Background
A leading global bioscience, advanced pharmaceutical products, equipment, and consumables manufacturer with billions in revenue and thousands of employees. At one of their specialized gene therapy sites, material readiness for commercial products and their associated buffers and media was not standardized across similar process runs. This lack of standardization led to over 200 rush material requisitions per year, resulting in significant transportation, inventory, waiting, and overprocessing wastes.
Challenges
➢ Non-Standardized Bill of Materials (BOMs): Site BOMs for commercial products and their buffer and media were inconsistent across similar processes, leading to inefficiencies.
➢ High Volume of Rush Material Requisitions: Over 200 rush material requisitions annually caused various operational wastes.
➢ Significant Employee Time Consumption: Material requisitions accounted for approximately 40.8% of overall manufacturing preparation hours (7620 hours per year), consuming valuable employee time.
➢ Operational Inefficiencies: The non-optimized material readiness process led to delays and increased costs.
Implementation
To address these challenges, a comprehensive material requisition standardization project was initiated. The key steps involved were:
➢Process Mapping and Data Collection: The material requisition process was mapped, and data on buffer, in-process, and rush material acquisition were collected to identify inefficiencies.
➢ Financial and Time Analyses: Detailed analyses were conducted to understand the financial losses and time consumed by the existing process.
➢ Design of a New Material Acquisition Process: A new, streamlined material acquisition process was designed to improve efficiency.
➢ Standardization of BOMs: 78 batch records material needs (BOMs) and 3417 material types were standardized to ensure consistency across similar process runs.
➢ Optimization of Inventory Levels: Inventory levels were minimized and optimized to reduce waste and ensure timely availability of materials.
➢ Digital Integration: Digital BOMs were integrated into the Material Review Board (MRB) system, and E-Kanbans were generated to automate and streamline material requisition.
Results
The implementation of the new material requisition process and BOM standardization led to significant improvements:
➢ 497 Labor Hours Saved Annually: The streamlined process saved 497 labor hours per year.
➢ $80M Annual Revenue from On-Time Material Availability: Ensured timely availability of materials for commercial gene therapy products, contributing to $80 million in annual revenue.
➢ $350K Direct Cost Savings: Achieved through reduced rush requisitions, optimized inventory levels, and minimized waste.
➢ 22% Warehouse Space Savings: More efficient use of warehouse space due to optimized inventory levels.
Testimonials
“The Material Standardization Project strategically supported the new gene therapy site’s operations beyond the current site. The collective team approach was amazing, and site personnel learned how to solve some current problems using Lean methodologies.“ – Procurement Manager
“We haven’t seen the details of all process-related issues until the detailed analyses and time studies were revealed. The team’s expertise in Lean methodologies and Six Sigma tools resulted in substantial cost savings, improved efficiency, and improved operational standards across multiple manufacturing sites.“ – Plant Manager
