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Pharmaceutical Manufacturing and Packing Sourcer

Steps to Success

Intensifying competition and rising costs mean that increasing efficiency is one of the main concerns of pharmaceutical manufacturers. In addition, constantly changing market requirements lead to shorter product lifecycles, so manufacturers must have a high degree of flexibility to be able to quickly adapt to new demands. Ensuring optimal use of resources is an important starting point in meeting these latest trends.

Evaluating OEE is an established method for packaging line improvement, designed to minimise production costs through the optimum use of resources. But how does this apply to the pharma industry, and what is the best way of implementing changes?

PMPS: What challenges do pharma manufacturers face in today’s market and what solutions can be found?

Roland Pichler: Ever-increasing competition and the accompanying cost pressures are among the greatest challenges facing today’s pharma manufacturers. Every company strives to achieve maximum profits with minimum effort. Growing demand for high-quality, cost-effective products requires manufacturers to not only supply products quickly but, at the same time, keep production costs as low as possible. This means that it is important for manufacturers to constantly increase the efficiency and productivity of their machinery and lines, and this can be achieved by, for example, reducing downtime and minimising product waste.

The shortage of resources poses another important challenge. Key in overcoming this is optimum usage, which goes beyond optimising the availability of machinery. The entire production process must run smoothly to enable maximum efficiency of the entire line and its equipment. In addition to processing and production lines, the use of the workforce, as well as the organisation of work processes, structures and production equipment, must all be analysed and then optimised.

In production, every minute counts – so strategies for increasing efficiency have high priority. What role can OEE play?

The important thing with OEE is to make the process transparent and measurable, and by using this method as a key performance indicator, we can achieve that. OEE as a metric is used to identify line efficiency at the start of the process, and must be regularly checked to determine progress toward reaching an objective.

Any loss in production is expensive for manufacturers. Therefore, it is essential to know the exact causes of performance losses to be able to achieve maximum efficiency of the line equipment. OEE states the ratio of the actual to the theoretical output, while considering the most common reasons for productivity losses.

The calculation of OEE consists of three categories: availability, performance and quality. These factors are expressed in percentages as comparative values, which can be used to verify any implemented improvements.

What can this tell us about line equipment?

‘Availability’ refers to machinery and workers that enable production according to a schedule. To put it simply, a machine only adds value when it is working. Regardless of whether downtime is caused by humans or machines, it costs the manufacturer money. The ‘availability’ score is calculated by comparing planned with actual machine production times – or, in other words, by calculating the duration of unplanned machine downtime.

The ‘performance’ figure calculates the waste of resources that arises when machines are not running at optimal speed. To determine the performance of the equipment, the actual machine run time is compared with what is theoretically necessary to achieve the produced quantity. This means that time losses which arise when equipment is started up after downtime, for example, are also considered.

‘Quality’ is the third factor in the OEE calculation. It is used to determine how many products do not meet the required quality standards and are therefore rejected. For the manufacturer, poor quality scores mean that there is too much rejected material or post-processing required, consuming additional time and resources.

The three indicators are determined and evaluated during an OEE audit, which takes approximately four weeks. At the end of this phase, a report is created to summarise the results and provide detailed insights into overall line efficiency. Based on this report, an OEE consultant can give recommendations for line improvement. If a manufacturer does not have the necessary tools in place to measure the three indicators, such as manufacturing execution systems, external measuring devices can be used.

What is the best way to implement OEE?

OEE consulting services are generally based on a structured process that can be divided into five steps. An improvement project requires planning and preparation, development and identification, data collection, analysis and improvement, and review phases.

These five steps, which are also known as ‘DMAIC’ (define, measure, analyse, improve, control) or Six Sigma methods, form the core elements of OEE assessment.

Customer-specific problems are analysed in the ‘plan and prepare’ phase at the start of the consultation, then converted into a structured improvement project. In addition, both the objective and team should be determined in conjunction with the manufacturer. Ideally, the project team should combine the manufacturer’s product and process knowledge with the OEE consultant’s method and machinery expertise. The project plan is also created in this phase, with milestones to be issued by management representatives.

In the ‘develop and identify’ phase which follows, each individual machine is rated based on the OEE audit and the available key indicators, including determination of possible causes for losses. This phase takes place in a workshop setting, attended by members of the combined team. The possible reasons are listed, assessed according to likelihood, and processed according to the Pareto principle, meaning that 80 per cent of the effects come from 20 per cent of the causes.

The ‘data collection’ phase monitors complex relationships between cause and effect, using statistical analytical methods – such as hypothesis testing – before being converted into appropriate measures and solutions. This means that complex relationships with several causes – temperature, material and product, for example – are first verified using statistics before any measures or solutions are taken.

On the basis of these results, a detailed action plan can be compiled in the ‘analyse and improve’ phase. This establishes the causes of the inefficiencies and produces advice that can be used to improve OEE. The suggested measures can be discussed and evaluated with the project team, before being approved by the manufacturer for implementation.

How can manufacturers ensure that these improvements will bring the desired results in the long term?

This is a very important point. Consistent monitoring of the improvement measures using the OEE key performance indicators is important for long-term results. This monitoring is implemented in the final phase – the ‘review’ process – and clearly shows whether or not the planned objectives have been reached and the solutions have contributed to improvement. A before-and-after comparison is then performed, which highlights the improvements achieved.

However, as some measures for improvement only take effect later – for example, with training or further development – it is important to provide the manufacturer with appropriate management tools, such as control charts, which show progress or offer additional assistance in making a decision to enable action before inefficiencies set in.

Furthermore, OEE measurement creates experience and empirical data that can be applied to other machines and future projects. In effect, OEE assessment begins a continuous improvement process.

How has OEE changed over the last few years, and what does it have to offer the pharma packaging industry in the future?

The method was developed on the basis of the OEE key performance indicator, devised in 1951 by the Japan Institute of Plant Maintenance. Today, OEE is an established industry calculation – it can be tailored to each company’s individual needs and considers all important loss factors.

Over the next few years, I believe that OEE consulting will increase in importance in the development of machinery. Suggestions for improvements can be filtered into R&D and provide manufacturers with equipment that meets the requirements of the market long-term.


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Roland Pichler, Manager of OEE Consulting, Bosch Packaging Services, has over 18 years of experience in the packaging industry, and gained the Six Sigma Master Black Belt certification in 2002. With more than 10 years of practice focusing specifically on quality and logistics management, he now leads OEE Consulting Services for Bosch Packaging Technology globally.
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