Advanced Laboratories Sept 2011

1. Reengineering Laboratory Processes
To Accelerate Business Output
Mini Workshop
Michael McNamara
MSc MRACI C Chem Marcus Evans Conference: Advanced
Laboratories, Melbourne September 2011
PBI Consultancy Services
ph 03 94997193 mobile 0407713768
1michael.mcnamara@live.com.au PBI

2. Reengineering Laboratory Processes
Mini Workshop - Learning Objectives
 Review approaches to efficiency improvement
 Review their application to the laboratory environment
 Focus on 2 key tools
– scheduling in the laboratory
– process mapping particularly value stream mapping
 Apply these tools in a smaller group setting to a case
study
 Review as what has been learnt from the case study
exercises as a larger group
“I hear and I forget. I see and I remember. I do and I
understand.” Confucius
2

3. Reengineering Laboratory Processes
Mini Workshop - Program
 Overview of Efficiency Improvement
– 3 Ps, Toolkit including lean Six Sigma and BPR
35 minutes
 Case Study – Workgoup Activity
– Applying the toolkit 35 minutes
 Workgroup Review
– What have we learnt 20 minutes
3

4. The Laboratory Environment
A Quick Look Back
 In 1970s in a laboratory do an assay to measure something – assay SOP and
specification
 An anlyst did what the supervisor told them to do
 In 1980s/1990s sees introduction or strengthening of
– Complex technologies and IT systems
– HR Systems eg EEO, EBA, KPIs,
– OHSE
– Industry specific Quality Standards
 eg GMP, GLP, FSANZ etc
– General Industry standards ISO 9000, 9001 etc
– Regulatory Standards eg ICH
 Improvements in efficiency focussed on
– People managment by KPI
– New technology especially IT
 Often these changing standards and environment left companies with
complex inefficient business processes
4

5. The Laboratory Environment
The Scene Today
 In 1990s/2000s focus on efficiency
improvement through quality
– ISO 9000/9001
– TQM/JIT
– Business Process Reengineering
– Six Sigma
– Lean Manufacturing
– Lean Six Sigma/Lean Laboratory
– Application of Advanced Statistical Approaches
 Eg Multifactorial DOE experimentation
– Industry specific approaches eg QbD in the pharma & biotech
industries
5

6. Success in Introduction of New IT
2000 23% 49% 28%
1998 28% 46% 26%
1995 40% 33% 27%
1994 31% 53% 16%
30,000 application projects in large, medium and small
U.S. companies since 1994. Succeeded
Challenged
Source: The Standish Group International, Extreme Chaos, Failed
The Standish Group International, Inc., 2000

7. Key Success Factors in
Introduction of IT – Rank Order
1. Executive Support
2. User Involvement
3. Experienced Project Manager
4. Clear Business Objectives
5. Minimized Scope
6. Standard Software Infrastructure
Source: The Standish Group International, Extreme Chaos,
7 The Standish Group International, Inc., 2000

8. Introduction of New Technology
& IT Systems
Planning
Selecting or Customising IT System Reengineer Business Processes
Integration
New IT system New Business Processes
Validation
New IT system New Business Processes
8 Change Management

9. Improving Laboratory Performance
The 3 Keys – 3Ps
•PEOPLE
•PRODUCT
9
•PROCESS

10. Improving Laboratory Performance
The First Law
Quality
Time Cost
PICK TWO !
10

11. Improving Laboratory Performance
The First Law – Revised
Quality
Time Cost
CHANGE THE SYSTEM
11 TO IMPROVE ALL 3!

12. Improving Laboratory Performance
Changing the System
New Existing
Environment
Improve
People
Outsource
to lower efficiency
costs of existing
workforce
Environment
Business
Invest in Streamline
New Existing
Technology Process
12

13. Improving the Process
The Toolkit -1
Lean Six Sigma Business Process
Lean Laboratory
Reengineering
Advanced Statistics
TQM
DOE
QFD
QbD
13

