Lean Comes to Pharma

By Adam FarberUlrik Schulze, and Kim Wagner

These are turbulent times for innovative drug makers. After years of high margins and deep pockets, the pharmaceutical and biotech industries are now in an era of slower growth and belt-tightening. But drug makers increasingly recognize that one-time cost cutting isn’t enough—their problems run too deep for just a Band-Aid.

As senior management searches for new business disciplines that will improve efficiency and productivity, the Toyota Production System and other “lean” approaches to operational excellence look more and more appealing, with the promise of truly transformative, company-wide change.

Just as Toyota revolutionized auto making with its Lean production system, pharma executives are aiming to secure their industry’s brave new future by adopting the Lean philosophy and tools.