior management and the site leaders in implementation of the strategy. This generated a feeling of isolation among the downstream employees. It further contributed to resistance to change, as a result slowing the execution of the strategy. Essentially, companies that aim to execute a strategy position themselves for power realignments that result from the design of the strategy. Issues with communication and uncertainties Uncertainties within Wyeth have caused confusions, thus significantly challenging successful implementation of the strategy. Factors signifying uncertainties include poor communication and feedback mechanisms, in addition to lack of clear goals of what should be expected from the strategy. This has promoted disorders, which has confronted the site leaders in their efforts to implement the strategy successfully (Kotter 1995). Proposed directions Organisational culture change Organisational transformation should begin from the site managers. They need to change their actions to ensure that production increases, as well as becomes efficient. Hence, the site managers should also start to talk about step change improvement instead of incremental change (Parmelli et al. 2011). They should also understand their exceptional position as role models for the change. For sustainable change to happen, the leaders should change the way they think and behave. This is different from traditional operational excellence strategies. Sustainable change will happen when the site managers make personal changes in their behaviour and own thinking. Once the site managers are made to realise what they should do as leaders, they will engage the employees based at their sites to take ownership of process improvements and to drive change (Oakland & Tanner 2007). Leadership transformation The site leaders should take strong leadership roles. As stated by Smith et al. (2007), among the dominant factors that distinguish a company, which benefits from high value and those that do not, is the strong leadership role that leaders take in making decisions in organisational management. Hence, failure on the part of the leaders to take such initiative is a recipe for failure. Hence, the site leaders must take strong leadership roles and get the right front-line personnel. For instance, they should be mentors and coachers rather than dictators and administrators. Creation of new business models The new business model should be communicated effectively to the entire workforce if it has to be understood and to gain acceptance. The business model details out the ways in which varied pieces of business fit together. It further ensures that different legislative pieces fit together and that the strategy is focused on the objectives the company intended to attain. Hence, clarifying the new model can bring value by ensuring that the company’s executive management and employees understands how the new model operates as a whole. As suggested by Ghobakhloo et al. (2012), although greater willingness may exist on the part of the leaders to recognise and implement business strategies, their capacity to translate such strategies is what determines the success of the strategies. Strategic alignment There is also a need for strategic alignment throughout the corporation and its site offices. Alignment refers to the top-to-bottom systematic arrangement of business goals, methods of information sharing among the business units and the organisation’s capacity to understand and take advantage of the factors external to the organisation. Strategic alignment entails the dynamic process of ensuring continual change and adaptation to change. It also refers to the extent to which business dimensions coincide with the mutual coherence, of where the corporate strategies are synchronised to support the stated alignment. According to Santa et al. (2010), a company’s competitive essence depends on its ability to align to its business operations in the corporate strategies and objectives (Delery & Doty 1996). Effective communication strategies Wyeth should implement effective communication strategies. This is to ensure time collection, dissemination and storage of information and effective coordination of roles during deployment of the mini-ts and operating efficiencies. It also includes passing to the employees communication on changes in the organisation to prevent deterrent in implementing mini-t’s in the sites (Oakland & Tanner 2007), and to get the site managers to change, a comprehensive diagnostic at all sites. For instance, the site managers should have regular and consistent communication rather than operate in disunity. Additionally, the site managers should coordinate with their colleagues in order to assess the plant’s value streams and budget. Diagnostics assessment The site leaders should also regularly carry out diagnostics to discover the key performance indicators. Further, they should discuss the diagnostic information. Once this is achieved, they should work as a team in developing transformational road map for their respective sites. These include comprehensive training for the leaders at various levels, beginning with the site leadership team to the manager. Organisational learning The company should invest tremendously in learning, in addition to establishing the organisation’s capability. Hence, training modules for the site managers, front-line leaders as well as those taking part in mini-transformations should be developed (Dartey-Baah & Amponsah-Tawiah 2011). Focus should be on training on lean transformation and transition planning. At this stage, the key skills to be imparted include problem solving, time prioritization and good coaching (Lean Manufacturing Tools 2014). This can be ensured using corporate Lean-leader programs and workshops. This is reflected by Komarcki’s report, which stressed use of coordinated approach, customer service, employee engagement and sharing of common processes. Report 3: Recommendation report from Montreal site MD to Kouba The MD is specifically concerned with operations. Hence the proposed directions are centred on operational management. The ‘mini-t’ project can substantially