Lean For Everyone

Lean Biotech - Scope Creep, VOC and How caBIG got ca-tooBIG

What happens when you spend $350 million and forget to listen to your customers?

What is caBIG-

caBIG stands for the Cancer Biomedical Informatics Grid and was originally started in 2004 to create a framework and standard by which everyone who is doing research can easily share information and collaborate with others.

Between 2004 - 2010 the total cost was $350 million.

 

What did the customers/users have to say?

In 2010 the new NCI Director asked for an independent assessment to be done on caBIG.  They basically asked the customers of caBIG what they thought of the program.  Below is an excerpt from the reported findings.

There was complete agreement that caBIG®’s original goals were worthy and remain highly relevant to the future of cancer research in the United States (U.S.). However, there was also strong consensus among those interviewed that caBIG® has expanded far beyond those goals to implement an overly complex and ambitious software enterprise of NCI-branded tools

 

There was strong consensus from the interviews on the following points:

• The caBIG® program management structure is overly complex and expensive.
• The contractors did not really understand the cancer research space in which
  they were operating.
• The internal processes for soliciting and evaluating proposals for subcontracts
  are not transparent.
• Participation of the same contractors in both program management and software
  development has the potential for conflict of interest and unfair competitive advantage.
• There is a perception that caBIG® favors an “in group” of participants.

 

There were several fundamental problems in the approaches used to implement the caBIG® program, including:

1. A “cart-before-the-horse” overly broad grand vision for the program.
2. A “build it and they will come” mentality.
3. An unfocused attempt to address all problems in clinical and basic research.
4. A “one size fits all” approach to funding and management of scientific and
   software development projects.
5. A business model that is unsustainable and not cost-effective for the NCI or
   potential users.
6. Development and management of clinical informatics and basic science discovery
   tools under one umbrella organization.
7. Lack of independent scientific oversight of goals, priorities, projects and
   evaluation of progress.

 

Those of us in the commercial sector are not surprised.

We saw the behemoth that caBIG was becoming.  It was trying to be everything to everybody and lost focus on who its customers were.

There are several tools that caBIG developed that work well, the problem is that there are commercial entities like LabVantage that have comparable tools that are more polished, user friendly and easier to deploy.

 

The biggest difference is that caBIG is free to use while LabVantage is not.  But then again I think $350 million could have purchased a lot of LabVantage licenses!

You can read the entire report here.  Download BSA caBIG Final Report - 2-24-11

 

Lean Biotech - Using Lean Methods in the Biobanking Industry

The use of Lean in Biobanking and Prospective Procurement

I was recently interviewed by Andrea Charles at Pharma IQ about the current trends in biobanking and the future of biorepositories.

For those unfamiliar with my background I've had over 10 years as a supplier in the biobanking industry with an additional 6 years as a customer/user of biomaterials.

 

If you're interested in lean and the future of the biobanking industry then please give a listen.  We talk about:

• Current trends by biotech and pharmaceutical companies
• Why it's critical to use lean in biobanking
• What are the typical bottlenecks of implementation
• What's a minimum clinical data set
• 10 yr - 20 yr vision on biobanking

 

FoundationBio is a new supplier that listens to its customers

There is a new startup company called FoundationBio whose CEO (Leif Honda) is currently adopting Lean principles to propel his company to becoming the preferred supplier of biomaterials for biotech and phama companies.

His vision is a move towards prospective procurement which allows the VOC (Voice of the Customer) to pull the order thus allowing value to flow and eliminating the wasteful practice of banking excessive inventory.

 

My favorite quote:  "A biobanks only value is given to it by its customers"

 

Lean Biotech: I got to dumpster dive in Pfizer's supply closet. It was not a Lean place.

Several years ago the Pfizer facility in Ann Arbor, MI closed its doors and gave away a lot of free items.  I got to experience it first hand.

Background:

Pfizer donated much of the equipment and supplies via the MIED (Michigan Innovation Equipment Depot) which was created by Ann Arbor Spark. 

The MIED helped distribute the materials to new startup biotech companies in Michigan Smart Zones.

I had a friend who was given access to these materials and asked me to come along as a “trained eye” to identify consumables that would be of use in a small start-up biotech.

 

It felt like an archaeological dig as we opened each box to see what treasures we had.

When the facility closed down each lab had its consumables boxed up separately. (petri dishes, forceps, tubes, gloves, pipettes and pitpette tips..etc.) 

So each pile of boxes represented what was still in each individual lab when it was closed.  Every time we went through another pile of boxed up consumables it didn’t look anything like the previous box.  Why?

In essence every lab seemed to use different brands of gloves and pipettes.  What I discovered was that each lab operated on its own.

