«Abstract Over the past fifteen years, the authors have worked with several of the top pharmaceutical companies in the world. In this paper they share ...»
Pharmaceutical Scheduling Issues: Bringing New Treatments to Market
Robert C. Newbold, CEO, ProChain Solutions, Inc.
Wendell P. Simpson III, Ph.D., Principal Consultant,
ProChain Solutions, Inc.
Over the past fifteen years, the authors have worked with several of the top pharmaceutical companies in the
world. In this paper they share the experiences and techniques they have used to help large pharma companies
gain dramatic improvements in on-time performance and start-to-finish project durations (cycle times), without adding additional resources. The introduction outlines the overall situation in the pharma industry today, along with some of the potential for improvement. The second section describes where benefits can be attained: why, for example, a double-digit improvement in project cycle times is realistic. The paper continues by explaining how the Critical Chain scheduling approach can be used to gain these benefits, and then describes how to approach the needed culture changes.
Introduction The world of pharmaceutical product development is undergoing significant changes. Hugely profitable blockbuster drugs are fewer and farther between. Development times are increasing, partly due to the complexity of products and partly due to increasing regulatory oversight. This leads to increased costs, along with a reduction in the time a compound is protected under patent law. And even when a profitable new product hits the market, competitors may follow quickly with drugs that have similar characteristics.
All this means that every day and every dollar is crucial for the pharma industry. For those rare products with potential sales of a billion dollar per year, each day earlier that it hits the market can be worth several million dollars. While many companies want to keep their competitive advantages confidential, the potential for benefits is clear. One large pharma company reported improvement of on-time performance from about 60% to 100% (Merrill, 2009, p 14); another spoke of 30% improvements in cycle times (Conard, 2011, p 5).
The pressures, and the potential for benefits, have led in recent years to adoption of various technologies in search of benefits. Project management has been of particular interest; we will focus primarily on Critical Chain management in late-stage drug development as an enabler of huge potential benefits in most large pharmaceutical organizations. However, this discussion is not just for pharma companies; we have found these same lessons be valid across many verticals and sizes of companies.
The Problem In our experience, project schedulingis fairly similar throughout the pharmaceutical world. Various compounds are analyzed for potential in treating different kinds of conditions. The most promising ones, those that seem likely to be effective and safe based on scientific study and tests in animals, start several phases of clinical trials in order to test safety, efficacy, and dosages. These tests can last many years, and on average only one in 6 compounds starting this process actually appears on the market (Tufts Center for the Study of Drug Development, 2010, p 4). Different countries have different regulatory requirements. Meanwhile,
The pharma project environment can be extremely complex. A large company may have scores of drugs in the pipeline, each with multiple clinical trials in process, and each trial having hundreds or even thousands of patients across dozens of sites and many countries. Work involves many different disciplines, from chemistry and biology to manufacturing, packaging, and data analysis. Competitive pressures are pushing these companies to do more with less, meaning each person may be involved with several different projects. The need to manage this complexity in an efficient way has evolved into an approach we call “Deadline Management.”
From a project scheduling perspective, the ultimate indicator for managing a compound is its final milestones:
expectations of when the compound should be on the market in different countries and generating revenue.
These final milestones are typically set by analyzing anticipated requirements for the drug, coupled with baseline historical data. They are broken into major milestones that represent significant events along the development process: first human dose, first efficacy dose, and so on. Traditionally, these major milestones are broken into even smaller mini-milestones, for example individual clinical trials and pieces of clinical trials; and sometimes even smaller “inch-stones.” Together, these milestones comprise the project’s schedule, as shown in Exhibit 1.
It is common practice in pharma for milestone dates to serve as more than a forecast of future events. They are also commonly used as the basis for both project control and personnel management. This is done by treating milestone dates at all levels as deadlines. The underlying theory is that if all the milestones are achieved on time, the project will be completed on time. Projects are considered “on track” if they hit their milestones/deadlines (at all levels), and in trouble if they are late. To provide stronger incentives, people are measured based on performance relative to deadlines. Bonuses depend on good performance; missing deadline dates can have serious consequences. As a result, milestones end up driving the schedules and driving urgency.
Treating what was originally intended to be a forecast as a deadline has some serious negative consequences.
© 2011 by ProChain Solutions, Inc.
Originally published as part of the 2011 PMI Global Congress Proceedings – Dallas, TX Each milestone date in the project has to be estimated. Everyone knows that there is some uncertainty to how long things will take, and meanwhile they know that their estimates will be used to set their deadlines. This creates a strong incentive at the work level to add safety time to estimates. This incentive is, of course, in direct conflict with incentives at the top of the organization to deliver new products faster. As a result, the estimating process is transformed into a negotiation process between managers who are looking for more speed and those who are measured by whether they hit the deadlines. The resulting milestone dates inevitably include safety time. The amount of safety time, rather than being dependent on the actual work required, is more often dependent on the experience and negotiating skills of the individuals involved.
If there is only one Carpenter resource to work on this project, the Carpenter must choose between working on Task A and Task D. In order to help the project complete as quickly as possible, Task A should clearly be worked first, because it is on the critical path. If the only data available to the Carpenter are the deadlines (milestone dates), there is a good chance she will start work on Task D because it is most imminent. When she makes this choice, she will be delaying the entire project. Thus, the priorities implied by deadlines can easily result in delayed projects.
