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"For a Swedish pharmaceutical client, 75% of the effort of the sales administration  was spent on services that were not in the top 10 list of priorities for their internal business customers!"

LINUS LARSSON, EXPERT IN LEAN CONSULTING, pa CONSULTING GROUP

Smart Lean in pharma - reducing commercial pharmaceutical costs

Many pharmaceutical companies are facing substantial patent expiries on major brands, an increasing pressure on pricing and a challenging shortage of new products in their pipelines. This is forcing many companies into reducing costs by cutting staff, restructuring their organisations and outsourcing non-core activities, especially in the mature European and US markets.

But if all you do is to keep cutting away at the headcount, you can ‘break’ the organisation. As parts of your organisation shrink you can fall below critical mass in key functions, potentially throwing away some core ‘nuggets’ that have driven competitive advantage for you.

You can’t just expect fewer people to continue to work in the same way as before, so how do you change the ways of working as you shrink your organisation to drive efficiency and liberate headcount? By selectively applying some of the best lean administration techniques to the front office world of sales, marketing and medical, PA Consulting Group has successfully helped a number of our pharmaceutical clients to change the ‘What’, ‘How’ and ‘Why’ of work, to deliver substantial cost benefits.

Our success has come from applying our in-depth and real world experience of the pharmaceuticals business – we call it Smart Lean.

Smart Lean is about keeping things simple:

  • What– challenge the demand for the services that have always been provided,

  • How – change the way of work across the business and eliminate waste

  • Why – create a capability for challenging why you do things, enabling ongoing continuous improvement within your organisation.

What – Challenge the services

In one of our Swedish pharmaceutical clients, we discovered that 75% of the effort of the sales administration support group was spent on services that were not in the Top 10 list of priorities for their internal business customers! Simply publishing a reprioritised services catalogue changed the game for this group, and released 50% of the effort (and headcount). It also increased morale and motivation by refocusing their effort on what the business truly valued.

How – Change the way of working

The business analysis group of one of our French pharmaceutical clients was sending out good quality, timely information reporting each month across the sales, marketing and medical organisation. On the face of it the service and quality was good.

However, on investigation, 45% of the work that was involved in producing and preparing that information was on “wasteful” activities – looking for information in different places, re-working reports each time new information emerged, or manually manipulating data. Re-designing this process liberated a great deal of time, effort and cost.

Why – Create capability

In one of our US pharmaceutical clients we identified that a lack of information standards was reducing sales and marketing compliance and driving inefficiencies and unnecessary costs in speaker programmes. The organisation and booking process was radically re-designed to address these issues. Standard information, such as pre-approved speaker candidate lists and standard payment schedules for services were made available to the sales organisation, which led to significant efficiency improvements in commercial operations and sales support.

Our Smart Lean approach draws on our many years of experience of successfully applying Lean in other functions and sectors. Most importantly, Smart Lean is sustainable inside your organisation by teaching your teams some simple techniques to sustain a continuous improvement approach.

To find out more about reducing costs through a 'smart lean' approach, please contact us now.

 

Contact
Andrew Hooke
Life sciences
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