Originally Published MDDI May 2005
Across all industries, customer demand–based manufacturing (CDBM) and lean manufacturing are in vogue right now. Many firms that employ them have demonstrated improved productivity, efficiency, customer response, and inventory management. However, there is much uncertainty as to whether they can work in a heavily regulated sector such as medical devices. Encouragingly, one partnership is proving that they can.
In early 2003, Ethicon Inc. (Somerville, NJ), a Johnson & Johnson company, introduced a set of ambitious response-time and productivity goals for its vendors. One of its suppliers of electronics and software systems, HEI Inc. (Minneapolis), used that as incentive for its efforts, begun a few months before, to implement lean manufacturing and establish a CDBM-based training program.
The efforts paid off. At the end of 2004, HEI became the first supplier to meet Ethicon's goals in four consecutive quarters. For that, it received Ethicon's first Supplier Excellence Award.
“Clearly, there were extra challenges to do this for the medical device industry,” says Simon Hawksworth, HEI's vice president of sales and marketing. “The level of documentation required to ensure regulatory compliance complicates the manufacturing process. Combining that with a transition to a lean manufacturing process takes a bit more time than in other industries. You also have to make sure that there will be no issues with any of the many audits you have to have. The only way to do that is to put demands on your people to track the process to a point that exceeds requirements. You reduce your risk that way.”
Although HEI has not had any problems arise from audits, should those ever occur, it has plans in place to implement changes as quickly as possible, he says. To bring about the changes, HEI recruited personnel from JCIT International (Englewood, CO) for training. “We don't see the kind of volumes in medical devices that we see in other industries, so we needed to cross-train our people to go from product to product to improve productivity,” Hawksworth says. “We had to go from ‘push manufacturing' to ‘pull manufacturing.' We also had to make cultural changes, such as adopting a ‘no excuses' attitude.” Since implementing the new system, HEI says, the firm has improved productivity by 23%, inventory management by 58%, and customer response time by 57%. It has also made significantly better use of floor space, Hawksworth says.
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