A second execution problem is that tasks are rarely completed early. To complete a task prior to the deadline is to erode your negotiating position the next time a schedule is created. Suppose, for example, you were to negotiate for a commitment date of two weeks and then deliver in one week. Chances are you would not get a full two weeks the next time you were required to do a similar task. The cumulative effect of taking away the possibility of finishing tasks early is devastating to the chances to complete a project on time. If tasks can only be late, you may have trouble putting in enough safety time. Even if everything has a 90% chance of completing on time, putting ten such items in sequence gives you less than a 35% chance of finishing the last item on time.
A third execution problem is greatly diminished transparency into real status and real issues. Over time, the us-versus-them tenor inherent in schedule negotiations can erode trust to a level that real status and real issues are intentionally veiled. One associated syndrome is referred to as “schedule chicken” (Schedule chicken, 2009). If several people are late, the first one to admit it gets the blame; the others get a reprieve. So people don’t want to admit they’re going to be late, and serious problems may not be identified until it’s too late to recover from them. Proactive project management is extremely difficult when trust levels are low.
© 2011 by ProChain Solutions, Inc.
Originally published as part of the 2011 PMI Global Congress Proceedings – Dallas, TX Finally, we have the worst effect of Deadline Management. If you have a task that requires about one week of work, and the task is due in two weeks, you are under-utilized. When there’s too much safety time, people take on (or are assigned) multiple tasks. Taking on multiple tasks seems logical, but it means that people are typically juggling many things at once. Since the choice of what to work on is driven by urgency rather than a credible schedule, and since there are many projects and managers in the mix, people are virtually forced to multitask.
Multitasking, sometimes called “switchtasking” (Crenshaw, 2008, p 17), means switching between several tasks without completing any of them. Many people multitask their reading, switching back and forth between several books that they’ve started. How many books do you have on your nightstand? How many important tasks do you have on your desk right now? Deadline Management and its associated negotiations promote multitasking. Most people, in most organizations, multitask. We have found it to be endemic to large organizations in general and pharmaceutical organizations in particular. Search “monster.com” for jobs requiring multitasking skills and see whether this is considered a good skill or a bad habit in today’s corporate world.
Ideally, these tasks would be worked one after the other, as shown at the bottom of Exhibit 3. Unfortunately, the reality is somewhat different, as people are subject to pressures from executives, various functional and project managers, and deadline dates. The work is most commonly multitasked, as shown in Exhibit 4.
This picture shows how, with one switch per day, each task takes over three times as long from start to finish.
Notice that this does not include other penalties from multitasking. Task switching also creates quality problems (Loukopoulos et al, 2009) and adds time to projects through lost productivity (Crenshaw, 2008, pp 13-28).
Now let’s consider how multitasking might affect an individual project. Exhibit 5 shows an ideal project plan, after the project has been completed. The boxes represent tasks and the lines represent links between them.
Every task had a deadline and every deadline date was met; consequently, the project was delivered on time.
This appears to be a wonderful success for Deadline Management.
Exhibit 5: Perfect Project Plan
In Exhibit 6, the green boxes show the actual work that was performed. Work was put down and picked up many times, on many tasks. With the circled task, for example, someone may have started a little late, worked it enough to figure out they weren’t in trouble, put it on the back burner for a while, and then put in a spurt of focused time – possibly involving weekends – to finish on time.
Exhibit 6: Reality
The picture depicted in Exhibit 6 clarifies several big problems with multitasking. First, we have no idea where the real critical path is at any time; it really depends on how much multitasking people do. So it’s hard to tell people where to focus on any given project and have a real impact on the overall completion. Second, given the level of multitasking, management has poor information on the loading of individuals. That means © 2011 by ProChain Solutions, Inc.
Originally published as part of the 2011 PMI Global Congress Proceedings – Dallas, TX they don’t really know how many projects to start. The only way to be sure people are staying busy is to make sure there’s more than enough work to keep everyone busy, which ironically is also enough to keep people multitasking. And third, the work sits around a lot. There is a lot of whitespace.
Exhibit 7 shows schematically the cause-and-effect logic of the problem we have just outlined. We have seen it over and over in many industries, especially in the pharma world. Deadline Management leads to negotiated times, multitasking, and poor priorities; multitasking leads to reduced efficiency and long cycle times; and so on. The key to this picture is the dotted lines, which show reinforcing loops. Due to the poor performance, management places an ever stronger emphasis on hitting deadlines. People also have an even greater desire to have work queued up – that is, to multitask. And if we start enough projects to be sure people will be kept busy, we will have more projects active than can be worked without multitasking. The key question is, how can we keep work flowing and get rid of the whitespace? How can we get rid of the multitasking and chaos and move from Exhibit 6 to Exhibit 8?
Exhibit 8: Objective
This is not just a theoretical exercise. There are tremendous benefits to be had. For most organizations, there are substantial differences between the best and the worst in terms of cycle times for similar projects. Within a single pharma organization we have seen multiple instances where there is a variation of a factor of 10 or more in cycle times for similar clinical trials. Applying the processes and discipline to reduce this variation and the average cycle times is potentially worth billions of dollars to a large pharma company.
© 2011 by ProChain Solutions, Inc.