21 April 2012
Blaze of glory
Increased OEE, smashed targets and soaring morale – Max Gosney finds out how Sanofi in Dagenham is rewriting the record books despite impending closure
Shopfloor operator Ricky Lee fizzes with enthusiasm as he describes how his kaizen nous helped nullify a production issue on the line. It's a familiar sight on many a thriving factory floor, but here at Sanofi's Dagenham plant, the event is quite extraordinary.
Ricky is being made redundant in just over a year when this 77-year-old factory closes. He's one of 420 who will lose their job – the consequence of a fall in demand for medicines produced at Dagenham as drug patents expire and copycat products flood the market.
But where you might expect tears and tantrums, since the closure was announced three years ago there have been unexpected triumphs. "We've been genuinely surprised by the performance level," reflects Mark Whitfield, manufacturing operations leader. "We have a dashboard measuring 10 KPIs and we actually ended the year with everything on green."
A 5% rise in overall equipment effectiveness, new products launched in record-breaking time, workers voluntarily staying late to get the job done – you almost want to check the sinks to see if the water doesn't drain clockwise in this small corner of Essex. Performance-linked redundancy pay explains the improvements in part, but Sanofi's success is drawn from something more subtle than the pull of pound notes.
Each employee has been issued with a £2,000 training credit which can be cashed externally to take up qualifications in subjects of their choice, anything from basket weaving to biochemistry.
"Learning new skills is a real plus point for the future," says Whitfield. "That's going to set you apart when you're in front of that interview panel. We're trying to get that message through." In-house coaching focuses on job hunting, with sessions on CV writing and interview skills delivered via a dedicated resource centre.
Day to day, employees are encouraged to take part in continuous improvement (CI) at every turn, explains improvement lead Kevin Bailey. "Some people think continuous improvement is just a Sanofi thing. We're trying to get people to recognise that what they're doing is not unique so they can sell those skills when they go for an interview. We've made a clear link between getting involved and developing skills for the future."
The site thrives under a CI symbiosis between employee and employer, says Bailey. Workers use kaizen activity to hone their skill sets while Sanofi profits from productivity gains. Projects have been widespread, including boosting product recoveries within sterile areas, solving sealing issues on drug packaging and implementing 5S. "We started the process with the group saying, 'we don't want this' and 'why do we need this when we're closing?'," reveals Bailey. "Now, at meetings they ask, 'when are we going to be implementing this?' And when we say three months, someone replies, 'it won't take me that long, I'll get it done in a couple of weeks'."
In a perverse way the closure has eliminated the cynicism that crushes CI on many ordinary sites, according to Bailey. "Nobody will be made compulsorily redundant before 2013, so when we make an improvement it's not about wanting to bring about an early redundancy. We've removed the blockers of a normal site. It sounds peculiar, but I've found CI easier to implement during the closure."
Falling volumes have also made for fertile ground. A drop of 40% in production of cancer drugs, as a result of lost patents, is creating extra capacity for improvement activities. And the more successful the CI the more capacity is freed up to do even more, says Louise Meehan, a microbiology analyst who has helped Bailey steer the programme. "A few of the operators who were involved in 5S were then involved in ordering new tools. They felt like they were being listened to and were contributing, so they were much more open to the next part of the project and passing it on to their peers."
Despite comprehensive buy-in, you can't escape the inconvenient truth of looming redundancy. Job losses may be far enough away to be ignored for now – but in a year's time it will be a different story. "It's like walking a tightrope," reflects Bailey. "I think everything is going along at the moment. But nearer the time, people's thoughts will be on the closure. There will be peaks and troughs."
When the end does come, some workers may yet enjoy an unlikely reprieve. Sanofi is spearheading regeneration plans to sell part of the factory plot for industrial and healthcare use, reveals Whitfield. "If we could in any way, shape or form, sell existing buildings with some ongoing operations that would be an ideal scenario. Perhaps we could attract universities or a packaging manufacturer? Maybe keeping a skill set going that's relevant to our current employees."
