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Consolidating Strategic Suppliers? Successful Tooling Transfer is Key

Global strategies in the medical device industry transform as company profiles change, new target markets open, and technology evolves. One leading trend particularly prevalent in today’s environment is the goal of consolidating a supply base—reducing what may be an oversized, unmanageable supply chain into a key group of strategic supplier partners.

Jared Sunday

Global strategies in the medical device industry transform as company profiles change, new target markets open, and technology evolves. One leading trend particularly prevalent in today's environment is the goal of consolidating a supply base--reducing what may be an oversized, unmanageable supply chain into a key group of strategic supplier partners.

However, how do you get to that point from where you are today? Raumedic has developed a quick-response streamlined approach for transferring injection mold tooling and ancillary manufacturing assets to a right-sized core group of strategic supplier partners. The goal is to transfer assets from one supplier to another while minimizing any potential risk or impact to production, thus making the process transparent to the end user. 

A look inside one of Raumedic's Class 7 Manufacturing cleanrooms.

Consolidating Suppliers Is Essential

Perhaps the only constant in today's industry is change. On a daily basis, large medical companies are being merged or purchased or are actively acquiring smaller companies with new technologies. As companies are purchased or merged, supply chains are inherited, resulting in a large, scattered, and non-strategic base. Consolidating could reduce costs and lower risk to supply chain management with delivery reliability, while improving overall quality, responsiveness, and customer service.

Changes could also be made as a result of dissatisfaction with a current supplier. Costs may have increased, communication could have become challenging, or quality standards could have slipped. Once-reliable suppliers may have gone through changes, plants may have closed or moved, core competencies now may be different, or their technology growth may have become stagnant. 

Economic and Technological Benefits

Immediate hard-cost reductions can be realized with a solid strategy. Grouping similar technologies at a single supplier will result in being able to leverage higher annual spending for lower, hourly manufacturing rates. Raw material costs for plastic resin and packaging materials will decrease with an increase in purchase quantities. Reduced shipping rates can be realized by grouping delivered products into larger container deliveries and by ordering products closer to the final point of delivery. Such soft cost impacts may take a bit longer to recognize, but they will happen.

A smaller group of key suppliers is easier to manage. Communications will improve by becoming more frequent and specific, and travel costs can be reduced. World-class suppliers will begin to understand and recognize your business and will be able to contribute leading technologies that improve your product and your market share. 

Take Initiative to Minimize Risks

Once the decision is made to transfer, what happens next? Sure, it can be as simple as shipping the tool from one supplier to another. However, that could lead to dissatisfaction and visible impact to end customers.

To minimize risk, be sure to do your homework upfront, develop a plan, and design a team that will pave the pathway for success. As soon as the decision is made to transfer, meet with the management team of the intended new supplier. This process can be divided into two parts: before the tool ships and after the tool arrives. Once the tool leaves its current location, the clock starts ticking! Work done before the tool ever leaves its current location is just as critical as any efforts made after. Any proactive effort to reduce the amount of actions once the tool moves is time well spent. 

Before Moving Tools: Adhere to a Clear Roadmap

Defining the project scope and a clear roadmap for success should be the primary goal of the project kickoff. The following approach developed by Raumedic helps to contribute to a successful, economic and time-saving transfer:

Define asset ownership. If given an opportunity, walk the current process, not only to identify any current tooling condition issues, but to identify all asset ownership and processes needed for manufacturing. This would include the injection mold, spare components, inspection fixtures and gages, end-of-arm tooling, manifold controllers, assembly fixtures, printing fixtures, welding fixtures, and any functional test fixtures. 

Availability of current product. When possible, send at least 3 to 10 complete shots from the current tool, in its current condition, to the intended new supplier. Use these parts to have a complete evaluation on the visual and dimensional aspects of the current product. This pre-work will highlight any potential pitfalls of a revalidation effort. It will prove metrology methods and enable the measurement Repeatability and Reproducibility studies to be completed ahead of time. 

Tool drawings. Gather information on the following: molding press size for capacity planning or equipment purchasing purposes; spare components; and ancillary equipment connections to support proper tool functions.

