While lean manufacturing has been around since the 1950s, it is still just beginning to flourish in the pharmaceutical industry. There remains, however, a question as to the size of the value lean can bring to pharma. We are, after all, an industry with tremendous efforts in R&D, marketing, sales and the like. Manufacturing, especially manufacturing quality, is of critical importance to our success, but cost is much less of a driver of success than it is in automobile manufacturing, for example. So what can a manufacturing method do for R&D, for office-based work, for sales and marketing?

Quite a lot, it turns out. Lean originated at Toyota, where it is simply the science of improving work: identify a work issue, apply science to improve it, make the improvement stick, repeat as rapidly as possible.

One could hardly ask for a better fit with the pharmaceutical industry, where science is so integral to success. Indeed, lean thinking enabled Pfizer to cut a year from its research path, enabling Xalkori to launch a year early. It also made a tremendous impact in accelerating biology and large clinical trials. Lean thinking helped Lilly scientists improve their chemical discovery performance by more than 90%. And, while office-based lean is just getting a toehold in pharma, the value shown elsewhere is tantalising. Lean thinking enabled General Motors to cut office-based expenses by $3.6 billion in three years, without a single layoff. Lean thinking does improve manufacturing, but in innovation and office-based improvements, it is pure magic.

Innovative innovation

So why is its wider value only now coming to light? In part, it is because lean is a tremendous competitive advantage for Toyota, which applies lean thinking everywhere in the company, from R&D to customer complaints. Any competitor applying lean only in manufacturing is at a tremendous disadvantage. Competitors could benchmark Toyota’s labour advantage in manufacturing, only later learning that similar advantages exist in every part of the company. For example, with the same or fewer resources, its product development has been more than twice as fast as that of its competitors, while delivering higher-quality products. Such advantages are almost insurmountable, which is why Toyota has spent decades innovating on how to innovate.

This leads us back to the pharmaceutical industry. We have some of the best scientists in the world. Leading biologists, chemists, engineers and clinicians work in our companies. What would it look like if we were to apply their brilliant minds to improving how we innovate? What would our sales look like if our compounds were in patent for one, two or three years longer because our R&D system delivered 10-20% faster? What if our innovations gave us an additional new product every three to five years from a modest increase in the success of our clinical programmes? What if our clinical trial costs dropped by 20% because we found better ways to coordinate clinical activities across the globe? Would that be worth investigating?

As a thought experiment, let’s consider the lean experiments already up and running in three areas: R&D, office/selling, general and administrative (SG&A), and manufacturing.


Innovation is commonly thought of as a black box: you put money in and hope to get new products out. But in reality, innovation is a three-sided problem. The mechanical side is the physical work: synthesising molecules, purifying them, testing them in vitro and in vivo. The creative side is designing the right experiments to run, while the social side is the smooth coordination of science across dozens of functions, so that no programme stops or even slows in its race to market.

There has been a lot of valuable lean/Six Sigma work in improving the mechanical side of innovation, and there will be much more. Reports from the likes of Lilly, Pfizer, GSK and suppliers such as WuXi PharmaTek demonstrate that millions of dollars of savings can be made by having clean, orderly labs that execute experiments exquisitely well. But of course, the wrong experiment, no matter how leanly or cleanly run, will never yield a valuable innovation. We need to be able to improve the creative side of innovation.

The creative side is the bit where scientists actually design the right molecules, the right experiments and the right clinical studies for the mechanical side to execute. The lean work that has been implemented here contributes to the opportunity to come. Lean researchers in Lilly’s discovery area enabled a reduction in the number of molecules synthesised by as much as a factor of ten. Importantly, this was accomplished by improving the quality of the experiments the chemists executed. As a result, Lilly scientists (and, later, Pfizer scientists using the same approach) executing only 10% of their prior experiments were able to generate as many as ten times the number of solid leads. This capability not only reduces the workload of many discovery processes, but, excitingly, enables a company to leapfrog non-lean competitors, moving from follower to winner in every first-to-market race.

"Lean enabled Pfizer to cut a year from its search path and Xalkori to launch a year early."

Creativity, however, is nothing if it cannot be sold into, coordinated within and harnessed by the company as a marketable innovation. Most of my work has been in this area, and the opportunity it offers is no less significant than that found on the creative side of innovation. Coordination alone is one big opportunity space. It was just by mapping and redesigning R&D activities that Pfizer was able to reduce time to first-in-human trials, enabling Xalkori to launch a full year ahead of expectation. There is much more to be gained in this area. Lean efforts have designed 2.5-year paths to proof of concept for probe molecules, de-risking the most difficult part of clinical science at a fraction of current time and cost.

Scientific experiments to improve each of these three sides of innovation demonstrate tremendous opportunity. The company that unleashes its scientific talent to expand on these ideas will bring better, more innovative molecules to market, accelerate these to earlier launches, and launch more of them than its competitors. These experiments will provide additional billions of top-line value to those who play.


SG&A absorbs 28% of revenue for the top ten pharma companies. This is, from a cost perspective, the next big horizon for pharmaceuticals. Every dollar spent and every minute squandered on something that could be done less expensively or more easily is an opportunity wasted. Importantly, lean office is a well-established field. The automobile industry tackled this a decade ago, and financial services have been applying it strongly for nearly as long.

The important thing in lean office work is first reducing the time it takes to do something, usually by simplifying processes and forms, and eliminating queues; and second, increasing quality to eliminate rework. Improvements happen fast, and costs drop accordingly. As noted, General Motors removed more than $3 billion in office costs within three years. Amazingly, its project staff for this work comprised fewer than 25 people.

Of course, pharmaceutical companies are stocked with scientists. As a result, there exists not only the ability to apply known lean science to existing office opportunities, but to create new and specially tailored approaches to the needs of each company. This means that pharmaceutical companies could outstrip other industries in the rapid and effective implementation of office-based improvements.


It would be remiss to ignore the opportunity of lean manufacturing in the pharmaceutical industry. Lean is predicated on doing the right thing the first time and every time, removing the possibility of confusion and mistakes, and ensuring that manufacturing processes are designed and operated in such a way that they deliver the same, high-quality product every time. With the ever-present danger to patients from poor quality, and with increasing regulatory scrutiny, the need for lean has never been greater.

Perhaps that is why it is quietly becoming a part of every pharmaceutical manufacturing network. Almost a decade ago, Pfizer began using lean to slash the time and cost of Lipitor manufacturing, while upping its quality game. That is why companies from AstraZeneca to Novartis have built lean into many of their everyday manufacturing operations. Without lean, their ability to deliver quality and compliance in a changing regulatory environment would be increasingly difficult, if not impossible. But the road to lean manufacturing is long, and we are still early in our efforts.

The future

Lean will always be valuable in manufacturing, and it is quietly becoming a mainstay in this area of the pharmaceutical industry. However, the nature of patent protection and generic competition place a tremendous importance on the improvement of our R&D and office work. Imagine how much more valuable a company would be if by investing in the right experiments, it doubled its innovation output. Imagine how much more shareholder value would be released if office processes were streamlined as they were at GM. Imagine what a few of our brilliant scientists could do if they focused their innovative efforts on innovation itself, on coordinating the large R&D teams, on reducing office waste and increasing its quality.

Lean, with its simple idea of using science to improve work, offers the possibility of transforming our industry. It is just good science.