The earliest occupiers based on current interest could be a supermarket and hotel. Tinned peaches and trouser presses taking the place of life-saving cancer drugs – a sad reflection on the UK's economic drift. However, Sanofi's regeneration plans are also targeting diverse uses such as offices, laboratories, a health centre, training facilities, R&D, warehousing – and even a heritage museum. "We've got to be realistic," reflects Whitfield. "We have turned down some deals. What we don't want to do is lock the gates and sell the land to the highest bidder. If it doesn't get sold it just mothballs and you see that all over the UK."
Once the regeneration plans are complete, the former tenants have vowed to make a return visit. "I think I would come back," says Whitfield. "Me too," adds Meehan. "Because we've seen a lot of the changes happening as we've been working, it won't be such a big thing. Everyone is very open about it. We're seeing the trucks pass by every day."
Sanofi's inclusive approach seems to have spurred a genuine affection among the workforce – a feeling you just wouldn't attribute to most major redundancy programmes. Bailey says: "The difference with this is they're trying to regenerate the land for industrial use. It's creating some sort of legacy. I've worked in companies where they shut the door and that was it. There was no talk about what came next."
The next incarnation for the Dagenham site remains to be seen. With its vast plot and good transport links, the site is sure to command some healthy offers. The company is determined to ensure that manufacturing forms part of its future. Doing so would provide a fitting legacy for Whitfield, Bailey, Meehan and the 417 other inspirational individuals who have made Sanofi's last days some of its most successful.
Sanofi, Dagenham: then and now
Over 4,000 people were employed at Dagenham when the site opened in the 1930s with chemical, R&D and photography operations filling the 108-acre site. The plant moved into manufacturing cancer-fighting drugs like Taxotere in the 1990s. However, shifting market demand began to bite after the turn of the millennium.
The chemical operations facility and photographic facility closed. Then the expiry of key patents on oncology drugs caused a fatal loss of volume as low-cost generic rivals began to seize market share. The site will produce 40% fewer cancer drugs in 2012 compared to 2011 and was deemed unviable by Sanofi HQ. Around 450 remaining employees will be made redundant next year. "The Dagenham site has three priorities," explains Jim Moretta, site leader. "The continued supply of our life-saving medicines to our patients; the successful transfer of our products and site closure; and to fully support our people to prepare for the future. I see continuous improvement tools and techniques positively impacting on all three priorities and I am immensely proud of what the workforce has achieved."
Dagenham spirit: record-breaking performance
Skills development: Intensively training a soon-to-be-redundant workforce sounds as obtuse as the Titanic house band's decision to play on. Yet the results are outstanding: the site negotiated head office backing for an employee support scheme. Each worker has a £2,000 training kitty, which can be spent on courses of their choice. A job centre has also been set up on site, with careers advice, CV coaching and a library all geared towards helping individuals to secure their next job. Everyone has responded with gusto, going the extra mile to deliver new product launches and driving up OEE among other KPIs. Performance and morale, despite the impending closure, are termed "outstanding" by site leaders.
Continuous improvement: With employees paid extra for meeting performance targets upon closure, it's tempting to attribute support for improvement solely to cash. But as any lean consultant worth his salt will tell you, the promise of pound notes will only inspire people so far. Outstanding achievements are often driven by stirring human qualities like recognition and personal development. Sanofi has satisfied both in spades, with CI activities directly equated to enhancing future employability and meal vouchers for star performers. Moods have also lifted as employees have been empowered to deliver 5S, ticking the box of another top motivator: added responsibility.
Honesty: There were no emails, clandestine meetings or whispers in the staff canteen – when Sanofi announced the Dagenham closure, the news was delivered in person by the site leader and his superiors with as many employees as possible. "It was done well. Nobody had any inkling," says Denise Dailey, who works in quality control. "We were allowed to go home for the afternoon and reflect. When we returned, we met with our immediate leaders to discuss our concerns." Transparency and openness has continued ever since with regular communication of site activities and performance. Employees are closely involved with developing the site's legacy – a business park which, if ambitions are realised, will play host to some sort of manufacturing presence.
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