The impending exit of Ford, GM Holden and Toyota from Australia by 2017 will be accepted with some sadness. However, the automotive industry will leave a powerful legacy for flourishing sectors such as pharmaceutical, biotechnology and medical technology. By Michael McLean.

The automotive industry’s legacy is steeped in value-adding activities learnt from exporting engines, vehicles and other components. Upon deeper analysis, the lessons learned from this industry’s systems and processes can be, and are being adapted and adopted to benefit other sectors.

Scratch the surface of other industries’ managers, engineers and technologies and you will find a pedigree, passion and language that is positive about their time in the automotive sector. The Bathurst 1000 will still run but maybe not so much with the Ford Blue V and GM Holden Red, but in a different canvas and colours. Motor racing will still be in Australia, just with different players. The motor vehicle industry has brought us advanced manufacturing technologies that we need to race – so to speak – in different value-adding markets.

One automotive legacy can be found in the symbiotic relationship that Perth bio-medical company Ozgene has established with Toyota, Nissan, GM Holden and their local and global suppliers. With deep automotive industry and supply chain experience, McLean Management Consultants and Lean Design Australia determined the strategies, structures, systems and processes from the automotive industry that can be migrated to Ozgene to give both productivity and quality step-change.

Ozgene supplies customised genetically modified mice for drug validation and medical research trials worldwide. The company has explored various practices from diverse industries, and found an affinity with the automotive industry. Its connection to the automotive industry tells a story of motors to mice, a lesson that demonstrates how an existing body of knowledge has powerful applications in terms of realising the new economy and digital age.

At first glance, the world of DNA research might seem unrelated to vehicle manufacturing. Yet the process behind designing, engineering and manufacturing DNA into medical research mice, which involves knocking-in and knocking-out specific genes of interest, shares many common elements with processes of the automotive industry. Motor vehicle manufacturers thus have a valuable, if unexpected, legacy for genetic research, shaping Ozgene’s strategies to drive “human Lean” and foster humanisation, stability, harmonisation, improvement and innovation.

The Lean management model seeks to build trust and confidence by focussing on the core values of humility and respect. It is centred on creating value for the client and is characterised by a desire for continuous improvement.

Similar to the automotive sector, Ozgene wanted to build in quality at the design stage, as downstream processes and activities are dependent upon such outputs and inputs being correct the first time around. By implementing relevant aspects of the Toyota Production System (TPS) in its laboratory, Ozgene streamlined the flow of delivery, minimised waste and enabled a more flexible operation to variable client demands in Australia and internationally.

The implementation of process-failure-mode-and-effects analysis (PFMEA) provided Ozgene with a framework proven in the aerospace and automotive sectors for identifying ways that its processes could fail. With particular focus placed on the failure modes and effects on its clients, the causes and associated risks and implications, Ozgene has been able to better plan risk mitigations and ‘step-by-step’ procedures, embedded in an innovative iPad-enabled standardisation.

Ozgene’s use of A3 storyboards as a structured problem-solving and continuous improvement approach are a further adaptation of a lean, automotive sector-based medium, capturing and visually demonstrating the progress in resolving an issue. Ozgene used the scientific “IDEA” in their A3s, which works with the PFMEA technique to comply with the Risk Reduction and Reaction Plan.

Finally, linking back to the Lean management model, Ozgene executed a relentless and continual engagement of its people, including both its staff and its  client base around its own Huddle Board design. Together these processes, originally inspired by the automotive industry, have been applied to suit the Ozgene organisational context.

Since following this model, Ozgene has seen a dramatic 600% increase in productivity and quality gains. Ozgene CEO Frank Koentgen says the model has resulted in shorter timelines for clients, has helped clients better access their projects, and fostered the implementation of Ozgene’s revolutionary technology. Other key performance indicators have also been achieved, such as meeting and exceeding animal husbandry compliance.

This success has differentiated Ozgene in the biotechnology and biomedical market, reflecting the adoption of automotive processes management frameworks. For example, by identifying processes specific to the automotive industry, Ozgene has been able to select the most suitable processes to adapt to their organisation.

Looking beyond Ozgene and the life sciences sector, these standards, processes and capabilities are now being applied to a diverse array of sectors. Other companies that have benefitted from the automotive industry approach include Asciano, BHP, Boral, CBA, Colorpak, CSR, Electrolux, Nissan, RAAF, RAN, ResMed, RPC Technologies, Thales, Westpac and Zurich Insurance.

Michael McLean is the Managing Director of McLean Management Consultants. He will present Retained Learnings: Applying Automotive Strategies To Bio-Tech Advanced Manufacturing at the Advanced Manufacturing Summit, to be held from 15-16 November in Sydney. Mr McLean will be joined by Ozgene Research and Finance Manager Maya Koentgen. The Summit, hosted by AusBiotech, Australia’s biotechnology organisation, will explore the potential of advanced manufacturing to drive the future of biotechnology, pharmaceuticals and medical technology.