A process improvement

project: GSK Case Study

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GSK Case Study

Author: Taher

Table of Contents
Introduction..............................................................................................2
Process Improvement by GSK...................................................................2
Need of Process Improvement by GSK..................................................2
Objectives of Improving Project Processing...........................................3
Methodologies by GSK for Process Improvement.....................................3
Enterprise Resource Planning (ERP)......................................................3
Lean Management and thinking by GSK...................................................6
Elimination of Waste..............................................................................7
Implementation of appropriate CSR......................................................8
Critical Analysis of followed procedures...................................................9
Enterprise Resource Planning (ERP)......................................................9
Lean Management.................................................................................9
Conclusion.................................................................................................10
References.................................................................................................10

Process Improvement: GSK case study

Introduction
The British multinational pharmaceutical company GlaxoSmithKline is
headquartered in Brentford, England. It started off with the integration of
SmithKline Beecham plc and Glaxo Wellcome plc during 2000. Followed by
Pfizer, Sanofi and Novartis GSK is considered to be fourth largest
pharmaceutical company with respect to prescribed drug sales. It is one of
the leading research based organisation who is devoted to developing,
manufacturing and market branding of products related to human health
(Weyzig, 2004). The main markets for GSK includes France, Germany, US,
Japan, Italy and UK with the total revenue of 25.7 Bn, operating income
of 7.8 Bn and net income of 5.3 Bn for the year 2012. It extends its
horizons over 160 countries with more than 99,000 employees. The
organisational
divisions
consist
of
consumer
healthcare
and
pharmaceutical healthcare. The main products of GSK include antimalaria, tuberculosis, de-worming drugs. It is known for providing complex
diseases including asthma, cancer, diabetes and mental health. The
former division, consumer healthcare provides nutritional and oral
healthcare products to the customers which are prescription free or over
the counter medicines. GSK is determined to follow a Corporate Social
Responsibility or CSR approach towards its business operations. It has
played a vital role in the R&D sector for helping the lower economic
countries, community investments and providing voluntary licenses for
the production of highly diseased prone medicines in African region (GSK
company profile, 2012). Hence the main focal point of the company is to
adopt strategic operations for delivering sustainable growth while
strengthening financial performance and reducing risks of diseases
through broadening global business and simplifying the operating model.

Process Improvement by GSK

Business Process Improvement or BPI is a methodical approach for
business entities for optimising the management approach. This facilitates
the business entities for achieving more efficient results through
organising the cost and cycle times for product development while
recovering the quality. It is a division of organisational development for
accomplishing goals and objectives for increasing profit and performance
(Shtub, 2010).
Need of Process Improvement by GSK
Presently the key challenge for GSK is to perk up the superiority and
quality of human life through improving the efficiency of its products. This
can further result in making people feel better and live a longer life
(Peopleclick Authoria, 2012). The organisation accomplishes its tasks through the
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help of entrepreneurs and engaging people who own innovative thinking.

Hence the organisational culture is strong and is attained through
integrity. The shift from patented drugs to generic drugs can augment the
organisations integrity for achieving the goal through the development of
new vaccines, medicines and healthcare products (Zaman, 2011). It can
be achieved through alliance with other companies who are major dealers
of generic and branded drugs globally. However these private based
companies have a fast working mechanism and managerial product life
cycle for fortification of their core competitiveness and consumers in the
emerging market demand low-cost products. However these low cost
products can be troublesome for people. In addition GSK has limited
shared objectives for the system and is short of sustainable management
skills and training. There is no stability of care which leads to massive
loss, incapability for coping with cost increment, vulnerable revenue
bases, no strong linkage among healthcare and social care, low ability for
keeping hold of professionals and global ecological and economic threats.
Hence it also needs to deal with the complications while dealing with Food
and Drug Administration (FDA) while introducing new product into the
market (Lakshmi, 2013).
Objectives of Improving Project Processing
Through studying the aspects of GSK the management decided to improve
the project management processes. The basic goals for perking up the
processes includes the establishment of a centre of distinction for clinical
trial document production which could emphasise upon the production of
documentation, setting up one central hub which can handle the
operations of research centres, developing automatic electronic system
for efficient services, altering the structure of managerial tasks through
implantation of project improvement tools. Additionally the objectives also
included certifying the FDA regulations, enhancement organisational
structure for meeting up the goals. Hence for achieving all these
objectives there was a need for streamlining the procedural
methodologies of GSK (Luu et al., 2008).

