Partnership with Professional Project Management Company Boosts Performance, Bottom-Line by $12 MillionTime waits for no man … or pharmaceutical company. This take on a familiar maxim is especially appropriate for drug makers. Every day counts in propelling the next blockbuster drug from the laboratory to pharmacy shelves. With hundreds of millions of dollars hanging in the balance, economic success or failure is closely tied to overall time to market.
Such pressures compelled one pharmaceutical firm to look more closely at its internal project management resources and strategies. By doing so, it achieved an average 43 percent schedule compression and produced $12.6 million in accelerated profits and cost savings across key development initiatives.There is no doubt that every pharmaceutical company has experienced delays during the latter stages of development that stopped the launch of a new drug. The inherent costs and risks are closely tied to a company’s ability to properly manage all aspects of multi-layered projects that extend over a number of years. The characteristics that make these projects particularly complex and challenging include:
* Large project teams (often geographically dispersed) that include multiple specialties: engineering, clinical, toxicology, regulatory, manufacturing, marketing, etc.;
* Obstacles that are often difficult to predict and that require creative scenario analysis to effectively mitigate;
* The need to plan, manage, and track hundreds of interrelated activities against aggressive timelines that compete for priority from limited resources; and
* Goals that once established can rapidly change due to shifting business priorities or scientific realities.
Project management helps companies navigate through these complexities. Unlike a simple administrative skill used to track activities and costs, project management contributes significant value when it becomes the means for creating and sustaining operational energy. As this pharmaceutical company found, integrating professional project management into critical drug development initiatives enabled it to manage that energy and ultimately achieve unprecedented success.
Critical StrategyRealizing that project management tasks were diluting scientists’ focus on their core competencies — causing inefficiencies and frustrations — fueled the company’s desire to review its project management capabilities. The company also understood that internal technical proficiency alone could not deliver streamlined time-to-market success on highly complex projects; it needed a more formal approach to project communication, planning, coordination and control. Reducing development time or avoiding delays can change the present value of a new product from negative to positive, and increase the prospects of commercialization, explains a company executive. “We began seeing that improving our project management process could lead to better performance,” he notes.In 2001, the company partnered with the Life Sciences division of Integrated Project Management (IPM), a Chicago-based professional project management firm, to lead the company toward a more structured approach on many fronts of its drug development program. After closely evaluating IPM’s services, the company decided to deploy internal project managers on smaller, purely technical projects and IPM professionals on complex, multi-functional projects. This blended model allowed the company to balance resource utilization and at the same time, gain the value of learning from IPM’s practices.From 2001 through 2002, IPM professionals worked together with the company’s teams on a total of 10 projects, including:
* Five compounds at various stages of development;
* Three work process optimization efforts involving quality assurance and stability specification setting processes; and,
* Two manufacturing capability enhancement efforts related to coordinating validation of a new pilot plant and addressing compliance issues at a commercial production site.
The Role of Professional Project ManagementAs it tackled the projects, IPM began with its Requirements Based Activity® (RBA) approach, a joint project planning process that defines measurable objectives and clarifies project requirements. The RBA process incorporates factors that influence the project’s success, and maps out a project strategy (the backbone of any effective project management approach), as well as budget parameters and schedule milestones. Next, team structure and associated roles and responsibilities were defined and team members aligned to a common project objective via a formal kick-off meeting. This facilitated the creation of an Integrated Project Plan and Schedule that incorporated input from all key functional representatives and project stakeholders. Now, activities and action items could be tracked, reported and expedited; issues resolved; and risks mitigated.
“IPM’s approach helps companies pursue the right actions within an aggressive timeframe, using limited resources effectively,” notes Tim Noffke, Vice President, Life Sciences.
To further optimize project timelines and protect key milestones, two schedule management techniques were employed early on: scenario analysis and critical chain project management practices. Risks, such as potential issues with process yields during technology scale-up, had to first be identified, analyzed and quantified. The project teams highlighted various critical issues, and then conducted what-if analyses, enabling them to plan ahead for contingencies. The effort resulted in a more robust project schedule and increased overall confidence that the company’s investment in the development pipeline would realize an attractive return.
Leveraging the knowledge and expertise of both IPM and the Theory of Constraints Center (TOCC), the project teams also employed Critical Chain Project Management methodology across its critical projects. Unlike traditional Critical Path methodology, which plans the shortest path to project completion based on task durations and interdependencies, Critical Chain adds a very important third dimension: resource constraints. With this addition, Critical Chain ensures that no single resource is over-allocated within any given timeframe, which could cause unanticipated delays due to conflicting priorities.The Critical Chain approach also eliminates the extra “safety” time typically built into individual task estimates. This time is instead consolidated and appended to the end of the project as a single buffer that can be managed holistically. The net effect: individual task times are shorter, and project teams can more accurately measure progress against the schedule as a whole. Resources can be deployed as needed when certain tasks are consuming buffer time. The team can also more readily exploit opportunities when tasks finish early.
The Critical Chain methodology brings benefits beyond individual projects. When applied across an entire R&D portfolio, multiple projects can be more effectively managed simultaneously because the project management team can readily evaluate the implications of adding or canceling projects, increasing or shifting resources, changing overall project priorities, etc.
When analyzed, the results delivered by the project management approach applied were striking:
* An average 43 percent schedule compression on five drug development projects, improving on already aggressive baseline schedules despite significant project obstacles.
* In measurable dollars and cents, the company realized $12.6 million in accelerated profits and costs savings in 2002.
* The company’s investment in professional project management services and a critical chain-based software tool totaled $2.9 million. For every dollar invested, $4.35 was saved.
* 95 percent of critical chain milestones were achieved on or ahead of schedule.
* 75 innovative management tools were developed in response to specific project requirements, enhancing the efficiency and effectiveness of overall project execution.
Across the board, these results were viewed as remarkable – especially given that both timelines and workload made several aspects of the development efforts “initially seem difficult, and in some cases impossible, to achieve,” as noted by management representatives. Some aspects of the value created by partnering with IPM were also qualitative, but equally important to overall results. Most significant was the company’s increased confidence in its own ability to meet commitments, made possible by streamlined communications, enhanced cross-functional teamwork and alignment to goals, and better decision making at all levels.
The project management processes and tools used proved their value in facilitating efficient information flow between all stakeholders. “Reliance on ad hoc systems to manage activities and information cannot be effective in today’s project environment,” says Noffke. Without the many qualitative enhancements, results would have fallen short of expectations.
Project management excellence has been and will continue to be the mechanism that enables this company to achieve critical milestones in bringing new products to the market on or ahead of schedule. The outcome of these 10 projects clearly shows that the stronger or more mature project management is in an organization, the greater the results that can be achieved.