The Perfect Storm: A Low-Performing Biotech Plant

3 Pages Posted: 1 Jun 2017

See all articles by Robert Landel

Robert Landel

University of Virginia - Darden School of Business

Rebecca Goldberg

University of Virginia - Darden School of Business

Abstract

For the past 12 months, a major pharmaceutical company had rolled out a comprehensive set of cultural changes and breakthrough lean-process activities that were instigated by the need to cut nearly 25% of costs across its key global production facilities. The cultural changes and breakthrough lean-process activities called for aggressive action, and company leadership thought that the company's cost reduction goal could only be achieved through operational transformation, in a three-prong approach incorporating leadership behavior and management infrastructure changes that complimented the lean initiatives rolled out in the 24 manufacturing operating systems of its more than 40 global sites. A senior leader charged with heading up this global effort schedules a meeting with her lead contact from the external advisory firm hired to help with the design and initial implementation of a cost reduction to discuss the roadblocks they both had encountered at their least successful site.

Excerpt

UVA-OM-1463

Jan. 20, 2012

THE PERFECT STORM: A LOW-PERFORMING BIOTECH PLANT

For the past 12 months, a major pharmaceutical company had rolled out a comprehensive set of cultural changes and breakthrough lean-process activities that were instigated by the need to cut nearly 25% of costs across its key global production facilities. This need to cut costs was driven by two events. First, several of the company's patented blockbuster products would soon be going off-patent creating a significant revenue shortfall in the near future. Second, company leadership was currently negotiating with representatives from another major pharmaceutical company that had offered to acquire it over the next 18 months.

The cultural changes and breakthrough lean-process activities called for aggressive action, and company leadership thought that the company's cost reduction goal could only be achieved through operational transformation, in a three-prong approach incorporating leadership behavior and management infrastructure changes that complimented the lean initiatives rolled out in the 24 manufacturing operating systems of its more than 40 global sites. The large-scale program involved both senior leadership and an external advisory firm. With the assistance of the external firm, the pharmaceutical company had designed a complete rollout plan that began by identifying the first- and second-wave sites (others in the global network would be tackled later) and conducting an in-depth diagnostic analysis of the potential for financial gain, process improvement, and cultural changes at each of these production sites.

. . .

Keywords: operations transformation, leadership behavior, managment infastructure, lean initiatives

Suggested Citation

Landel, Robert and Goldberg, Rebecca, The Perfect Storm: A Low-Performing Biotech Plant. Darden Case No. UVA-OM-1463. Available at SSRN: https://ssrn.com/abstract=2974977

Robert Landel (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/faculty/landel.htm

Rebecca Goldberg

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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