Methodologies by GSK for Process Improvement

Enterprise Resource Planning (ERP)
In the current era business environment is vibrant with respect to the
global requirements. Organisations are facing challenges due to the rise in
competition in mounting consumer demands, expanding markets and
consumer behaviour. In return this intensity the pressure on companies for
lowering costs of products affecting the supply chain management,
reduction in inventories, growing the list of product choice, providing
better services to the customers with high quality products and

accomplish the global demands. Hence for GSK to remain competitive in

the market it needs to upgrade its potentials and improve the business
procedural operations. It needs to interconnect with its suppliers,
distributors and consumers. This can only be achieved through upgrading
its process planning by the help of ERP. The usability of ERP offer two main
benefits for GSK including a unified and central enterprise view of the
business including all functionalities of departments and secondly the
enterprise database through which business procedures are entered,
recorded and further processed. As a result this progresses the
interdepartmental collaboration for pulling off with all objectives and
receptiveness of stakeholders (Kulp et al., 2006).
The IT investments by GSK can be a turnover for the manufacturing
process of the organisation. The WTO agreement instructs the
pharmaceutical companies to achieve patents on their formulations.
Hence the companies have intensified their researching areas over clinical
trials which are data intensive area. Similar is the case with GSK which
needs to be organised as an application in the pharmaceutical industry
(Paul et al., 2010). As GSK is moving from patents to generic drugs, it
needs to focus upon patents first and then move forward. The main
emphasise which needs to be focused for GSK includes infrastructural
system including the networking of messages and data, drug designing
softwares and application development, software packages for efficient
data storage through word processors, spreadsheets, planning for
Enterprise
resource,
implementation
services,
consultation
for
medications and formulations, external connections for efficient supply
chain management through connecting dealers with pharmacists, ecommerce and data ware housing. Hence ERP designing is considered to
be one of the key components for manufacturing industry of
pharmaceuticals (Pammolli, 2011).
The main module system for ERP of GSK includes the following (Paul et al.,
2010)

Figure 1 - Module system for ERP

Approval from
seller
Authorised by
GSKs
parameters

Procurement
Simplified
procedure with
regard to GSKs
needs

Material
management
Safe usage of
chemicals,
quarantine

SOP
management
Authorised by
GSKs
parameters

Audit Trial
Production
Production of
medicines once
approved by
governing
authorities

Distribution
from labs to
storage units
Management of
multiple storage
units

Maintenance
management

Authorised by
GSKs
parameters

Accessible
processes for
labs

The basic target through the implementation of ERP with respect to the
GSKs supply chain was to abridge and regulate the procedures which are
followed for accomplishing a task across GSK network. The functioning of
a single module in the ERP template facilitated the future GSKs operating
model through structuring the scalability which enabled the basic ways of
functioning at all sites. The implementation of the system also took away
obsolescence risk factors involved. GSK implemented ERP which
encompasses the business procedures propped up by a system which are
driven throughout the manufacturing pharmaceutical laboratories of GSK
globally and also provided the management of GSK with end control
synchronisation and business information. The program brought a
business change throughout the organisation with development due to IT
and endowed with generalization for IT changes. GSK further shared
common processes in conjunction with commercial organisational factors
including finance, order to cash and procurement through the alignment
of data into one platform. The entire positive outcomes were only due to
the strategies followed through training more than 16,000 users about
computer literacy, languages, learning styles, support change
communications through expertise and services for technology. External
sources were also used along with 600 simulations and courses. Maximum
participation was required by the employees hence GSK used mix leading
edge learning technology for sustainable business benefits. Assima ATS a
simulation tool was used for the purpose of better training and
understanding of concepts by the employees. The training portal was fully
updated with supported material of reference by the professional
developers (Mandal, 2003).
Options for ERP strategy
For balancing out the complexities of oversimplification through IT and
Line of Business (LOB) the three primary options for ERP strategies were
`

utilised by GSK. These options consisted of ERP deployment models

including Hub Only, Hub and standard spoke solution and hub and a
choice of spoke solution options.
In the Hub only model the single instance of a single application was
obligated regardless of business complexities and location. Hub and
standard spoke solution were implemented upon spoke business units and
hub and a choice of spoke solution model the firm utilised a controlled
choice of applications for the simpler spoke business units which further
offered sufficient options to go well with vendor management. A clear
picture can be presented as figure 2 (Paul et al., 2010):