 

Silo's are costly!!

It’s to be expected that different types of labs will have different needs however when it comes to gloves, lab coats and pipettes you don’t need a lot of choices.

I must have counted 25 to 30 different brands of gloves (not sizes…I mean brands) and 14 different manufacturers of hand held pipettes.  To be honest there were brands I had never even heard of before.

I spoke to someone working at the distribution warehouse who used to work at the Pfizer Ann Arbor facility.  He confirmed that each lab had the ability to purchase whatever supplies they needed.

 

These are some of the conclusions I’ve drawn:

• The facility must have been spending a lot of cash just to track all the supplier accounts
• The purchasing department must have been overburdened or required a huge staff to operate
• There seemed to be no standard put in place from where you should/could order from
• From a cash burn perspective they could have operated for several months on the supplies they had just laying around.

 

These days when I visit a company I keep close attention to what the supply room looks like. 

As I walk through different labs or office areas I observe how much is sitting on shelves or still in boxes.

To me this is a KPI (Key Performance Indicator) of how they spend their monies and use their resources.  It’s as good as any P&L statement to get a gauge on how well a company is being run.

Has anyone else had this same experience?

Why you need to have a "lean eye" when doing any Merger and Acquisition deal.

Finding a "diamond in the rough" is the dream of any good M&A strategy and spotting where you can apply lean is a great place to start.

I've visited a lot of biotech companies and been taken on the "Disney Tour" of their facilities.  I've even given a few myself and they can be the most enlightening in regards to operational efficiency.

What is always readily identifiable is the presence or lack of lean methods being utilized.  This is a huge advantage when estimating the upside of a deal.

Part of any M&A deal is estimating the future growth potential of the company being acquired.

Most businesspeople focus on financial statements and sales forecasts coupled with marketing and industry data to scope a future deal.

All of these are needed to assess the possibility of an M&A but if these are taken into context with the current operational flow of the company,  you now have an excellent forecasting model. 

It's essentially a gemba walk for assessing the current state and/or future possibility of a lean implementation.

When you look at the numbers in context with their operations management you will see the future.

Here are some scenarios to ponder:

 

If all the financials look good and the company is not lean then the upside potential is very good.  Using lean methods would lead to and even more profitable company by reducing waste and increasing customer satisfaction.

If all the financials are just ok and the company is not using lean then the upside could still be very good.  Not only would you get the company at a reduced price but also have a huge upside from a lean implementation.

If the financials are just ok and the company is already using lean to keep costs low then the company might not have as much upside.  There could be a fundamental flaw in their business model where they missed the VOC or need additional lean implementation.

If the financials are terrible then the company is either using lean improperly or not at all.  You then have little upside unless your looking to acquire some type of proprietary technology or the sum of the parts is worth more than the whole of the company.  The only time this is a good value is if the poor financials are due ONLY to operational costs.

The presence or absence of lean in an organization can be a great indicator as to the future viability of any investment  So the next time you're going on the "Disney Tour" it might be worthwhile to bring a lean expert along for some additional guidance.

Lean Biotech: Using the "pivot" to redefine your direction.

Being able to change your vision based on experimental results is essential to the success of any small biotech.

 

Using the pivot in biotech.

The lean startup involves "the pivot".  The idea being that you should change your vision or "pivot" it based on new data. 

Every hear of Sildenafil citrate?  This was a drug being tested to reduce hypertension and ischemic heart disease. 

It didn't work.  It did however have an unexpected side effect and the compound later became known as VIAGRA. 

The pivot is about staying grounded while deciding on a new direction.

Scientists continually move into the unknown using trial and error however there has to be a starting point before each experiment can begin.  This is the pivot point.

Experiments should be used to confirm a hypothesis or direction.  If the experimental data does not support the hypothesis...step back...pivot...and reshape your hypothesis using the new data set.

A "leap of logic" can produce an unstable pivot point.

I've seen several times where scientists are pivoting from a bad position.  The data that led them to their current state is either flawed or assumptions were made that caused a "leap of logic" to occur. 

I once saw 3 months of work tossed out because early in the experimental process the researcher made an unfounded assumption. In biotech a waste of time is more costly than the monies spent.

With proper planning and solid experimental data, the use of the pivot can have a huge impact.

Think about how different our lives would be, and Pfizer's revenue stream, if that pivot would have never happened.

"We can't use Lean in biotech, it will stifle our creativity." WRONG!!

By employing lean philosophy scientists can unburden their minds from repetitive tasks so that spontaneous creative thinking and continuous improvement can occur.

A Standard Operating Procedure (SOP) exists so you don't have to think about how to do it.

