Operational Excellence Model for Pharma Industry - Report

This report delves into the development of an Operational Excellence (OE) model specifically tailored for the pharmaceutical industry. It begins with an introduction to operational excellence within the context of the pharmaceutical sector, emphasizing its importance in addressing challenges related to innovation, productivity, and cost. The report then presents a comprehensive overview of a Business Excellence Framework (BEF), highlighting its key principles, including leadership, customer focus, system thinking, people, continuous improvement, information and knowledge, and corporate social responsibility. It outlines the process of developing the model, emphasizing the importance of continuous improvement and sustainability. Furthermore, the report discusses the conceptual components of the BEF, such as risk management, corporate governance, and Six Sigma frameworks. The report uses the example of Allergan plc and the challenges faced by the pharmaceutical industry in Ireland to highlight the benefits of implementing an OE model. The report also discusses the impact of the model on risk management, growth, sustainability, and organizational development, including how these factors contribute to improved financial performance, customer satisfaction, and operational efficiency. The report is based on the assignment brief that requires a conceptual model that identifies the critical parameters essential for the current and future success of any pharma business.

OPERATIONAL EXCELLENCE
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Table of contents
Introduction......................................................................................................................................3
Introduction to pharmaceutical industry and operational excellence..............................................3
Overview of the Business Model.....................................................................................................4
Key Principles of the model............................................................................................................8
Key Elements of the model............................................................................................................10
Assessment of the model...............................................................................................................19
Conclusion.....................................................................................................................................25
References......................................................................................................................................26
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Introduction
Operational excellence is considered as an execution of business strategy. This can be done more
reliably and consistently than the competition. This is mainly evidenced by the end results. Each
and every employee of an organisation can be able to see flow of value for the customers. The
current assignment is focused on the Business excellence Framework. The framework will be
developed and discussed based on the pharmaceutical industry. The write-up will highlight the
process of developing the business excellence framework. The key principles and the levels of
the models will be discussed in this assignment. The importance of such principles and the
framework for the pharmaceutical industry will also be highlighted. Elements will also be
discussed that are in the framework. Some of the elements that will be linked to the
pharmaceutical firms are quality Risk, safety. The analysis of the business framework will be
followed by the selection of a pharmaceutical or a medical device that is currently recalled. The
problems in the selected device and its possible root cause will be also discussed. This will be
followed by some assumptions made for the pharmaceutical industry.
Introduction to pharmaceutical industry and operational excellence
Pharmaceutical industry is going through a dramatic changes now a days. It is evidenced that
operational industry is a significant procedure which should be adopted by this industry so that it
can maintain sustainability. As commented by Nolan and Anderson (2015), biotechnology and
Pharmaceuticals Company can have profit by adoption of the operational Excellence. The
growing pressure of innovation, productivity and cost is the major reason due to which
operational excellence is important. According to the viewpoint of Pandey and Bharadwaj,
(2016), every industry has its own characteristics and challenge that determines the way
operational excellence can be tailored within the industry. In pharmaceutical industry of Ireland
the major challenges includes cost and innovation. Lack of capacity, lack of control, poor flow,
bottlenecks, poor quality, many defects and high process cost are some of the issues which are
faced by pharmaceutical industry without having an operational excellence framework (Alkhalidi
and Abdallah, 2018).
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Figure 1: Typical issues of lacking process excellence in pharmaceutical industry
(Source: Mwololo, 2015)
Based on the reference of Bellm (2015), it has been evidenced that 88% of the companies in
pharmaceutical industry are using the tools and principles of OPEX, whereas 12% of the
companies perceive that they only have an OPEX Culture. There are three types of companies
based on the use of operational excellence. These are First Movers, Followers and Laggards.
Companies which started with OPEX more than 5 years ago are first movers, whereas followers
are those who have started OPEX 2- 5% years (FIR, Antonsen and Ahm, 2015). Lastly, laggards
are those who have started with less than 2 years ago. Based on the study done by Gólcher-
Barguil, Nadeem and Garza-Reyes (2019), lead times, flexibility are two most known objectives
of using operation excellence in pharmaceutical industry.
Overview of the Business Model
Introduction to the model
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Lack of
capacity
lack of
control
poor
flow
bottlene
cks,
poor
quality,
many
defects
high
process
cost