Figure 2 Model

Local
business
entity

German
entity

HUB

Australia
n entity

Malaysia
n sales
branch

Canadia
n
subsidia
Canadian
entity

HUB and
standard
spoke

German
entity
Engineer
to order
division

Customer
finance
subsidiary

HUB

German
subsidiary

After sales
services

Lean Management and thinking by GSK

Achieving Competitiveness through Innovation and Value Enhancement or
ACTIVE is a strategy adopted by GSK which is intended for recovering the
performance of capital ventures in the processes of industries through
altering the adversarial behaviours ( Carleysmith et al., 2009). It is one of the top
notch activities in the UK industry which is operated by leading companies
and supplier firms. It is considered to be the superlative action plan which
states that inefficient business processes must be removed. This can only
be achieved through cultural change of supply chain management and
vertical integration. There are eight main Value Enhancing Practices or
VEPs that are followed including (Gebauer et al., 2009):
Effectual project concept efficient team for project management
Effective supply chain interrelationship valuable communication and
management level undertaking the project risks efficient novelty and
continuous improvement project implementation efficient
measurement performance
The above mentioned pathway set a clear corridor for achieving objectives
and scope of the firm through proper implementation of the strategies. It
was carried out by the establishment of a sold based team which
understood the defined responsibilities. The supply chain relationship in
GSK was broadened for increasing the value chain and level headedness
of benefits and risks. GSK has expanded its project horizons for
maintaining the lean principles through implementing numerous
procedures including PROjEN. It includes a combined approach which
employs procedures for achieving organisational objectives (Yang, 2009).
The procedure made certain that stakeholders are collaborated properly.
This also included the usage of ground-breaking technology for proper
drug development including 3D modelling which could further produce
detailed designing. A dedicated project managerial team was formed
which was highly motivated towards simultaneous engineering procedures
`

resulting in the reduction of manufacturing period and made sure about

making things happen. Reviews related to achievement of projects were
done as early in the design phase and trial phase. The front end designing
were pre-authorized for avoiding needless delays which further helped in
using innovative methodologies for using photogrammetric technology for
developing 3 dimensional models of drugs. Latest softwares were used for
proper visualisation of compounds. This also involved the extended
communication of stakeholders. The suppliers were being involved in the
front end reviews for the modelling of compounds. As a result the
designing phase was reduced which further helped in dropping down the
risks involved which were further analysed through risk management.
Before the commencement of any of the project construction sites were
cautiously examined for improving the competency of project teams and
reducing the on-site inventory. Hence the emphasis was upon increasing
the business benefits (Smith, 2010).
Elimination of Waste
Elimination of waste refers to downsizing the non value activities for
increasing the efficiency of organisational procedures. Hence it is a path
for perfection which can adopt by GSK. The following aspects should be
eliminated including motion which includes the needless movements for
performing a task, unnecessary inventory which is not being processed for
adding value including unwanted materials required for developing drugs,
infrequent time spent on movement of documents and waiting period
which includes the time spent for Quality Assurance department for
approval of documents or batches (King, 2009).
Kaizen refers to aspects which are altered for the betterment of
organisational behaviour. It also includes breaking the barriers for getting
rid of non value steps and time. It is considered to be one of the major
catalysts for improving performance of the organisation. The current
situation of GSK involves issuance of the batch record; five sequential
reviews are taken for the batch records by a team, divergent
investigation, follow up by each team, sheet management, countering all
departments including QA, manufacturing, compliance and maintenance.
Hence the current situation depicts that the teams are not highly
organised and effectual, QA team also wastes much amount of time, less
optimisation and solutions are always identified during the processing of
implementation. The solution should be faster the activities through
leaning them, building self confidence among the team players of the
team, emphasise upon the Kaizen for enhancing the activities. This should
be done in accordance with one internal project manager and one QA
specialist who are familiar with the team. Analytical processes should be
identified which can observe the internal processes and documentation
`

