Contrasting Technical Issues Facing the Pharmaceutical Industry with Changes in the Domestic Automotive Industry from 1

1. Contrasting Technical Issues Facing the Pharmaceutical Industry with Changes in the Domestic Automotive Industry from 1980 to the Present Lessons to be Learned and Techniques to be Adopted Allan Wilson Li Peckan The 2080 Group June 12, 2002

2. WHY is this comparison important to the FDA and the Pharmaceutical Industry? • The automotive industry has already gone through a transition in response to external forces • We perceive that the Pharmaceutical industry is currently experiencing analogous forces • There are significant “lessons learned” which could result in savings of time, effort and resources • It is important to look at different manufacturing industries as a source of innovation and learning

3. A Number of Events / Trends Occurred in the Period Between 1975 and 1985 Which Were The Impetus For Change in the Automotive Industry: • Pricing Pressures: An Increase in Oil Prices and the OPEC Embargos • Domestic Quality Problems • Growing Foreign Competition

4. Factor 1: OPEC Oil Embargo

5. Factor 2: Increasing Pressure Around Product Quality Issues A 1973 Plymouth Duster

6. Unsafe at Any Speed! 1964 Corvair source: corvaircorsa.com

7. Factor 3: Foreign Competition 1982 Toyota Celica Source: classic-celica.com Increased quality and reliability and competitive cost resulted in: increased perceived value

8. A Typical Automotive Assembly Plant: 1980 vs. Today

9. Lessons Learned from the Automotive Industry: It is important to: • Understand what your customer values • what they need, want, and are willing to pay for • Be mindful of your competition • what they are doing to gain competitive advantage • Develop a strong focus on product quality • This has not been a moving target but a rising bar

10. Lessons Learned from the Automotive Industry: It is also important to: • Adopt a culture of continuous improvement • continuous improvement in quality, cost and timing are essential to survival – the tools are necessary, but not sufficient to drive the shift in thinking that is required • Focus on the integration of effort • between product design, engineering, operations and quality functions • Redefine “mass production” • by insuring quality at the source vs. inspecting quality into the finished product

11. Similar Trends That Are Arising in the Pharmaceutical Industry: • Pricing Pressures • Regulatory Pressures • Patent Protection Pressures • Foreign Factors

12. Our Current Thinking Around the Applicability of Automotive “Lessons Learned” to the PAT Movement: • Learning to Manage Volumes of Data • Measurement Systems are Critical • Developing an Understanding of the Process • Simplicity and Parsimony in all Things

13. Our Current Thinking Around the Applicability of Automotive “Lessons Learned” to the PAT Movement: • Learn from other manufacturing industries that have made similar transformations as a way of accelerating your progress along the continuous improvement curve • PAT is a step in the product quality journey, but you must also consider the other elements of that journey such as: • An emphasis on process stability and capability • Quality assurance at the source • In-Process Error reduction strategies • Workforce dynamics that can help or hinder your change management initiatives