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Introduction to Lean Manufacturing

Question:

Discuss about the application of the lean Manufacturing process in the context of GSK.

Lean manufacturing refers to a continuous developing philosophy, which is applied in the manufacturing industry to reduce the cost and to increase the productivity. The concept of the lean manufacturing is generated from Toyota automobile company as they are the first user of lean technique. This lean manufacturing is associated with the cost reduction and customer satisfaction (Gündüz 2015). On the other hand, application of the lean manufacturing is vital for the organization to improve the quality and delivery process of a supply chain management. Lean makes an organization profitable by reducing the waste and cost of the operation. Therefore, continuous elimination of the problem in an organization is caused by lean manufacturing technique. This report deals with the application of lean manufacturing theory and the process management in the context of Glaxo SmithKline service unlimited or GSK.

Glaxo SmithKline plc or GSK a UK based pharmaceutical organization and it’s headquarter is based in the Brentford, London. This organization is world's sixth largest pharmaceutical organization. This organization manufactures pharmaceutical products and markets these products. They manufacture drugs for various diseases including diabetes, infection, cancer, asthma and mental health. They are popular to provide malaria vaccine. Besides, that is famous for the oral healthcare products include Aquafresh, Sensodyne toothpaste. They also offer health drinks like Boost, Horlicks and so on (Gsk.com 2018).

One of the major issues of the pharmaceutical company is the inventory management and high cost of manufacturing (Fullerton et al. 2014). In the context of GSK, they have been facing issue regarding their high operation cost. However, the medicinal stores order the drugs that are prescribed by the physician. Therefore, often the store holders have no idea what they order and the manufacturers as well as the wholesalers have to maintain sufficient stock with the variety of medicines.


This often creates an issue as if the wholesalers do not get the adequate order then the stock become out of data and waste occurs in the supply chain process (Cherrafi et al. 2016). GSK is a popular pharmaceutical organization, thus, they have to keep a variety of medicines besides maintaining the low inventory. The staffs of GSK fail to keep track of the inventory as a result, this organization has been facing issue to manage the low inventory with a variety of medicines. On the other hand, their manufacturing, as well as operating cost, is high, which needs to reduce to enhance the profitability. GSK needs to aware of the area of improvement in their operating process. However, if this manufacturer keeps high inventory in order to meet the demand of the customers then they have to face huge waste in their supply chain management, which also affects the profitability of the organization. On the other hand, low inventory management often leads this organization to deliver the products as per the requirement of the customers. Hence, application of the lean manufacturing process will be helpful for such organization to improve productivity besides reducing the cost.

About Glaxo SmithKline (GSK)

Role of the suppliers

Several factors are associated with the manufacturing process as well as the process design in an organization. One of the major factors is the suppliers. However, manufacturer depends on the suppliers for raw materials to produce the goods. In the context of GSK they are the pharmaceutical organization and manufactures different types of medicines. Hence, they have a huge dependency on the suppliers for the raw materials for their medicine manufacturing. This organization is popular for their malaria vaccine and they also offer health drink to the customers. In order to manufacture these products they need to obtain fresh raw materials from the suppliers. However, for the manufacturing of the medicine the pharmaceutical organization needs fresh materials within 24 hours (Ismail and King 2014). Thus GSK needs suppliers those are able to fast supply the raw materials. As for example, Parexel is the major supplier of GSK. This supplier provides raw materials to develop malaria vaccine. This supplier is capable to supply the materials quickly as if they delay then the materials can be spoiled as a result, the manufacturing process of GSK will be hampered.

However, often the organization faces problems in their manufacturing due to the delay of the suppliers. Due to the bad climate often the suppliers fail to provide the raw materials within the promised time. On the other hand, transportation issue is another big issue that often hampers the supply of the raw materials. As argued by Hudnurkar et al. (2014), if the supplies of the raw materials are not forthcoming then the manufacturing process becomes slowdown. As asserted by Cherrafi et al. (2016), a smooth supply operation as well as the delivery of the raw materials within the time will lead an organization to promote their production within the scheduled time. Hence, for GSK it is crucial to make a continuous communication with their suppliers to enhance their manufacturing process.