14. Improving the Process
Six Sigma – the approaches
DMAIC DMADV (also called Design for Six
Sigma
Used for improving existing processes Creating new product or process
designs
•DEFINE (the problem) •DEFINE
•MEASURE (the current state) •MEASURE (CTQ Attributes)
•ANALYSE (cause and effect) •ANALYSE (DESIGN
ALTERNATIVES)
•IMPROVE (or optimise process) •DESIGN DETAILS
•CONTROL (the future state) •VERIFY (BUILD PROTOTYPE)
14

15. Improving Laboratory Performance
Six Sigma – the methods
 5 Whys  Quantitative marketing research through
 Accelerated life testing use of Enterprise Feedback
 Axiomatic design Management (EFM) systems
 Business Process Mapping  Root cause analysis
 Cause & effects diagram (also known as  Scatter diagram
fishbone or Ishikawa diagram)  SIPOC analysis (Suppliers, Inputs,
 Check sheet Process, Outputs, Customers)
 Control chart  Stratification
 Cost-benefit analysis  Taguchi methods
 CTQ tree  TRIZ
 FMEA  Statistical Methods (About 20 or so)
including Design of experiments
 Histograms
 Pareto analysis
 Pick chart
 Process capability
 Quality Function Deployment (QFD)
15

16. Six Sigma – the 5 Whys
(as used within Toyota for TPS)
 My car will not start. (the problem)
Why? - The battery is dead. (first why)
Why? - The alternator is not functioning. (second why)
Why? - The alternator belt has broken. (third why)
Why? - The alternator belt was well beyond its useful service life and has never
been replaced. (fourth why)
Why? - I have not been maintaining my car according to the recommended
service schedule.(5th why, a root cause)
Why? - Replacement parts are not available because of the extreme age of my
vehicle. (sixth why, optional footnote)
I will start maintaining my car according to the
16 recommended service schedule. (solution)

17. Lean Laboratory
(derived from Lean Manufacturing)
 Lean Laboratory Principles Improve the process
 Identify and map the value stream, streamline the process
 Make value flow, create pull and eliminate non-value add
– Improve sample and test scheduling
 prioritise samples (customer must start dates then FIFO)
 smooth sample flow
 optimise resource use
 Level the load & mix (often the critical step)
– Eliminate waste
– Manage performance
 Two key activities in lean laboratory (80% of the cost & efficiency gains)
– Process improvement
– Test Scheduling
17

18. Improve the Process
Business Process Reengineering - 1
 fundamental re-thinking & radical re-design of
organisation or business
 Redesigns the way work is done
– to better support the organisation's mission, improve
quality and timeliness and reduce costs.
– Focus on integration of business units eg laboratory
– Develop a well-integrated business
 starts with a high-level assessment of the organisation's
mission, strategic goals, and customer needs.
18

19. Business Process Reengineering -2
 Basic questions are asked (Define) eg,
– Does our mission need to be redefined?
– Are our strategic goals aligned with our
mission?
– Who are our customers?
 focuses on the business processes (Measure)
– how resources are used to create products
and services that meet the needs of particular
19 customers or markets

20. Business Process Reengineering -3
 Re-engineering systematically identifies,
analyzes, and re-designs an organization's core
business processes (Analyse and Improve)
 Aims to achieve dramatic improvements in cost,
quality and time
 Defragments and streamlines overall process
 Can be applied to whole of organistaion or
specific business units
– in the context of a holistic view of organisation
20

21. Business Process Reengineering –
Process Maps
Process Map Type Purpose Positives Negatives
High-Level Process Map or Perspective, big-picture, Management, Quality not enough details
Flow Chart Systems Manual, good for adding
metrics
Low-Level Process Map or Sub-processes, small- Understanding flow, unclear responsibilities, Not
Flow Chart picture procedures, details SIPOC, alternative flow
Cross Functional or “Swim Responsibilities HR, job descriptions, job alternative flow
Lanes” Map training, procedures
Document Map or SIPOC Data management Document and record not enough activity detail
Map control
Activity Map or Value Process Improvement granular details good for OK for training and
Stream Map work instructions and communications
procedure writing
Work Flow Diagram Training, communications More realistic great for training and
communications
Rendered Process Map Training, communications Most realistic great for training and
communications
21 Originally published in 2009 by Bizmanualz, Inc. under the title Seven Types of Process Maps – Part I

