How a US Pharma Subsidiary in the UK Coped With an EU Problem

A US-based global pharmaceutical corporation chose me to implement my TYM approach to achieve world-class performance in all its manufacturing plants. We started with a high-volume consumer product made in its UK plant.

Analysis and Findings

My analysis showed how, by changing the way they worked:

• They could make the product faster. In just 3 days, down from the current 40 days,
• They could increase productivity by over 60%, and
• They could make products 100% right first time.

Implementing these changes would slash costs, free up cash, and enhance customer service. Specifically, unit costs of the product would reduce by 23%.

TYM Program Implementation

The company formed a small team that worked with me on a ten-week TYM program. We Identified necessary steps, assigned responsibilities, and developed an implementation plan highlighting financial and business benefits.

The board approved our plan. Over the next six months, I guided the team to realise these benefits.

Transformative Results

The product faced several direct EU competitors. The reduction in unit costs allowed the company to either maintain prices and make higher profits, or lower prices to increase market share. Or both.

The much shorter lead time enabled the company to respond to customer demands more quickly than their competition. 

Within a year, they became the corporation’s best-performing subsidiary.

Compelling Conclusion

At the time, the UK was part of the EU. An EU competitor lodged a complaint with the EU authorities, claiming the company was dumping the active ingredient made in the US to reduce costs unfairly. The company denied this. But the EU ruled in the competitor’s favour, imposing a 100% tariff on the active ingredient from the US.

This increased the product cost by 15%. However, because the TYM program had reduced unit costs by 23%, the company absorbed the added cost and even dropped its prices by 5% to increase its market share. The EU complainant never figured out how the company absorbed the extra cost, yet lowered their prices, and still made more money.

Call to Action

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