1. Optimizing a Central Testing Lab to Avoid Additional Business Costs BackgroundBackground The client is a unit of a parent company recognized worldwide as a top manufacturer and seller of pharmaceutical products. The Corporation has nearly 100 donor collection centers in the USA and Europe that provide source plasma for further manufacture into many medical products. SPG’s Consulting AssignmentSPG’s Consulting Assignment The client’s Central Testing Lab was experiencing lengthy delays in sample processing times, leading them to miss their turnaround time commitments to the collection centers. The company was considering an expansion of their facilities and/or going to three shifts to expand their capacity. This expansion would be quite costly in terms of labor, equipment and facilities. The client asked SPG, Inc. to provide the business basics and process facilitation to improve CTL operations, increase capacity, lower operating costs, and strengthen leadership. SPG - Business Analysis FindingsSPG - Business Analysis Findings The SPG analysis focused on Receiving, Testing, and Data Control. SPG consultants examined the present lab environment, the step-by-step processes and programs that guided the day-to- day operations, and meshed these with the business needs and the regulatory boundaries. Specifically, the analysis revealed:  Capacity growth limited to current volume levels.  Excess cost in the operation.  Goals and objectives virtually non-existent.  Poor communications among departments.  Roles and responsibilities and clear expectations did not exist.  Inefficiency and redundancy resided in the process flow.  No tools for managing laboratory operations.  No scorecard to track key performance indicators. Results and Quantitative BenefitsResults and Quantitative Benefits SPG consultants and client employees partnered in a 16-week effort. Work teams consisting of employees from the client and SPG consultants were formed to develop and implement solutions. An Executive Steering Committee approved the work team recommendations, and the work teams developed an integrated implementation plan to carry out the recommendations. During the project:  Evaluations of all area capacities and present and future workloads were made including workflow, workstation set-up, and quality communication frameworks between internal and external customers.  A management control system was designed and installed to assist management in controlling their resources and hitting performance targets.  A scorecard that gathered key performance indicators (KPI’s) from all areas of the operation was developed. This scorecard helped management to quickly focus on areas that were performing outside expected parameters and to take appropriate steps to permanently remove barriers to optimum performance. Significant financial improvements resulted from implementing the recommendations, including:  The “samples per week” run rate improved from approximately 57.7k in October 2000 to 73.4k in August 2001, a gain of 27%.  In October 2000 the CTL was averaging a ratio of approximately 1407 samples per Lab Tech, and in July 2001 the ratio improved to 1790 samples per Lab Tech.  The project focus provided quicker turnaround times at a cost savings per test. This additional capacity allowed the CTL to absorb additional testing into their present cost structure, and allowed the lab to avoid costs associated with: renovations to house additional work cells, moving to a three-shift operation, or potentially relocating the lab.  Schrudder Performance Group, LLC. Proprietary Information - 1201