• The challenge: 3 plants into a new one • How to better manage capacity and gain productivity in the face of increased complexity? • Value Stream Mapping has helped us to identify restrictions, bottlenecks and all other factors that limit effectiveness and efficiency throughout the complete manufacturing

1. VSM to support the definition of
Production Planning strategies of a new Packaging Center
Marcelo Costa – Head of Production Performance
13th OPEX in Pharma and Biotech Hannover
28th September 2017

2. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017
Our target and current VSM
Future VSM and final thoughts
The challenge
Welcome and Good Afternoon
Agenda
2

3. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017
Our target and current VSM
Future VSM and final thoughts
The challenge
Agenda
3

4. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017 4
The scenario
Volumes are increasing and also the complexity is developing
significantly over the time
100% capacity
(3 shifts)
100% capacity
(4 shifts)
SKU’s
+120%
in 5 years
Plant A Plant B Plant C

5. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017 5
Or just fill gapsComplete re-build?
Determine the scope of change
Radical vs. incremental

6. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017 6
The challenge
Consolidation of oral solids blister packaging operations from 3
plants into a new packaging center
Build up a center of
excellence for blister
packaging in the group
Threats:
 Increased throughput time due to no direct connection
between bulk manufacturing plants and Packaging Center
 Starvation of packaging lines due to increased lead time of
bulk supply and capacity restrictions of bulk manufacturing
 Reduction of “flexibility” and back up sites
Opportunities:
 Facilitate late stage packaging given the high number of
SKU’s for a same molecule (thus improvement of finished
good inventory, and, consequently, service level)
 Enhancement of Demand Planning & Plan adherence
 Creation of a new way of working in order to increase and
sustain long term productivity of packaging assets
400 km

7. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017
Our target and current VSM
Future VSM and final thoughts
The challenge
Agenda
7

8. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017 8
 Characterizing, understanding and
managing capacity is fundamental
to operational excellence success
 Failure to understand and manage
capacity = eventual failure of the
system
Decision-Making is about Trade-offs
Capacity management as a key driver for the Packaging Center
Service Cost
Flexibility Efficiency
Dedicated lines
Optimal allocation and
prioritized sequence
Trade-offs
No dedicated lines
No standard allocation
FIFP1
1 First in, First Packed
8
Lower Capacity Higher Capacity

9. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017 9
Enabling capacity management
in order to simulate product allocation strategies
# of camp. T C
Vrsac Banja Luka Sabac
Room 2 UHL 1 3x5+2 89% 65.970.346 74.123.984 1 24 395 251 781 656 65.911.417 0 0 0 65.970.346
Room 4 UHL 2 3x5+2 87% 41.375.973 47.558.589 3 34 424 269 788 736 33.466.904 0 7.729.903 13.811.454 27.505.136
Room 3 UHL 3 3x5+2 98% 68.857.213 70.262.462 4 15 183 128 540 389 52.961.727 0 15.717.846 715.134 68.142.079
Room 5 UHL 4 3x5+2 86% 62.030.409 72.128.383 2 30 242 204 904 679 17.521.481 42.853.156 1.655.772 62.030.409 0
Room 1 UHL 5 3x5+2 109% 89.056.523 81.703.232 3 38 276 216 860 691 45.139.106 29.623.055 14.294.362 79.569.153 9.476.370
Room 6 UHL 6 3x5+2 81% 69.634.707 85.968.774 1 46 206 188 966 625 0 7.036.333 62.598.374 69.634.707 0
Room 7 UHL 7 0 0% 0 0 0 0 0 0 0 0 0 0 0 0 0
Room 8 UHL 8 0 0% 0 0 0 0 0 0 0 0 0 0 0 0 0
Room 9 UHL 9 0 0% 0 0 0 0 0 0 0 0 0 0 0 0 0
Room 10 CAM 1S 3x5+2 99% 27.869.056 28.150.562 1 35 308 207 660 526 25.067.276 0 2.801.780 27.869.056 0
Room 11 CAM 1 3x5+2 103% 30.208.396 29.328.540 4 41 310 214 731 593 14.355.370 0 15.853.026 13.878.297 16.330.099
Room 12 CAM L 3x5+2 95% 22.440.299 23.621.367 5 23 266 170 560 424 21.656.739 0 0 20.940.265 1.500.034
Room 13 IMA C80 3x5+2 85% 32.858.733 38.657.333 3 24 253 167 539 496 32.858.733 0 0 26.279.965 6.578.768
total 93% 510.301.654 551.503.226 10 2.863 2.014 7.329 5.815 308.938.753 79.512.544 120.651.063 314.728.439 195.502.832
Dvs. Previous 5% 488.220.881
# of
SDU's
# of
orders
available
capacity@ 100%
(in blisters)
current
utilization
(%)
# of SKU's
with
demand
LinePC room
shift
model
Bulk Supplycurrent utilization
(in blisters)
# of
BL
# of
SKU's
Determining the purpose of
each packaging machine:
 What’s not working now?
 What roadblocks are there to
fixing the problem?
 What is the effect of the
problem?

10. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017
Sales
Affiliates
3rd parties
Bulk in Plant A
Coated / Uncoated
tablets
Current Packaging in
Plant A
CAML
Production
PlanningSupplier
SAP/APO
Forecast
monthly
Purchasing
Orders
2-3 months
1-2 months
FG safety stock at affiliates
but managed by SCP HF
No dedicated line for
products
Replenishment
lead time
SAP- Packaging
Fine planning
10
Month +1
CAM1
UHL1
UHL2
IMAC80
UHL3
UHL4
QC/
QA
OXOX
OXOX
SAP- Production
Fine planning
Month 0
Bulk GR=0
Unique
Coater:
capacity and
sequencing
< 3 days
QC/
QA
Set up matrix:
• T or C
• Bulk
• MKT
• BL format
• Special request
• # of blisters
Q⇒ 𝑃
Allocation criteria:
• Capacity
• Tablet/ Material / Blister size
• Tooling availability (when shared)
• Fixed priority line, but back up line is any other if tooling available
Bulk restrictions
QC/QA bulk
release
QA
Simplified Current VSM
Finding gaps and opportunities for achieving the vision

11. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017
as it was 35x77 45x114 59x114 71x120 35x77 45x114 45x114 71x120 45x114 35x77 59x114
40 40 41 45 46 53
ideal sequence 59x114 59x114 35x77
40 41 43 45 46
Okt. 15 Nov. 15 Dez. 15
43
69x11445x114
Okt. 15
69x114 35x77
45x114
4442
Nov. 15
47
59x114
48
45x114 35x77
49
45x114
50
59x114
51
45x114
52
45x114
71x12059x11445x114 71x120
Dez. 15
45x114
4842 44 49 50 5147 5352
11
Examples of the necessary change
Goal of mapping is to develop the implementation plan
as itwas 35x77 45x114 59x114 71x120 35x77 45x114 45x114 71x120 45x114 35x77 59x114
40 40 41 45 46 53
idealsequence 59x114 59x114 35x77
40 41 43 45 46
Okt.15 Nov.15 Dez.15
43
69x11445x114
Okt.15
69x114 35x77
45x114
4442
Nov.15
47
59x114
48
45x114 35x77
49
45x114
50
59x114
51
45x114
52
45x114
71x12059x11445x114 71x120
Dez.15
45x114
4842 44 49 50 5147 5352
18 blister changes
11 blister changes (time lost = 18 – 11 = 7 x 6 h per c/o = 42 hours)
 Capacity loss1 ► no bulk reliability ► no optimal sequencing:
 Synchronisation between end of
manufacturing and start of packaging
(SAP)
 Optimised sequence of orders from
“packaging point of view” (pacemaker)
 Equipment is less flexible than people
1 Example from Plant A: UHL1 from Oct. to Dec. 2015
2 Supermarket is a location where a predetermined standard inventory is kept to supply downstream processes
actual
 Capacity loss ► no bulk reliability ► lines starvation:
ideal
Packaging
Center
Supermarket2
Bulk
No extra capacity needed
due to reduced variation from upstream demand

12. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017
Our target and current VSM
Future VSM and final thoughts
The challenge
Agenda
13

13. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017
Sales
Affiliates
3rd parties
Bulk in Plant A
Coated / Uncoated
New Packaging Center
in Plant A
UHL5
Production
PlanningSupplier
SAP/APO
Forecast
monthly
Purchasing
Orders
2-3 months
1-2 months
FG safety stock at
affiliates but managed
by SCP HF
Replenishment
lead time
SAP- Packaging
Fine planning
13
Current Month +3
done by production
planners
UHL1
UHL3
UHL2
UHL4
UHL6
QC/
QA
OXOX
OXOX
SAP- Production
Fine planning
Current
Month +2
Bulk GR=15
Second
Coater:
capacity and
sequencingQC/
QA
New Setup matrix:
• BL format
• Bulk
• MKT
• Especial request
• # of blisters
Q⇒ 𝑃
Allocation & Planning criteria:
• Planned Capacity
• Fixed priority line, fixed back
up line – changes in allocation
only if given important
disruption of bulk
• Blister size
• Tooling availability (when
shared)
QC/QA bulk
release
Bulk in Plant B
Coated / Uncoated
Bulk in Plant C
Coated / Uncoated
IMAC80
CAM1S
CAM1
CAML
3 weeks
3 weeks
3 weeks
1-2 weeks
QA
Simplified Future VSM
Design improvement on paper as the blueprint for implementation

14. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017 14
 Simulations have to be done whenever a new
Forecast is released
 Back up lines to be pre-defined in order to avoid
occurrence of “last minute allocations” and
creation of chaos in long run
 List of products and number of batches in
Supermarket have to be updated as per
fluctuations in demand
 Simulations are only valid with a sound data basis
 Consistency of the plan has to be validated in real
life:
• Line allocation is not static
• “Standards” should always change
The Future of the Future VSM
Identification of the required level of technical and non-technical
competencies
Max
Min

15. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017
Final Thoughts
What we have learned when drawing the Value Stream Maps
 Like many other lean tools, doing value stream mapping for the
sake of doing the map wouldn’t help us much
 It is fundamental to have a clear understanding of the goal of the
mapping; in our case, we had a problem that we wanted to fix
 A simplified version of VSM worked out quite good, because we
wanted only to comprehend the main road blockers to our
allocation strategy, and interfaces between plants and systems
 Be careful not to turn your VSM into a wasteful theoretical exercise,
especially when one picture is not enough to capture the process:
• When product mix changes frequently
• When there is high variability in processing times
• When route selection varies
• Equipment is shared by more than one product family
 Our downstream processes are still not reliable enough and
packaging centre had to be decoupled from the continuous flow
 Basic Improvement Framework: Look at capacity first
 We are now substituting capacity for inventory buffers, aiming to
reduce variability. Hopefully, we will be capable of reducing
capacity buffers in the future
 Select a cross-functional team, whose members are familiar with
the process
15

16. PageVSM to support Production Planning │ 13th OPEX in Pharma and Biotech Hannover │ 28th September 2017
Thank You for your attention!
I will be very glad to
keep in touch with
You on
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