Lean's Impact on the Bottom Line: Eris Lifesciences' Lean Transformation Drives Operational Excellence and Financial Gains

Company Description

Eris Lifesciences Ltd is a publicly listed Indian pharmaceutical company and a leading player in the domestic branded formulation market. Ranked #21 in the Indian Pharmaceutical Market (IPM), Eris has established a strong presence in its core cardio-metabolic franchise in just 17 years from inception.

The company is diversifying its business with emerging therapies in Dermatology, Neuropsychiatry, Women’s Health, and Nephrology, which now account for 29% of its revenue. Chronic and sub-chronic therapies represent approximately 86% of Eris’s revenue, covering nearly 90% of India's Rs. 55,000+ crore chronic care market.

Project Goal:

The primary objective of the project was to enhance operational excellence at Eris Lifesciences Ltd. This included aspects like:

• Increased plant capacity and efficiency
• Improved resource utilization
• Reduced production costs
• Lower maintenance expenses
• Enhanced preparedness for regulatory audits
• Creating a model production facility for visitors and customers
• Improved labor productivity
• A more organized and clean work environment

Challenges:

Eris Lifesciences faced several critical challenges hindering their operational excellence:

5S Implementation:

• Lack of awareness and understanding of 5S principles
• Absence of visual controls and standardized practices
• No established safety plans
• Low initial 5S score (14)

Kaizen Practices:

• No existing culture of continuous improvement (Kaizen)
• Low employee engagement in problem-solving activities
• Limited understanding of Kaizen methodologies
• Low baseline Kaizen score (2)

Changeover Times (SMED):

• Excessive changeover times significantly impacting production efficiency:
  • Granulation: 26% of available time wasted on changeovers
  • Compression: 32% of available time wasted on changeovers
  • Packing: 12% of available time wasted on changeovers
• Long average changeover times:
  • Granulation - 200 minutes
  • Compression - 300 minutes
  • Packing - 200 minutes

Value Stream Mapping (VSM):

•  production lead time of products was not monitored, leading to inefficiencies.

Maintenance Management:

• Inaccurate maintenance downtime and cost data:
  • Average Machine Downtime: 551 hours per month
  • Average Cost of Maintenance: ₹70,913 per month

Approach of GREENDOT :

The successful implementation of these strategies hinged on the following key elements:

• Comprehensive Training: In-depth training sessions were conducted for all relevant personnel covering the principles and practices of 5S, Kaizen, and SMED. This ensured a common understanding and facilitated effective implementation across all levels of the organization.
• Regular Monitoring and Review: Regular monitoring and review meetings were established to track progress, identify any challenges, and ensure ongoing effectiveness. This allowed for course correction and adjustments as needed.
• Culture of Continuous Improvement: A culture of continuous improvement was fostered by encouraging employee feedback and suggestions. This empowered employees to actively participate in identifying and implementing further improvements.
• Data Collection and Analysis: Improved data collection and analysis systems were introduced to monitor key performance indicators (KPIs) related to 5S, Kaizen, and SMED. This data-driven approach enabled informed decision-making and provided evidence of progress.
• Initial Resistance to Change: As with any significant change initiative, some initial resistance was encountered from employees accustomed to existing practices. This was overcome through clear communication of the benefits, extensive training, and active employee involvement in the process.
• Ensuring Consistent Participation: Maintaining consistent participation and engagement from all employees can be challenging. This was addressed by fostering a sense of ownership among employees, highlighting the positive impact of their contributions, and recognizing their achievements.

Implementation:

Solution:

A multi-pronged approach incorporating 5S, Kaizen, SMED, Value Stream Mapping (VSM), and Maintenance Management initiatives was implemented:

5S Implementation:

• Training programs on all five stages of 5S (Sort, Set in Order, Shine, Standardize, Sustain) were conducted to establish a comprehensive understanding.
• Awareness and application of 5S principles were actively promoted throughout the organization.
• Initiatives like "1-minute Sort" and "5-minute Shine" activities were introduced to encourage continuous improvement.
• Red and Yellow Tag strategies were implemented to identify and address workplace issues.
• The "Place for Everything and Everything in its Place" (PEEP) concept was introduced to ensure organization and efficiency.
• Regular cleaning and inspection activities were established across departments.
• Specific problem areas were identified and addressed through the creation and implementation of One Point Lessons (OPLs). A total of 91 OPLs were documented.

