Online - 2455-3891

Vol 11, Issue 7, 2018 Print - 0974-2441

Review Article

KAIZEN AND LEAN IMPLEMENTATION IN PHARMACEUTICAL INDUSTRIES: A REVIEW

SRINIVASAN G*, SHAH N

Department of Pharmaceutics, Vivekanand Education Society’s College of Pharmacy, Hashu Advani Memorial Complex, Chembur (E),
Affiliated to University of Mumbai, Mumbai – 400 074, Maharashtra, India. Email: [email protected]
Received: 11 January 2018, Revised and Accepted: 09 May 2018

ABSTRACT

Kaizen is one of the most commonly used words in all kind of industries. It has been implemented in organizations around the world as a way
to improve production values while also improving employee morale and safety. The kaizen process brings about improvements that are small
and incremental, and significant results can be seen only after a certain period of time. Many organizations across the world have adopted kaizen
management philosophy and have successfully increased the efficiency of their end-to-end supply chains. With a focus on quality and regulatory
compliance that are getting stringent day by day, pharmaceutical companies have been adopting these new strategies. This review focuses on basic
aspects of Kaizen and Lean implementation and highlights few examples from pharmaceutical industry.

Keywords: Muda, Lean management, Kaizen 5S, Plan-do-check-act/standardize-do-check-act cycle.

© 2018 The Authors. Published by Innovare Academic Sciences Pvt Ltd. This is an open access article under the CC BY license (http://creativecommons.
org/licenses/by/4. 0/) DOI: http://dx.doi.org/10.22159/ajpcr.2018.v11i7.24722

INTRODUCTION 3. Acknowledging the problems openly.

4. Create environment for teamwork.
The word kaizen is derived from two Japanese words “Kai” which means
5. Development of self-discipline.
change and “Zen” which means good, so kaizen means to change for the
6. Giving constant feedback to employees.
good [1]. The main focus of kaizen is to break down complex processes
7. Promoting development of employees.
into subprocesses and then gradually to improve them. It is a strategy
for continuous improvement by making small increments to make the
Of this foundation, three key factors arise as follows [8]:
process more efficient and adaptable [2]. In the United States (US),
1. Elimination of waste (Muda).
kaizen is often synonymous with “Kaizen Blitz” or “Kaizen event” [3].
2. The Five-S frameworks or housekeeping.
3. Standardization.
The strategy to involve workers at all levels and functions in an
organization to address a problem or improve a process is what kaizen
According to Imai, a guru in these management philosophies and
aims at. It includes the use of analytical techniques such as value stream
practices, the management and employees must work together to fulfill
mapping (VSM) and Five-S framework to identify opportunities and to
the requirements for each category[9].
identify and eliminate wastes and errors at earliest [4]. In short, it rapidly
implements work cells, improves setups, or streamlines processes [3].
Elimination of waste (Muda)
The concept of Kaizen is deeply ingrained in the minds of employees at
Muda in Japanese means waste. Work is a series of value adding
all levels in Japan. Many times, they do not realize that their thinking is
activities, from raw materials, ending to a final product. Muda is any
based on kaizen strategy for continuous improvement [5].
non-value-added process at any given stage of production [10].
THE OBJECTIVES OF KAIZEN [5]
In Kaizen philosophy, the aim is to eliminate the seven types of Muda ,
• Kaizen aims on establishing acceptable working culture/environment i.e., 7 deadly wastes that are as follows [10,11]:
as that encourages feedback from employees who continuously try 1. Overproduction - Producing more than production schedule.
to improve their jobs or process. 2. Inventory - Too much material before initiation of process.
• Determine the capital cost of projects. 3. Defects - Material and labor are wasted; capacity is lost at bottleneck.
• To involve slow but steady incremental improvements. 4. Motion - to get parts because of space taken by high work in process.
• To involve every employee and develop products as per the demands 5. Processing - Protecting parts for transport to another process.
of customer. 6. Waiting - Poor balance of work; operator attention time.
• To create defect-free products. 7. Transportation - Long moves; re-stacking; pick up/put down.

FEATURES OF KAIZEN [6] Overproduction [12]

• It is widely applicable throughout different markets. • It means to manufacture a product more than its actual
• Although slow in giving outcomes, it is highly effective and result requirement.
oriented. • Overproduction leads to high storage costs, and defects are difficult
• It is a learning experience for an entire organization that adopts to detect.
kaizen. • To avoid this, the production should be scheduled and only what can
• It is a team-based approach and requires collaborative efforts. be immediately sold or shipped should be produced.

