Case Study 1
Challenge
A company has been manufacturing a high volume sterile injectable product for many years. The active ingredient is a commodity material and relatively inexpensive compared even with generic product APIs. It provides a good revenue stream to the company and its supply is critical to patients who need it.
Approach
As part of a program to identify waste across the manufacturing site, a KPI assessment of the product’s manufacturing process was conducted. It was quickly identified that Process Yield was readily available only on the final 2 steps of the process and was at 96.8%. However, taking an E2E cumulative view the process capability analysis revealed that the true yield was just 61%. Further assessment revealed that part batches were being lost at the front end of the process due to various factors and the loss was being tolerated due to low cost of the manufacturing materials. This material loss was assessed at €58k p.a. However, the cost of handling the waste, the assigned high fixed costs for manufacturing the product, as well as the opportunity cost i.e. taking up valuable production line time, constraining use for other products sharing the line, was resulting in a total waste value to the company of >€1m.
Result
Process optimisation fixes were identified, implemented and the process revalidated. Operating margin for the product improved by ca. 25%, with annual manufacturing costs of the product reduced by €450k.
