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Polpharma strengthens market share through WCO implementation

WCO implementation

Executive Summary
To counter the strong competition in the generics market, particularly in Central and Eastern Europe, Polpharma implemented World Class Operations (WCO). The Dry Forms section was the pilot project, with the direct goals of lowering manufacturing costs, active ingredient losses and improving changeover times. The results yielded a time saving of six hours each on the granulation and the packaging changeover times, and direct financial savings of €150,000 p.a. – 73% due to yield improvement alone. Future investment costs of €968,000 were also averted. At WCO maturity, volume is expected to increase by 50 to 70 million packages annually.

 

SituationWCO implementation
To remain ahead of robust competition in the generics market, particularly in Central and Eastern Europe, Polpharma identified a need for improved flexibility. Since flexibility might be a growth-limiting factor, it could be addressed either through new capital investment or improving inherent process flexibility. Polpharma took the decision to implement World Class Operations (WCO).

Direct goals of the WCO implementation were to lower manufacturing costs and active ingredient losses, shorten changeover times and increase flexibility in response to market needs, without upping stock levels.

Action
Following a Steering Committee workshop, part of the Dry Forms section was identified as the pilot area, as bottlenecks were usually encountered with the three granulation lines and, to a lesser extent, packaging. Stage 1 of the rollout embraced the TRACC Best Practices of Teamwork, Visual Management, Focused Improvement, and 5S, supported by Setup Time Reduction blitz exercises in the pilot area. This was followed by broadening implementation and rollout to other parts of the company in Stage 2 — the remaining Dry Forms sections, as well as the Wet Forms and Infusions departments.

shutterstock_8254750Problem areas identified on these lines included a systemic lack of treated water for washing on the granulation side, as well as complex and extensive changeovers for packaging, often causing prolonged stoppages. Three line operator teams were assigned to the granulation and packaging lines while Profit Improvement Projects (PIPs) were introduced simultaneously.

A structural analysis approach was followed with the emphasis on shortening the washing time (changeover) of the granulation lines, as well as curbing changeover on the packaging lines.

Direct goals of the WCO implementation were to lower manufacturing costs and active ingredient losses, shorten changeover times and increase flexibility in response to market needs.

Results
The immediate results were impressive — washing time on the granulation lines dropped from 14.7 to 8.7 hours, while packaging posted a similar improvement after a SMED blitz with changeover time decreasing from 11 to 6 hours.

However, results in the pilot area were most inspiring in terms of financial gains — direct cost savings amounted to €150,000 p.a of which €110,000 was due to yield improvement alone. Future investment costs of €968,000 were also averted.

To support production improvements, Polpharma requested additional support through a supply chain project. It was aimed at limiting stock levels and improving warehouse service flexibility, which resulted in better planning and delivery capability.

Results in the pilot area were most inspiring in terms of financial gains – direct costs savings amounted to €150,000 p.a.

WCO implementation

Elements of TRACC Foundation practices also were rolled out to warehousing to improve communication and cooperation through Teamwork, order and organization through 5S, and to stimulate better support for production departments through Visual Management. It’s anticipated that once the company’s WCO implementation reaches maturity, it will increase its production volume by 50-70 million packages per year. The aim is also to increase the number of key brands from the current 10 to between 20 and 30.

Company Background
As one of the largest and most modern European pharmaceutical plants, Polpharma specializes in manufacturing both generic and over-the-counter cardiological, gastrological and neurological drugs. Founded in 1935, the company combines tradition and experience with modern technology and the highest manufacturing standards.
After years of nationalization, a milestone in Polpharma’s history was its privatization in 2000, funded solely through Polish capital. This gave the green light for thorough changes, which turned it into a strong business and the top player in the Polish pharmaceutical market. Together with the Medana Pharma Terpol Group, in which Polpharma is a majority shareholder, it’s the Polish market leader in volume of drug packages sold. Reinforcing its position in international markets, the company has representation in Russia and its own representative offices in Lithuania, Kazakhstan, Belarus, Azerbaijan, Uzbekistan and Ukraine.

 

Disclaimer
This resource has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained herein without obtaining specific professional advice. Competitive Capabilities International (CCi) does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this resource or for any decision based on it.

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