BASIC PRINCIPLES OF KAIZEN [7] Waiting [13]

1. Major focus on customer. • It may involve waiting for personnel, data, equipment, or a part of
2. Making continuous improvements. equipment.
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• This can occur when flow of materials through supply chain is poor, on defects and encouraging teams to conduct problem-solving
long production runs and large distances between work centers. activities [19]. When standards are in place, workers can immediately
• This can be avoided by linking processes together so that one process detect a problem if there is any deviation. Then, the employees can
feeds directly into another, thus reducing waiting. either review and modify the standard or correct the deviation. This
is a never-ending process better explained by the plan-do-check-act
Transporting [13] (PDCA) cycle, known as Deming cycle [20].
• It is a cost incurred when the product is transferred between
To improve on a standard, it is first important to set a standard. For
processes. Transporting does not add any value to the product.
every aspect in an organization, be it a process, product, personnel, and
• Quality can be deteriorated because of excessive movement and
handling. team leaders, there must be a precise standard of evaluation set [21].
• This waste can be reduced by mapping product flows that are easier Kaizen aims for constant improvement of these standards. In one-
to visualize. point standardization, each worker performs many tasks, of which
only one task needs to be standardized. This one-point standard is
often displayed in the workplace so that the worker is always mindful
Inappropriate processing of it. Once that particular standard is followed meticulously, another
• It is the use of expensive equipment where process can be completed standard, if required, can be added. Standardization is a way of spreading
by the use of simpler devices. the benefits of improvement throughout the organization [22]. In a
• This often results in high costs of production and poor plant layout. disciplined environment, everyone, including management, is mindful
• Replacing complex steps with simpler ones or combining processing of those standards [20].
steps can greatly reduce the waste of inappropriate processing.
• The lean implementation by Toyota is a classic example of techniques Standardization process is a very important one that has few key
to avoid inappropriate processing [14]. features, presented below [22]:
• Represent the best, easiest, and safest way to do the job,
Unnecessary inventory • Offer the best way to preserve know-how and expertise,
• Overproduction of materials, high waiting time, and procuring • Provide a way to measure performance,
unwanted raw materials can lead to unnecessary inventory. • Show the relationship between cause and effect,
• This tends to hide problems on the plant floor. To improve operating • Provide a basis for both maintenance and improvement,
performance, such problems must be identified and resolved. • Provide objectives and indicate training goals,
• Excess inventory can lead to increased storage time, and productive • Provide a basis for training,
floor space is consumed [15]. • Create a basis for auditing or diagnosis, and
• A seamless flow between work centers can help in avoiding buildup • It provides sources to prevent recurrence of errors and consequently
of excess inventory. minimize variability.

Unnecessary/excess motion [4] MAJOR KAIZEN CONCEPTS [23]

• Related to ergonomics, this waste can be seen at every stage of a Management must emphasize on learning and implementing certain
process. It can also lead to health and safety issue which can become basic concepts and systems to realize kaizen strategy:
a problem for organizations given the stringent safety standards of 1. Kaizen and management.
current times. 2. Process versus result.
• To avoid this, jobs involving excessive motion should be redesigned 3. Following the PDCA/standardize-do-check-act (SDCA) cycles.
and improved with involvement of plant operators. 4. Putting quality first.
5. Speak with data.
Defects [16] 6. The next process is the customer.
• This can result in reprocessing which is a tremendous cost to
organizations because of quarantining inventory, reinspecting, It is the responsibility of top management to clearly put forth these
rescheduling, and capacity loss. concepts and systems to their employees. It should demonstrate
• Many times, a significant proportion of total production cost is the leadership by practicing kaizen within its department and then
cost of defects. establish an implementation schedule for whole organization [24].
• Defects can be reduced only through employee involvement.
Kaizen and management
Five-S Framework In the kaizen context, management has two major functions:
In Japanese, “Gemba” means workplace. The Five-S framework Maintenance and improvement (Fig. 2). Maintenance refers to activities
is the process of managing “Gemba” for improvement. The value directed toward maintaining current technological, managerial, and
is added to any product or service before passing them to next operating standards and upholding such standards through training
process using the 5S methodology [15]. The “Five-S” is derived from and discipline. Under this function, management is responsible to
first letter of Japanese words referring to five practices, namely, perform its assigned tasks so that everybody can follow standard
seiri (organization), seiton (tidiness), seiso (Purity), seiketsu operating procedures and maintain the same standards for every
(cleanliness), and shitsuke (discipline) (Fig. 1) [17]. They provide production batch [25]. Improvement, on the other hand, refers to
significant insight in the orderliness of work area. These evaluations activities focused toward enhancing current standards. Management
aid in understanding what employees feel about their products always aims to maintain and improve standards. Improvement can
or services, their organizations, and themselves. The evaluations be classified as kaizen and innovation (Fig. 3). Small improvements
can be carried out by preparing checklists for production and non- because of ongoing efforts are what kaizen is all about [26]. Innovation,
production areas that cover various aspects of cleanliness, safety, and however, involves large investment of resources in new technology
arrangement of workplaces [18]. or equipment for drastic improvements. Due to their fascination with
innovation, kaizen and its long-term benefits are often overlooked by
Standardization Western managers. While innovation asks for large investments, kaizen
Even though standards are set by management, they must be changed emphasizes on a low-cost approach to improvement based on human
with the change in work environment. Improvement can be achieved efforts, communication, training, teamwork, involvement, and self-
by periodic reviewing of standards, collection, and analysis of data discipline [9].