Validation strategy. A robust, yet aggressive validation strategy should satisfy all quality requirements while balancing confidence levels with timing to execute protocols. Whereas the supplier should write, control, and execute to the approved protocol, the customer's role would be to approve the overall process flow, review any potential deviations, and approve submitted packages. This minimizes resources required and places accountability at the site of manufacturing. Validation protocols should be approved ahead of time by stakeholding members of quality, engineering, procurement, and manufacturing. A change to the protocol after the tool transfer risks extending sampling or metrology timing, which may extend beyond safety stocks. Raumedic is often confronted with the comment: "We want the same parts we were getting before." If that is truly the requirement, then a reduced nominal process point capability study or a revalidation based on equivalency may be the preferred path forward. Rely on an experienced supplier to interpret quality aspects and recommend a strategy that will meet the requirements. 

Define the project team. Clearly define the matrix of roles and responsibilities within both organizations. Project managers, tooling engineers, manufacturing engineers, quality assurance, and metrology all play key roles in success. The driving champion will be the supplier's project manager.  This individual should have control of all necessary resources and can be given access to monitor existing production inventory levels so that priority decisions can be made on a real-time basis. The first order of business would be to create the outline of a project schedule. Then, based on weekly consumption, the schedule will show how many components are needed to cover the gap until the tooling is validated at the new supplier. Schedules will also begin creating and driving project-related action items. 

Administrative items. Many other smaller, but equally important, links in the chain should be identified and addressed prior to tool movement. These include placing purchase orders for all resin and colorants required; identifying rates of product use in manufacturing to select appropriate safety stock and inventory levels; creating bills of materials ahead of time; approving and auditing suppliers if necessary; creating supplier and customer codes for scheduling systems; validating new resin suppliers; and creating budget approvals for last-minute required travel, repairs, missing items, new fixtures, etc. Remember to do as much as you can up front to enable quick decision-making once the clock starts ticking. 

After Moving Tools: Supervise the project

Once the preparation work is complete and signed off by the project manager, it is time to move the tooling and manufacturing assets. As equipment arrives, it should be (1) documented with pictures, labeled, and cataloged; (2) spare components should be stored and protected; (3) initial condition checklists should be completed and reviewed with the team; and (4) key tooling areas should be checked dimensionally.

The project manager should initiate a series of project meetings that are held regularly. Daily internal meetings and weekly meetings between the supplier and the customer are crucial. The following topics should be covered: action items reviewed; schedules updated and confirmed; and priorities given consideration and communicated. The project manager will also create a monthly steering committee meeting--a formal presentation of project status to key project stakeholders and appropriate management individuals from both the supplier's and the customer's locations. In this meeting, scope changes are communicated and documented. This also offers opportunity to escalate any decisions, delays, or key risks to the overall project schedules and component shortages. This steering committee meeting is a chance to dictate what is needed for success and to get buy-in for that action.

The drive to consolidate suppliers may seem like a mountain of a challenge to overcome and that each step is fraught with risk. Do not be afraid to rely on the key strategic supplier base; they are able to successfully lead and manage this effort. By the end of the project, you will have gained a long-term partner that can help aide growth, market share, and profitability.

In closing, Raumedic offers some general guidelines for ensuring success:

 

DOs

·       Build a robust process-based transfer plan with key stage gates and clear steps.

·       Expedite an aggressive quality plan.

·       Agree upon a transfer checklist listing deliverables and assets.

·       Retain last shot samples per quality plan requirements.

·       Have a project budget and team pre-approved and in place.

·       Monitor status daily of safety stocks, inventories, and sampling execution.

·       Empower the project manager with the tools to be successful.

 

DON'Ts

·       Reinvent a quality standard.

·       Build large inventories to compensate for a poor transfer plan.

·       Forget to complete as much pre-work as possible.

·       Allow action items to continually be delayed or put off until the following days.

·       Limit project management visibility to stock levels and access to your internal project team.

·       Delay key decisions! Once the tools move, the clock is ticking. 

 

This process is possible and can be done with ease and minimal risk. Consult your key strategic suppliers and begin the planning process today.

Jared Sunday is technical sales manager with Raumedic. 

Raumedic will be exhibiting at Booth #1730 at the upcoming MD&M Minneapolis Expo November 8-9, 2017.

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