Kaizen, Kai-who? – why ‘lean’ matters for pharma IT

Nick Plank

C&amp,C Group

Lean management, six sigma, Kaizen philosophy applied to business – these terms have become familiar to those of us working within, or supplying, the life sciences sector.

From the dramatic changes in working practises adopted by Japanese firms such as Takeda embracing key-account-management sales strategies, to the organizational change implemented by companies like Daiichi-Sankyo inspired by Kaizen theory –pharma executives have seen the benefits in re-engineering their businesses to become lean and receptive to change.

For the management consultancies offering business process re-engineering guided by lean and Kaizen management principles this is good news. Kaizen management is not necessarily simple when it comes to implementation despite many of the guiding principles appearing to be common-sense. For this reason it makes good sense to engage such companies – they have built excellence in the area and this is of value.

“…pharma executives have seen the benefits in re-engineering their businesses to become lean and receptive to change.”

But change is also afoot in the world of professional IT services and consulting and many of the latest changes and innovations in pharma IS are supporting the adoption of lean principles and the implementation of Kaizen. Why do the same things many times in many different places when they can be consolidated into central processes and systems?

Or in IT terms, why implement business intelligence, data warehouses, CRM, and other systems common to each country office within a region when a single facility can service all countries?

Whether it’s internal consolidation of IT systems or outsourcing to the new Cloud CRM vendors, the centralised approach works well and is proven to add value and deliver savings.

We have seen pan-European business intelligence projects such as European national sales data warehouses deliver positive ROI within Year 1 of the implementation.

That’s right, ROI in year 1! In pharma IT delivery ROI in Year 1 is extremely impressive.

But get this. These projects continue to deliver the same ROI year on year paying for themselves many times over – some of these systems still operating and continuing to receive investment over 7 years later – when the average life of an IT system is between 3 and 5 years.

“These projects continue to deliver the same ROI year on year paying for themselves many times over…”

“The most dangerous kind of waste is the waste we do not recognize.” – a quote attributed to Shigeo Shingo of Toyota, a well known adopter of Kaizen principles.

In pharma business intelligence much of a sales information analyst’s time can be occupied with number-crunching and preparing the latest set of sales data every month to get this month’s reports out to the same audience. It is also often a hidden cost. This is valuable time which can be saved.

Henry Ford in 1926 was ‘right on the money’, to use an American expression, when he said, “Time waste differs from material waste in that there can be no salvage.”

Recognizing this waste is central to the time savings delivered in centralizing European business intelligence. The process of loading and preparing the data, whilst it may not be identical, is typically similar across each country office. It can be centralised and automated, freeing up the country analyst’s time to analyse, innovate, and discover the information within the pre-loaded and ready-to-use data warehouse. Another such waste is found in data procurement.

“Another such waste is found in data procurement.”

Centralising data procurement so that European offices have access to all of the data procured by the countries within their region delivers a variety of cost efficiencies associated with a single point of purchasing. It also increases access to data throughout the company and improves accuracy associated with providing reporting and analysis from a ‘single source of truth’ database.

Coming back to recent innovations such as multi-tenant Cloud CRM services, there are significant benefits in operating central information management and business intelligence architectures. Especially so if they are delivered as an outsourced fully hosted and managed service where the vendor manages the entire data life-cycle – from receiving the data, loading it, taking responsibility for the refresh (the roll-ups and aggregations of all the metrics used to measure your performance), and finally delivering the data back to the countries based on the SLA’s the vendor has agreed with the countries.

This type of hosted European sales data management facility can be easily integrated from the hosting vendors data centre securely over site-to site virtual private network to the Cloud CRM vendor’s data centre. As soon as the European business intelligence database is refreshed then the sales metrics are instantly available within the reps CRM selling tools and their partner mobile BI apps.

Taking it a step further the latest salesforce alignments and activity data from the Cloud CRM vendor database can be passed back to the central European sales data warehouse which allows the hosting vendor to apply these to the indirect brick or mini-brick level sales data. Once integrated the pharma company’s sales vs. activity metrics can be calculated and also passed into the reps CRM selling tools and their partner mobile BI apps.

Whilst the global economy appears at times to be de-globalizing with countries moving towards independence and dare I say it, a possible break up of the Euro, there is still plenty of reason to consider centralizing IT in the other direction – whether that’s business intelligence, CRM, or other business areas such as promotional materials approvals. Lean means less.

Less time, less operating costs, less capital investment, less resource required to deliver more information, more time for continuous improvement, and more consistency and accuracy than before.

As the legendary business guru Tom Peters says, “Almost all quality improvement comes via simplification of design, manufacturing… layout, processes, and procedures.”

Lean is about simplifying the complex in a common sense way – and if it isn’t that common right now then it should be our objective to go out there and make it so.

About the author:

Nick Plank is a Director at C&amp,C Group and has been working in the life sciences industry for 15 years, providing enterprise, SaaS, and digital technology based solutions throughout the brand life cycle for branded and generic companies, delivering global, European, and UK focused projects.

You can follow C&amp,C Group on Twitter @candc_group

What’s your experience with ‘lean’ in life sciences?