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AngioDynamics to Lay off Workers in Bid to Achieve "Operational Excellence"


Posted in Medical Device Business by Arundhati Parmar on December 6, 2013

Medtech operational excellence programs, whether small or large, seem to involve some people losing their jobs. 


These days the term "operational excellence program" can actually be construed as a pseudonym for layoffs.

AngioDynamics, the New York medtech company that provides minimally invasive therapies for vascular access, surgery, peripheral vascular disease and oncology, announced Thursday, that it has launched an "operational excellence" program that will bring savings of $15 million to $18 million over the next three years.

The plan includes consolidating plants in New York to "establish a single manufacturing center of excellence in Glens Falls and a distribution center of excellence in Queensbury." That will eliminate between 80 and 100 positions.

""Our operational excellence program is focused on creating an organization that is more efficient within the context of its current assets," said George Bourne, Senior Vice President and Chief Technology & Operations Officer, in a news release. "We believe bringing our New York manufacturing teams under one roof and centralizing our distribution center will result in the propagation of best practices and continuous improvement techniques, while also contributing to our overall efforts to reduce costs."

Another company that has been striving for "operational excellence" is Boston Scientific. The company announced in October that it would be eliminating 1,100 to 1,500 positions that would save the company pre-tax operating expenses of about $150 million to $200 million by the end of 2015. That restructuring program was intended in part to "strengthening its operational effectiveness" of the company. 

But it's not clear whether such moves in the end truly benefit the bottom line.

When Boston Scientific made the restructuring announcement, analyst Mike Weinstein commented that past restructurings didn't really help the company's profits and asked whether this new program would truly have an impact on Boston Scientific's bottom line.

To which the Massachusetts company's CFO contended that its restructuring programs roughly mirrors the rest of the industry's programs in terms of benefits and the amount of dollars. He also added that new acquisitions by Boston Scientific required heavy investments which prevented the savings from layoffs to being reflected on the bottom line.

It remains to be seen whether AngioDynamics' move to save through layoffs - much smaller in comparison to Boston Scientifics efforts for operational efficiency - will affect its bottom line.

 -- By Arundhati Parmar, Senior Editor, MD+DI
arundhati.parmar@ubm.com

 


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