Warehouse Inventory and Material Process Flow Improvement in a Compounding Pharmacy Gretza Valle Rodríguez Master in Manufacturing Competitiveness Dr. Miriam Pabón, Ph.D. Dean Graduate School and International Alliances Polytechnic University of Puerto Rico Abstract ⎯ Pharmaceutical inventory management aims at waste reduction in process while Six Sigma aims to improve the control over critical raw aims at reduction of process variation” [2]. “Lean materials and its traceability, when used in the Six Sigma focuses on eliminated non-value added compounding of total parenteral nutrition (TPN) waste from process in order to streamline and reduce waste of expired materials. A production, improve quality and gain customer compounding pharmacy dedicated for patient satisfaction in the long term” [3]. The Lean Six specific TPN products uses a variety of drug Sigma utilizes the DMAIC tool (Define, Measure, additives and components and raw materials that Analyze, Improve, and Control phases) to ensure vary in final product quantity usage day after day. that the process is fully analyzed in order to Improving inventory performance through lean Six determine the causes to the problem. This analysis Sigma approaches has been the objective of this uses qualitative and quantitative data if available, to research. By implementing Lean methodology with get to the root cause of the problems identified. DMAIC tool, the material process flow in the The lean Six Sigma concept has been utilized Compounding Pharmacy has been able to reduce in this research to determine the assignable causes stock cost, material waste, diminish documentation of the inventory process flow variations and errors and has effectively controlled and monitored implement actions that shall control, and trace the raw material inventory. inventory used in a compounding facility. Key terms ⎯ inventory management, Lean Six Sigma, process flow improvement, waste reduction METHODOLOGY In the compounding pharmacy facility, a cool INTRODUCTION room warehouse is used to store critical and most Pharmaceutical industries have been seeking to used raw materials under controlled temperature maximize quality throughout their process and and cleaning controls. Raw materials located in the finished products. Inventory process improvement cool room warehouse is based on a fixed-time is a necessary approach to provide an efficient period mode, where inventory is counted weekly. system of the control and monitoring of raw The quantities of materials used differentiate daily materials used during the production process of as the production process is not a manufacturing patient-specific total parenteral nutrition in a process were quantities are fixed and it depends on compounding pharmacy. There are many shifting demands. The raw materials are stored in approaches deemed to improve inventory racks labeled with the content of the materials and management and process flow to minimize costs the expected quantities of stock in the area. A and waste. “Six Sigma and lean concept have material handler receives the raw materials and then become two of most popular methodologies for stores them in the cool room warehouse. However, improving productivity, quality and business a deficiency in organization of which product lot performance” [1]. These concepts can be applied to number was received first to be used first versus any company, including pharmaceutical and which was received last, has been a problematic manufacturing industries, for continuous method in terms of process flow and waste. improvement of processes. “Lean methodology Furthermore, the documentation and traceability of materials and to improve the traceability of raw materials used during daily inventory system in a short time line. production has been a point of focus in internal A Gemba Walk was performed to observe the audits because traceability of some materials such work process flow. Raw materials process flow as disposables was not granted. The approach of occurs from the cool room warehouse, where the this research is to use the DMAIC methodology to materials are unpackaged from their primary determine the root cause of the events and identify package, transfer to a Decontamination Room effective solutions that can be implemented to where materials are disinfected. Furthermore, prevent recurrence of material waste and materials are then transferred via a Pass-thru hatch documentation errors. to the ISO 8 grade cleanroom “Dispatch Area” to be temporarily stored in dedicated bins in the racks. Define Phase An operator in the “Dispatch Area” prints a list of During this phase, a project charter (table 1), materials to be used during the compounding was developed to include the problem and goal process in that particular day. This may contain statement, scope and objectives. The process was multiple lot numbers of the materials stored also defined in order to understand the flow of temporarily in the “Dispatch Area” as per the materials from the delivery to the Cool Room introduction of the materials from the Warehouse until its use in the Compounding Room. Decontamination Room, thus causing that the FIFO (first in first out) methodology not be followed and Table 1 use of several lots during the production. Project Charter CURRENT SITUATION PROJECT TITLE During the day of production, the raw materials • Poor organization in cool Warehouse Inventory located in the “Dispatch Area” are disinfected and room warehouse and Material Process Flow Improvement in a transferred via a Pass-thru hatch to the ISO 7 • Poor process flow Compounding Compounding Room to be used for the preparation • Material waste not used and Pharmacy