sku optimization
TRANSCRIPT
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OptimizationofSKUCreationProcessandAdherenceImprovementthroughuseofWorkflow
Management
by
RichardJ.Gimlin
B.S.AeronauticalandAstronauticalEngineering,
UniversityofIllinois,2003
M.S.AeronauticalandAstronauticalEngineering,
UniversityofIllinois,2005
SubmittedtotheMITSloanSchoolofManagementandtheEngineeringSystemsDivisioninPartial
FulfillmentoftheRequirementsfortheDegreesof
MasterofBusinessAdministration
And
MasterofScienceinEngineeringSystems
InconjunctionwiththeLeadersforGlobalOperationsProgramattheMassachusettsInstituteofTechnology
June2012
2012RichardGimlin.Allrightsreserved.
TheauthorherebygrantstoMITpermissiontoreproduceandtodistributepubliclypaperand
electroniccopiesofthisthesisdocumentinwholeorinpartinanymediumnowknownorhereafter
created.
SignatureofAuthor__________________________________________________________________
EngineeringSystemsDivision,MITSloanSchoolofManagement
May11,2012
Certifiedby________________________________________________________________________
DeborahNightingale,ThesisSupervisor
ProfessorofthePractice,AeronauticsandAstronauticsandEngineeringSystemsDivision
Certifiedby________________________________________________________________________
BradleyMorrison,ThesisSupervisor
SeniorLecturer,LeadersforGlobalOperationsProgram
Certifiedby________________________________________________________________________
DonRosenfield,ThesisReader
SeniorLecturer,MITSloanSchoolofManagement
Acceptedby________________________________________________________________________
OlideWeck,Chair,EngineeringSystemsEducationCommittee
AssociateProfessorofAeronauticsandAstronauticsandEngineeringSystems
Acceptedby________________________________________________________________________
MauraM.Herson,Director,MBAProgram
MITSloanSchoolofManagement
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OptimizationofSKUCreationProcessandAdherenceImprovementthrough
useofWorkflowManagement
by
RichardGimlin
SubmittedtotheMITSloanSchoolofManagementandtheEngineeringSystemsDivisiononMay11,
2012inPartialFulfillmentoftheRequirementsfortheDegreesofMasterofBusinessAdministration
andMasterofScienceinEngineeringSystems
AbstractOverthepastseveralyearsandintotheforeseeablefuture,Amgenhasbeenexperiencing
substantialSKU/DFUproliferation.Formerly,AmgenfocusedprimarilyontheNorthAmericanand
otherdevelopedmarkets(lowtomediummix,hightomediumvolumes).Howevermorerecently,
expansionintoemergingmarketshasbeenafocus(highmix,lowvolumes).Consequently,thecomplexityofAmgensproductportfoliohassubstantiallyincreased.
MostoftheinternationalexpansioneffortstakeplaceattheBredapackagingfacilityinthe
Netherlands(ABR).HeretheInternationalOperationsteammanagesSKUlaunches,SKUrefreshes
(lifecyclemanagement)andSKUrationalizationforEuropean,AustralianandEmergingMarkets.
CurrentlytheInternationalOperationsLeadsmanuallymanageproductlaunchesusinga
combinationofMicrosoftExcel,andMicrosoftProject,alongwithvariousothertoolsanddatabases.
Alltoolsandprocessesusedaremanualorsemi-manual,laborintensiveandpronetoerror.
Thegoalofthisprojectwastobeginstreamliningtheseprocessesthroughtheimplementationofa
WorkflowManagementTool.Specifically,aproofofconceptfortheplanningportionoftheSKU
creationprocesswasthefocus.
Theworkstudiedhereresultedinfouroutputs:
1. DetailedprocessmapfortheplanningphaseoftheSKUcreationprocess2. URSdocumentforBlock1ofworkflowtoolanddraftdocumentsforBlock2andBlock33. DraftCommit-to-Launchprocessandassociatedchecklist4. Nearandlongertermplanforworkflowtoolimplementation
ThesisSupervisor:DeborahNightingale
Title:ProfessorofthePractice,AeronauticsandAstronauticsandEngineeringSystemsDivision
ThesisSupervisor:BradleyMorrison
Title:SeniorLecturer,LeadersforGlobalOperationsProgram
ThesisReader:DonRosenfield
Title:SeniorLecturer,MITSloanSchoolofManagement
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Acknowledgments
TheauthorwishestoacknowledgeDonRosenfieldandtheLeadersforGlobalOperationsProgram
foritssupportofthiswork.Furthermore,theauthorwouldliketothankhisthesisadvisers
DeborahNightingaleandBradleyMorrison,companysupervisorElsPasmooij,projectchampion
OlivierBocquet,andAmgenforsupportingthisresearch.
Finally,theauthorwouldliketothankhisfriendsandfamilyfortheircontinuedsupport.Iwould
neverhavemadeitthisfarinlifewithoutyou;muchofmysuccessIowetoallofyou.
.
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TableofContentsAbstract ..................................................................................................................................................... 3
Acknowledgments .................................................................................................................................... 5
Table of Contents ..................................................................................................................................... 6
List of Figures ........................................................................................................................................... 8
Chapter 1: Introduction ............................................................................................................................. 9
1.1. Amgen Background .................................................................................................................. 9
1.2. Motivation ................................................................................................................................ 9
1.3. Problem Statement .................................................................................................................. 12
1.4. Hypothesis .............................................................................................................................. 13
1.5. Scope Adjustment ................................................................................................................... 13
1.6. Actions Taken Overview ........................................................................................................ 14
Chapter 2: Project Rationalization .......................................................................................................... 15
2.1. A Dollar today equals a lot of dollars tomorrow .................................................................... 15
2.2. Failed Attempt to use Product Launch Delays as Rationalization ......................................... 17
2.3. Use of the Current Product Portfolio as an Example of financial benefit .............................. 18
2.4. Risk Reduction and Process Adherence ................................................................................. 20
Chapter 3: Methodology ......................................................................................................................... 23
3.1. Familiarization ........................................................................................................................ 23
3.2. Study Design .......................................................................................................................... 23
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3.3. Supplier Meeting .................................................................................................................... 24
3.4. Quantitative and Qualitative Process Review ........................................................................ 25
3.5. VSM Planning ........................................................................................................................ 26
3.6. Business Unit Reorganization ................................................................................................ 27
3.7. VSM Execution ...................................................................................................................... 29
Chapter 4: Output ................................................................................................................................... 33
4.1. Overview ................................................................................................................................ 33
4.2. Commit-to-Launch ................................................................................................................. 33
4.3. User Requirements Specification ........................................................................................... 35
4.4. Implementation Plan ............................................................................................................... 36
Chapter 5: Repeatable Process for Workflow Tool Implementation ..................................................... 38
5.1. Indirect Project Deliverables .................................................................................................. 38
5.2. Workflow Tool Implementation Process ................................................................................ 38
5.3. Continuous Improvement Cycle ............................................................................................. 41
Chapter 6: Conclusion ............................................................................................................................ 43
6.1. Summary ................................................................................................................................. 43
6.2. Next Steps ............................................................................................................................... 43
6.3. Future Work/Internship Ideas ................................................................................................. 45
References .............................................................................................................................................. 46
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ListofFiguresFigure 1. 1: Amgen's Market Mix .......................................................................................................... 10
Figure 1. 2: Forecasted SKU Growth ..................................................................................................... 11
Figure 2. 1: Demand Forecast Unit Product Lifecycle ........................................................................... 15
Figure 2. 2: Shifted DFU Product Lifecycle .......................................................................................... 16
Figure 2. 3: Revenue Increase due to Product Lifecycle Shift ............................................................... 16
Table 2. 1: Revenue Increase Example .................................................................................................. 19
Figure 3. 1: Study Design ....................................................................................................................... 24
Figure 3. 2: Business Reorganization ..................................................................................................... 28
Figure 3. 3: Stock Keeping Unit Lifecycle ............................................................................................. 28
Figure 3.4: Original Process Mapping .................................................................................................... 29
Figure 3. 5: Modified Process Map ........................................................................................................ 30
Figure 3.6: High Level Current State Mapping ...................................................................................... 30
Figure 3.7: Final High Level Process Mapping ...................................................................................... 31
Figure 3.8: Detailed Process Map .......................................................................................................... 32
Figure 4.1: Commit-to-Launch Checklist Part A ................................................................................... 34
Figure 4.2: Commit-to-Launch Checklist Part B ................................................................................... 34
Figure 4.3: Workflow Tool Interface Example 1 ................................................................................... 35
Figure 4.4: Workflow Tool Interface Example 2 ................................................................................... 36
Figure 4.5: Block 1 Implementation Plan ............................................................................................... 37
Figure 4.6: High Level Implementation Plan ......................................................................................... 37
Figure 5.1: The Continuous Improvement Cycle ................................................................................... 42
Figure 6. 1: Block II and Block III ......................................................................................................... 44
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Chapter1:Introduction
1.1. AmgenbackgroundAmgendiscovers,develops,anddeliversinnovativehumantherapeutics.Itistheworldslargest
biopharmaceuticalcompany,employeesapproximately17,000peopleworldwideandis
headquarteredinThousandOaks,California.Abiotechnologypioneersince1980,Amgenwas
oneofthefirstcompaniestorealizethenewsciencespromisebybringingnovelmedicinesfrom
labtomanufacturingplanttopatient.Amgentherapeuticshavechangedthepracticeof
medicine,helpingmillionsofpeopleinthefightagainstcancer,kidneydisease,rheumatoid
arthritis,bonedisease,andotherseriousillnesses i.Amgenpioneeredthedevelopmentofnovel
productsbasedonadvancesinrecombinantDNAandmolecularbiology,andlaunchedthe
biotechnologyindustrysfirstblockbustermedicines ii.Amgenhas10principalproducts;
Aranesp,Enbrel,EPOGEN,Neulasta,NUEPOGEN,Nplate,Prolia,Sensipar,Vectibix,
andXGEVA.Keyfinancialhighlightsfrom2011includetotalrevenueof$15.6billion,product
salesof$15.3billionwithanR&Dexpenseof$3.2billion iii.