through evaluating the gaps and propose practical solutions. The flow can
be created through reducing queues for increasing flexibility and reliability
of products (Bahensky, 2005).
Implementation of appropriate CSR
The main mission for GSK is to recover the quality of human race through
better products. The main focal points include the integrity,
entrepreneurial spirit, innovative ideas and enthusiasm for achieving
targets. Although during 2003 GSK adopted numerous principles of CSR
however it needs to adopt numerous factors through the determination of
key issues. This includes the employee practices in which all employees
are treated equally, access for medicines through the contribution in R&D
sector by collaborative investments, headship and being innovative
through establishing its own standards for influencing others, following all
ethical conducts, considering all environmental factors and in depth
collaboration with the stakeholders (Porter, 2006). For the purpose of drug
testing the industry standards must be met including the Conduct of
Clinical Trials and Communication of Clinical Trial Results which was
developed during 2002 by PhRMA. Although GSK actively participated
during its commencement however some of the aspects are not followed
including the guidelines for research objectivity and clinical practices.
Policies for animal research should also be optimised for reducing the
number of animals studied in each research. It should recognise the fact
that all nations have equal autonomy powers for biological research. The
corporate policy for Pharmaceutical Marketing and Promotion Activity
should also be followed for keeping out employees from bribery. For
supply chain, GSK should instruct the suppliers and contractors to follow
the binding clauses. However during 2003 over 350 suppliers were asked
for observance of these clauses. Regular audits should be performed for
keeping an eye on the operations (Hopkins, 2007).

Critical Analysis of followed procedures

Enterprise Resource Planning (ERP)
Although ERP is an integration of numerous processes involved in the
company but also has pros and cons listed below (Finney, 2007):
Aspect
Strategi
c

Advantages
Emphasise upon core business
Widens flexibility for changing
environment
Encourages redesigning of plans

Disadvantages
Dependency
upon
service provider
Loss of critical resources
Issues regarding data

with respect to information

Usability of IT resources permits
business volatility easier to handle
and well handling of workloads
Financial Helps the management to monitor
the IT costs instead of capital
expense
Staff and labour cost is saved
Decrease the business volume due
to pay as you go strategy and
saving the operating expense
Reduced initiation cost
Increased ratio of economy due to
outsourcing
and
Information
System from service providers
Technica Users gain advantage of using up
l
to date technology
Mangers of GSK provided with
highly secured data transformation
Centrally Managed service for the
organisation

security, legal issues of

privacy and conformity
Low control over Supply
chain management
High investment cost
More subscription fee
rather than services
Hidden costs are very
high due to outsourcing
Contracts for monitoring
and coordination is far
above the ground

Not accurate results

Low technical prone staff
Risks of data security
due to alteration or
update of data
Uncertainty due to nonscalable services

Lean Management
Advantage
Disadvantage
The decrement of waste proves vital Due to dependency upon supply
for
customer
satisfaction
while chain management there can be
delivering the just in time concept
delays in the delivery system
giving
rise
to
customer
discontent
Enhanced form of productivity due to High
investments
due
to
emphasis upon improvements in increasing the productivity and
processing system
standard
of
processes
for
implementation procedure
Organisational change at a high Requirement of high input from
altitude but can be treacherous
the
employee
which
can
overburden due to stress and
compromising the quality
Expansion of quality of products of Results
in
dismantling
the
GSK while considering the needs
preceding systems and purchase
of new machineries demanding
training of employees
`

Delivery time is shortened due to

management
of
inventory
and
medicines are readily available in the
market

Dependency upon suppliers due

to
which
vendors
can
be
reluctant in supplying products
within
a
planned
schedule
(Croom et al., 2000)

Conclusion
The present business environment for GSK is challenging. The business
improvement process can create a direct link with the customer through
demographic data. With the large number of operating units of Tesco the
execution orders can publicized easily. Challenges including tight margin
pressure, limited budgeted labour hours and alerting consumer
demographics can easily be met through a diverse cultural change. GSK is
the leading pharmaceutical company in the world with high financial
position. It has a brand image of being environmental friendly along with
customised range of products. However it needs to improve its production
capacity for increasing the strategic position and benchmark. The
operational competence needs to be enhanced in the current political and
economic instability. No doubt the drug designing and pharmaceutical
products require huge investments but there is a need for following
appropriate project planning techniques. This report can guide through the
steps that can be taken for high-levelled strategic management.

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