Transformational Process Improvement Project: Define...

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Define Measure Analyze Improve Control Transformational Process Improvement Project: Contracting Process Application of Lean Six Sigma methodology enabling step change improvement in Contracting Process Performance and setting foundation for further transformational journey. Siddika Demir & Tej Singh

Transcript of Transformational Process Improvement Project: Define...

Page 1: Transformational Process Improvement Project: Define ...sig.org/docs2/Genentechs_Transformational_Process_Improvement_Project.pdfTransformational Process Improvement Project: Contracting

Define

Measure

Analyze Improve

Control

Transformational Process Improvement Project: Contracting Process Application of Lean Six Sigma methodology enabling step change improvement in Contracting Process Performance and setting foundation for further transformational journey.

Siddika Demir & Tej Singh

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©2014, Genentech

Genentech at a Glance

Founded more than 40 years ago, Genentech is a leading biotechnology company that discovers, develops, manufactures and commercializes medicines to treat patients with serious or life-threatening medical conditions. Personalized Healthcare is a key element of our research and early development strategy. We're focused on tailoring treatments to specific diseases and patients and identifying which patients are most likely to respond. Fast Facts

•  Founded in 1976 •  Became a member of the Roche Group in March 2009 •  Headquarter in South San Francisco, California for all

Roche pharmaceutical operations in the United States •  Over 14,500 employees •  Genentech sells approximately 40 products in the US •  US Pharmaceutical sales were $17.4 billion in 2014* •  gRED has approximately 20 new molecular entities in clinical development

*15,822 CHFm; average exchange rate 0.91.

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•  Go Simple- Contracting Process Improvement

•  Initiated in response to a crowd-sourcing event in which employees stated issues with contracting process

•  Represented the greatest number of challenges for the highest number of people

•  Contract volume increasing year over year

Burning Platform…

©2014, Genentech 3

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1- Identify Need for External

Services/ Goods

2- Determine Supplier Contract

Engagement Process

3- Sourcing (Select

Supplier)*

4- Request Contract & Business Approval

5- Draft & Negotiate Contract

6- Approve & Sign (Execute)

Contract

7- Obtain Purchase

Requisition & Approval

8- Retain Contract Record

& Support Searches

9- Amend Contract

10- Manage Contract

Execution Compliance

11- Manage Contract

Payments Compliance

12- Manage Contract Record/

Delete/ Purge Contract

Go Simple – Contracting Initiative spans across Global Pharma Procurement

Commercial Contracts

Global Product Strategy Contracts

CMO/Direct Materials Contracts

Project Scope and Global Groups

Procurement Services Contract Services

Procurement Services Contract Records

Scientific Sourcing – Contracts & Outsourcing

Scientific Sourcing – US Site Contracts

©2014, Genentech 4

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Project Structure

Steering Committee:

Subset of Global Pharma Leadership

+ Legal + Finance + IT

Initiating Sponsor & Project Sponsor

Core Team

Project Lead, BPE Lead, Process Lead, System Lead, Project Mgr., Communication Lead

Extended Team Members: GPP Contract Teams, Legal, Finance, IT, Representatives from Contract global customers

Processes Technology Customer Relations

©2014, Genentech 5

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Approach Used: Lean Six Sigma DMAIC cycle of BPE framework

Culture

People

Process

Technology

Structure

Vision GPP Value To Patients

BPE is a philosophy & methodology that engrains end-to-end process thinking and enables routine delivery of excellent performance.

Define

Measure

Analyze

Improve

Control

©2014, Genentech 6

What is the Problem & Goals?

What’s current state/ Baseline?

What are key contributors?

How can we solve this problem?

How can we ensure solution sticks?

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Process  1    

Process  2    

Process  3    

Customer

VA – 5% BVA – 35% NVA – 60%

Focus of Traditional process improvement approaches

Focus of Lean Six Sigma based process improvement approaches

Different Way of looking at Opportunities to drive Process Improvement

©2014, Genentech 7

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Increased Output

NVA / Waste

Value Add Work

BVA / Incidental Work

Increased Output from an Inefficient Process

©2014, Genentech 8

NVA / Waste

Value Add Work

BVA / Incidental

Work

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Value Added Work

Additional Value Add BVA /

Incidental Work

NVA / Waste

Raise productivity through process improvement

Thru Process Improvement

Apply Process Excellence

NVA / Waste

Value Add Work

BVA / Incidental

Work

Increased Output through a More Efficient Process

©2014, Genentech 9

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DEFINE: Why, What, When

Work  Stream   Goals  (for  project  closure)  