AmgenBreda,thecompanysEuropeandistributioncenter,islocatedinTheNetherlands
betweentheportsofRotterdamandAntwerpandclosetoairportsinTheNetherlands,Belgium,
andGermany.Thesitehousescommercialoperationsthatassembledevicesandlabel,package,
anddistributeproducttoEurope,NorthAfrica,andtheMiddleEastiv.
1.2. MotivationOverthepastseveralyearsandintotheforeseeablefuture,Amgenhasbeenexperiencing
substantialStockKeepingUnit(SKU)/DemandForecastingUnit(DFU)proliferation.Formerly,
AmgenfocusedprimarilyontheNorthAmericanandotherdevelopedmarkets(lowmix,high
volumes).Howevermorerecently,expansionintoemergingmarketshasbeenafocus(high
mix,lowvolumes).Thismarketsegmentationismostnotablewhenlookingatrevenueversus
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productmix.TheNorthAmericanmarketisresponsibleforapproximately80%ofcompanytotal
salesrevenueand75%oftotalpacksales.HowevertheNorthAmericanmarketisonly
responsiblefor10%ofAmgenstotalSKUs.Contrastingthis,theinternationalmarketis
responsiblefor20%ofcompanyrevenueand25%oftotalpacksales,butcontributes90%ofthe
companystotalSKUcount.Torres,KhanderiaandSmithexplainindetailtheimpactofthisSKU
proliferationandsuggestpotentialwaysofhandlingthesedifferentmarketsthroughSupply
ChainSegmentation v
ThisincreaseinSKUshasbeeninresponsetocompanyinitiativestogrowinternationally.Asthe
NorthAmericanmarkethasmatured,thecompanyhasbeenforcedtorelyoninternational
marketstoincreasecompanyrevenues.Consequently,thecomplexityofAmgensproduct
portfoliohassubstantiallyincreasedasAmgenhasexpandedabroad.Overaperiodofeighteen
months,Amgenwilllaunch128newproduct/countrycombinations.Figure1.1 Error!
Reference source not found.belowisasnapshotofAmgensNorthAmericanandInternational
Markets.
Figure1.1:Amgen'sMarketMix
vi
MostoftheinternationalexpansioneffortstakeplaceattheBredapackagingfacilityinthe
Netherlands(ABR).HeretheInternationalOperationsteammanagesSKUlaunches,SKU
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refreshes(lifecyclemanagement)andSKUrationalizationforEuropean,AustralianandEmerging
Markets.CurrentlytheInternationalOperationsLeadsmanuallymanageproductlaunchesusing
acombinationofMicrosoftExcel,MicrosoftProject,alongwithvariousothertoolsand
databases.Alltoolsandprocessesusedaremanualorsemi-manual,laborintensiveandproneto
error.Thelegacyofthesemethodologiescanbepartiallyattributedtotheformerfocusonlow
mix/highvolumemarkets.WhenfocusingonamarketsegmentthathasfewerSKUs,this
methodologywasadequate.However,asinternationalmarketexpansionhascontinued,these
oldmethodologieshaveincreasinglybecomeburdensomeandtimeconsuming.Figure1.2
depictstheSKUgrowthfrom2010forecastedinto2013.
Figure1.2:ForecastedSKUGrowth
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Thegoalofthisinternshipistostreamlinethelaunchprocessesthroughtheimplementationofa
WorkflowManagementTool.Suchatoolwillhelpdriveprocessdiscipline,identifyglitchesand
processdisconnects,providelineofsightvisibility,referencesinglesourcesoftruthandhelp
reduceworkload.Specifically,aproofofconceptfortheSKUcreationprocesshasbeen
developedandimplementationinitiated.AseriesofstepswereexecutedtodefineaUser
RequirementsDocument.Additionally,arepeatableprocesshasbeendevelopedforexpanding
thisWorkflowManagementToolintoadjacentsub-processes.
Inshort,Amgenssuccessinnewmarketsiscreatingadditionalcomplexityinitsoperations.To
addressthiscomplexity,processstandardizationisbeingimplementedinmanydepartments.To
helpdrivethisprocessstandardizationinInternationalOperations,aworkflowmanagementtool
isbeingdevelopedandimplemented.
Inthisdocument,theimplementationofaforementionedworkflowwillbediscussed.First,
projectrationalizationwillbedeveloped.Withbackgroundinformationinplaceandahypothesis
totest,theprojectmethodologywillthenbeintroduced.Theimplementation(orgoing-forward)
planwillbepresentedfollowedbythedevelopmentofarepeatableprocessforimplementinga
workflowmanagementtool.Finally,adiscussionoftheresultsandprojectwrap-upwillclosethis
document.
1.3. ProblemstatementTheinitialproblemstatementforthisinternshipwastodeterminehowbesttoimplementa
workflowmanagementtoolforAmgensInternationalOperationsTeam.However,astheproject
unfolded,itbecameclearthatthescopeoftheoriginalproblemstatementwasmuchlargerthan
anticipated,andwasmuchmorecomplicatedthanjustimplementingaworkflowtool.Therefore
overtimeamorespecificproblemstatementevolved:Howtoimplementaworkflowtoolin
phasesovera12to18monthperiod,whichpieceoftheSKUcreationprocesstobeginwithand
howbesttodefinetheprocessstepfortheworkflowtoolinthechosenphaseoftheproject.
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Effectivelytheoriginalproblemstatementwasdecomposedintomultipleones.Thisinternship
endedupfocusingononlyaportionoftheoriginalproblemstatement.
1.4.Hypothesis
Twohypothesesarepresentedhere.Thefirstisspecificallyaddressedinthisdocument:TheSKU
creationprocessisnotadequatelydocumentedandsubjectmatterexpertsdonotunderstand
howtheirtasks/rolesimpactothers.Thesecondhypothesiscouldnotbeaddressedinthetime
permitted.Insteaditispresentedheretohelpestablishthefoundationoffuturework:A
workflowmanagementtoolwillincreaseprocessvisibility,reducetheamountoftimeittakesto
createanewSKUandhelpdrivethecontinuousimprovementcycle.