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Fig. 1: Kaizen-5S

of top management in kaizen implementation play an important

role [28].

The PDCA/SDCA cycles

The PDCA stands for “PDCA,” which is the first step in kaizen process.
The PDCA cycle ensures the continuity of kaizen in pursuing a policy. It
is also known as Shewhart cycle, Demming cycle, or PDCA (Fig. 4) [29].

Plan - to establish a target for improvement and devising action plans

to achieve that target.

Do - to implement the established plan.

Fig. 2: Japanese perceptions of job functions
Check - to inspect the implementation of plan as per decided timelines
and targeted outcomes.

Act - to perform new standardized procedures, to prevent recurrence of

errors, or to set targets for improvisation.

As any new work process can be difficult to follow in the beginning,

the “SDCA” cycle must be followed to stabilize a process before starting
to work on PDCA cycle. SDCA primarily deals with maintenance
while PDCA deals with improvement; these become the two major
responsibilities of management [23].

Putting quality first

Quality should always be given highest priority in comparison to price
Fig. 3: Improvement broken down into innovation and kaizen
and delivery aspects. Lack of quality in product or service can create a
bad reputation for any company no matter how attractive prices are Al
Smadi [30]. Lot of management commitment is required to maintain
quality because managers are often tempted to make compromises in
meeting delivery requirements or cutting costs. In doing so, they risk
sacrificing not only quality but also the life of the business [9].

Speak with data

In kaizen, it is important to understand a problem correctly to solve
it. The relevant data have to be gathered and analyzed to initiate the
problem-solving process. This helps in understanding where the focus
is and also serves as a starting point for improvement [31].

The next process is the customer [32]

All work is a series of processes, and each process has its supplier
as well as a customer. A  material or a piece of information provided
by process A (supplier) is worked on and improved in process B and
then sent on to process C, i.e., customer. The axiom “the next process
is the customer” refers to two types of customers: Internal (within the
Fig. 4: Plan-do-check-act cycle company) and external (out in the market). Most people working in an
organization deal with internal customers. Hence, they must commit
to never provide inaccurate data or defective parts to people involved
Process versus result
in next process. When the overall process is carried out in this manner,
Process-based errors lead to failure in achieving planned results.
the end customer in the market surely receives product or service of
Kaizen preaches process-oriented thinking as their improvement
high quality.
ultimately improves the results [27]. As stated before, kaizen
focuses on human efforts in contrast to result-based thinking of the
ASPECTS OF KAIZEN
West. Using various strategies associated with kaizen, namely, the
PDCA cycle; the SDCA cycle; quality, cost, and delivery (QCD); just- Gemba Kaizen
in-time (JIT); total quality management; JIT; and total productive “Gemba” means the place where the products are made, so Gemba
maintenance (TPM), a process-oriented approach should be applied Kaizen is to make continuous improvement at the location where all the
to achieve target results. Here, the commitment and involvement action is going on to make the organization better [33].