expired of the total parenteral nutrition. The pharmacist in • Documentation errors in the ISO 7 Compounding Room receives the material lot/ expiry date used materials and signs the list of materials previously • Traceability of materials used modified by the operator and distributes the not efficiently established materials to the pharmacy technicians to start the PROJECT GOAL PROCESS SCOPE • Implementation of improved • Raw materials production process in the ISO 5 laminar flow hood system within 30 days inventory cabinets. • Optimize traceability of • Materials process materials flow In this area, the secondary package of the raw • Drive consistency adequacy • Traceability materials is then removed and disinfected to be and thoroughness in tasks • Reduce costs in waste introduced in the critical area. The compounder BARRIERS TO SUCCESS KEY ACTION used in this production process is linked with a Commitment to FIFO & • Gemba walk Segregation • Process Flow Chart system software where critical raw materials Optimized inventory • Fishbone Diagram management software (components/additives) are traced. Although the • 5S • Cost Analysis compounder captures the critical raw materials used via a bar code scanning process, it leaves out the The project scope is to establish an improved traceability of the main container and disposables process to reduce material waste, human errors in used throughout the compounding process. The documentation and effectively monitor and track all following are the deficiencies identified during this raw materials used for the finish product. The goal process: is to prevent any deviations in procedures related to • Poor organization in cool room warehouse • Lack of adherence to procedures • Poor process flow The process flow chart identified several • Material waste not used and expired factors of the problem. First, the steps for picking • Documentation errors in material lot/ expiry materials using an uncontrolled list caused date used inventory flow problems, as multiple lots can be • Traceability of materials used not efficiently picked versus using one lot at a time. Second, the established printing of the inventory list once the materials are temporarily stored in the Dispatch Area contains Measure Phase the different lot numbers of the materials to be A process flow was developed to understand used. The operator performing the task was the inventory and material flow process by steps documenting all the lot numbers in the area, rather and identify which activities were adding value to than transferring one lot of the material until it was the process and which ones were not (figure 2). By consumed completely. At the end of production, identifying areas that do no add value, opens areas materials that were not used were returned to the of improvements to eliminate waste and human Dispatch Area to be consumed the next day. errors. This process flow only outlines the This process caused materials with earlier involvement of materials and not the entire expiration dates to be left behind, leading to waste compounding production. Understanding how and the traceability of the materials used per day inventory flows in the company’s warehouse, clears not being granted. any obstacles that do not add up, Data was collected for different materials that minimize/eliminate excess on all resources and where left expired and a graph (figure 3) of material create a process standardization, enabling a waste cost over time was generated from September continued inventory flow. 2019 until May 2020. Figure 3 Material Waste Cost Over Time Analysis Phase The focus of the analysis step was to determine factors that significantly contributed to the problem. During the analysis phase of this research, an Ishikawa fishbone diagram (figure 4) was used to identify the root cause of the inefficient inventory and process flow in the pharmacy. Different factors were identified reviewing the process flow, procedures and documentation of forms during a Figure 2 production day. Material Process Flow Chart Figure 4 Fishbone diagram The main causes were branched to sub-causes, as seen in the fishbone diagram in figure 4. The sub-causes identified were related to measures, people, method and environment which interrelated causing an inefficient inventory and material process flow in the pharmacy. The sub-cause under machinery were not taken into account at the moment of implementing immediate actions for the proposed timing of thirty days, because of the development of a software and its validation were Figure 5 considered for future improvement project. Total Material Cost Percentage Further analyzing the inventory, an evaluation Improve Phase of all material cost items was performed (figure 5), resulting in 65% on nutrient drugs for its high In order to improve the inventory and material quantity purchase and prices, followed by 15% raw process flow, several recommendations and materials used for the preparation of the measures were taken. Following the Lean building compounded products and subsequently 10% for blocks such as “5S (workplace organization and microbiological culture media for the standardization), visual controls, point-of-use environmental and personnel monitoring and storage (POUS), standard work, streamlined layout, disinfectants. It has been identified that the most working in teams, and autonomous maintenance impact of materials that have been left unused due (part of total productive maintenance) can all be to the segregation and identification of the lot constituents of introducing a planned number/expiration date were microbiological implementation effort” [4]. The 5S system in the culture