1.5. ScopeadjustmentDuringthecourseoftheinternship,twoeventshappenedthatchangedthescopeoftheproject.
First,itwasdiscoveredthatthecurrentprocessdocumentationwasinadequatetosupportthe
developmentofaworkflowtool.Specifically,theprocessasdocumenteddidnotreflectthe
mannerinwhichworkwascompletedonadailybasis.Second,theoriginalorganizationsplitinto
multipleentities.ThismeantthattheSKUCreationprocess,whichoriginallyhadbeencontained
withinoneorganization,nowstretchedacrossmultiple.Theprocesscanbesplitintothree
sections;Strategy,PlanningandExecution.ThenewRegionalOrganizationsnowownthe
StrategyandPlanningportionsoftheprocessandtheSiteBasedOrganization(ABR)owns
Execution.
Toaddresstheseitems,aValueStreamMappingexercisewasaddedtothescopeoftheproject
tocaptureadequateprocessdefinitiontosupportdevelopmentoftheworkflowtool.
Furthermore,withthesplitintheorganization,itwasdecidedthattheproof-of-conceptshould
focusonthePlanningportionoftheSKUcreationprocess.Finally,asanoutcomeoftheVSM
exercise,anewCommit-to-Launch(CtL)processwasproposed.Partofthisprocesswasthe
creationofaCtLchecklistthischecklistwasaddedtothescopeoftheworkflowtoolproject.
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1.6. ActionstakenoverviewEarlyon,significanttimewasspentlearningandattemptingtounderstandtheprocessesas
documented.LateraprojectteamwasformedandVSMexerciseswereconducted.Duringthe
VSMexercise,adequatedetailwascapturedtodocumentthePlanningportionoftheprocess.
MultipleprojectswereinitiatedbasedontheoutcomeoftheVSM,andaspreviouslymentioned;
thecreationofaCtLchecklistwasaddedtothescopeoftheproject.Usingtheresultsofthe
VSM,adetailedprocessmapwasdeveloped.Buildingonthis,theUserRequirements
Specification(URS)andCtLchecklistweredrafted.TheURSwasreviewedinternallybyAmgen
personnelandexternallybytheserviceprovider(McErnest).Furthermore,aquotefromthe
serviceproviderfortheworkflowtoolhasbeenreceivedandtheprocurementprocesshasbeen
initiated.TheCtLchecklistiscurrentlybeingpilotedwithinemergingmarketswithfull
implementationanticipatedinthefirstquarterof2012.
Thisinternshipresultedinfourprojectoutputs:
1. DetailedprocessmapfortheplanningphaseoftheSKUcreationprocess2. URSdocumentforBlock1ofworkflowtoolanddraftdocumentsforBlock2andBlock33. DraftCommit-to-Launchprocessandassociatedchecklist4. Nearandlongertermplanforworkflowtoolimplementation
Chapter2ofthisdocumentpresentsprojectrationalization.TheninChapter3,project
methodologyisdiscussed.Withthatasabasis,thespecificdeliverablesarediscussedinChapter
4.InChapter5,arepeatableprocessissuggestedforworkflowtoolimplementation.Finally,in
Chapter6,wesummarizetheprojectandproposefutureareastofocusadditionaleffort.
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Chapter2:ProjectRationalization
2.1. AdollartodayequalsalotofdollarstomorrowGenerallyspeaking,aproductlaunchedintoamarketfollowsawellbehavedprofilethroughout
itslifecycle.Inthebeginning,sometimeafterdevelopmentandregulatoryapproval,theproduct
hasnosales(becauseithasnotbeenlaunchedyet).Oncecountryspecificapprovalhasbeen
receivedandthecommercializationprocessiscomplete,aproductisthenlaunchedintothat
countryandsalesgraduallyincreaseovertimeforthatcountryspecificDemandForecastUnit
(DFU).SalesgrowthcontinuesfortheDFU,buteventuallyhitsaplateau.Saleswillthenremainat
thisplateauleveluntilpatentprotectionrunsoutorsomeotherproductfortheailmententers
themarketplace.Atthispoint,iftheDFUwasleftalone,itwouldfollowsomenaturalpathof
salesdecrease.However,DFUsaremanagedatthispointintheirlifecycles,andareobsoletedin
amannerthatbestfitsthespecificsituation.Figure2.1belowisageneralrepresentationofthe
typicalDFUProductLifecycle.
Figure2.1:DemandForecastUnitProductLifecycle
Underthesecircumstances,itisofparamountimportancetolaunchaproductintoamarketas
soonaspossible.Oncepatentprotectionislost,productcanquicklyloseupto90%ofitssales
revenuevii.BydelayingthelaunchofacountryspecificDFU,thecompanystandstolosea
substantialamountofrevenueoverthelifeofaproduct.Additionally,ifthecompanycould
launchtheproductearlier,itwouldstandtogenerateadditionalrevenueoverthelifeofthe
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product.Bymovingthelaunchdateforwardbysomearbitraryunitoftime,theupdatedproduct
lifecycleprofilewouldlooklikethatseeninFigure2.2.
Figure2.2:ShiftedDFUProductLifecycle
Therefore,thetotaladditionalrevenueforaproductDFUwouldbeequaltotheareabetween
thesetwoproductlifecyclecurves(thisignoresthetimevalueofmoney).Thiscanbefurther
simplifiedbyrealizingthatthetotalareabetweenthesetwocurvesisequaltotheunitoftime
multipliedbytherevenueperunitoftimeintheplateauphaseofaDFUslifecycle.
Consequently,thevalueofthisadditionalrevenueissimplyequaltotherevenueperunitoftime
attheplateauperiodtimestheunitoftime.Figure2.3illustratesthis.
Figure2.3:RevenueIncreaseduetoProductLifecycleShift
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2.2. Failedattempttouseproductlaunchdelaysasrationalization
Inanefforttorationalizetheimplementationofaworkflowmanagementtoolandthepotential
valueitcouldbringtothecompany,averylaborintensivereviewofproductlauncheswas
initiated.Inthisreview,productlauncharchiveswerescrubbedtofindwhichproductswere
launchedlateandhowlatetheywerelaunched.Theoriginalideawastousefinancialdatafrom
salesinconjunctionwithlaunchtimelinesstoquantifytheimpactofproductdelays.However
thislogicwasflawed.
Thebiggestissuewiththislogichastodowiththeframeworkinwhichitisset.Avastmajority
(estimatedatgreaterthanninetypercent)oftheseprojectlaunchdelaysareactuallyduetothe
commercializationprocess.Whathappensisthecommercializationgrouptargetsaparticular
datetolaunchnewDFUsintotheirmarkets.Theinternationaloperations(IO)groupisthen
responsibleforexecutingproductlaunchesaccordingtothistargetdate.However,asthedate
approaches,delaysinlaunchprocessstepsoutsidethecontrolofIOcan/dohappen.Examplesof
thisincludedelaysinreceivingmarketingauthorizationorcountryspecificpricingagreements.
Thereforethecommercializationgroupwillchangethetargetlaunchdate,andIOadjuststhe
planaccordingly.
Oneconversationbetweenavicepresidentandaseniormanagercharacterizesthissituation
verywell.Whenthevicepresidentinquiredifallproductlauncheswereperplanfortheyear,the
seniormanagerresponded,Alllaunchesareperplan,butsometimestheplanchanges.
SincetheproposedworkflowtoolwillbeusedbyIOtomanageproductlaunchesandthe
aforementionedproductlaunchdelaysareduetoprocessstepsoutsideofIOsrealmof
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influence,theoriginalargumentrationalizingtheproduct(namely,theintroductionofthe
workflowtoolwillincreaseproductlifetimerevenue)isnotvalid.
2.3.Useofthecurrentproductportfolioasanexampleoffinancialbenefit
Asecondquantitativeattemptwasmadetorationalizetheimplementationoftheworkflow
managementtool.Thistime,thecurrentproductportfoliowasusedasanexampletodetermine
thetotalincreasetoannualrevenueassumingadecreaseintheproductlaunchtime;andhence
anincreaseintotalproductlifecyclesales.Hereaonemonthimprovementtoproductlaunch
timeisusedasanexample.
