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Implementation Of Shop Floor Productivity and Capacity Improvement Initiatives At Orthopedic Implant Manufacturer: Building infrastructure, collaboration, and scalability to a previously family-owned business THE CHALLENGE: The client, one of the largest providers of outsourced medical device manufacturing services in the U.S., had established an 11-plant North American manufacturing network through a series of acquisitions. Their orthopedic business was supported by a recently purchased facility based in Pennsylvania, which had a strong reputation for quality and responsiveness. While lingering post-acquisition integration issues typically associated with roll-ups remained, the critical issue for the facility had become capacity constraints and their negative impact upon customer service. The facility was in crisis with poor shop floor morale driven by significant overtime hours and even more critical, key customers were on the verge of pulling their business. THE PARTNERSHIP: Analysis: Our diagnostic revealed that despite the plant management’s efforts to meet significant market growth through extensive over-time, critical infrastructure and process modifications would free up an additional 25+% in capacity without substantial investment in equipment. Strategy: VertiSync developed a comprehensive shop floor improvement program which focused on three key areas: planning/scheduling, shop floor organization, and quality. Since speed was of the essence, the 10-week program was conducted in 2 phases. It began with a 6-week planning and implementation phase directed at jointly validating the sizeable opportunity, developing a detailed roadmap, and implementing against the highest impact areas. The client team then implemented against a detailed workplan for the following 7 weeks with VertiSync input during weekly tracking meetings. The second 4-week phase entailed establishing systematic and codified processes and automated shopfloor performance tracking systems and key performance indicators to ensure the sustainability of the improved performance. Execution: Given the magnitude of the effort, our joint, cross-functional team included key members of the shop floor organization and plant management. Together the team worked to identify and prioritize drivers of additional capacity. Elements of the program included: restructuring the shop floor organization, providing improved supervision and support in key bottlenecked production centers, creating a highly effective recruiting and training process, developing and establishing a disciplined, capacity-based planning and scheduling system, improving production yields through multiple quality feedback mechanisms between the production floor and quality organizations, and developing shop floor production performance tracking and key performance indicators and reporting. THE RESULTS: The project produced a 25+% improvement in plant capacity with no additional capital investment. Key metrics showed significant improvement: on-time delivery improving from 50% to 80+%, first pass yields increasing by 20%, lead-times reduced from 18 weeks to 12 (and dropping). Bottlenecked shopfloor workcenters were reorganized increasing machine utilization and an automated performance reporting and feedback infrastructure was created and put in place. The horizon for new machinists to achieve independent operator status was reduced from 6+ months to less than 6 weeks. Financially, the facility was able to surpass its latest quarterly EBIT forecast by 20%, including covering our consulting fees within the quarter. The following quarter has the potential to surpass budgeted revenue and EBIT by 25+%. |
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