People  and  Process  

DOA    Cycle  Time    Produc?vity  

•  Develop  Financial    recommenda5on  •  Deploy  Legal  DOA    •  30%  reduc5on  (priori5zed    areas)    •  Define  demand-­‐to-­‐contract  process  efficiency  measure    •  10%  improvement  

Technology   Select  System  

•  Develop  System  requirements  &  Proposal    •  Implement    quick  wins    

S2P  Program   Implement   •  Single  System:    80%  GPP  Contracts  in  one  system    •  Paperless  Contrac5ng:    >50%  of  GPP  Contracts  “Paperless”  

WHY: GEOS, Go Simple Feedback and Corp Audit findings (post project kick-off)

WHAT & WHEN:

It is too complex, requires too much effort and takes too long to get a third-party contract

Clearly defined intent & what success will look like ©2014, Genentech 10

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Percent  Time  Spent  (avg.)  

Time  when  work  is  being  done  on  contract  Wait  ?me  

3%

97%

MEASURE: Current State

Gained current state understanding and developed baselines

Average Cycle Time

45 Days

for sub-steps selected for improvements review

©2014, Genentech 11

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MEASURE: System Landscape

contracting)process)steps

Sci)Sourcing)C&O

Sci)Sourcing2)USSC

US)Commerci

al) GPS)BA GPS)US TOP)Basel TOP)US G&A Research Fac

PS)Contract)Services WE)Sites

Other)NA)Sites

LATM/CEMAI)sites

APAC)sites

3"#Sourcing Ariba&9 Ariba&9 Ariba&9 Ariba&8)some

Ariba&9)some

4"Request#Contract#(incl.#Business#approval)

C4 Nextance CR3&(US) CR3&(US) CR3&(US) CR3 C4,&Ariba&9

5"Draft#&#Negotiate C4 C4&(gRED)

6"Approve#&#Execute Ariba&9 C4 Nextance Ariba&9 Ariba&8)some C4&(gRED)

7"Contract#Purchase#requisition#&#Approval

Ariba&9,&Ariba&8,&g2g g2g g2g Ariba&8 Ariba&8 g2g g2g Ariba&9,&

Ariba&8,&g2g g2g g2g Ariba&8 g2g.&Aria&9 Ariba&8 Ariba&9

8"#Manage#Record#(Contract#to#repository)

Ariba&9,&Ariba&8,&Nextance

C4&and&Nextance Nextance Ariba&9 Ariba&9,&

Nextance Ariba&9 Ariba&9,&Nextance Nextance Ariba&9,&

Nextance Nextance Nextance Ariba&8 C4,&Ariba&9,&Nextance

Ariba&8)some

11"#Contract#Compliance#(Payment/Order)#

Ariba&9,&Ariba&8&

Ariba&9,&Ariba&8& Ariba&8 Ariba&8

System and System Usage Variation by GPP Group and Site

Nextance  Repository  

60%  

C4  19%  

Ariba  8  11%  

Ariba  9r1  10%  

Contract Distribution Across 4 Main Systems

>225K contracts

Current State •  Too many systems & processes- confusing for our stakeholders

•  Difficult to collaborate & leverage contracts across GPP groups and sites

•  Limited use of systems functionality to increase efficiency

•  Complicates reporting & data analysis to enable further improvement

•  Limits ability to make improvement to systems, as 4 systems would need changes

•  Controls not in place to ensure that all contracts are in the repository

Gained current state understanding and developed baselines ©2014, Genentech 12

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ANALYSE: Focus areas identification

•  IP Involved ?

•  Strategic relationship agreement?

•  Outside SME reqd.?

•  In-house template used?

•  HCP involved?

•  EHS Involved?

•  Common contract type across teams?

•  Internal SMEs reqd.?

•  Existing MSA with rate card in place?

•  Is this an SOW ?

•  Amendment Agreement?

•  Amendment SOW?

•  Multi-groups Involved in contract?

•  Global?