Inthisanalysis,thetimevalueofmoneywasonceagainignored(cashflowswerenot
discounted).Furthermore,itwasassumedthattheexampleproductportfoliohadalifeoften
years.Inthisanalysis,twoextremevaluesweredeterminedforonemonthsrevenue;a
minimumandmaximumvalue.Theminimumvaluewasfoundbylookingatthemostrecent
monthssales.Thisisanacceptableminimumvaluebecauseeachproductintheportfolioisat
variousstagesinitslifecycle.Somewillbeinthelaunchphase,somewillbeintheplateaustage,
andsomewillbeapproachingobsolescence.Thereforethisvalueisreasonablyconsidered
acceptableasaminimum.ThemaximumwasfoundbytakingthemaxmonthlysalesofeachDFU
withintheavailabledata.ThisisconsideredamaximumbecauseallDFUsexperienceanoversell
atsomepoint.Inadditiontothis,countryspecificproductsoccasionallygetreplaced;i.e.,the
DFUsgetswappedout.Therefore,somedouble-dippingundoubtedlyhappenedwhile
undergoingthisanalysis;i.e.,twomaximumswerecountedinthetotalfora
country/product/dosagecombination.
Theresultsofthisanalysiswerequiteprofound.Therangeofvaluesdeterminedforthe
increasedrevenueoverthelifeofthecurrentproductportfoliowas285to564milliondollars.
Conservativelythisrepresents300milliondollarsofrevenueoverthelifeofthecurrentportfolio.
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Onceagain,assumingatenyearlifeofaproductportfolio,aonemonthreductionintheproduct
launchprocesswouldrepresenta30milliondollarincreaseinannualrevenue.Justaoneday
improvementintheproductlaunchprocessforeveryproductcurrentlyintheportfoliowould
representonemillionadditionaldollarsinannualrevenue.
Toillustratethismethodology,asimpleexampleisgiven.InTable2.1below,animitation
productportfolioisgivenwithsixmonthsoffinancialdata.Todeterminetheminimumvaluefor
eachproduct,themostrecentmonthsfinancialdataiscaptured(highlightedinyellow).To
determinethemaxvalue,themaximummonthsrevenueoverthelifeoftheportfolio(here,
onlysixmonthsarerepresented)iscaptured(highlightedingreen).Bysummingtheminandmax
values,yougetarangeofrevenuesoverthelifeoftheproductportfoliothatcouldberealizedif
aonemonthimprovementintheSKUcreationprocesswasrealized$5000to$7700here.
Thereforeaconservativevalueforthetotalpotentialrevenuerealizedinthisexamplewouldbe
$5,000(orthesummationoftheminimumvalues)overthelifeoftheproductportfolio.
Table2.1:RevenueIncreaseExample
MonthlySales
Product Jan Feb March April May June Min Max
A $1,000 $900 $1,000 $2,000 $600 $1,000 $1,000 $2,000
B $0 $0 $0 $0 $100 $300 $300 $300
C $400 $300 $200 $100 $0 $0 $0 $400
D $700 $700 $600 $700 $700 $700 $700 $700
E $100 $0 $0 $0 $0 $0 $0 $100
F $200 $200 $100 $300 $400 $100 $100 $400G $2,000 $1,700 $2,300 $3,000 $1,000 $2,100 $2,100 $3,000
H $300 $300 $300 $200 $200 $300 $300 $300
I $0 $0 $0 $0 $200 $500 $500 $500
Total $5,000 $7,700
However,onceagain,theinitiallogicwasflawed.Althoughthisanalysisisbelievedtobecorrect,
thetoolthatistobeimplementedwillbeanoperationstool.Generallyspeaking,IOlaunches
productsontime.However,targetlaunchdatesareassignedbythecommercialization
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organization.ThereforeanyresultingefficienciesgainedfromthistoolwouldresultintheIO
launchprocessbeginninglaterandstilllaunchingontime.Thereforetheincrementalvalueofthe
toolwouldhavetobequantifiedonacostsavingsbasis;increasingthebottomline,notthetop.
Althoughthevalueofreducingtheoveralltimerequiredforthecommercializationprocessis
substantial,itfallsoutsideofthescopeofthisproject.Thereforethisanalysiswithitsinitially
flawedlogicismentionedheretohighlightpotentialareasforfutureimprovementandincreased
revenues.
2.4. RiskreductionandprocessadherenceAftertwofailedattemptstoquantitativelyjustifytheproject,qualitativerationalizationhasbeen
completedasajustificationtoimplementtheworkflowmanagementtool.Aspreviously
mentioned,literaturesourcesquotesubstantialtimesavingsintheexecution(orlaunching)of
projectsviii.OnearticlebyReijersandPoelmansisofparticularinterest,because25different
workflowtoolsimplementedinto13differentcompaniesarestudied.Generallyspeaking,
implementationoftheseworkflowtoolswasviewedaspositivewithsomeexamplesshowing
reducedprocesstimesbyupto50%ix.Thistimesavingsitselftranslatestoacostsavingsand
henceanincreaseinnetearnings.Unfortunately,thecompanydoesnotdoactivitybasedtime
accounting,soitisimpossibletoaccuratelyforecastthesavingsassociatedwithareductionin
productlaunchtimes.Nevertheless,acostreductioninDFUlaunchtimewilltranslatedirectlyto
areductionincost.
Furtherrationalizationincludestheneedtodevelopandadheretostandardprocesses.Itiswell
documentedinmanufacturingenvironmentsthatasyouconsistentlyrepeatastandardprocess,
thereissubstantiallearningandareductionintheamountoftimeittakestocompletethe
process.T.P.Wrightintroducedtheconcepttotheaerospaceindustryin1936x.Sincethen,
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learningcurveshavebeenappliedtoalltypesofworkfromsimpletaskstocomplexjobswith
processtimereductionsofupto96%xi
AlthoughprocessdocumentationexistthatdefinesprocessesexistatAmgen,itisbutonewayto
getthejobdone.Infact,eachemployeehadadifferentwaytocompletetheirwork.Although
similarthemesexisted,noonefollowedthestandard.Partofthisisbelievedtobeduetothe
confusingnatureoftheprocessdocumentation.Furthermore,asyougainexperienceina
position,theabilitytoskipstepsthatmightnotseemnecessaryisdeveloped.Thereforethe
thoughtisthatbyputtingaworkflowtoolinplacebasedoffastandardprocess,youforcepeople
toadheretoit.Thisinturnwilldrivelongtermlearning,processefficienciesandreducesthe
risksassociatedwithmultipleworkingmethods.
Eventualautomationoftheworkflowtoolalsoaddsvalue.Asthephasedimplementationgoes
forward,theworkflowtoolwillbepluggedintoexistingsystemssuchasSAP.Byautomating
thetoolinsuchafashion,youwillcreateanenvironmentinwhichasinglesourceoftruthexists.
Multipledocumentsmanagingthestatusofaprojectwillnolongerexistandemployeeworkload
isreducedduetotheremovaloferrorpronemanualmicromanaging.Lineofsightvisibilityalso
becomesapossibility.Byintegratingsimplevisibilitydisplaysanddashboards,onecaninstantly
identifywheredelaysinaprojectareoccurringandfocusonthem.Furthermore,processsteps
pronetodelaycanbeidentifiedforprocessimprovementactivity.
Finally,seniorleadershiprecognizestheneedtoadheretostandardprocedures.Intwoseparate
instances,differentvicepresidentsmadestatementsdirectlytothispoint.Thefirstsaid, We
needtodothingssystematically,methodologicallyandconsistentlythiswillallowyoutofocus
onquality,whichwilldrivecostdown.Thesecondsaid,Togetbetterweneedtobealittle
moreconsistentinhowwegetthingsdone. Bothofthesestatementssupportthe
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implementationofaworkflowmanagementtool.Thistoolwillhelpstandardizework,drive
adherencetoprocessesandultimatelydrivethecontinuousimprovementcycle.
Inthenextchapter,weshalldiscussmethodologyandhowtheprojectwasexecuted.