Kaizen Practices:

• Training sessions were conducted to educate employees on Kaizen principles and waste reduction techniques.
• Employee participation in Kaizen activities was actively encouraged.
• A total of 38 Kaizen projects were identified and implemented, including 11 major Kaizens with significant benefits.
• Measurable improvements were achieved in production efficiency and changeover cost reduction (approximately 20%).
• Specific cost savings were realized through various Kaizen initiatives focused on areas like product wastage, paper usage, waiting time optimization, material reduction, and energy conservation.

Changeover Reduction (SMED):

• Dedicated training sessions were conducted to equip employees with SMED (Single Minute Exchange of Die) techniques.
• Significant reductions in changeover times were achieved across various production lines:
  • Granulation IV: Reduced from 5 hours to 3 hours
  • Cap-I: Reduced from 180 minutes to 110 minutes
  • Strip-I: Reduced from 220 minutes to 90 minutes
  • GR-II: Reduced from 240 minutes to 177 minutes
  • COAT-II: Reduced from 180 minutes to 87 minutes
  • COMP-V: Reduced from 300 minutes to 190 minutes

Value Stream Mapping (VSM):

• VSM workshops were conducted to map the current state of the production process, identifying bottlenecks and areas for improvement.
• A future state VSM was developed, outlining a more streamlined production flow with reduced lead times.
• Based on the VSM analysis, waiting time reductions were achieved through measures like:
• Improved utilization of Dry Color Blending (DCB) process
• Reduction in swab testing procedures
• Faster changeover times

Maintenance Management:

• Training programs were conducted to equip maintenance personnel with improved practices for data collection and analysis.
• Implementation of an abnormality matrix and TPM (Total Productive Maintenance) check sheets facilitated proactive maintenance and problem identification.
• Machine-wise maintenance breakdown hour and cost dashboards were established to track performance and identify areas for improvement.

Results & Impact:

• Success Metrics:
• The project's success was measured through a combination of qualitative and quantitative metrics:
• Improved 5S scores across departments, indicating a more organized and cleaner work environment.
• Increased employee participation in improvement activities, demonstrating a growing culture of continuous improvement.
• Significant reductions in changeover times and production lead times, leading to enhanced production efficiency.
• Measurable cost savings through various Kaizen initiatives and improved maintenance practices.
• Improved overall plant productivity.

Qualitative Achievements:

• Enhanced employee morale and engagement due to a more organized and efficient work environment.
• Improved product quality and consistency.
• Increased responsiveness to customer needs due to reduced production lead times.
• Established a foundation for continuous improvement through a culture of problem-solving and innovation.

Quantifiable Outcomes:

5s Implementation

• The Quality Assurance (QA) department achieved the highest departmental self-assessment score of 24 out of 25, signifying a significant improvement in workplace organization and cleanliness.

Kaizen Initiatives:

• A total of 38 Kaizen projects were implemented, resulting in substantial cost savings across various areas:
• Production efficiency and changeover cost reduction by approximately 20%.
• Reduced product wastage in Tendia M, leading to a yield improvement from 93.91% to 97.71% and a cost saving of Rs. 317,489 per month (Rs. 38,09,868 per Year).
• Savings of Rs. 3,680 per month (Rs. 44184 per Year) through reduced A4 paper consumption.
• Reduced waiting time in the Quality Management System (QMS) document issuance process, saving 525 hours annually and Rs. 39,000.
• Polybag usage reduction, resulting in monthly savings of Rs. 160,650 (Rs. 1927800 per Yeaer).
• Annual energy savings of Rs. 142,715 through cooling tower optimization.
• Reduced swab sampling, leading to cost savings of Rs. 139,460 and 820 hours annually.
• Annual savings of Rs. 947,175 achieved through improved control of HPLC solvent usage.

Changeover Reduction (SMED):

• Substantial reductions in changeover times were achieved across various departments, significantly improving production efficiency. This resulted in a 50% productivity improvement, allowing the plant to maintain the same output with reduced working hours and no overtime, leading to a profit increase of Rs. 18 Lakh approx.

Value Stream Mapping (VSM):

• By implementing the insights from VSM analysis, waiting times were significantly reduced, leading to improved production flow and efficiency. This contributed to the 20% production efficiency and changeover cost reduction achieved through the overall improvement initiatives.

Maintenance Management:

• Implementation of a structured maintenance management system resulted in:
• More accurate data collection and analysis of maintenance downtime and costs.
• Improved identification and resolution of maintenance issues, leading to reduced downtime and improved machine availability.

Proactive maintenance practices that helped prevent equipment failures and extend machine lifespan.