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Fig. 5: Kaizen effect on both API regulated and formulation domestic and regulated field

Kaizen Blitz material from one key process to next [39]. Once the mapping is done, basic
The blitz means a focused, intense, short-term event to improve a idea is to identify the wastes and gaps in system and make modifications
localized process with a basic concept of identifying and quickly to reduce these issues. VSM can be carried out for practically any business
removing waste. Kaizen Blitz involves training of personnel followed activity and expanded upstream or downstream. This tool highlights
by the analysis, design, and rearrangement, if required, of a process process inefficiencies, transactional, and communication mismatches and
or location. A  consultant often conducts this event over a period of also guides about the improvement [38].
2–5 days. A Kaizen Blitz is a focused activity on a particular process or
activity for rapid improvement [34]. KAIZEN IMPLEMENTATION IN PHARMACEUTICAL INDUSTRY

Quick and easy or mini kaizen The Pharmaceutical Industry has historically concentrated on
It is used to bring minute improvements in conscious and sub-conscious Research and Development and Marketing while manufacturing was
thinking of employees [35]. regarded merely as a regulatory compliance requisite. Moreover, the
pharmaceutical companies believed that Lean principles were not
Important characteristics of Mini Kaizen include [36]: relevant to their environment [40]. As pharmaceutical industry is highly
• Permanent changes in method of routine processes. regulated, the principles of process flow optimization, built-in quality,
• Continuous flow. reduction in equipment setup time, and process management were not
• Immediate, local implementation. implemented as easily as in other manufacturing industries [41].
• It is a quick and simple process.
Pharmaceutical industry requires a shift in thinking, due to following
Lean Kaizen factors [42]:
It helps the organization to reduce wastes, excess costs, and non- • Increasing buyer-driven pressure on pricing.
value added activities. This results in the development of a company • Increasing variability in demand.
in market in terms of competition, agility, and market responsiveness. • Higher heterogeneity of customer preferences.
Lean Kaizen is a systematic approach to identify and eliminate waste by
continuous improvement [37]. Furthermore, pharmaceutical industry has high working capital. Hence, to
gain competitive advantage through their processes, top pharmaceutical
Need of lean [33] companies have started to work with the Kaizen Institute. However, the
Lean is, especially, important today as a winning strategy. Some key industry still lags behind with regard to lean thinking [43].
reasons are as follows:
• To compete effectively in today’s global economy. Globally, pharmaceutical companies have shown improvement in the
• Customer pressure for price reductions. overall business performance after lean implementation. The savings
• Fast-paced technological changes. achieved are outstanding and appear to be higher than in other discrete
• Continued focus by the marketplace on QCD. manufacturing industries, such as the car industry. Quality improvement,
• Quality standards established by regulatory agencies worldwide. better use of assets, optimization of flow, higher flexibility, and a
• High customer expectations. sustainable and efficient continuous improvement strategy are some of
• Need to develop standardized process to obtain uniform high-quality the main points that the industry needs to focus on [44,45]. The Kaizen
outcomes. management system model with its various elements, such as flow
management, TPM, quality control, service management and change
VSM management that provides perfect solutions for every company [46].
It is the first step that has to be carried out toward lean implementation. As the methods and training maintain international standards, kaizen
Value stream means to a collection of all activities that are essential in the approach can be easily implemented on a global scale [47].
development of a product or group of products using similar resources,
from raw material to the end customers. The activities can be value added Sanofi-Aventis Deutschland GmbH
as well as no value added [38]. VSM involves documenting the correlation Sanofi Aventis Group began implementing Kaizen in 2005 at their
between the production and the controls required to manage various production plant located in Frankfurt, Germany, with initial focus
processes in production and related information. VSM documents the on 5S activities. A  second pilot was initiated 2  years later in another
basic flow of product, material inventory, and reasons for the movement of office. In November 2007, after impressive results with these pilot