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Chapter3:Methodology
3.1. FamiliarizationThefirstseveralweeksofthisprojectwerespentunderstandingtheproblemstatementandthe
organizationitwasimbeddedin.Duringthefirstweek,substantialtimewasspentunderstanding
ABRReadinessandphase1oftheproject.Twodayswerespentwiththeformerprojectowner
reviewingprocessdocumentationandtrainingmaterialthathadbeendeveloped.Withthisasa
knowledgebase,IbeganjobshadowingtheInternationalOperationsLeads(IOLs).Thegoalwas
togainadeeperunderstandingoftheirdaytodayactivities.Thiswasespeciallyimportantsince
thetooltobeimplementedwasmeanttostreamlinetheirworkanddriveprocessadherence
intotheirworkstatement.
Inthissametimeframe,aseriesofmeetingswereestablishedwithkeystakeholders.These
meetingsinvolvedpersonnelfromawiderangeofsupportorganizationsincluding:Information
Systems,SupplyChain,Planning,ProductDevelopment,Finance,CustomerService,Human
Resources,Regulatory,Quality,ProjectManagement,InternationalCommercialization,
Productionandmanymore.Thegoalofthesemeetingswastowidenthebreathofbackground
knowledgeoftheorganizationfortheprojectandtoacertainextent,gaintheirbuyinforthe
workflowtoolproject.Someofthesemeetingsservedasarubberstampofsupportbytheless
impactedorganizations.Othermeetingsweremoreinvolved,discussingthedetailsoflocal
supplychainstrategy.Inonemeeting,thedetailsofapreviousinitiativeandreasonsforits
failurewerediscussed.Finally,thesemeetingsservedasabasisforthecreationofasteering
team.Allofthisinputwasdrasticallyimportantasthesestakeholderswereeitherresponsiblefor
runningaparticularorganizationortheSMEsdirectlyresponsibleforcompletingprocesssteps
duringthecreationofanewSKU.
3.2. StudydesignVeryearlyintheproject,astudydesignstructurewasinstituted.Theprojectwasbrokenupinto
threestages:Understandingtheproblem,rationalizingtheproject&creatingaplan,and
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executing&implementing.Understandingtheproblemlargelyfocusedonthefamiliarization
pieceoftheproject.Rationalizationandcreatingaplannaturallycamenextandlookedatthe
potentialvalueofimplementingaworkflowtoolandhowtogoaboutit.Executingand
implementingfocusedongettingtheprojectdone.
Atthebeginning,anticipatedstepsforeachstageoftheprojectwerelisted.Ateachstage,the
expectedoutcomeandanticipatedrequiredresourceswerelisted.Asoneacademicprofessor
commonlymentionedinclass,thiscreatedtheopportunitytobesurprisedandincreasedthe
learningpotential.Aftereachstageoftheprojectwascompleted,theactualoutcomewas
comparedtotheexpectedoutcomeandforthcomingstageswereupdatedaccordinglyto
incorporatethisnewknowledge.Figure3.1belowsummarizesthisstudydesign.
Figure3.1:StudyDesign
3.3. SuppliermeetingAfterapproximatelysixweeksoffamiliarization(andotheractivities)ameetingwasheldwith
thepreviouslyidentifiedpreferredsupplier.ThisparticularsupplierwasasmallBusinessProcess
ManagementConsultingfirmspecializinginworkflowmanagementsystems(McErnest)andhad
beenselectedpriortotheprojecttoimplementtheproposedworkflowmanagementtool.
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Duringthismeeting,tooldetailswerediscussedanddefinitionrequirementsreviewed.Themost
importantpointtocomeoutofthemeetingwastheneedtoimplementtheworkflowtoolin
phases.Upuntilthispoint,thescopeoftheprojecthadseemedoverwhelming.Duringthis
meeting,itbecameapparentthattheprojectneededtobebrokenupintophases,andtheinitial
implementationoftheworkflowtoolshouldbewithasmallpieceoftheoverarchingprocess
withalimitednumberoforganizationsinvolved.Theaforementionedstudydesignwasupdated
toincorporatethisinformationandthenextstageoftheprojectinitiated.
3.4. QuantitativeandqualitativerocessreviewEarlyoninthefamiliarizationprocess,itbecameevidentthatalthoughtheSKUcreationprocess
wasdocumented,itdidnotnecessarilycapturethewayworkwasdone.Qualitatively,the
processesdidnotreflectthemannerinwhichworkwasexecuted.EachIOLhadsubstantial
SubjectMaterExpert(SME)expertiseandaccordinglyhadapersonallycustomizedwayof
executingthecreationofanSKU.Therefore,theprocessasdocumentedwasbutonewayof
gettingtheworkdone.
Althoughthisindividualismwasobservedearlyinthefamiliarizationprocess,itwasmoredifficult
toquantifyorcaptureinamannerthatcouldbeeasilycommunicated(beyondthevague
statementthatemployeesdontfollowstandardwork).Eventuallyamethodologytoquantify
thisindividualismwasidentified.Duringphase1ofABRReadiness,aprocessstepchecklisthad
beendeveloped.Thischecklistincluded167requiredstepstocreateanewSKU.Usingthis
checklistasabaseline,eachIOLwasaskedtobucketeachstepintooneofthreecategories:A
highlevelmilestone,trackedatthehighestlevelwithintheorganizationforeachSKUcreated,an
IOLleveltasktrackedandcompletedbyanInternationalOperationsLead,oraSubjectMatter
Expert(SME)leveltaskthatneededtobecompletedattheSMElevel,butnotnecessarily
trackedattheIOLlevel.
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AftertwoIOLsreviewedthischecklistandprovidedtheirinput,only30ofthe167requiredsteps
werecommonlybucketed.Inotherwords,137ofthe167stepsweregroupedintoconflicting
categories;meaningthattheIOLsdidnotagreeonwhowasresponsibleforeachstepandits
importancewithintheSKUcreationprocess.Thisreviewprovidedaquantifiablebasisforfurther
processdevelopment.ThereforetheaforementionedstudydesignwasupdatedandaValue
StreamMapping(VSM)exerciseforthetargetedportionoftheSKUcreationprocesswasadded
totheprojectplan.
3.5. VSMplanningInitiallytherewassubstantialresistancetoconductingaVSMexercise.Variousstakeholdersfelt
thatifaVSMwasconducted,itwouldmeanallthepreviousworkthathadbeencompletedto
documentandstandardizetheirprocesseswouldbescrapped,effectivelythrowingawayayear
ofwork.Theaforementionedmethodologytoquantifytheprocessdocumentationdeficiencies
providedinitialleveragetogainsupportfortheVSMexercise.Furthermore,togainbuy-in,the
VSMwassoldasaprocessvalidationexercise.Wewouldvalidatetheexistingprocessas
opposedtorecreatingwhathadbeenpreviouslycompleted.SpinningtheproposedVSMinthis
mannerhelpedtogainsupportattheworkinglevelwithintheorganization.Finally,asteering
teamwascreatedtooverseetheprojectatthesiteleadershiplevel.Includedamongthisteam
wasthesiteleader,DirectorofQuality,DirectorofInternationalSupplyChain,andDirectorof
InformationSystems.Thissteeringteamwasinstrumentalinremovingroadblocksduringthe
entireprojectandsecuringresourcesfortheVSM.
Withthenecessarysupportinplace,planningfortheVSMbegan.Theauthorspastexperience
conductingValueStreamMappingsuggestedthattheexercisewouldtakeuptotwoweeksin
duration.Thisexperiencecamefromtheaerospaceindustry,executingwhatwasreferredtoasa
VisualVSM.Agooddescriptionofthevaluestreammethodologycanbefoundin Learningto
SeebyMikeRotherandJohnShookxii.
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Itquicklybecameapparentthattheorganizationdidnothavethenecessaryresourcesto
supportaveryextensiveVSM.Thereforeanabbreviatedmethodologyspecificallytailoredto
thiscompanywasused,andathreedayexercisewasscheduled.Detailsofthemethodologywill
bediscussedbelow.
WiththeVSMscheduled,SMEsacrosstheentireValueStreamwereidentifiedforparticipation.
Thesteeringteamwasutilizedtosecurethenecessarypersonnelfortheexerciseandwhen
necessary,findsuitablealternatives.OncepersonnelwereidentifiedfortheVSM,one-on-one
meetingswereconductedtorapidlybringpeopleuptospeedontheproject.Aprojectteamwas
createdbasedonthisgroupofpersonnelandweeklystatusmeetingswereheld.Finally,the
BusinessProcessManagementofficewasbroughtintoprovideoversightfortheprojectand
visibilityacrosstheentiresite.