Role of the workforce in manufacturing process

The workforce of an organization is a major part as without a strong workforce it is difficult for an organization to enhance their product manufacturing. In the context of GSK, they are famous for the manufacturing of Malaria vaccine. Therefore, they are popular for the health drink manufacturing. There is a high demand for this particular medicine and the health drink in the global market. Due this huge demand GSK needs to manufacture high volume products as a result, they need more workforces. The workers are directly associated with the product manufacturing (Tate et al. 2014). Thus, they can affect the manufacturing process through various ways. As for example, there is sick day and vacations, which often hampers the production of an organization. In the context of GSK they produce vaccine and health drink, which needs to prepare within a specific time. However, vaccine needs to manufacture within a proper time otherwise the advantages of this vaccine can be destroyed. Hence, due to strike, holidays and sick days the pharmaceutical industry faces labor shortage issue, which hampers the manufacturing process.

Issues in GSK

As commented by Ismail and King (2014), to meet the market demand high volume and fast production is crucial for the pharmaceutical industry. Hence, for GSK often they need to supply high volume medicine in the market due to the high demand. Therefore, often they have some emergency order, which they need to deliver fast. In order to produce bulk amount of products within a short period the pharmaceutical industry needs more workers. This will enhance their manufacturing process.

Equipments

Equipment is an essential part of the manufacturing process as it helps the organization to enhance the manufacturing process by producing high quality and high volume products. As asserted by Panwar et al. (2018), manufacturing process includes complex machine in order to develop good products. As argued by Cezar Lucato et al (2014), malfunction or breakdown in the equipments can affect the manufacturing process. GSK is a pharmaceutical industry and they use various types of equipments in their drug manufacturing. Hence, occurrence of the equipment breakdown is very common in this organization. This hinders the manufacturing process in this organization.


On the other hand, it is important for the pharmaceutical industry to improve the efficiency of the all machines, which will help this organization to promote a continuous and effective operation process in their manufacturing process. For the pharmaceutical industry as for example, in the context of GSK they focus on the fast production process, which needs latest technology as well as the modern equipments. As criticized by Bhamu and Singh Sangwan (2014), failure of the machine is a major drawback of the modern technology. Hence, for GSK breakdown or damage of the equipments can affect the flow of the manufacturing.

Organizational policy

Organizational policy plays an important role in influencing the manufacturing process of an organization. However, pharmaceutical industry develops policy based on the type of the manufacturing, type of the product and scale of the production. The management policy has great influence on the selection of layout regarding the manufacturing process (Yang et al. 2015). In GSK they follow the regulatory policy to reduce the barriers from their drug manufacturing process. However, for the consumers it is not possible to judge the quality of the medicine. The pharmaceutical industry needs to make policy to ensure the quality of the drug. Regulatory policy helps the manufacturer to develop good manufacturing practices by ensuring the quality of the raw materials that are provided by the suppliers. However, often the pharmaceutical companies fail to follow the policies of quality management during the manufacturing process. This affects the quality of the products as well as the manufacturing process. However, GSK can develop a good manufacturing practice in their organization by following the regulatory policy.

Factors Affecting Manufacturing Process in GSK

Influence of the factory overhead

Factory overhead refers to the dependency of the manufacturer on the on power machine, workspace light, and equipments. Lack of one of this thing may hamper the manufacturing process (Chauhan et al. 2015). For GSK to introduce a better manufacturing they need to maintain a continuous flow of the electricity and the water in their manufacturing zone. As commented by (Alves and Alves 2015), the lack of water supply, power supply and changes in the management style leave a great impact on the manufacturing process. Often the temporary shutdown of the power supply affects the manufacturing process. In GSK, they have to maintain a proper supply of the power as any breakdown in the power supply can affect the continuity of the manufacturing process in this organization.

