Operational Excellence - Pharmaceutical Industry

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
capaci
ty
lack
of
contro
l
poor
flow
bottle
necks,
poor
qualit
y,
many
defect
s
high
proce
ss 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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