medias, disinfectants and raw materials. cool room warehouse requires for an area where it These items have resulted in material waste due to is sorted, set in order, shine, standardized and expiration, when not used as per FIFO concept. sustains throughout time. To achieve this, the implementation of visual controls such as material criteria. The effectiveness of these actions shall be lots that are in use and that should not be used yet measured in terms of deviations to procedures in indicates the operators the status of the system. relation to nonconformances detected. For a period Operators will visually detect which material lot of three months, no non-conformances related to number should be continued to use, preventing the not documenting traceability of all materials used mix up of different lot numbers during same day during production day shall occur. A Material production. This system will also prevent further Waste Cost Analysis for the following months shall waste of materials that are left to expired by not detect if the actions taken have controlled the using them once received as per FIFO’s concept. inventory issue defined previously. Identification of the incoming material in the Cool Room Warehouse with visual aids containing “In RESULTS AND DISCUSSION Use,” “Next in use” and “Do not Use” will help the During the course of identifying the causes of operator to follow the FIFO (First in first out) deficiency in inventory management and material concept and dedicate in transfer those materials that process flow, several factors were identified and are in use and in same lot prior to changing lots. mitigated following lean Six Sigma methodology. Streamlining the material flow and the The implementation of visual aids to help identify documentation of the material lots in use during the with material lot numbers are in used and which production day captures the traceability effectively ones should not, has significantly reduced the waste of raw materials (drug additives, components, in materials unused/expired. container and disposables) for a patient specific Moreover, the implementation of a controlled product. The standardization of this process and form for the traceability of all raw materials used training will consistently meet the specifications for the production of the TPN units has been outlined in the procedures audited by quality. effective and assures, with the revision of a The creation of a dedicated form as per pharmacist, that all raw materials and additives established procedure, to document all materials to used in the compounding process performed per be used in the production day, including the Type operator in each ISO 5 environment and of material, Lot and Expiration Date will trace all Compounder is traced. This procedural form add raw materials used during the compounding consistency to the process performed. production per day, rather than having an Since the implementation of visual aids and an uncontrolled weekly edited form. The new audited controlled form for traceability, no controlled form shall be verified by the pharmacist deviations have been identified. Moreover, no to confirm that the materials documented in the waste related to unused/ expired materials have form are in fact the materials to be used in the been detected during walk-throughs in the production. Quality Department shall audit daily warehouse and in waste cost analysis performed by the forms documented by the pharmacy personnel operations management. to assure that it is in compliance with the established procedure. A weekly monitoring of the CONCLUSION inventory in the warehouse will also assure that materials are not left to expire. The existing inventory and material process flow was analyzed, and improvements proposed. Control Phase From the research conducted, the deployment of Following the improve phase and the lean Six Sigma methodology in the organization implementation of actions, quality department has has provided the identification of factors that audited all forms containing the traceability of contributed to the deficiency observed within the materials to assure conformance to established inventory organization, raw material process flow and documentation of each lot/expiry used. The decision to review this process was due to observations identified within internal audits related to deviations to procedures, where traceability of all raw materials was not granted. The simple actions implemented for organizing and standardize the documentation for traceability of all materials used for the compounding of the total parenteral nutrition has been reliable and effective in mitigating the deviations previously identified and the costs in waste of unused materials. It is suggested that in the future, an inventory system software be used to facilitate the counting of inventory and record the traceability of all materials in a better effective manner. REFERENCES [1] J. L. Cheng, “Improving inventory performance through Lean Six Sigma approaches,” The IUP Journal of Operations Management, vol. XVI, no. 3, pp. 23-38, August 2017. [Online]. Available: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=32157 48 [2] A. Rastogi, “A brief introduction to Lean, Six Sigma and Lean Six Sigma,” GreyCampus, March 18, 2018. [Online]. Available: https://www.greycampus.com/blog/quality- management/a-brief-introduction-to-lean-and-six-sigma- and-lean-six-sigma [3] N. A. Saad, “Deployment of Lean Six Sigma in strategic inventory management,” Journal of Advanced Research in Business and Management Studies, vol. 13, issue 1, pp. 39- 54, 2018. [Online]. 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