Abstract
Lean and Six Sigma are powerful principles and methodologies applicable to any area of work. They enable individuals and teams to focus on what constitutes value to their customers, and on how to deliver that as effectively and efficiently as possible. Applied in a continuous way, Lean and Six Sigma can become a way of working and a philosophy for any organization. This case study shows how Lean and Six Sigma were used to identify and streamline the priorities for a global Information Management Service within Pharmaceutical Research and Development so that it could deliver real and consistent value to its customers.
Keywords
Introduction
Lean and Six Sigma are powerful principles and methodologies, originating from manufacturing but applicable to service operations such as finance, human resources, Information Technology (IT), Library and Information Management, Research and Development (R&D), Purchasing and indeed to any area of work and activity. They are ideally applied by the individuals responsible for doing the work, with the active support and engagement of management teams, and within the context of an organization’s overall goals.
The methodologies enable individuals and teams to identify and focus on what constitutes value to their customers, and on how to deliver that as effectively and efficiently as possible.
Applied in a continuous way, Lean and Six Sigma can and should become a way of working, and indeed a philosophy for any organization.
This case study, carried out with a team of colleagues, shows how Lean and Six Sigma principles and techniques were used to identify and streamline the priorities for a global Information Management Service within Pharmaceutical R&D so that it could deliver real and consistent value to its customers.
Case Study – Context
Within the pharmaceutical industry, potential drug assets progress through a series of major decision points on their way from early drug discovery to the clinic. These decision points bring together an enormous amount of data on the particular asset in question and may include an assessment of efficacy, development costs and potential value. The value estimation has many components, but in order to make informed decisions we need to gather data around the intellectual property position of the asset and the competitive environment into which the medicine will be launched. This information is publically available, but the skill of the Information Analyst resides in the ability to access, analyze and present it in a way that is easily consumed by key decision makers.
The Information Analysis Service
Lean and Six Sigma principles originated in manufacturing environments with well-defined processes and standardized outputs. However, the global Information Technology group from which this case study is derived was interested in exploring the feasibility and value of applying the principles in a service based group. The Information Analysis (IA) team within Information Management proposed that there might be benefit in applying these to the IA service. Their interest coincided with other business support and technical groups within the company’s R&D function beginning to evaluate the application of Lean and Six Sigma approaches which were already well established within the Manufacturing division.
At the time of this case study, the IA team was responsible for the creation of analytical, biomedical and patent reports in support of drug asset progression 1 decisions along the drug development pipeline. The work required a strong scientific background coupled with deep information retrieval and analytical skills. The reports were designed as comprehensive distillations of established knowledge and to be directly used in decision making.
These reports were created specifically for each combination of asset and decision points and were compiled in both a reactive (where a specific question needed an answer, usually at very short notice) or proactive (in support of planned events) fashion. Delivery to the decision maker was in the form of an electronic document or, more usually, in the form of a presentation supplemented by written material.
The management of supply/demand, cost and quality was controlled by a service board comprising representatives from the analysts, suppliers to the IA service, and from the consumers of the service deliverables.
What is Lean Six Sigma?
Lean and Six Sigma are process improvement techniques that are used either individually or in combination to improve the quality and delivery of business processes.
Lean, or Lean Manufacturing was originally developed by Toyota and branded as the ‘Toyota Production System’. Based on a series of principles, its focus is on eliminating waste: wasted time, wasted effort, and wasted cost in a way that engages all those directly working on a process, in a journey of continuous improvement. It follows on from such approaches as Total Quality Management (TQM), quality circles and Business Process Engineering.
Motorola developed the Six Sigma approach as a way of reducing variation, and so ensuring delivery of consistent quality products to its customers. Based on statistical methodologies to understand the ‘voice of the process’, it also has an emphasis on understanding the ‘voice of the customer’, i.e. what constitutes quality in the eyes of the customer.
In practice, an organization will obtain greatest effectiveness and efficiency by applying Lean and Six Sigma together. In this way the organization can ensure a focus on its customers (effectiveness), lean and streamlined processes (efficiency), and sustained, or continuous improvement. Some organizations have adopted the term ‘Lean Six Sigma’ or ‘Lean Sigma’ to emphasize this dual approach.
Although Lean and Six Sigma principles and methodologies have originated from manufacturing backgrounds, they are applicable to any situation where there are customers, something to be delivered, and a process to translate customer requirements into some form of deliverable. They are therefore being increasingly applied to research and development, and to service environments such as finance, IT, human resources, education and library and information management.