In order to have sustainable organisational excellence an integrated leadership and management
system is required(Pourghahreman and Qhatari, 2015). This system is known as Business
Excellence Framework. In the pharmaceutical industry Business Excellence Framework will be
helpful. The main aim of BEF is to provide a continuous improvement for the business
environment. As opined by Kaminsky, and Wang (2015), pharmaceutical industry requires
continuous improvement due to increasing demand on innovation and cost cutting. Thus, this
framework will be best for this industry to support operational excellence. It has been argued by
Hajou, Batenburg and Jansen (2015), a successful business always improves its business process
by understanding the performance and capability of business. Thus, in the pharmaceutical
industry, companies such as Allergan plc based on its performance development this type of
framework to improve the business process (Pourghahreman and Qhatari, 2015).
There are some areas which will be improved by adding BEF to companies in pharmaceutical
industry. These are pointed as follows:
 Financial performance will be improved
 Customer service and satisfaction will be focused
 In order to create inspirational leadership BEF is used in this industry
 Reducing the operational cost is another key factor for which BEF is used
 Improvement in decision making capabilities
 Improvement in change management capability
Thus, this model will help the company such Allergan plc to improve the above field by
incorporating business excellence framework.
Process of development of the model
Based on the opinions of Köhler (2019), it has been identifies that an effective operational
excellence program helps in identifying the gaps in performance. In addition it also implements
the effective solutions and helps in measuring the results and ensures the continuous
improvement. This theory perfectly justifies the business environment of pharmaceutical
industry. Company such as Allergan’s Plc and other pharma and biotech companies in Ireland
cannot afford the gaps in performance. This is because this industry serves humans. According to
the viewpoint of Kumar et al. (2019), unfortunately there are several organisations that do not
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have clear strategy. Without a holistic approach within this industry effective timelines, a
pathway to success cannot be met.
Thus, it is important to develop a operational excellence model for this type of business industry.
As commented by Lawrence and Kopcha (2017), that the role and perception of PEX with in the
concerned industry as significantly changed over the last decade. Thus, this model is required
for Allergans Plc to best in this competitive world. The below is the Business Excellence
framework for the company Allergans Plc to make its business sustainable.
Figure 2: Continuous Improvement and Sustainability
(Source: Muse, Njeru and Waiganjo, 2016)
There are many positive impacts on the companies such as Allergan’s Plc after incorporating the
above model. As for example, risk management and compliance have impacts of loss
prevention, risk reduction, improved safety records and increased uptime. According to the
opinion of Mercanoglu and Ozer (2015), the impacts of growth and sustainability are global
market expansion, increase in revenue and continuous improvement. Organisational
development impacts the development in workforce, change management, employee engagement
and culture. Lastly, cost optimisation helps in waste reduction, reduced overtime spend,
streamlining of the process and reduction in overtime spend.
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Growth the
sustainability
Risk
amnagement
abnd
compliance
Organisational
developement
Cost
optimisation

Conceptual components of model
The Business excellence Framework is an umbrella that provides business initiatives that are
integrated in one coherent form (Modgil and Sharma, 2016). There are some business initiatives
such as cost cutting, focussing on innovation that fits comfortably with the BEF. The conceptual
components of Business excellence framework to improve the performance of companies such
Allergan plc are as follows: Risk Management Corporate Governance Triple Bottom Line Reporting Six Sigma Framework ISO the 9000 series Enterprise Resource planning Balance scorecard
Above are some of the components which are taken care of while incorporating the operational
excellence model within the company.
Figure 3: Components of Business Excellence Framework for pharmaceutical industry
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Risk
Management
Corporate
Governance
Triple Bottom
Line
Reporting
Six Sigma
Framework
ISO the 9000
series
Enterprise
Resource
planning
Balance
scorecard