3.6. BusinessunitreorganizationWhileplanningfortheVSMwasunderway,abusinessunitreorganizationthataffectedthe
projectwasinstituted.Figure3.2belowillustratestheorganizationalsplit.Thesingular
organizationwassplitintomultipleones;effectivelyseparatingthesupplyanddemandportions
ofthebusinessforinternationalmarkets.Theproductdemandportionofthebusinesswas
reorganizedintogeographicallybasedregions;eachregionbecameanindependentorganization
ledbyadirectorwhoreporteduptoavicepresidentatthecorporatelevel.Theproductsupply
piecenowbecamethesoleresponsibilityoftheoriginalsiteandreportedtoadifferentvice
presidentatthecorporatelevel.Thissplitintheorganizationmodifiedthefocusoftheproject.
Figure3.3isadepictionofthelifecycleofanSKU.TheSKUiscreatedduringthelaunchphaseof
theproductlifecycle.SalesgrowovertimeuntiltheSKUeventuallyplateausduringthelifecycle
managementphase.Towardtheendoftheproductlifecycle,theSKUexperiencesdeclining
sales(forwhateverreason)andiseventuallyobsoleted.
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Figure3.2:BusinessReorganization
Figure3.3:StockKeepingUnitLifecycle
Thegoaloftheinternshipwastocreateaproof-of-conceptfortheSKUcreation(orlaunch)
process.Thecreationprocesscanbebrokendownintothreephases;strategy,planningand
execution.Intheoriginalorganization,allthreephasesoftheSKUcreationprocesswhere
containedwithinasingularbusinessunit.However,withthechangeintheorganizational
structure,thestrategyandplanningportionsoftheprocessnowresidewiththeregionalunits
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andtheexecutionpiecewiththesite.Furthermore,withtheorganizationalsplit,thisproject
migratedwiththeteamthatformedRegion1.Therefore,thepotentialscopefortheproof-of-
conceptwasnaturallylimitedtothestrategyandplanningportionsoftheSKUcreationprocess.
EventuallyitwasdecidedtofocusontheplanningportionoftheSKUcreationprocessduring
theVSM.Thereasoningwastwofold.First,thestrategyphasewasviewedasamatureprocess.
Second,itwasbelievedthattheworkflowtoolwouldhaveagreaterimpactifusedduringthe
planningphaseoftheprocess.
3.7. VSMexecutionAthreedaymappingexercisewasconducted.Thefirstdayfocusedonthecurrentstateprocess.
Aspreviouslymentioned,theas-documentedprocesswasusedasabaseline. Figure3.4isahigh
levelviewoftheoriginalprocess.
Figure3.4:OriginalProcessMapping
Largebannerstylecopiesofthismapwereprintedout,andtheteammodifiedtheas-
documentedprocesstoreflecthowworkwasactuallycompleted.Attheendofthemorning
sessiononday1,thepictureinFigure3. 5wastaken.Inshort,theprocesswasnotaccurately
capturedinAgmensdocumentation..
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Figure3.5:ModifiedProcessMap
Withthisasabackdrop,itwasdecidedtostarttheafternoonsessionofday1withafreshpiece
ofbutcherpapertodocumentthehighlevelcurrentstateprocess.Figure3.6istheresultofthe
afternoonsessiononday1.
Figure3.6:HighLevelCurrentStateMapping
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Onday2,theteamstartedbyidentifyingpotentialimprovementopportunities,commonly
referredtoasKaizans.TheseKaizanswerethenrankedinorderofimportanceandabilitytobe
executedinshortorder.Notethatonlychangesthatcouldbeimplementedinshortorder(less
thanamonth)wereconsideredinordertoenabletheoriginalprojecttostillbecompleted
withinthegiventimeframe.WiththeseKaizansinmind,theafternoonsessionofday2was
utilizedtocreateahighlevelfuturestate. Figure3.7isapictureofthefinalhighlevelfuturestate.
Figure3.7:FinalHighLevelProcessMapping
Themorningsessionofday3wasutilizedtofurtherdevelopthefuturestatemaptoidentifyall
thedetailedprocessstepsimbeddedinthehigherlevelmap.Thefinaldetailedmappingcanbe
seeninFigure3.8.Theafternoonsessionofday3wasusedtodevelopsolutionstotheidentified
Kaizansand/orcreatetheirassociatedactionplans.Finally,areportouttotheleadershipteam
wasconducted.
MostoftheseKaizansandtheirassociatedactionplansfalloutsideofthescopeofthisproject,
excepttonotethattheywerecompleted.OneoftheKaizanswasaddedtothescopeofthis
project:thedevelopmentofaCommit-to-Launch(CtL)checklist.Thistaskwastakenonbythe
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author,becauseitwasbelievedtobeanintermediatesteptothecreationoftheworkflowtool.
Thistopicwillbecoveredinmoredetailinthenextchapter.Anotherinterestingimprovement
ideawastheintroductionofacomplexityratingsystemfortheSKUcreationprocess.Each
proposedSKUwouldberatedfromonetothreestarsbasedonitscomplexity.Thestarratingin
turnwoulddictatethelevelofgovernancerequiredduringtheprocesshighlightedbelow.
Additionally,thestarratingwouldbeutilizedforcapacityplanning.Higherratedstarsrequired
moretimeandresources,soonlyacertainnumberandcombinationofprojectscouldbe
handledatatime.
Figure3.8:DetailedProcessMap
Nextwewillpresentspecificprojectoutputsthatresultedfromtheworkconductedonthis
internship.
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Chapter4:Output
4.1. OverviewDuringthecourseofthisproject,therewerefourprimaryoutputs.Thefirstisthe
aforementioneddetailedprocessmapthatwasaresultoftheVSMexercise.Thesecondwasthe
creationofaCommit-to-Launchprocess.ThethirdwasthedevelopmentofaUserRequirements
SpecificationDocumenttodefinetheproposedproof-of-conceptforaworkflowtool.Thefourth
isanimplementationplandetailinghowtocontinuethedevelopmentoftheworkflowtool.The
latterthreeshallbebrieflydescribedhere.
4.2. Commit-to-LaunchDuringtheVSMexercise,oneoftheKaizansaddedtothescopeofthisprojectwasthe
developmentofaCtLchecklist.Withthesplitintheorganization,thenewentitiesneededa
formalwaytohandoffwork.ThereforetheCtLprocesswasconceived.Thisprocessconsistsof
twoprimarycomponents:theCtLchecklistandaformalagreementbetweenaregionandthe
sitetocommittoanSKUlaunch.
Theformalagreementisverystraightforward,andthereforewillnotbediscussedanyfurther
otherthantonotethatitispartoftheprocess.TheCtLchecklistontheotherhandsubstantially
overlappedwiththedevelopmentofthedetailedprocessmap.Inshort,theCtLchecklistis
simplythatachecklist.Itconsistsoftwoparts;PartAandPartB.PartAvalidatesthe
assumptionsfromtheStrategyphaseoftheSKUcreationprocess.PartBdealswiththeprocess
stepsassociatedwiththePlanningphase.Eachchecklistitemhasared/yellow/greencheckbox
toindicatethestatusofeachstep.Redindicatesthatthechecklistitemisbehindschedulewith
nogo-forwardplan.Yellowindicatesthatthechecklistitemisbehindschedule,buthasago-
forwardplan.Greenindicatesthatthechecklistitemisonschedulewithnoissues.Eachchecklist
itemalsohasasmalltextfieldtoentertaskspecificinformationthatisimportant.Figure4.1and
Figure4.2arerepresentativeexamplesofpartAandBoftheCtLchecklist.Inthese,allchecklist
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itemsaregreen,exceptforlocallabeling,whichisyellowandindicatesitisbehindschedule,but
hasago-forwardplan.
CtL part A:Assumptions Validation for CtF
Product
Strength Which Strengths being Launched?
Label Changes Country Label?
PackagingConfiguration(Primary andSecondary)
Changes to Packaging Configuration Specify the packaging specification
numbers
Device TrainingCommitment
Device Training CommitmentUpdate.