SIPOCs as a Starting Point for a Lean Six Sigma Project
SIPOC is an acronym of Supplier, Inputs, Process, Outputs and Customers, typically used to provide an overview for a process to be improved, and is one of the first things to be defined by a Lean and Six Sigma project team. It is usually applied in reverse order.
Customers can be external, or internal – the general definition being those who pay for, choose, or use a product or service. An individual, team or organization may have any number of customers, with a range of requirements, and so will need to have processes in place to understand the customers’ ‘voice’, and to maintain that dialogue so as to have ‘satisfied’ and ultimately loyal customers. An in-depth understanding of what is important to its customers will enable a manufacturer or service provider to prioritize its work and ensure that it is allocating its often limited resources to the activities that will deliver the greatest value. Suppliers and customers are increasingly looking to build partnership type relationships to achieve improved effectiveness of their delivery, and efficiency in how they go about it.
An output, or deliverable, can be a product or a service, or, in the case of internal customers, intermediate steps in its production. It can be something very tangible, as in a manufactured product, or something less so, such as analytical or research information enabling decisions to be made.
Processes are the series of steps involved to achieve an end. In this context, these are the steps involved from the point of customer enquiry and discussion of their requirements, to the actual delivery of the product or service. Such processes are also referred to as ‘value streams’. An organization will also have other supporting (for example administrative) processes that will impact the functioning of its core value stream: providing inputs, using outputs, and having an influence on the overall flow of the value stream.
In Lean and Six Sigma, processes are first mapped, then streamlined (or standardized), and then monitored for variation on an on-going basis. Control charts are typically used as a way of visualizing the performance, or capability, of a process. Some variation will be natural and to be expected in any stable process: the key is to spot the variation that indicates that a process is out of control, and that might therefore lead to undesirable knock-on effects to time, cost or quality so that these can be addressed before they become serious.
The inputs are what are needed from the suppliers in order to carry out the processes: they can be very tangible materials, or something less tangible such as information. Customers can also act as suppliers: for example as suppliers of information on what they require in order to trigger off the process which will ultimately deliver these requirements.
A theoretical SIPOC for the kind of work performed by an Information Analyst is shown here in Figure 1.
SIPOC for the Information Analysis Service.
What Products or Services do we Create for Greatest Added Value?
Activity Analysis
In order to determine which activities added the highest overall value to the customers of the service, we first needed to determine what activities actually took place within the team in as objective a way as possible. Simple questioning of analysts about the activities required to produce a report produced variable results; responses were often oversimplified (because a lot of the activities were obvious or instinctive to the individual concerned) or difficult to assess (because each analyst described their activities in different ways). We settled on an ACVA (activity customer value analysis) methodology the first step of which was the activity analysis. We: Identified the different job roles within the overall team, e.g. Analyst, Team leader, Manager, Director. Identified the major activities carried out by each of these, whether directly related to report generation or not. Created a spreadsheet (in Excel) listing each of the activities with columns for recording other data such as actual time spent on each activity and job role. Used the spreadsheet to observe and record, where possible, multiple individuals in each of these categories and capture data on which activity was being performed every thirty minutes throughout a working day.
The author of this article kicked off the exercise by being an observer so that the approach could be tested and the initial results shared with the IA team. As the observee was the actual Director of the department at the time, this was also an important role-modelling change-management activity!
As we rolled out the exercise, we used observers where possible who did not perform the roles that they were observing and also did not have any line responsibility for each other – again to help defuse any possible anxieties about being ‘watched’.
This initial data collection also helped us to eventually settle on around fifty activities distributed over the roles for the final analysis. It also gave us an assessment of what activities were performed within the team and how much resource was being applied to each.
Value Analysis
The second step in the ACVA, and a key one in the Lean and Six Sigma methodology in general, requires the specification of value from the viewpoint of the customer.
In order to determine the value perceived by R&D customers we: Selected the R&D business partners with whom we interacted most frequently. Designed an interview-based questionnaire covering the list of about fifty activities. Discussed the business partners’ perception of the value delivered through the service activities. Asked them to identify any gaps.
This exercise gave us an assessment of the value of each of our activities in the eyes of the customer, and helped us to pull together a prioritized list of the activities.