contribute to the streamlining of Wyeth’s core processes, cutting operating costs and increasing customer satisfaction. To ensure that the ‘mini-t’ project speed up change processes at the Montreal site, certain recommendations are suggested. Basically the recommendations are aimed at ensuring that the ‘mini-t’ project has a structured approach with certain deliverables and ownership of changes, once the ‘mini-t’ project is implemented. All together, the recommendations make up a 12-week training program with 10 workshops each week, from week 3. Facilitating a Successful ‘mini-t’ project at Montreal site There should be a defined approach to implementing that ‘mini-t’ project to ensure Wyeth’s objectives are attained. Consequently, a consultant should be hired to begin diagnostic assignment of the site to support planning for mini-t initiative during the first week. The diagnostic assessment will seek to identify Montreal site’s current improvement principles and practices. After the initial assessment, the site leader will develop an organisational plan to execute the mini-t initiative based on the site's allocated resources in week 2. Training The mini-t implementation at the Site will start with several levels of training for the employees and site leaders. Week 3 will consist of foundation training, introduction of mini-t principles that targets all the employees at the site and significant investment of resources for the site. Additional trainings, such as train-the-trainer, leadership, supervisor and standardisation should also be conducted simultaneously. The training will focus on developing leadership qualities among the site’s management, front-line leaders and employees (Toni et al. 2014). This will be enabled through organisational learning and culture change. For sustainable change to happen, the leaders should change the way they think and behave. This is different from traditional operational excellence strategies. Sustainable change will happen when the site managers make personal changes in their behaviour and own thinking. Organisational transformation should begin from organisational learning. Employees need to change their actions to ensure that production increases, as well as becomes efficient. Hence, the site managers should also start to talk about step change improvement instead of incremental change. They should also understand their exceptional position as role models for the change. Areas to be focused through organisational learning include communication, how to align their personal goals to that of the Montreal site and ultimately to the overall corporate strategy (Toni et al. 2014). Activities Montreal site's implementation of mini-t consists of a wide range of activities and should therefore focus on training to achieve organisational culture change, implementation of effective communication strategies and employee efficiency. The training should take 5 days. During the training event, it is proposed that focus be on Wyeth’s manufacturing process at Montreal site. A team of between 8 to 10 people should be formed across the organisation, which will be given full-day training on the techniques during the 10 workshops. Each week, a team will be nominated for training for the next 10 weeks. The team should afterwards spend the rest of their time seeking to implement new and greatly improved processes. The workshop should be on program design, change management and how to lead change, what mini-t entails, business process management, application of Lean, as well as how the team can make it work. This will ensure that the simple improvements are formalised to improve the activities that have failed to be run during the first wave of operational transformation are run using an optimal format. Creating site leadership teams Composition The training will bring the employees and the site managers together, as well as other individuals who perform some level of work at the site. It should also have some representative from the Wyeth and stakeholders, such as customers. This is mainly to establish fresh ideas and perspectives at the ‘mini-t’ project. The site leaders should specifically be trained on ‘on-the-job’ practice. The team will be made up of the site manager, the front line leaders and the employees. Areas and capabilities to be targeted The areas to be targeted for the team include clarification of the roles and responsibilities of each employees, effective communication strategies, how to build trust an accountability, and basic lean awareness. In the training event, different teams will meet for 5 successive days each week for 10 weeks to repair the core work processes. The training would however start with the ‘mini-t’ project methodologies. The team would be required to brainstorm on the current state of the Montreal manufacturing site to determine all forms of waste, such as events loopbacks, over-processing, cases of delay, defects and handoffs. Immediate action The findings found by the team would afterwards be used to come up with innovative processes that are faster, simpler and more cost-effective. The action plans will have to address all dimensions of implementing the strategy, including communication, organisational culture and issues of efficiency. Execution of the improvement will start immediately the team has completed its week of work. Report 4: Recommendation report from Montreal site QH to Kouba Overview The Qualitative Head (QH) is specifically work with the senior quality experts to promote highest levels of regulatory compliance, highly quality product and product safety hence the suggested directions are focused on qualitative management to reduce wastes and scraps. Hence, the most suitable method would be implementing a ‘continuous improvement strategy policy that constantly introduces small, yet incremental changes in the Montreal site to improve quality and efficiency, to prevent waste or scrap products. This is based on the assumption that the employees at the site are the best individuals who can identify room for improvement as they engage with the processes all the time. At this stage, Kaizen Event is suggested, which will run