22. Process Maps – High Level
Process Map -
Order
Production (JIT)
Cash
22 Originally published in 2009 by Bizmanualz, Inc. under the title Seven Types of Process Maps – Part I

23. Process Maps – Low Level
Process Map A/R Cycle
Legend
23 Originally published in 2009 by Bizmanualz, Inc. under the title Seven Types of Process Maps – Part I

24. Process Maps Cross Functional
Map (Swim Lanes Map)

24
Originally published in 2009 by Bizmanualz, Inc. under the title Seven Types of Process Maps – Part II

25. Value Stream Map
Value
Add step
Clearly
Wasteful
 step
Possible
Waste
Step
4+1=
Total
Steps +
Value Add
Steps
25
Originally published in 2009 by Bizmanualz, Inc. under the title Seven Types of Process Maps – Part II

26. Process Maps – Low Level
Process Map
Legend
26 Originally published in 2009 by Bizmanualz, Inc. under the title Seven Types of Process Maps – Part I

27. The Toolkit Work Flow Diagram

27 Originally published in 2009 by Bizmanualz, Inc. under the title Seven Types of Process Maps – Part III

28. Business Process Reengineering -
Process Analysis Checklist
 Reduce handoffs (one person handles as
many tasks as possible)
 Centralize data (single point for holding data,
minimise data entry)
 Reduce delays /eliminate wait steps
(streamline workflow)
 Free resources faster
 Combine similar activities
28  Use rendered maps to sell changes

29. Business Process Reengineering
Example
Simplified schematic outline of using a
business process approach,
exemplified for pharmaceutical R&D:
1. Structural organization with
functional units
2. Introduction of New Product
Development as cross-functional
process
3. Re-structuring and streamlining
activities, removal of non-value
29 adding tasks

30. Lean Laboratory
Schedule Levelling – Define
 majority of the workload (85-95%) is
driven by 2-3 products.
Pareto Analysis – Sample workload
 Product A and C same product family,
same tests and could be tested
together at the same time.
 Product B accounted for 19% of the
sample volume but not 19% of the labs
workload only 2 very simple tests, A
and C needed 9 tests.
 Focus exclusively on A and C (80-90%
of the labs workload) - the main priority
of the site
 Process Map - approval and release
activities carried out after the batches
30 Ref: http://bsm.ie/blog/andrew-harte/improving-lab-performance-six-sigma
were fully tested is significant part of
effort

31. Lean Laboratory
Schedule Levelling – Measure
Fig 2: Product A Cycle Times  Product A spread of times centred around 11-15
days
(Jan - Apr)
 Corresponded to target cycle of 15 days.
 66% of samples met the 15 day target /33% late.
 Vast bulk of the resources were occupied by test
x
 The results of test x were required by a separate
department to proceed with their process.
 Laboratory heavily resourced test x to test every
sample every day – inefficient variable workload
 Eg Day1 five analysts might test 12 samples
Day 2 test 4, (67% drop in productivity)
 Strategy needed to level resources without
increasing cycle times ie control the numbers
tested each day.
31 Ref: http://bsm.ie/blog/andrew-harte/improving-lab-performance-six-sigma

32. Lean Laboratory
Schedule Levelling – Analyse
 Data Analysis:
 Daily: 1 and 17 samples per day average of 7.
 Weekly: 25 to 45 samples per week average of 36.
 Weekly incoming workload much less volatile (coefficient of
variance 0.2 versus 0.6).
 Predictability per week is good ie approximately 36 samples.
 Weekly control is possible therefore develop a weekly testing
pattern
 the weekly average rate for each test was determined.
 The number of samples for each test would be different as
Product A received some tests that product C did not and vice
versa.
32 Ref: http://bsm.ie/blog/andrew-harte/improving-lab-performance-six-sigma

