At a Glance
- A leading ophthalmic drug manufacturer in Asia reported costing errors that led to project and budget overruns, despite having advanced production facilities.
- An analysis by Renoir revealed deeper problems in management, control systems, and production planning tools.
- Through a Management Action Team and training sessions, Renoir successfully overcame employee resistance and implemented measures that led to improved transparency and significant operational improvements, including a 6% increase in productivity, a 42% reduction in equipment downtime, and a 100% improvement in procurement timeliness.
Background
The pharmaceutical manufacturing landscape is complex, influenced by intense competition, the economic climate, and a stringent regulatory environment. As a result, there is a need for continuous optimisation across all stages of development to ensure operational efficiency and financial sustainability.
The pharmaceutical industry, comprising both public and private entities, is an essential component of global healthcare systems. Through research, development, manufacture, and marketing of medicines, pharmaceutical companies play a vital role in improving human health and well-being. Drug manufacturing is part of the pharmaceutical industry, where pharmaceutical companies manufacture drugs on an industrial scale.
Our client is one of the largest ophthalmic drug manufacturers in Asia, ranking in the top three in terms of market share in its home country. They research, manufacture, and distribute ophthalmic medicines including anti-bacterial products, allergy medicines, and glaucoma treatments.
The Challenge
The company owns plants equipped with high-end and semi-automated production lines. Despite the state-of-the-art equipment, the company was reporting costing errors that were causing project and budget overruns.
Analysis
The company commissioned Renoir to analyse and identify the root causes of the problems. Our analysis revealed that modern technology was masking deeper problems, including ineffective management and control systems, and inefficient production planning and scheduling tools. Staff morale was also low.
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Project Approach
A team of four Renoir consultants formed a Management Action Team (MAT) to improve business operations, targeting key areas of production and business functions, including activity-based costing (ABC), equipment maintenance, 5S changes, and an overall improvement in behaviour and culture change.
Initial resistance from employees was addressed through change management and engagement strategies. This resulted in a positive shift from complacency to enthusiasm for business improvement.
“We were sceptical at first, but Renoir’s help with our continuous improvement activities and the actual improvements achieved surprised us.”
– Vice-President Operations
Implementation
Renoir facilitated the management and staff training sessions, focusing on key areas such as effective communication, time management, developing resource planning, and using project management tools.
Initial employee resistance gave way to a new sense of ownership, encouraging active engagement in identifying and solving problems. Renoir’s consultants and the company’s personnel worked together to implement the ABC system, which improved the transparency of reporting.
This transparency facilitated a better understanding of direct and indirect costs, enabling the implementation of tighter cost control measures and resulting in increased departmental budgets.
Recognising the positive impact of Renoir’s involvement, the company continued to use our services for a follow-up project. This project aimed to optimise and improve the company’s advanced technical capabilities.
Results
Productivity increased by 6%, from 91% to 97%
Equipment downtime reduced by 42%
Best batch production for daily volume increased by 20%
Procurement timeliness reached 100%, up from 64%
Reduced inventory, saving over US$250,000
*We have intentionally omitted client-specific details to maintain strict confidentiality.
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