Employee safety

Employee safety is a crucial part of the organizational operation process. In a manufacturing industry during the selection of a particular production layout maintenance of the employee safety program is crucial (Khalili et al. 2018). The production layout should consist of non-slippery floor, strong odors, safety from the dangerous fumes and excess heat. For GSK it is important for the organization to reduce the hazardous substances from the manufacturing such as toxic chemicals and defective equipments to ensure the worker safety. This organization produces drug thus they needs to create awareness among the employees regarding the use of protective clothes. This will help such organization to ensure a hassle free manufacturing process by maintaining the safety of the employees. However, if the safety o the employees is hampered then the production process will be affected.

Resources

Resources or capital is the vital factor of manufacturing process. As argued by Alves and Alves (2015), without the proper management of the resources it is difficult for an organization to enhance their manufacturing activities in a proper way. For GSK they need to arrange the resources such as workforce, financial resources and technical equipments. Arrangement of the raw materials is another vital resource for the pharmaceutical industry as the manufacturing of the medicine depends on the fresh raw materials. Lack of proper resources hampers the manufacturing process as well as the flow of the production.

Application of the lean manufacturing in the context of GSK

Application of the lean manufacturing is a big revolution in the manufacturing industry. Lean principles lead an organization to give optimum production along with low investment (Sundar et al. 2014). However, application of lean principle will help GSK to reduce waste and improve the overall quality of their medicinal products. Lean manufacturing is applied by following four major steps include value stream mapping, error proofreading, maintenance of the total productivity and control. GSK can apply the lean principles by reducing the batch size. Reduction of the batch size will help them to maintain the low inventory and keeps the batch numbers constant. On the other hand, by keeping smaller batch size GSK will be able to save money by reducing the shipping cost. Managers of an organization can use the lean principles to enhance the cost reduction process and the customer engagement in an organization. However, the leaders in an organization need to play a fundamentally different role in the implementation of the lean manufacturing. The leaders have to create an environment in an organization to facilitate the continuous improvement in this organization. In the context of GSK, they need to develop an environment in which the organization is involved in the bringing continuous improvement through the introduction of lean principle management. However, cost reduction is an important part of the lean principle. The managers of an organization reduce the cost by reducing the operational cost in the process management. Therefore, the managers motivate the employees to meet the needs of the customers. This leads the managers to enhance the customer engagement in organization. However, GSK tries to meet the current needs of the market that is the emergency delivery of the drug to medicinal stores. This is a big approach of this organization, which enhances the customer engagement.

Organizational Policy and Manufacturing Process in GSK

Incorporation of the new technology is a big aspect of lean manufacturing. GSK needs to implement the lean manufacturing process by incorporating the technology. GSK has been facing challenges in order to keep a balance between the low stock management and customer demand. They need to keep the variety of products besides minimizing the waste. As for example, EZO office Inventory is an useful inventory management software that enables the organization to keep a track of the vendor, remaining stock and sales track (Wong et al. 2014). However, by using such software GSK will be able to keep a record of their existing stock and the product those are sold. It helps them identify the products, which have more demand in the market. Hence, they can store such particular product in a large amount and eliminates the stock of the other products, which have less demand in the market. As for example, health drink such Horlicks has more demand than Boost. In the context of GSK, they can maintain large stock for Horlicks in comparison to Boosts. This will enable GSK to reduce the waste and to manage the inventory.

In order to manage the inventory ERP or enterprise resource management software is used in the lean manufacturing process (Cezar Lucato et al. 2014). This reduces the error from the manual entry of the information. However, ERP also reduces the requirement of the repetitive process, which also reduces the cost. In the context of GSK, application of ERP in the lean manufacturing process will help the staffs to build a good relationship with the customers. On the other hand, the employees keep the real-time information through using this software. However, reduction of the manual handling in the lean manufacturing process is also associated with the reduction of labor cost.

