Operational focus

Allergan VP Has Overseen Drug Maker's Streamlining

When Allergan Inc. Chief Executive David Pyott unveiled a sweeping restructuring of the Irvine drug maker's global operations in 1998, carrying it out fell to Jacqueline Schiavo.

With a more streamlined, focused Allergan projecting 20% profit growth this year, a big chunk of credit goes to Schiavo, the company's vice president of worldwide operations.

"Most big drug companies can't do half that," said Andrew Forman, an analyst with Arlington, Va.-based Friedman Billings Ramsey Group Inc., of Allergan's profit forecast.

From 30 to Three

Since 1998, Schiavo has overseen the consolidation of 12 plants into three and the shedding of nearly 600 jobs. A decade ago, Allergan counted as many as 30 plants.

"That whole process of creating worldwide operations and making it into the global manufactoring operation that it is today has really been a tremendous challenge in terms of the work that had to be done," Schiavo said.

Oversees Third of Workforce

Allergan's "operations story" started in 1990 when the company formed its worldwide operations unit, Schiavo said.

Before that, "We all reported to different places in the organization," she said. "That was fairly typical of pharmaceutical companies in the '70s and the '80s. By the time we got to 1990, we realized this was not the future of manufacturing in the pharmaceutical industry."

About 1,800 of Allergan's 5,200 workers today fall under Schiavo's worldwide operations unit. Under her watch are drug finishing plants in Texas, Brazil and Ireland.

She's responsible for quality assurance, sourcing and procurement, engineering and technology, human resources and manufacturing financing for her operation.

Schiavo also watches over production done for Allergan in India by Nicholas Piramal India Ltd. And she oversees Allergan's making of contact lens care products for Santa Ana's Advanced Medical Optics Inc., which the drug maker spun off last year.

Allergan plans to produce for Advanced Medical until 2005.

By many measures, Schiavo is the highest-- ranking woman in business in Orange County.

Allergan, which makes eye and skin drugs, counts yearly sales of $1.4 billion and is OC's most valuable company with a market capitalization of more than $8 billion last week.

Kelly Gray of Irvine apparel maker St. John Knits International Inc. has a higher title as co-- chief executive, but she shares duties with Bruce Fetter, who handles finance and production.

OC lost its top woman executive last month when Foothill Ranch-based apparel retailer Wet Seal Inc. fired Kathy Bronstein as its chief executive.

"I don't concern myself terribly as to whether I'm the 10th-ranking female executive, the 15th-ranked or the first" Schiavo said. "When I come to work, my focus is on Allergan and advancing the business."

"What I'm often asked is what's it like being a woman at Allergan," Schiavo said. "My answer is always the same: I can't prove it, but I suspect it's a lot like being a man at Allergan, because we have very high standards of ethics and performance. I don't know if my experience here has been really any different than my male colleagues."

Schiavo reports directly to Pyott, the Scotsman who's turned around Allergan by closing plants, shedding businesses and boosting research and development spending.

"He also manages in a disciplined way," she said.

Schiavo's part of Allergan's executive committee, made up of Pyott's senior man- agement team.

Each month, she takes part in a worldwide operations review with Pyott, Chief Financial Officer Eric Brandt and others.

Schiavo contends she never has a typical day and "that's one thing I like about this company."

One week a month, she sets aside as "team week" where she and other worldwide operations officials deal with issues such as information systems, finances, human resources and sourcing for Allergan's plants.

"The rest of the month is up for grabs," Schiavo said.

Schiavo could be at one of Allergan's plants, dealing with executive committee matters or taking part in a new product launch with global engineering and research and development teams, she said.

"Operations has a very heavy execution component-every day, little white bottles have to come off that line," Schiavo said.

Allergan's plants use a mix of automation and human labor.

"I'm a great believer in automation, but only if it's appropriate to the task at hand," she said. "What we don't do is automate things for automation's sake."

The Internet and other technology have cut Schiavo's traveling. Allergan's closure of plants and consolidation of global operations also pared her time away from home.

But don't ask Schiavo about her home life. Schiavo politely declined to answer any questions about her life outside Allergan, saying she prefers to stay focused on business.

She doesn't wear a wedding ring, and her office at Allergan's DuPont Drive campus only has photos of her with colleagues, along with a few other tokens, including a pair of toy globes and a paperweight with a photo of an eye and Allergan's corporate symbol.

Schiavo, 54, is a native New Yorker who earned a microbiology degree at Cornell University, where she worked for a few years as a research microbiologist.

She also has a master's in business administration from Pepperdine University, earned during her time at Allergan through what she calls a "very generous" educational reimbursement program.

Schiavo joined Allergan in 1980 as section manager for Herbert Laboratories, as Allergan's dermatology product unit then was known (named for company founders Gavin Herbert and his son).

Schiavo moved her way up the Allergan ladder, working mainly with manufacturing, quality assurance and engineering, but also putting in a year in sales.

"Like many people in the pharmaceutical ranks, I've moved up by assuming responsibility for the work of others, by going through the supervisory ranks," she said. "I firmly believe the best venue for development is a challenging work assignment-- that's where we all develop our best potential."

Prior to Allergan, Schiavo's career included stints at Warner-Lambert Co.'s Nuclear Medical Laboratories and Baxter International Inc.'s Travenol unit, as well as Rochelle Laboratories Inc., a generic drug maker in Long Beach.

With three decades at Allergan, Schiavo jokingly refers to herself as the class historian as she recounts how the company has changed.

"Probably the biggest change is really our strategic vision and what we're all about," Schiavo said. "When I arrived at the company, our largest part of the product line was really optical-we defined ourselves pretty much as an eye care company."

SmithKline, now part of GlaxoSmithKline PLC, owned Allergan in the 1980s and "really saw us as an eye care company," she said.

SmithKline spun off Allergan in 1989.

The best management teams are a mix of people with institutional memory and "brilliant new additions," including Pyott, she said.

"Now, we have really evolved from that into a specialty pharmaceutical company with premier standing," Schiavo said.