By Deb Borfitz
August 17, 2009 | With pharmaceutical companies today subject to many of the same market forces the semiconductor industry encountered a decade ago, including intense competition and a sluggish product pipeline, operational efficiency is imperative.
The chip makers quickly learned that “critical chain” project management is the most rapid and reliable way of attaining that goal, says Andreas Scherer, general manager of Virginia-based ProChain Solutions. The methodology has its roots in manufacturing, but ProChain has spent the last eight years customizing it to the world of clinical R&D. Top-tier life science companies now consider it a crucial strategy for reducing development cycle times.
The efficiency gains are nothing short of staggering. Typically, companies that implement critical chain project management accelerate projects by 15% in the first year, says Scherer. Key clinical processes can be shortened by up to 35%. It is common for them to simultaneously get a 95% on-time delivery rate.
The hard part is enacting change to entrenched corporate behaviors. The critical chain process emphasizes a culture of systematic upfront planning, transparent communication about project status, the ability to deal with bad news early on, and enabling project team members to do focused work in lieu of multi-tasking, says Scherer.
At the planning stage, multidisciplinary teams physically come together in a room—often for three or four days at a stretch—to identify the most intelligent way to manage work and handoffs between key functional areas. The group is challenged to zero in on the most aggressive duration of a task as if it were their sole priority and all legitimate shortcuts were taken, such as picking up the telephone rather than awaiting an email.
Most large pharmaceutical companies have a “deeply ingrained milestone system,” says Scherer. “Bad news hits people very late and problems are expensive [if not impossible] to fix.” A chief concern of big life science companies is optimally utilizing resources within a function, resulting in multiple project assignments. Clinical development ends up with an “army of multi-taskers” as well as “padded durations” for estimating task completion times, both of which contribute to diminished output.
In a critical chain environment, padding is taken from individual tasks and used to protect overall projects in the form of “buffers.” Individuals get recognized not for hitting a target date but for completing key tasks “in a focused way, as quickly and completely as possible,” Scherer says. If they finish early, the work gets carried forward to the person responsible for the next task on the critical chain. This is called “running the relay race.” Software helps identify these tasks and makes them visible. Establishing the mindset of a relay racer with all team members is the crucial part.
“During project execution, the project team constantly screens for downstream risks to the schedule,” says Scherer, “by carefully tracking buffer consumption.” Mitigation plans are put together well before the actual risk occurs. Project status is tracked on a weekly basis via a computerized “fever chart,” based on progress made on critical chain tasks overlaid with the amount of buffer consumed. A project consuming less of the allotted buffer shows up as green on the fever chart. One consuming more gets flagged with red and one just at pace is announced by yellow.
“The notion of red does not necessarily mean a project is doomed,” says Scherer. “I’ve seen teams mostly in the red that still have their project come in on time. The fever chart provides an early warning of increased schedule risk.”
ProChain Solutions serves Fortune 500 companies in the life science space, where it replaces software packages such as Microsoft Project Server, says Scherer. Its solutions include a scheduling algorithm to time-optimize project planning by helping teams visualize critical chain tasks and consumption of the buffer. The customer base includes Abbott Labs and Eli Lilly.
In addition to developing software, ProChain Solutions certifies project managers as either Critical Chain Experts, requiring six to nine months of on-the-job training, or Critical Chain Professionals, which takes two to three months. “This is a truly low-risk, very scalable approach to introducing the critical chain methodology into a large R&D organization,” says Scherer. In less than a year, an organization can be “self-sufficient.”