for 5 days (PEX 2014). An underlying assumption is that there should be no compromise on the customer expectations in addition to the quality and compliance. Planning the training The training will focus on improving the quality of medicine produced at Montreal site to prevent wastes. The diagnostic assessment will be conducted with the help of the consultant during the first one to three weeks to identify the non-value-adding and waste-reducing activities. The problems scoped at the define stage are based on Komarcki’s findings. Concerns raised by the Komarcki report during the eight first-wave core locations stressed on a need for simplifying the production-line and value-stream mapping, as well as a need to reduce the prevalent direct and indirect labour. At the same time, boundaries would be identified, the business course would also be defined and the resources to be committed identified. Hiring a training facilitator To make the training event successful, a consultant will be needed to lead and facilitate the event. Hiring of the training facilitator will take place in the first week. The site manager will need a professional with experience in lean philosophies and technology to lead the event (Stephens et al. 2012). The facilitator will assist the team to stay on track, as well as to pull them towards the right direction in attaining the best possible outcomes. Overall, the site manager will run the event. Objectives The training would be focused on improving leader’s employees’ daily work activities, behaviour and thinking to improve quality of the medicine and to prevent wasteful production. It is significant since waste exists in the site’s value stream. Additionally, the presence of Lean principles like flow and pull are noticeably absent. There should also be creation and sharing of 'best practices.' There should also be standardizing of common processes that match that of other sites. The training will be action-oriented. They will take two hours for each two days, targeting the site leaders and employees. The structured 10-week improvement cycle is applied in preparing and executing the mini-t. Preliminary preparation The preparation for the mini-t will start three weeks in advance using a detailed checklist that can be used for each event. Data collection through diagnosis should start two weeks in advance once the training facilitator has been recruited. The data will be applied in driving change through the training. A week before the event, employees and leaders who will take part in the training will be notified of the activities. The training and its objectives will be communicated to the employees, as this will be critical in preventing possibilities of rumour mill (Carter et al. 2012). Achieving commitment and understanding from the management The training will require support from the company’s executive management. Just like any other initiative, it is essential that the senior management team show full support and commitment. It is submitted that failure to get such a commitment would lead to poor results. A diagnostic report highlighting the areas to be addressed by the training and the estimated expenditure will be sent to the management in the second week before actual training to ratify the budget (Stephens et al. 2012). The boundaries of the training The training will be run at the Montreal site’s premises. The departments to be involved include the production department and quality management. The mini-ts comprised 10 to 12 weeks of activities aimed at improving the daily work activities, employee behaviour and leader behaviour. Selection of the team The site manager will be the team leader. The team members will consist of the people who work within the site, in addition to the sales, administration and maintenance. Implementing measures of performance Since the training seeks to achieve a significantly leaner processes and functioning to reduce wastes. This will be based on gathered data indicating current performance that can be compared against improvements, once the event is finished. Activities Despite the topic, the format of mini-t is essentially the same. Even as min-t can be conducted in 5 day, the following are suggested to take place during the 5 days of training. On Day 1, the existing conditions affecting the site will be documented while the wastes will also be identified. Changes to the key improvement metrics will be quantified each day. Day 2 will consist of implementing big changes. Day 3 will consist of debugging and adding improvements. Day 4 will consist of standardizing the improved processes. On Day 5, formal brief-out will be presented to the management, which shows the outcome of the compared ‘before and after conditions’ and the attainments realised. At this stage, debriefs will be held between the facilitator and the team leader on the fifth day, to examine areas that need further improvements. Winding up The improvement actions will be reviewed each day, challenges will be identified and plans created for the next day. Each successive will be used during the 7 weeks. Follow-up checklist will continue to be developed to push on the improvement process, such as metrics review, debugging and subsequent follow-ups. Conclusion On analysis of the four reports, it is concluded that Wyeth has to engage in a number of operational transformation, including use of high aspirations based in the context of the case, having a high performing leadership team, implementing a balanced approach, enabling the line leaders to drive change, and designing scalability. Overall, there should be a consistent approach throughout the sites. There should also be a fully integrated improvement across various functions and readiness to make fundamental step-change improvement in processes. There should be emphasis on engaging all employees, as well as building their capabilities to build and change mind-sets and tendencies to achieve sustainability. Additionally, there should be creation and sharing of 'best practices.' There should also be standardizing of common processes that match that of other sites. 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