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Implementation Of Shop Floor Productivity and Capacity Improvement Initiatives At Medical Device Manufacturer: Moving From A Job Shop Environment To Disciplined, Flow-Oriented Facility THE CHALLENGE: The client, a rapidly growing manufacturer of precision components for the medical device industry, had established an 11-plant North American manufacturing network through a series of acquisitions. The largest of these facilities was based in Minnesota, and was the acknowledged crown jewel of the network in terms of both capabilities and profitability. 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, key customers were on the verge of pulling their business, and the prevailing mindset within the company was that capacity could only be unlocked through investment in additional machinery, which meant a multi-million dollar capital investment. THE PARTNERSHIP: Analysis: Our diagnostic revealed that despite the plant’s growth (the facility had nearly doubled in size from $25 to $50M within a 4-year time period), a job-shop mindset continued to govern plant management despite an evolving production profile with many flow characteristics. Team analysis revealed that the shop floor was actually capable of an additional 25+% in capacity, and that this improvement would not require investment in new machines. Strategy: VertiSync developed a comprehensive shop floor improvement program which built upon the principle of operations segmentation. The 28-week program was conducted in 3 phases. It began with a 2-week planning phase directed at jointly developing an implementation roadmap and modeling/determining the associated economics. This was followed by an 8-week phase in which the joint team launched a selective set of productivity improvement pilot programs within key shop floor areas. The final 18-week phase entailed comprehensive rollout to the remaining key areas and transitioning program ownership from VertiSync to client personnel. Execution: Our joint, cross-functional team included key members of the management team and the shop floor organization. Together the team worked to design the pilot efforts (e.g., segmenting production by part characteristic, standardizing processes and part set-ups, and modifying scheduling approach), building credibility/buy-in from the shop floor and aligning shop floor activities with key customer service metrics. The team also rapidly developed and implemented recruitment, hiring, and training programs to attract and train precision machinists. In addition, the team conducted extensive systems mining efforts in order to turn extensive plant data into reliable, leverageable information by which the plant could be managed. THE RESULTS: The program produced a 25+% improvement in plant capacity with no additional capital investment. In addition, key production processes were standardized in critical shop floor areas. Customer service improved along several critical dimensions, with lead times improving from 16 weeks with 50% on-time delivery to 3-4 weeks with nearly 100% on-time. The entire shop floor was reorganized 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 now has the capability to contribute 50% more EBIT dollars to the parent company. |
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