Label, Leaflet, CartonLanguage
Changes?
SKU strategy Any changes? Describe.
MAH Who is MAH in country? WhichAmgen Entity? Updates?
Artwork
Artwork Existing? Special Requests?
Mockups/Samples
/Specimen
Where Mockups created/submitted? Where Samples required/submitted? Where Specimens required/submitted?
Quality
Method Transfe r Upda te?
RegistrationTesting
Update?
Import Testing Update?
Site Inspection Was it completed? Update?
Brand Protection Amgen Standard? Special Requests?
Local Labeling Local Labeling required? Distributor
audited?
Stability/ClimateZone
Special requirements? Different Zones?
Additional Labeling Changes? Describe.
Supply Chain
Supply Chainupstream
Description of DS, DP, FDP process.
Supply Chaindownstream
(Distributor / LSP /
Transport Lane)
Changes?
RSLTSL
RSL Expected? Changes? TSL Expected? Changes?
Supply Strategy Changes to Strategy?
Cold Chain Changes?
Key Milestones
Date Filed DD-MMM-YYYY
Est. Approval DD-MMM-YYYY
First Shipment MMM-YYYY
5 Year Volume/Revenue (per year) Forecast
Peak Sales ($)
Peak Volumes (units)
Overall Country Revenue($)
Figure4.1:Commit-to-LaunchChecklistPartA
CtL part B:Additional information
IOL
Verify Demo
Pack
Requirements
Demo Packs Required by the Country?
(Y/N)
If so, plan in place to supply them?
(Y/N/NA)
Endorsement:
Conceptual buy-
in by ROT
Conceptual buy-in by of Execution
Project Plan by ROT (Y/N)
Launch Strategy Creation of Artwork at Risk?
Printing at Risk? (Brief Description)
IOPM
Transition Plan
Endorsed
Transition Plan Required? (Y/N)
If so, is it appropriately endorsed? (Y/N)
Resources
Committed
Are all resources to support SKU
creation execution in plan place? (List
Y/N)
Risk Evaluation/
Assumptions
Complete? (Y/N)
(Brief Description )
Project Plan
Complete
IOPM Project Plan Complete and in
Place? (Y/N)
Planning & Production
Technical BOM in Place (Y/N)
Line and Capacity ReviewSite Planning: Complete? (Y/N: Brief
Description)
Verify Manufacturing
Equipment Changes
PD: (Brief Description)
System Setup
IS System Setup Plan in
Place
(Brief Description of Plan)
Finance Setup Plan in
Place
(Brief Description of Plan)
Price Setup Plan in Place(Brief Description of Plan)
Commercial SKU Setup
Complete
(Y/N)
Regulatory
Expiration and
Manufacturing Date
Format Verified?
Complete? (Y/N)
Variation Status ApprovedComplete? (Y/N)
CMC Revisions
List all open revisions w/ associated
change control identification.
Which variations are included?
Which variations are pending (not
included)?
Additional Regulatory
Requirements
(Brief Description)
Misc
Validate Distribution
Model
TPM: ISC Selection and transportation
. (Brief Description)
Quality
Product Specification RTE, Photostability, etc. provided
by PQL.
Verify Control
Document Changes
Complete? (Y/N)
List applicable documents
Figure4.2:Commit-to-LaunchChecklistPartB
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4.3. UserrequirementsspecificationTheURSdocumentservesasafoundationtobringtogethermultidisciplinarysystem
requirementsintoasingledocumenttosupportsystemdesign,construction,commissioning,
qualification,validationandongoingoperation/maintenance.AUserRequirementisacondition
thatmustbesatisfiedinorderforasystemtomeetitsintendedpurposefromtheperspectives
ofallstakeholders.Inshort,itdefinestherequirementsoftheworkflowtool.Threeofthese
documentswerecreated;thefirstwassubmittedtotheserviceprovider(McErnest)andthe
othertwoweredraftscreatedforuseduringfuturedevelopment.
BasedontheURSsubmitedtoMcErnest,multiplemockupsoftheproposedworkflowtoolwere
created.Figure4.3andFigure4.4andtwoexamples.Furthermore,aquotewasreceivedfrom
theserviceproviderandapurchaseorderinitiated.
Figure4.3:WorkflowToolInterfaceExample1
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Figure4.4:WorkflowToolInterfaceExample2
4.4. ImplementationplanFinally,animplementationplanwascreatedtoproposeatimelineonhowtheworkflowtool
shouldbeputintoplace.Figure4.5capturestheimplementationplanforBlockI.Figure4.6is
thelongerrange,broaderscopeimplementationplanfortheentire(currentlyproposed)
workflowtool.
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Figure4.5:Block1ImplementationPlan
Figure4.6:HighLevelImplementationPlan
Note:thisimplementationplanwas/ishighlydependentonhiringareplacementProject
Managertocontinuetheworkthattheauthorbegan.Anydelayinhiringareplacementwill
resultinaslidetothisproposedschedule.
Inthenextsection,weexploreindirectprojectdeliverablesanddeveloparepeatableprocessfor
workflowtoolimplementation.
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Chapter5:RepeatableProcessforWorkflowToolImplementation
5.1. IndirectprojectdeliverablesThedeliverableforthisprojectwastocreateaURSdocumentdefiningaworkflowtoolforthe
SKUcreationprocess.Inordertoachievethisgoal,severalsub-deliverableswereaddedtothe
scopeofthisproject.Asdescribedinthepreviouschapters,alloftheseagreedtodeliverables
werecompleted.Namely:
1. DetailedprocessmapfortheplanningphaseoftheSKUcreationprocess2. URSdocumentforBlock1ofworkflowtoolanddraftdocumentsforBlock2andBlock33. DraftCommit-to-Launchprocessandassociatedchecklist4. Nearandlongertermplanforworkflowtoolimplementation
Inadditiontotheseidentifiedprojectdeliverables,therearesomeindirectbenefitstothe
organization;twooftheseshallbediscussedhere.Thefirstisthecreationofaprocessfor
implementingaworkflowtoolwhichcanbeusedinthefuturetoexpanditsfunctionality.The
second,longertermbenefitisthenewabilitytodrivethecontinuousimprovementcycle
throughtheuseoftheworkflowtool.
5.2. WorkflowtoolimplementationprocessAlthoughastudydesignframeworkwasusedincompletingthisproject,nospecificprocessfor
implementingaworkflowtoolwasfollowed.Duringthefamiliarizationprocessofthisproject,
significanttimewasspenttryingtofindaguideonhowtoimplementaworkflowtool
unfortunatelynothingwasfoundandtheprocessforimplementationturnedouttobeoneof
discovery.Somehelpfulhintsdidcomefrom ProjectPortfolioManagement.
Usingthead-hocpathfollowedtocompletethisprojectasabasis,thefollowingprocessis
proposedforcontinuedimplementationofthecurrentworkflowtool(orimplementationofa
newworkflowtoolinadifferentorganization):
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1. ProjectFamiliarization(68weeks)a. Spendthefirsttwoweeksfamiliarizingoneselfwiththeorganizationandtheprocess
thatistobeimplementedinaworkflowtool.Ifaspecificprocesshasyettobe
identifiedforworkflowtoolimplementation,allowanadditional2weeksfor
selection.Note:thisstepisnotnecessaryiftheprojectmanagerisfamiliarwiththe
organizationandprocessinquestion.
b. Duringthefollowingfourweeks,inadditiontothefamiliarizationprocess,establishasteeringcommitteeandprojectteam.Note:thisstepisnotnecessaryifanactive
projectteamandsteeringcommitteeareinplacenoneedinreinventingthe
wheel.
i. Theprojectteamshouldbearepresentativemixofallrolesthattheworkflowtoolwillinterfacewith.
1. Holdweeklyorbi-biweeklyprojectteammeetings.ii. Thesteeringcommitteeshouldconsistofateamofseniorleadersthatcanremoveanyunexpectedroadblocksandenabletheprojectteamtobe
successful.
1. Holdmonthlysteeringcommitteeteammeetings.2. VSMandpreparation(5weeks)
a. Onceprojectandsteeringteamsareinplace,beginpreparationforaVSMforthetargetedprocess(4weeks).
i. SecureVSMfacilitator(s).ii. CreateVSMA3.
