Nikolai HansenContinuous Improvement Director, H. Lundbeck A/S

Lundbeck LeanCreating the Best Supply Chain in the Pharmaceutical Industry

Who is Lundbeck?

OUR VISION OUR MISSION OUR VALUES

is to become a world leader in

psychiatry and neurology

is to improve the quality of life of

people suffering from psychiatric and

neurological disorders

Imaginative – Dare to be different

Passionate – Never give up

Responsible – Do the right thing

Our Product AreasThe world’s most burdensome illnesses

1. Cancer 14. Osteoarthritis

2. Depression and anxiety 15. Bipolar disorder

3. Ischaemic heart disease 16. Liver cimhosis

4. Cerebrovascular disease 17. Dementia

5. Chronic obstructive pulmonary disease 18. Endocrine disorders

6. Refractive errors in the eye 19. Macular degeneration

7. Hearing loss 20. Nephritis and nephrosis

8. Congential anomalies 21. Drug abuse

9. Alcohol dependence 22. Hypertensive heart disease

10. Diabetes mellitus 23. Epilepsy

11. Cataracts 24. Migraine

12. Schizophrenia 25. Rhematic heart disease

13. Asthma

*) Disability adjusted life years, Source: Lundbeck based on Global Burden of Disease 2004, WHO

Our Supply Chain

Lumsås Padova

Valby Nice

Valby Nice

MexicoChina

Pharmaceutical Bulk Production

Finished Goods ProductionChemical Production

Suppliers and Industrial Customers

Why Lean?

The Best Supply Chain in

The Pharmaceutical Industry

Our Lean Journey

• Phase 1: Improve• Phase 2: Lead• Phase 3: Align• Phase 4: Strive for perfection

2006

2008

2010

2013

“Improve”: Start the Event Machine

• Map processes and activities across departments (Current, Ideal and Future State)

• Identify what adds value to your business. Bring attention to areas of improvement

• Run Kaizen Events with groups of employees across departments. Dedicated for 3 - 5 days to find real solutions and implement them

Lean Year 2 (2007): 70 Events, 1/10 of employees

Event example: Reduction of setup time by 40%

Establish Lean Support and Academy

• Project Organization established to direct Lean initiatives

• All managers trained in Lean tools• Lean Ambassador Program established to

train employees to facilitate Lean events

Lean Academy and coaches

The “Improve” Phase in a Nutshell

• Strength: Close link between training and learning by doing

• Characteristic: Transformation was driven by events rather than daily management

• Weakness: Lack of systems and middle management motivation

”Lead”: Get all Managers Onboard

• Senior management group align and communicate leadership expectations: “The Lean Leadership Model”

• Ambitious development programme executed

The Lean LeadershipFoundation

Lean PeopleLeadership

Lundbeck Lean

Acceleration

SustainingLean

1 2 3 4

Personalleadership

Business focus

A Lundbeck Lean Leader should:

Have the combination of detailed knowledge of the processes and the ability to develop the employees

Coach and ask questions not provide solutions

Teach others to learn through their own experiments and errors

Lean Leadership

Engage Managers in the Transformation

• Self-inspection based on the Shingo model

• All managers were trained in assessment using the principles in the Shingo Model of Operational Excellence

• Managers paired up and assessed areas outside own division

• Each assessment concludes with feedback on principles and systems, and concrete “Strengths” and “Opportunities”

• Strength: Increased leadership commitment and confidence

• Characteristic: Managers engage themselves in the Lean implementation

• Weakness: Lack of alignment and employee involvement

The ”Lead” Phase in a Nutshell

”Align”: Build Systems that will Guide and Direct

• Policy Deployment– Link strategic objectives and targets/activities

department and team level– Targets and activities are prioritized across functions

and departments

• Board meeting system– Visualise performance in all departments– Frequent meetings with focus on daily operations

• Improvement Boards– Manage idea generation and implementation– The employees are responsible for improving their

everyday work

All About People 2011 – Engage teams in Kaizen

Kaizen team of the year

First Shingo Silver Medallion in Europe

The “ALIGN” Phase in a Nutshell

• Strengths: Good infrastructure in place. Lean creates results

• Characteristic: Everybody is now part of the system

• Weakness: Lean is not fully embedded as a culture

21

“Strive for Perfection” – Develop a Real Lean Culture2013: Integrate SHINGO into Corporate Principles and Teach Lean Culture

• Every month COO broadcasts principles lecture

• Management teams teach principles systematically and recognise improvements and behaviour as principled behaviour

Full integration of Lean into Daily Operations

Ensure that daily management systems are

aligned and support production needs

• Managers’ roles, responsibilities and daily tasks

• Standards for daily tasks• Feedback, coaching and follow

up routines

Develop the leadership standards that will drive the culture forward

The Daily Lean Leadership Initiative

• Deployment of objectives• Improve response management• Production follow up• Daily management systems

Standardise how managers support

operational excellence and continuous improvements

Our Lean journey

• Phase 1: Improve• Phase 2: Lead• Phase 3: Align• Phase 4: Strive for perfection

2006

2008

2010

2013