The Transformation to Process-Centered Organization

Is process-centered organization in biopharmaceutical manufacturing a stepping stone or a stumbling block?
Jan 02, 2013
Volume 37, Issue 1

The scientific and engineering challenges of producing biopharmaceutical products on an industrial scale, historically, have required deep subject matter expertise to be deployed efficiently and with direct responsibility for the result. This modus operandi has remained intact because most facilities were single product (i.e., high volume, low variety) and underwent little change. To compete in the current marketplace, however, pharmaceutical facilities need to be increasingly multiproduct, flexible, fast moving, and more customer centric (i.e., low volume, high variety). The traditional command-and-control model is often not responsive or agile enough to meet this challenge.

Process-centered organization (PCO) structures have come into fashion over the past few years. PCO structures realign organization building blocks with the value-adding processes in the business. Instead of functional hierarchies being the dominant structure, people are organized into multidisciplinary teams whose goals are focused on managing the end-to-end activities that deliver value to their customer. Team size can extend to many tens of members.

This concept has become best practice in many industries where lean, fast material and information flows are crucial for survival. Removal of cross-functional boundaries and an element of self-management and empowerment are fundamental. When it works, the value stream can be run with fewer layers of management; headcount efficiencies are increased; and decision-making can be delegated more effectively. Most importantly, communication routes can be short-circuited and the black holes found at organization interfaces are often eliminated.

Examples of process-centered organization

Several pharmaceutical companies have successfully made the transition from a traditional organization structure to a new progressive model. The result, in some cases, has been the difference between survival and eventual plant closure. In other cases, the change has been a failure, and a reversal in direction has ultimately been necessary.

Simon Chalk
In one groundbreaking example, an inbound materials logistics process team was formed out of separate functions from materials scheduling, warehousing operations, quality assurance, and quality control. The teams were co-located in an office adjacent to the inbound material flow and given authority to work together to meet common objectives. A period of value stream mapping, analysis, and improvement led to redesign of the way of working, adjustments to the allocation of responsibilities, and cross training to enhance the range of skills in the team. Prior to the change, receipt to release could take anywhere from 7 to more than 40 days. Material safety stocks reflected the length and variability of these cycle times. After the change, cycle times were consistently achieved in the one-to-three day range. The team eagerly took up the challenge of empowerment and a culture of "self-direction" emerged from the scheme. Support was given to ensure the interpersonal and team-working skills were in place for the individuals. The project became the starting point for a more demanding redesign in manufacturing areas where a bottom-up approach was taken to transform the wider operational organization. In this case, structure followed strategy in a way that supported irreversible cultural change.

Another equally informative case study showed how the organization structure in a facility was redesigned in a radical way with less emphasis on improving performance, ways of working, enlarging breadth of skills, and more emphasis on managers becoming process flow owners within a self-directed team arrangement. The lines on the organization chart were the center of attention. In due course, the change was found to be too radical with insufficient focus on business performance improvement. Structure didn't follow strategy, and the organization was changed back to a classic line structure. After a period of reflection, the lessons learned led to adopting a more effective approach.

A common stepping-stone to PCO is to use more of the matrix-type structure where discipline teams are linked to production process teams by single contact points. These dotted lines build commitment and ownership to the goals of the process team without weakening membership of the functional team.

lorem ipsum