1. Note:AnA3isaone-pageproblemsolvingapproachusedtogettotherootcauseofanissue xiii
iii. Secureroom,audiovisualandanyotherrequiredfacilitiesresources.iv. SelecttargetVSMdate.
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1. Note:datemustbefarenoughouttogiveadequatetimeforpreparationactivities;fourweeksshouldbeanabsoluteminimum.
v. SecureVSMparticipants.1. Utilizesteeringteamasnecessary.
vi. ForVSMparticipants,whoarenotpartoftheprojectteam,holdone-on-onemeetingsforprojectfamiliarization.
vii. ConductanynecessarytrainingpriortoVSMexercise.1. Projectteammeetingsareagoodvenueforthis.
b.LastminuteVSMpreparation(2days)
i. Ideallynothingcomesup,butinreality,prepareforsomethingunexpectedtohappenlastminutebeforeyourVSMactivity.
c. ConductVSM(3days)i. LearningtoSeexivisagoodresourceforthosewithnopriorVSMexperience.Otherwise,utilizeyourfacilitator.
ii. OnlyselectKaizensforimplementationthatfitwithinyourworkflowtoolimplementationtimeframe(i.e.,dontbaseyourfuturestatefor
implementationonaKaizenthatwilltakeayeartoimplement,ifyouplanto
havetheworkflowtoolinplacesixmonthsfromnow).
3. CreatedetailedprocessmappingbasedontheresultsoftheVSM(2weeks)a. ThiswilldirectinputtotheURSdocumentfortheworkflowtool.
4. Create/updateURSdocument(4weeks)a. Createdocument(2weeks).b. Internalreview(1week).c. Serviceproviderreview(1week).
5. Workflowtooldevelopmentbyserviceprovider(4months)a. Respondtoanyinformationrequestbyserviceprovider.
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b. Developtrainingmaterials(1month).c. Trainworkflowtoolusers(1month).
6. Workflowtoolpilotandimplementation(6weeks).7. Updatethisprocessbasedonbestpractice(12days)
Note:Steps5and6werenotcompletedduringthisprojectandarelistedhereasprocess
implementationsuggestions.
5.3. ContinuousimprovementcycleAsmentionedatthebeginningofthisdocument,thegoalofthisinternshipwastostreamlinethe
launchprocessesthroughtheimplementationofaWorkflowManagementTool.Inthenear
term,thevalueofthisprojectcomesintheformofprocessstandardization.Throughtheuseof
theVSMmethodology,inconsistenciesandprocessdisconnectswereidentified.Furthermore,as
thetoolisimplemented,itwillhelptodriveprocessdisciplineaslineofsightvisibilityiscreated
andallstakeholdersbegintofollowthestandardprocess.
Longerterm,therealvalueofthisprojectwillcomefromareductioninworkload.Althoughthis
reductioninworkloadwillnotbeimmediate,theworkflowtoolhelpstocreateaframeworkfor
continuousimprovement.Initially,workloadwillgoupalittleaspersonnellearnandadaptto
thisnewtool.However,asemployeesgainexperiencewiththeworkflowtool,thiswillhelpdrive
processadherence.Asprocessadherenceincreases,rightfirsttimewillalsoimprove.With
improvedprocessvisibility,theabilitytoidentifyareasforfutureprocessimprovementwill
increase.Andastheseareasofimprovementareacteduponandimplementedwithinthe
workflowtool,thecontinuousimprovementcyclewillbeginalloveragain.Figure5.1isasimple
depictionofthiscontinuousimprovementcycle.
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Figure5.1:TheContinuousImprovementCycle
Inshort,therearemorebenefitstoimplementingtheworkflowmanagementtoolthanthose
thatareimmediatelyobvious.Althoughprocessstandardizationandimprovementisthenear
termfocus,therealvalueofthisprojectcomesfromthelongertermindirectbenefits;namely,
theintroductionofatoolthatcreatesaframeworkforthecontinuousimprovementcycle.
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Chapter6:Conclusion
6.1. SummaryTheoriginalmotivationforthisresearchprojectwasthegrowthofAmgensproductofferings
andtheincreasedsystemcomplexityassociatedwithalargernumberofSKUs.However,during
theinternshipitwashypothesizedthattheSKUcreationprocesswasnotadequately
documentedandsubjectmatterexpertsdidnotunderstandhowtheirtasks/rolesimpacted
others.Throughasystematicapproach,namelyValueStreamMapping,weprovedthatthe
processwasnotcorrectlydocumentedandthatnumerousstakeholdersdidnotunderstandhow
theirworkimpactedotherswithintheorganization.Althoughseniorproductmanagers
understandwhatworkneededtobecompletedandwhenitneededtobefinished,SMEsdid
not.Furthermore,manuallymanagingtheSKUcreationprocesswasquitecumbersome.
Onceourfirsthypothesiswasproven,theprojectthenshiftedintocompletingtheoriginally
(alongwithafewnewones)defineddeliverables.Theprojectresultedinfourprimaryoutputs:
1. DetailedprocessmapfortheplanningphaseoftheSKUcreationprocess2. URSdocumentforBlock1ofworkflowtoolanddraftdocumentsforBlock2andBlock33. DraftCommit-to-Launchprocessandassociatedchecklist4. Nearandlongertermplanforworkflowtoolimplementation
6.2. NextstepsGoingforward,severaltasksneedtobecompletedfortheprojecttobeasuccess.First,itisthe
authorsbeliefthataBusinessProcessOwnerneedstobeinputplacefortheSKUcreation(and
otherABRReadiness)process(es).Currently,BPOsarenormalemployeeswhodedicatetheir
sparetimetomanagingandupdatingprocesses.Thisisnoteffective;theBPOshouldbeafull-
timepositioninwhichtheindividualssoletaskismanagingbusinessprocesses.
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Second,theaforementionedCtLprocessshouldbefullyimplementedassoonaspossible.With
thecreationofmultipleneworganizations,thereneedstobeasmoothhandoffprocessforthe
SKUcreationprocesstheCtLprovidesthis.
Next,andmostcriticaltothisproject,istheimplementationoftheworkflowtoolproof-of-
conceptinMay.Severaltasksneedtobeaddressedfortheimplementationtobesuccessful.
First,anewProjectManagerneedstobeidentified(andpotentiallyhired).Oncetheyare
adequatelyfamiliarizedwiththeproject,theywillneedtoworkwiththeserviceproviderand
developtrainingmaterialsforAmgenpersonnelandinstructthemonhowtouseit.Assoonas
theproofofconceptisavailable,itwillneedtobetestedandpiloted.Aftervalidationis
complete,thePoCwillthenbereadyforimplementation.
Finally,itissuggestedthatonceBlockIimplementationhasbeencompleted,thePMfollowthe
processdefinedinchapter5forBlockII(AsseeninFigure6.1below)andsoforth.
Figure6.1:BlockIIandBlockIII
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6.3. Futurework/internshipideasFurtherinthefuture,Amgencouldbenefitfromconductingotherinternshipsattheir
internationalpackagingfacility.Twohypotheseswerepresentedhere;however,thesecond
couldnotbeproveninthegiventime.Afollowonprojecttothisonecouldcontinuethe
developmentoftheworkflowtoolandexpanditintothesurroundingprocesses.Evenfurther
intothefuture,Amgencouldsponsoraprojectthatwouldincorporatethistypeoftoolatthe
globallevel.Thisinternshipsgoalwouldbetocreateprocessmethodologystandardizationand
todrivethecontinuousimprovementcycleatagloballevel.
Finallyanequallyinterestingtopicthatwouldmakeanexcellentprojectisananalysisonhow
Amgendeterminestheirfinisheddrugproductinventorylevels.Currently,Amgenonlytakesthe
fixedcostofproductionintoaccountwhendeterminingoptimalproductionruns.Byneglecting
holdingcost,theyaregeneratingsub-optimalinventorylevels.Therefore,theproposedproject
wouldbetoevaluateallinventorylevelsattheABRsiteanddoanEOQanalysisonthe
manufacturinglotsizeplanningprocess.
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