Ireland: Cut costs or add value?
It is widely acknowledged that pharmaceutical manufacturing operations have entered into a period of significant cost reduction. Service providers like Dalkia—a French energy services company that has built its Irish business upon serving the pharmaceutical sector—have had to help clients cope.
Dalkia Ireland’s managing director Pat Gilroy remembers his years of collaboration with the country’s pharma industry: “We have worked with many of our partners for over ten years. In the earlier days, many new products were coming online. Existing facilities were being expanded or refurbished. New facilities were being constructed. The focus, at first, was simply on getting things working.
“But naturally, as sites moved ahead and became very good at manufacturing their products, the next logical phase was cost reduction—how do we do the same job for less, while maintaining integrity in reliability and availability?”
Dalkia takes a creative approach, helping clients make better use of their assets. Some of the company’s best work has been in partnership with Servier, at the latter’s Arklow site in eastern Ireland. Their implementation of an energy-focused maintenance program garnered a MEETA Award for Maintenance Excellence in 2011.
Pharma Boardroom spoke with several members of Servier’s leadership team in Arklow: Allain de Wilde, Mark Brunton, and Duncan Nugent—respectively general manager, production manager, and human resources manager. Arklow is the first site in Servier’s industrial network to deploy Lean Six Sigma, an efficiency methodology that many facilities around Ireland are busy applying today.
But de Wilde is quick to point out that for his team, driving efficiency has a very particular meaning. “We have been very cautious”, he says, “in avoiding the use of the term ‘cost targets.’ Instead, we have emphasized adding value.”
Over the past five years, Arklow has increased activity by 40 percent and multiplied threefold the number of references it handles, while increasing its workforce by only 17 percent—“meaning,” de Wilde concludes, “that we have attained greater productivity from our existing staff. Budget planning and cost control are important for us—but they are not our primary focus.”
For a number of pharma producers in Ireland, recent efficiency programs have led to job cuts on a scale that has gabbed front-page headlines in Irish newspapers. At Arklow, HR manager Nungent describes a more positive outlook: “We have been very clear with our people. We have pledged to retain the resources we have—but we must become better at our jobs.”
Production manager Brunton believes that in today’s constrained environment, becoming better at your job is more than a matter of trimming the fat. It is about a proactive response to challenges. “We adapt, “ Brunton says. “We adapt our business model, our working organization, and our technology. Our people, too, adapt—constantly.”
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