Results
By comparing the results of the activity analysis (with current time spent on each) and the value analysis (in the eyes of the customer), we were able to categorize our activities into: Value adding, i.e. those of real value to our customers. Non value adding, i.e. those of no value to our customers. Non value adding but necessary, i.e. those that did not directly add value to the customer but that we needed to carry out to manage the service, e.g. budgeting, reporting, and perhaps controversially, personal development.
This analysis enabled us to determine which activities we could stop (non value adding), activities we could reduce (non value adding but necessary), and in general how we should adjust the time we were spending to match our customers’ prioritization of value adding activities.
A clear example of a non value adding but necessary activity was that of producing the team’s monthly report. Up to then a whole hierarchy of the team had been involved in writing, selecting, rewriting and finally compiling the report. We reduced the activity to just one person’s extraction and compilation of information that was already available from our day-to-day record keeping.
Through such adjustments as these, we were able to focus an additional 20 per cent of the team’s activities on value adding activities.
Are the Service Deliverables Fit for Purpose?
Continuous Improvement Activities
Once we had determined what we needed to deliver in terms of customer value, we then needed to determine how we could deliver that value in the most efficient manner. Six Sigma methodologies allowed us to analyze the operation of the service capability, stability and defects based on the collection of service metrics.
Initial in-process service metrics included: Per cent of biomedical reports delivered within 20 days of initial customer request and Per cent of patent reports delivered within 30 days of customer request.
These metrics, whilst a useful guide, did not however link directly to our ability to produce the most valuable reports. The actual time of request can be quite arbitrary and what matters is when the material will need to be used in order to make the decision. Reports could be delivered 20 days prior to use and still meet the success criteria; however, key information emerging in those 20 days between report delivery and decision would not be included.
A second iteration, based on just-in-time delivery was then formulated: Per cent of reports delivered within x days prior to use, where x is determined by the cycle time by which information can be refreshed; e.g. x could be 7 days if the baseline information was only updated weekly.
The stability and capability of service delivery was monitored on a weekly basis by the creation and analysis of control charts. These (see Figure 2) became a critical input to the service management board.
Example of a potential control chart for the Information Analysis Service.
The creation of a stable and capable service over time naturally led to the introduction of an ever more stringent definition of the service in order to make sure that the metrics were as aligned to the generation of customer value as possible.
A third iteration, built on the second, was conceived where we added measures around: Quality and fit-for-purpose – measuring the presence/absence of key individual elements of the reports. Business impact – observed actions or decisions that were taken as a result of the information supplied.
What Did We Learn?
The overall elapsed time from the creation of the first metrics set to the implementation of the last was around twenty-four months. During that time a number of useful learnings and observations were captured: Bespoke analytical reports can be described in such a way as to allow Lean and Six Sigma methods to be used to streamline their production and increase their value. Value in the ‘eye of the customer’ should be the key determinant of what the service should provide. If this is captured correctly everything else flows. Full participation in the ACVA exercise, metrics definition and capture by the analysts helped break down any pre-existing cultural or behavioural barriers – the service, its performance and output was ‘owned’ by the Information Analysis team. Site-based displays and discussions of the work in progress, and frequent communication on the project helped to keep all members of the geographically dispersed group engaged and involved in the exercise. Training was important in the use of the methodology, before workshops and before control charts were used. There had been considerable variability in what people were doing: carrying out this project led to greater (beneficial) standardization. People had to reconcile their professional preferences, with the need for organizational/business management. People worry about the motives for this kind of exercise – participants need to be open-minded and to assume positive intent. It is often useful to set stretch objectives around the metrics definitions, trial them and then see what happens. The adoption of a bold approach meant that the service evolved much faster than by conventional means. The capture of metrics was initially seen as a non-value add activity, however it became clear that the effort required was easily recouped by stopping non-value activities (in the eyes of the customer).
Conclusion
The Lean and Six Sigma methodology was successfully used to streamline and improve the value provided by the Information Analysis Service. The approach used (and variations of it) is applicable to library and information services in public, academic and private sectors.
Lean and Six Sigma can also be used to focus on individual products and services, i.e. how to improve:
The processes involved from customer requests to final delivery – for example the author has worked with a Library Service to help consolidate bibliographic services from a decentralized to a centralized approach.
Quality, e.g. improving time-lines for delivery of services, or fit to quality criteria specified by customers
Our thanks go to members of the Information Analysis team, in particular Dr Peter McMeekin for his support in writing this article, Dr Liz Poyner for her work on the metrics development and Dr Paul Stead for his leadership during the ACVA activity.