Manufacturing Insights: Pfizer

Natale S. Ricciardi, president of Pfizer Global Manufacturing and senior vice-president of Pfizer, discusses the company's new manufacturing focus that features plant network optimization, increased outsourcing, and greater adoption of agile or lean manufacturing.
Jul 01, 2008

Question: Pfizer has reconfigured its manufacturing network through facility rationalization and a strategic decision to increase outsourcing. Can you outline the strategy and where it stands in implementation?

Natale S. Ricciardi
Ricciardi: The mission of Pfizer Global Manufacturing is to provide an innovative and powerful competitive advantage for Pfizer. To accomplish this, we have embraced several transformational strategies that will lead to a truly competitive global supply network with the right processes for 'make-or-buy' sourcing. This is a significant change from the traditional 'make-what-we sell' philosophy that had been in place historically as is typical in the industry and will require both operational and cultural change.

The cornerstone of this transformation has been our very effective and aggressive rationalization of our internal manufacturing network, which involves both drug-substance [active pharmaceutical ingredient (API)] and finished-product manufacturing activities. This rationalization is driven by a thorough analysis of supply–demand needs for all of Pfizer's products, coupled with a balance of business, employee relations, and community needs. We hold our 'respect-for-people' value paramount as we proceed. To date, the number of internal manufacturing sites has been reduced from just over 100 to 43 (announced or exited).

In each site-exit situation, we analyze the best value for Pfizer and endeavor to retain employment opportunities for our colleagues through the sale of facilities with trailing supply commitments from the new owner. This is in fact a key part of our increased outsourcing, and we strive to negotiate the best value for Pfizer with the intent of forming a mutually beneficial strategic alliance with the new owners.

While we recognize that this is a difficult process, we strive to keep all of our colleagues fully informed as we proceed. In many cases, they play an active role in the decision-making process. In all cases to date, we have had a strong commitment from our affected colleagues at the exiting sites. This is demonstrated by their outstanding results and high level of performance in meeting the significant milestones with respect to the uninterrupted and continued supply required.

While significant work has been done, we continue to work together to meet our goal to transform into a truly competitive global supply network that meets or exceeds the needs of all of our business partners.

Question: Can you outline your programs for continuous improvement and operational excellence in your manufacturing activities?

Ricciardi: Our continuous improvement program started almost five years ago. Initially, our focus was on the processes that directly impacted our products. Our objective was to gain a more in-depth understanding of these processes and to develop the competencies to apply the Six-Sigma tools for problem solving and process improvement. For processes that have a high level of capability, we then moved our focus from effectiveness to efficiency, applying the Lean tools to reduce cost by improving lead times, reducing inventory, and removing non-value-added activities. This approach is now being expanded into all our business processes. To date, we have completed, or have in progress, more than 3000 Green Belt and Black Belt projects that we manage and track via a software program. Our strategy for training has been to develop internal competencies that allow us to deliver all our training and coaching in house. We have a formal certification process for all levels of projects, and our colleagues are formally recognized for their achievements through communications, local recognition events, and publications. Examples of projects include: an operator applying Yellow-Belt tools to solve a local problem at his work station; a Black-Belt project to resolve a complicated technical problem with manufacturing a product; and a Lean project to halve the time to manufacture a product.