Factors considered for creation of Groupings

Developed way to simply complexity of the analysis & enable identification of focus areas

Access agreement

CRA

CDA > 110

Contract types

Master Agreement

SOW

Complex SA

IT Focused

Sponsorship / Grants

Complex non

template

IP

Other

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% Volume X Cycle Time

% V

olum

e ANALYSE: Focus areas identification

Analyzed Cycle time & Volume to identify potential focus areas

SOW, GSA/MA

CDA, Sponsorship Grants Wider scope

involvement in Complex SA

CRA

MA & SOW

CRA

CDA

©2014, Genentech 14

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100 120 140 160 180 200

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ANALYSE: Deeper Focus Areas Prioritization

Identified deeper focus areas ©2014, Genentech 15

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IMPROVE: Approach to Address Prioritized Areas

Developed approach for desirable impact on CT, Productivity, DOA & System landscape

Develop GPP wide efficient & harmonized processes

Self Service

Contract Team Approved

Min Legal Review

Complete Legal Review (strategic)

Align process complexity with level of risk

GPP Std.

GPP Std.

Cat./Work Type Std.

©2014, Genentech 16

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Prioritized Risk levers

•  Frequency

•  Compliance

•  Business

•  Impact of alignment with legal

Intellectual property (IP) Confidentiality Indemnification GMP EHS Subcontractors Firewall Insurance HCP Exclusivity PII/PHI Term Publication Rights Access To Records Conflict of Interest Liability allocation Subject Injury Payment terms Definition of Scope/ Information Governing law & Jurisdiction, entity selection

IMPROVE: Prioritized Risk levers (Legal) For development of Decision Trees & Playbooks to enable DOA

Definition of Scope/ Information

Governing law & Jurisdiction, entity selection

Intellectual property (IP)

Confidentiality

Publication Rights

Indemnification

Liability allocation

Exclusivity

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Product / Goods or Service?

Product/ Goods Service

Customized to Roche

Y N

$ IP

Y N

Developing product / process

– IP concern Generic service

IP review Template?

Y N Non-core biz (Std./ Language)

Core biz (pipeline until

launch)

Other side paper Check for certain items (3rd Party)

IMPROVE: Conceptual Decision Tree (IP related)

Similar process repeated for each prioritized risk lever to be consolidated overall ©2014, Genentech 18

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Desired Shift

Self Service

Contract Team approved

Low Legal Review

High Legal Review

IMPROVE & CONTROL: Driving Shift to Improvement

Striving to drive shift to better tomorrow- Go Simple!

Cycle time Productivity Legal Risk Mgmt. Empowerment Simpler Systems

©2014, Genentech 19

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Impact Analysis  Avg.  Current  State  Cycle  Time  (Business  days)      45  Days  

Major  Changes  

%  CT  Reduc?on  (normalized  for  

whole  popula?on)  

1.  U5lize  PO  if  contract  not  needed   5%  2.  Self  service  op5on  for  selec5ve  contracts   8%  3.  Provide  Concierge  help   2%  4.  Approved  Templates   6%  5.  Approved  Alternate  languages   6%  6.  Legal  SOP/Playbook   11%  

7.  E-­‐Signature   8%  8.  Business    Review  &  electronic  ini5al   6%  9.  Centrally  Managed  Repository   1%  10.  User  Training   3%       55%  Based  on  Contrac?ng  Team  SME's  inputs      Current  State  legal  Review  %    51%  Future  State  legal  Review    %    23%  

~ 30%. Major part of this can be achieved through current Contracting systems with patch on processes as short-term solution

0  

5  

10  

15  

20  

25  

30  

35  

40  

45  

50  

Current  State   Future  State  

Cycle  Time  (Business  Days)  

CT  

55%  

0

2

4

6

8

10

12

Current State Future State

Touch  Time  (Hrs)  

TT

28%  

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Summary: Impact

Cycle Time Productivity Legal Risk Mgmt. Ownership & Empowerment

Simpler Connected

Systems

10% increase 23% reduction in prioritized areas

Playbook developed for prioritized contract types

DOA- prioritized contract types

Global Process Owner

System requirements and selection recommendations generated

By Project Closure

20% Increase 50% reduction in prioritized areas

Playbook developed for additional contract types

DOA- expanded

Functional Excellence leader driving continued process improv.

Implementation in progress (one Global Contract Repository functional)

Further driven by Contract

Team

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Key Takeaways and Lessons Learnt

•  Comprehensive perspective: People, Process, Technology and Structure

•  Sponsorship: Heart- Strong will, Mind- Clarity of what changes will lead to, Body- Time commitment and be there, Voice- Say consistent words within meetings & around water coolers

–  Getting sponsorship from the executives in legal, GPP, IT before starting the project.

•  Harmonized Process and IT system: Preferred vs Pre-requisite

•  Build Trust: Deliver quick wins early enough, ensure inclusion and transparency, explain why

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Doing now what patients need next

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