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schemes, the management decided to rollout Kaizen across the whole • The oil consumption was reduced by plugging stem leakages, and the
site. Before introducing Kaizen activities, the plant was in dubious state use of coal-fired boiler was optimized to maintain steam pressure at
with oil leaking from machines, missing machine parts, etc. Through 5S peak load.
workshops and TPM, the plant’s performance improved markedly. The • Piramal health care was awarded the “Healthcare and Life Science
main administrative issues were search times, ergonomics, transparency, Manufacturing Supply Chain Excellence Award” during the 2008 SCM
and long lead times. The 5S framework and value stream addressed Logistics Excellence Awards for their efforts.
these issues and aided in achieving greater efficiency in their offices. • It is the only Indian company to figure on iSixSigma “10 Best Places
to Work for Six Sigma Professionals.”
All employees were involved, and they contributed many creative,
intelligent solutions to improve their working environment. The Lean sigma implementation by GlaxoSmithKline (GSK) [51]
management team believes that these activities will provide a solid, • GSK is the second largest research-based pharmaceutical company
long-term foundation for the company. Kaizen proved to be a powerful in the world.
team building activity that united all employees with a common goal • In 2003, Lean Sigma program was formally adopted and customized
of continuous improvement. It also significantly reduced the costs for use in R&D.
involved in manufacturing and supply [48]. • The anticipated benefits were as follows:
• Process harmonization: Reduction in waste production and
Boehringer Ingelheim process inefficiency.
It is the first Pharmaceuticals Company to receive the “5S Best in Class” • Increase in productivity by higher focus on value-adding
Award. The certificate was presented by Masaaki Imai on March 30, activities.
2009. Initially, the company introduced 5S to increase employees’ • Promoting the ideology of becoming a learning organization.
awareness of process optimization. • GSK was able to achieve annualized cost saving of £300 million
by 2004 through operational efficiencies.
Kaizen implementation in Indian Pharma industry is at a significant
phase. It is achieving a distinctive position in the international market Lean manufacturing by Merck [52]
with generics, contract research, and clinical trials. With the increase in • Merck worked with IBM global business services to implement
market share, companies face increased competition on the grounds of a program of lean manufacturing and to build these process
speed to market, cost competitiveness, quality of products, customer- improvements into its future global ERP system. From end-to-end,
oriented approaches in development, and effective distribution. Kaizen rigid production practices have been replaced with flexible, demand-
aids pharmaceutical industries in evaluating the ways and means to driven processes.
control supply chain costs and enhance their processing efficiency [48]. • Using VSM, the team tracked the changeover process and found that
most of the waste resulted from the lengthy production process it
Over the past 20 years, various organizations across the world started was following, as well as improper changeover procedures.
to adopt lean management philosophy to enhance their quality and • Using algorithms that minimized the overall effects of the
effectiveness of supply chains [49]. With quality and regulatory compliance changeovers, the IBM team identified the ideal manufacturing cycle,
always being the major focus, adopting new approaches to improve or “rhythm sequence,” resulting in a 50% reduction in changeover
operations have always been a priority for the pharmaceutical industry. time on some production lines.
Supply chain and operational cost-effectiveness have also come under • Key benefits included:
the focus because of increased competition and cost pressures. Many - Up to 30% reduction in production-related inventory costs.
major pharmaceutical companies have adopted operation improvement - Up to 20% reduction in overall operating expenses at plant level.
initiatives in the recent years and have realized their benefits. - Up to 50% reduction in change over procedures.

Initial results of lean implementation in Indian pharma [50] CONCLUSION

Following are some case studies of Pharmaceutical Companies:
With increased regulatory compliance requirements, it is now not
Dr. Reddy’s Kaizen implementation [50] possible for pharmaceutical industries to sustain on huge waste
• They undertook a company-wide constraint management initiative generations and errors that have become common in manufacturing
across various departments that included strategic planning, sector by the current operating model [53].
supply chain, marketing, metrics, finance, operations, and project
management. Like industries of other sectors, pharmaceutical companies have
• This initiative helped to develop an advantage for the company by started embracing concepts of Kaizen and Lean Management, and
systematically synchronizing its various departments of supply their benefits are clearly visible from the case studies mentioned in the
chain such as research and development (R&D), manufacturing, and article. The current pricing and regulatory pressures, batch failures, and
distribution. customer complaints have prompted Pharma companies to adopt these
• To improve efficiency and increase the productivity of R&D to new strategies. They now need to combine their knowledge of science
complete projects on time, they introduced more generic drugs and and the concepts of Kaizen and Lean Management to proactively work
APIs in the market at lower risk and investment. toward solving problems and increase their productivity.
• They undertook lean manufacturing initiative which focused on
reduction of process variabilities to increase flexibility. CONFLICTS OF INTEREST
• Key part of initiative was to involve operators to carry out The authors declare that there are no conflicts of interest regarding the
autonomous maintenance. This increased company’s net times and publication of this paper.
decreased overall operating times by 22%.
AUTHORS’ CONTRIBUTION
Piramal health-care kaizen implementation [50]
• To reduce expenses and cash-to-cash cycle, the company undertook The authors contributed equally to this work.
a supply chain initiative in 2005.
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