Operational Excellence in Quality Control

Operational excellence (Opex) is a key driver of sustainable corporate performance. Up to now, practitioners and also scientists have focused particularly on opex in production. However, the quality control laboratory (QC laboratory) represents a significant bottleneck in value creation in the pharmaceutical industry. In recent years, therefore, there has been increasing interest in Opex in QC laboratories as a previously unexploited performance driver.

Industry interest in opex in quality control
At the University of St. Gallen, work on Opex in QC began in 2016 at the Institute for Technology Management in the Production Management Division under the direction of Prof. Thomas Friedli. In a survey of ten leading pharmaceutical companies, the topic of opex in QC emerged as a high-priority area with great potential for improvement. The companies emphasized that difficulties with the

measurement of opex in QC. In particular, the companies lacked functional approaches to performance measurement and the selection of metrics as well as in the handling of comparisons despite structural differences between the laboratories.

In the course of 2016, the St. Gallen Opex Benchmarking for QC was developed and piloted together with the University of St. Gallen and across companies.

Opex benchmarking in QC laboratories
After the pilot phase, the questionnaire was completed and evaluated from 2017 with over 70 laboratories to date. By the end of 2019, just under 100 laboratories will have participated.

The central component for the benchmarking is a questionnaire that serves as the basis for a uniform industry-wide comparison of different QC laboratories. The questionnaire comprises a total of 352 data points. Since not every laboratory performs all possible tests and activities covered by the questionnaire, the laboratories usually answer just under 75 % of the questions.

Benchmarking provides a unique opportunity for a systematic analysis of the opex performance of pharmaceutical QC laboratories. In addition to the performance in quality, delivery reliability (service), productivity and costs, the so-called opex maturity level of the QC is also analyzed. The

Maturity is defined by nearly 60 questions based on a self-assessment of current opex capabilities. These questions provide an insight into how much effort the company or the QC laboratory invests in continuous improvement (not only financially).

Based on a comprehensive evaluation, each participant can be shown areas for improvement and recommendations for action can be made. If several QC laboratories of a company participate, a direct internal comparison is also possible, so that experiences and concepts for success can already be shared between the laboratories in a final project workshop. The QC performance and maturity data generated by the benchmarking of the different laboratories are an essential basis for research at the University of St. Gallen.

Development of a scientific measurement model for practice
The development and subsequent application of the measurement model in my dissertation was closely linked to the industry interest in the St. Gallen Opex Benchmark in QC laboratories and the participation of a large number of pharmaceutical companies.

For the scientific examination of the measurement of opex performance in QC laboratories, the initial research phase focused on a literature review in order to derive commonalities from existing approaches and to examine their applicability. Generic models of excellence have been identified in the literature, but their transfer to specific contexts has been neglected to date. Among other things, there is a lack of empirical work in academia and in practice that explores a holistic performance measurement approach in pharmaceutical QC laboratories.

My dissertation, which was written during my work at the Institute of Technology Management, addresses this knowledge gap by conceptualizing and operationalizing a holistic opex measurement approach in pharmaceutical QC laboratories. For this purpose, a quantitative and a qualitative research approach were combined.

The dissertation generates new knowledge on how opex performance, opex practices and the operational environment of QC laboratories are related. The research results enable practitioners to compare the findings with their own QC opex maturity level in order to prioritize improvement potentials with the highest impact on the opex performance of the laboratory and ultimately the company performance. In addition, the dissertation presents numerous influencing factors and delves into how these factors affect performance and practices. The final case studies with three selected companies allow practitioners to review their own opex strategy in QC labs and to take into account the insights and successful practices of the analyzed companies.

Continuous industry exchange facilitated by the University of St. Gallen
In 2018, and parallel to the preparation of the dissertation, the QCEx exchange platform was created specifically for QC laboratories. Initiated to enable cross-company exchange, the group also supported the discussion of preliminary research results in the initial phase. With an initial 16 companies, 20 pharmaceutical companies are now involved in the exchange in 2019. The exchange platform is an event series of three two-day meetings at a site of one of the participating companies. During the meetings, the participating companies have the opportunity to exchange ideas on selected topics. In addition to a laboratory tour, each meeting includes company presentations on a specific topic and interactive workshops. The topics for each meeting are defined in advance by the participants. In 2019, the topics "Regulatory Challenges & Risk Management", "Life Cycle, Change Management & Optimized Lab Operations", and "Digitalization, Automation & New Technologies" attracted the largest number of participants.

New industry opportunities for continuous improvement in QC
The model developed in the dissertation enables a holistic analysis of opex performance in QC laboratories. The quantitative and qualitative research results provide a starting point for critically reflecting on industry practices and realigning them based on the practices of successful QC laboratories. The St. Gallen Opex Benchmarking in QC enables practitioners to perform an individualized industry comparison of their own QC's status quo performance in quality, service, productivity and cost. At the same time, the analysis of the Opex maturity level, as part of the benchmarking, makes it possible to recognize in which areas (e.g. process management) the QC can still improve in order to ultimately improve performance. The QCEx exchange platform enables cross-company exchange and learning about the success concepts of other companies.