SOP's are not just written to make experiments reproducible. They also allow your mind to work on other tasks simultaneously.

Have you ever driven your car to work but don't actually remember the drive?  That's because it's the same thing every time.  Standard Work!!

 

If you have an SOP you can share the burden of work with others and maybe discover something new.

I'm not saying you shouldn't do any of the work,  but having others assisting can bring new ideas into the mix and spur creative thinking.

These new ideas will allow continuous improvements to be made to the SOP.  In lean it's called "kaizen" = good change.

BTW: You need a quick and efficient system for updating your SOP's.

In many instances the SOP's don't reflect the actual work going on. The most common reason given is that it takes too long to get approvals for new SOP's so people just implemented the changes.

An even worse scenario is where people have great ideas for changing the SOP but don't because it's too difficult.  This is an example of where creativity is lost because of a bad process and not because of repetitive work.

 

It's hard to schedule creative thinking from 9:30 a.m to 10:30 a.m. on your calendar and expect to have an epiphany.  Great ideas just happen but they only happen if your brain has some down time. 

How young biotech companies can take advantage of the lean philosophy

How quickly a biotech company can: do experiments, analyze results and make decisions is directly related to how quickly it will burn through its cash reserves and close its doors.

A small biotech company can burn through $200 million in cash very quickly.

In 2002 I was really impressed with some scientists I met from a startup called Avalon. 

In 2005 Avalon Pharmaceuticals raised over $250 million during their IPO.  This company had the cash and the talent to make big things happen.

In May of 2009 Avalon was sold to Clinical Data Inc for $10 million. 

Things happen quickly in biotech so maybe the process by which they operate should be as agile.

The experimental process has an over abundance of waiting and in the biotech world "Time" is your biggest cost. 

I'm not talking about the hourly cost of the FTE but the cost of coming in 2nd place.  The drug that gets to market first gets the patent and the lions share of the profits.

I've even known researchers who were days away from locating a cancer causing gene when their competition called a press conference to announce that they had isolated it.

Re-work should be considered a sin because its cost is way too high.

Too often the R&D freezer is piled with partially completed experiments.  How much "Time" was wasted on the experiments that were never completed? 

The cost of biotech reagents is huge.  I used to run an experiment every day that was equivalent to the cost of my annual salary.  Being aware of this fact made me take my job more seriously. Your staff should know the cost of all of their reagents so they understand the cost of wasted effort.

Scientists need to do more planning of their experiments.  Planning should be a team oriented approach with a specific goal in mind.

With the proper use of PDCA and the implementation of long term SMART Goals scientists will move consistently in the correct direction.

Having a team approach gives empowerment to its members and keeps everyone informed.  A small biotech company can lose its direction quickly so keeping everyone focused is a top priority.

Lean fits in exceptionally well in the biotechnology industry.  Those companies that embrace it will lead the discovery process, increase their worth and either have successfull IPO's or be prime acquisition targets.

Messy Freezers: How to wrangle your R&D people in biotech

You know them by their actions:   Nothing in the -80 C is labeled. There are 12 racks in the 4 C and each one has only 4 samples and those are labeled with bad handwriting that say 1, 2, 3 and 4.  Every time a freezer alarm sounds it's R&D looking for something that they can't locate right away.

An R&D labs disarray is directly proportional to the amount of space it is allowed to occupy. 

In simple terms, it will spread like "Manifest Destiny" through the lab occupying as much space as allowed.  Then it will ask for more.

 

The Story

The R&D department told me that they needed another shelf in the freezer because they ran out of space. 

I went with the Director of R&D to the freezer and looked inside at the mostly empty racks and did a 5 Whys.

What we discovered was that much of the contents of the shelf were so old that nobody knew what they were or who did the original experiments. 

They were still there because of the "fear" of throwing something valuable away because nothing was labeled.

 

What occurred next was a 5-S of the freezer.

After many of the items were cleaned out  and tossed we then gave accountability of keeping the freezer clean to one individual of the R&D team. 

This accountability rotated each week to a new member so everyone felt the difficulty in keeping the shelf organized. 

Within 2 months the R&D team started working together to keep the shelf organized.

Other benefits that were quickly realized were:

• Freezer alarms were no longer going off all the time
• Several members started voicing the opinion that they always hated the disorganization
• Everyone was happier to be able to get back to the science and away from the "searching"
• Projects were closed faster and items discarded quickly to make room for new ideas

 

I want to thank Mike for bringing this question up to me at my last talk.  I also want to emphasize that this is not just prevalent in the R&D department of commercial companies but also in most of academia as well.  It's hard to "wrangle cats" but not impossible.