(Source: Modgil, S. and Sharma, 2017)
Key Principles of the model
The principles of Business excellence framework model are the core of unified theory of
management and it is supported by the published body of research. There are eight principles that
will be discussed below and are core of the model.
Principle 1: Leadership
As per this principle, leaders of the company should lead by the example. The CEO of Allergans
Plc and professionals should have clear direction. Thus builds organisational alignment and
focuses on sustainable achievement of the goals. As viewed by Raitu et al. (2015), companies
within the pharmaceutical industry need to realise that culture of excellence can only be achieved
`when organisational leaders based on the principle of leadership. It is necessary that senior
executives of the company communicates regarding mutual agreed organisational purpose and
values(Pourghahreman and Qhatari, 2015). This will improve the performance of the company
as well as the industry.
Principle 2: Customers
The next principles is about the demands and requirements of the customer. The concerned
principle suggests that it is important to understand the values of customer both now and into the
future. This therefore helps in driving the decision of the organisation. As per this principle
company such as Allergan’s Plc should research about its users of the products, process and
services so that it can able to judge best usefulness and worth its offering. As viewed by Roy,
Patwardhan and Chaguturu (2016), this principle mainly gains advantage to the field of
competition by improving market share, generating loyalty towards customers and customer
acquisition. This principle should be followed by each company within pharmaceutical industry.
Principle 3: System Thinking
As suggested by Sharda (2016), innovation and cost cutting are two most focussed field in the
pharmaceutical business. This principle thus tells about continuous improvement in the system.
It is significant that the company such as Allergan’s plc should understand and anticipate
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potential consequences of the core actions. This will help to render continuous improvement
within this field. The principle of system thinking allow to apply the lessons and help in
reshaping the activities (Sieckmann et al. 2018). It can be assumed that with this principle the
goal will transform inputs into outputs and desirable outcomes are achieved by the stakeholders.
Principle 4: People
This principle is mainly for the employees working the company. It is important that in a
pharmaceutical company skills of workforce should be updated frequently. As stated by
SRINIVASAN and SHAH (2018), developing and valuing the capability of people and
resourcefulness to improve the organisation. Company like Allergans plc should know about
enthusiasm of their people (Sieckmann et al. 2018). This is due to the reason that people
working under a particular process understand the process best. Thus, it is important to harvest
the ideas of the employees to improve the outcomes. This helps in promoting the shred
ownership and creates a loyal and innovative workforce. This is important to have innovative
workforce within this field to meet the increasing demand of cost cutting and innovation
(Sriyakul, Umam and Jermsittiparsert, 2019). Attention to the workforce and their satisfaction
improves the workplace culture and improves organisational outcomes.
Principle 5: Continuous Improvement
Developing agility adaptability, responsiveness that is based on culture of continuous
improvement, learning along with innovation defines the fifth principle of this model. To be an
excellent company in the pharmaceutical industry, company like Allergan Plc should have the
capacity to implement change and learn quickly. This will help the companies to respond quickly
and give the new ways of doing business (Suprapto, 2016). Thus, by maximising both the
organisational learning and personal learning the company can lead to the improved efficiency
and effectiveness.
Principle 6: Information and Knowledge
The sixth principle of the business excellence framework is about the use of data, knowledge and
information to improve the performance. As per the reference of Syafei and LS (2018), it can be
told that variation has a direct impact upon predictability, cost and performance. In addition
measurement and management of the variation should be given the high priority. Thus, company
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such as allergens should use maximum of their informatics systems and data so that they can be
innovative and as a result performance can be improved.
Principle 7: Corporate and Social Responsibility
A well-known company be it in any field should always be socially, environmentally and
ethically responsible. The role of corporate citizen should be played by the authority of a
company to improve their brand image. As commented by Teker (2017), a best governance and
management accountabilities will ensure the border responsibilities if ab organisation. As for
example Allergan’s plc should involve in the corporate social activities to enhance public image,
improve risk management and have economic sustainability. The company should manufacture
their products in such a way that least damage is made to the environment. Before disposing any
of the wastage, it should be treated well (Valmohammadi and Roshanzamir, 2015). In pharma
and biotech industries there is chance of having lot of wastage that can hamper environment, thus
this principle will provide suitability to the company.
Principle 8: Sustainable Results
Last principle deals with focusing upon the sustainable results, outcomes as well the values.
The differentiation between an excellent organisation and an, average organisation can be done
by perceived value the organisation creates. An excellent company sustains fir shareholders,
suppliers, employees and other stakeholder (Vlahovic, Knezevic and Batalic , 2016)s. It is
important that companies in the pharmaceutical industry are able to make judgements to be
achieved by their key stakeholder’s group. This reflects the balance in monitoring the value
delivered by the corporate strategies.
Key Elements of the model
There should be some conditions that needs to be exist beforehand so that companies in
pharmaceutical industry can embark on the journey towards the operational excellence.
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Figure 4: Some of the key elements of OPEX
(Source: Wahab, Ismail and Muhayiddin, 2016)
The above picture shows a description of dome of the elements of the OPEX model. The
management commitment is one of the most important element which includes leadership,
continuous improvement, resources and responsibilities and delegations, these are mostly applied
in the pharma and biotech industry. In addition to this, strategic OPEX alignment and proper
roadmap and communication is required in this industry. The process must create a landscape
push and pull strategies should be used with a great KPI system. It also important to empower
the people of this industry in order to increase the performance level of the company. In addition
to this elements there are more elements which are linked with these model and described below
individually.
Vision
This is one of the key elements of the business excellence framework that comes under OPEX.
As commented by Wahab, Ismail and Muhayiddin (2016), vision refers to understanding of the
reason regarding why the company has been set up and what are its key objectives. In the
companies such as Allergan it important that the key stakeholder should know the vision of the
company. It is also significant that the strategy to create and deliver value to its customer and
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stakeholders is also understood well (Adamu, 2017). This referee to all leaders of the
organisation. It may start with `the senior leader however it should not be limited to the senior
only. The company should form mission and vision properly so that each one of the people can
stick to it and improve the performance.
People
The company rely on their people and their job so that they can be interface between customers
and business. There is a big question about this key element that is in case people is the biggest
asset, her who among the people are biggest assert? In addition to this what the company is doing
or needs to do for developing this key elements (Haleem et al. 2015). There are five key
essential field within this element which should be focused by every Company within the
pharmaceutical industry.
Figure 5: Five essential fields in people based on the model
(Source: Haleem et al. 2015)
Fairness
This means company needs to be fair with all the employees so that they can provide best of their
capability. As commented by Kazzazi (2017), many problems in the company arise in case
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Fairness
Firmness
Consiste
ncy
Staff
develope
ment
Leadersh
ip
develop
ment