Novartis, Lundbeck score wins for manufacturing in the West

Kudos to the Novartis ($NVS) ops team in Nyon, Switzerland! They've persuaded execs to keep open an OTC drug-making plant that the company had doomed to closure last fall. The company also has agreed to reduce job cuts at a Basel plant.

It's great news for the 320 industrial workers in Nyon who will continue to collect paychecks, even though they've agreed to a cut in a pay increase. Some will have their hours raised to 40 from 37.5 with no additional pay. The company expects to spend $42 million to upgrade the plant, according to Reuters.

In a bigger sense, however, the Novartis Nyon staff has reinforced the argument that pharma manufacturing in the West can be cost competitive with the East. It's unlikely that CEO Joe Jimenez (photo) would have agreed to keep the Nyon plant open and reverse the Basel job cuts if that weren't the case. Let's remember, too, the Novartis-MIT Center for Continuous Manufacturing, which is in its fifth year of the 10-year project that promises great manufacturing savings in the switch to continuous manufacturing from current, inefficient batch processing.

The news from Novartis is a heartening complement to that from Lundbeck, which has earned a Shingo Prize for Operational Excellence by creating manufacturing cost savings of 25% over the last 5 years without running to the East [see related story].

Both join GlaxoSmithKline ($GSK) in keeping manufacturing at home. The U.K.-based Big Pharma said last April it was pulling some bioprocessing work from a contract manufacturer in India and returning it to a Montrose, U.K., plant, which also had been slated for closure.

"The announcement today reflects the joint efforts of all concerned," Jimenez said in a statement [translated from French by Google].

I'll bet that's true. I'll bet it's also true that none of the "joint efforts" would have begun if not for the drive and the smarts of the Nyon manufacturing operations team.

George Miller - (e-mail)

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