Inventory management software helps the manufacturers to check the expiry date of the products. In the context of GSK, they can discard the old inventory by checking the expiry date of the medicines through the software. Lean manufacturing can be implemented through following the just in time strategy (Nallusamy et al. 2015). This lean manufacturing strategy can be established in GSK by following just-in-time production. However, excessive production causes the waste and hinders the cash flow. By following the lean manufacturing strategy GSK will communicate with the suppliers, vendors, and clients as a result, they can maintain a stable rate of entry of the products in their inventory. As a result, the organization has no need to face the product gathering and they can reduce the sudden emergency request of the product, which increases the cost.

Improving Manufacturing Process in GSK

Manage low inventory in the context of GSK by applying lean principles

Inventory is one of the major wastes among the seven wastes that are identified by the lean manufacturing. Inventory may add value or may not add value to an organization (Elking et al. 2017). For GSK it is crucial to keep fresh and updated product in their inventory as it is a pharmaceutical organization. Medicines those dates are expired are considered as the waste in the pharmaceutical organization. In the context of GSK maintenance of the accurate inventory is mandatory to reduce the waste from their operating process. Use of ERP is helpful to complete this process. However, the entire operation process of the supply chain management that is a movement of the raw materials to the production house and the movement of the finished product from the warehouse to the customer end should be managed in an appropriate manner (Cooper 2017). This is a major aspect of the lean manufacturing. Hence, by following the use of ERP GSK will be able to scan the barcode and track the inventory at the appropriate time. Use of this modern technology in the application of lean manufacturing process will allow GSK to track the movement of the suppliers.

Application of the cycle counting program is effective to improve the accuracy of the inventory record. As criticized by Marodin et al.  (2017), use ERP is helpful for keeping the inventory record however, it depends on the input method. Hence, cycling counting is an appropriate process to manage the data of the inventory. GSK can identify and eliminate any error from their inventory management by using cycle counting program. This cycle counting program will enable GSK to reduce the overstock over the time.

Cost reduction by applying lean principles in the context of GSK

Application of the lean manufacturing is associated with the cost reduction from the entire firm. GSK has been suffering from the negative impact of high operating cost. Hence, by applying lean principles they will be able to reduce the overall cost of their supply chain process. Cost of the raw materials often enhances the operation cost (Lucherini, and Rapaccini 2017). The manufacturers are able to select the suppliers by the application of lean manufacturing process. GSK have to maintain time to time track of the suppliers, which will reduce the waste of the raw materials as well as the operating cost. A lean will allows GSK to implement a simple manufacturing design system. Implementation of the complex manufacturing system may increase the expense in an organization (Nadeem et al. 2017). However, lean principles focus on the simple manufacturing design through the application of emerging technology. Such automation technology is beneficial to reduce the manufacturing cost.

Lean manufacturing focuses on the workforce reduction as it is associated with the high cost (Reza et al. 2017). Use of the automation technology will be effective to reduce the labor cost in GSK. As for example, Flash-View is an important software, which keeps the continuous track of the customer's order. This reduces the manual handling and labor, as a result, the operating cost of a business is reduced. GSK will apply the Flash-View software to minimize the expenses form operating process. On the other hand, by keeping the products up to date GSK will be able to reduce the waste from their supply chain process. Incorporation of the technology is the major aspect to apply the lean principles in the cost reduction process of GSK.

Conclusion

The entire study executes a brief account of the application of the lean manufacturing process in the context of GSK. However, GSK is a pharmaceutical organization thus, waste and high operating cost are the major two drawbacks of their supply chain management. Hence, application of the lean manufacturing will be a helpful activity for them to cope with the current challenges in their organization. Lean manufacturing is associated with the cost reduction, quality improvement, waste minimization, and high efficiency. However, lean manufacturing is a technology-oriented approach. In order to apply the lean principle in GSK, they should focus on the emerging technology. By using different software and technical system such ERP will be beneficial for GSK to implement lean technology in their manufacturing process. Therefore, they have to maintain the lean manufacturing in order to bring the continuous improvement in their organization.

References

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