33. Lean Laboratory
Schedule Levelling – Improve
 Strategic Approach Adopted:
 A fixed, weekly repeating pattern of tests
 Testing at the weekly average every week
i.e. testing at the weekly rate.
 Every test would be run every week.
 Samples would be tested in FIFO (first in first
out) order
33 Ref: http://bsm.ie/blog/andrew-harte/improving-lab-performance-six-sigma

34. Lean Laboratory
Schedule Levelling – Standard Tasks
 Design standard roles that make good
use of resources
– Define the combination and
sequencing of tasks based on
people who are productive
because they organize their work
well, rather than because they
move fast.
 Do a design on paper with a team,
then try, refine and deploy
-Involve analysts in an iterative
process to design productive roles
that meet the requirements of your
train or rhythm wheel
34

35. Lean Laboratory
Schedule Levelling – Control
Set Analyst Roles Standard Tasks covering:
• The activities required for the test role.
• The best order in which to complete them.
• Clear break targets.
KPI’s (key performance indicators)
• printed and posted weekly
• before six sigma lean lab project 66% of samples were tested inside
the 15 day target time.
• After project target was changed to 10 days, and all samples within
target
• An average lead time of 8 days.
•There was an annualised 3.9 fold return on investment for the project
35 Ref: http://bsm.ie/blog/andrew-harte/improving-lab-performance-six-sigma

36. Lean Laboratory
Schedule Levelling the Outcome
36

37. The Critical Step
Change Management
• Poor Change management is cause of > 70%
failures of improvement projects
Change
management
Improvement Consolidate
initiative gains
37

38. Reengineering Laboratory Processes
To Accelerate Business Output
Questions and
Comments
38

39. Reengineering Laboratory Processes
To Accelerate Business Output
Workgroup Activity
39

40. Reengineering Laboratory Processes
Mini Workshop - Program
 Overview of Efficiency Improvement
– 3 Ps, Toolkit including lean Six Sigma and BPR
30 minutes
 Case Study – Workgoup Activity
– Applying the toolkit 40 minutes
 Workgroup Review
– What have we learnt 20 minutes
40

41. Reengineering Laboratory Processes
To Accelerate Business Output
Workgroup Discussion
41

42. Workgroup Discussion –
Exercise 1 Scheduling Talking Points
 Testing Lab Organisation structure
 Quarterly rather than monthly scheduling
 Multi-skilling inappropriately applied to
analysts revise approach
 Priorities are first customer definition then
42 FIFO

43. Workgroup Discussion –
Exercise 1 Scheduling
43

44. Workgroup Discussion –
Exercise 1 Scheduling
44

45. Workgroup Discussion –
Exercise 2 Process Map Talking Points
 Overall organizational relationships and roles
 QA and OHSE and customer relations
simplification using multi-skilling
 OHSE advisor approval (currently OHSE
manager only approves – so cut him out)
 Direct analyst/coordinator contact with
customer for re-sampling requests
 Parallel reviews with Analyst OHSE and QA
45 to renew SOPs following revalidation etc

46. Michael McNamara
Biography
 Formed PBI in 2009 as a consultancy focussed on improving management
processes with a special interest in innovation
 Improvements to laboratory management
– increasing output by 30%
– with a 10% reduction in cost
 Clients include companies from start ups to large multinationals located in
Australia, Europe and the US
 Client Industries include biotechnology, pharmaceuticals, agriculture,
consumer goods, defence and aerospace
 Qualifications: BSc (Hons) Melbourne, MSc LaTrobe, Grad Dip Pharm Sci &
Drug Reg Melbourne, Grad Cert Tech Mgmt APESMA LaTrobe
 Over 20 years senior management experience in multinational agriculture,
biotechnology and pharmaceutical companies
 Specialist in management of innovation at all phases of product lifecycle
– from research and product concept
– through to product launch and lifecycle management
46

47. Reengineering Laboratory Processes
To Accelerate Business Output
Miniworkshop
Michael McNamara
MSc MRACI C Chem
PBI
ph 03 94997193 mobile 0407713768
47
michael.mcnamara@live.com.au PBI