Operational Excellence (OpEx) programmes are thriving in the Life Sciences industry. This is partially because of a decline in the creation of breakthrough products, the appearance of new competitors in the East, and tightened budgets in light of the challenging financial climate.
OpEx strategies seeking to make businesses more efficient are part of the latest wave in the search for increased financial viability for pharmaceutical businesses.
With no catalysts for easy growth, pharmaceutical companies are looking to hone their existing processes and tighten their operational infrastructures. The aim is to make both the processes and the entire organisational architecture more cost, resource, and time-effective. OpEx programmes such as Lean and Six Sigma, alongside a methodology of Business Excellence, have proved to be an effective tool to achieve this.
How OpEx can help
To understand why OpEx has become such a significant force in pharma in particular, companies need to look at how the industry has developed over time. The ‘big players’ in pharmaceuticals have traditionally focused all their resources and energy on ‘blockbuster’ drugs and products that have a significant ‘guaranteed’ cost-per-unit and/or distribution audience. When smaller-scale products – either with a niche market or low potential production volumes – have been discovered, these have typically then been sold off to smaller businesses. These smaller businesses have lower operating costs meaning that the products were more financially viable for them to develop. Initially, the sole focus was bringing commercially prolific products to market, but now, the pharmaceutical industry must take a more strategic approach to lay the groundwork for the success of its future business pipeline.
This is where OpEx comes in – pharma companies can use OpEx to become more efficient. Not only will this increase their ROI when it comes to their current processes, but cutting costs will also make some smaller projects, drugs, and research more profitable. Multinationals would, potentially, be in a position to develop drugs for rarer conditions because, with more efficient operational process, the potential profit margin would be higher.
With shrinking profit margins and the number of so-called ‘game changer’ drugs dwindling, pharmaceuticals is relying on OpEx strategies to adapt to a new model of financial viability.
Key factors for the success of an OpEx strategy
The consensus in the industry is that communication is one of the most significant factors when it comes to effectively implementing an OpEx strategy. For OpEx to be effective, it is important to listen to staff as well as keep them up-to-date – two-way communication is essential.
2) Middle management
It is vital that a business has middle management on-side. Management must put the full force of their support behind the strategy since it ultimately needs to become part of the foundations of the business’ values in order to be effective.
3) Make it intrinsic
Rather than making one particular department responsible for the strategy, you need to ensure that each department feels the responsibility for adopting a lean mentality. This change in ownership will ultimately work to change the culture of the business going forward by engaging the whole business in order to cement the strategy and increase the potential gains.
4) Track progress
Establishing a protocol for tracking results and implementing them is an important part of this process. This help you to understand the goals you want to achieve, and to monitor the results.
Personalising the strategy to your business’ unique needs is essential. This is not about following the path, but about finding innovative ways to make your business is more efficient, using the methodologies and frameworks of business excellence as a guide.
The role of managers
Leadership is a key pillar of this process. Alongside their duties, the role of a manager is to help an organisation become more successful. In order to effectively implement an OpEx strategy, you need to get the whole team on board. Everyone from the top to the bottom of the business can help find ways to reduce spend and increase profitability. Individual team members are the ones who know their job inside and out, and are often in the best position to help suggest ways to streamline process.
A shared vision will create a leaner business. An employee-led vision helps to give workers part of the responsibility for the success of the business, which leads to higher levels of job satisfaction. It is often thought that if you change the culture then the work will follow, but in fact, if you implement new ways of working then this, in turn, affects the culture.
The difference between framework and methodology
It is also worth noting that there are a plethora of frameworks and methodologies out there to follow, including Six Sigma, Eight Omega, ISO 9000, CMMI, BPMM, and SCOR. A framework and methodology are different things. The significant difference is that a framework supplies the architecture for you to work from. In contrast, a methodology is the way you go about building the house, so to speak. The two ideas are connected, but they are not the same.
How do you know if you’ve succeeded?
Sometimes the hardest question is: what does business excellence look like? A business which is self-aware, which looks internally and externally, and which constantly strives to improve processes and do things with limited waste. A business that adheres to an effective business excellence strategy is likely to be more resilient – with a better chance of evolving in line with market conditions, and keeping profits buoyant.
Opportunities for autonomy
Broadly speaking, there are two kinds of candidates in the recruitment market right now: those who like autonomy and those who don’t. In this sector, we have clearly seen candidates are looking for roles where they can make a real difference and run their position with near-full autonomy.
Here at DSJ Global, we specialise in helping recruit for across Strategy and Operational Excellence. We work alongside our sister agency EPM Scientific to help find senior staff in the Life Sciences industry that can help guide your business through business excellence procedures. For more information get in touch with us today.