Measuring Up Lean: The Journey Towards Operational Excellence
Lean manufacturing is commonly associated with automotive manufacturers but medical device makers are rapidly discovering the advantages of using it in their marketplace. This article discusses the benefits that can be realized with the implementation of lean systems in a highly regulated manufacturing environment.
In the one piece flow cell, an operator assembles, tests, and packages in a batch size of one.
At a Glance
“It’s a challenging industry. One defective product gets to a customer, the results could be life ending. Quality is the number one concern. Without a quality reputation, there won’t be a business. And you want us to focus our efforts on lean?”
Create an appropriate response to this question. A speech about how lean and quality go hand in hand might be one answer. Building in quality and not inspecting it in or how flow cannot be achieved without quality are other possible replies. While these are all good answers that are actually factual statements, they aren’t the only options. An excellent alternative would be, “No, I would like you to focus your efforts on achieving operational excellence.”
It’s time to think differently about lean in the medical device manufacturing industry. Lean books and teachings are not doing it. Learning about Toyota’s success with lean doesn’t excite this industry, and for good reasonthey are not car companies. With the best intentions, some medical device manufacturers have applied lean in the form of kaizen (continuous improvement) and value stream mapping. Yet the bottom line has not changed as the company has not aligned itself around the lean way of thinking; they have only adopted lean tools. This has happened in the medical device industry for many reasons but it can be explained in one statement: Most medical device companies have difficulty seeing where lean principles will lead them in their challenging environment. The counterpoint to that is: Applying lean principles will lead them to operational excellence.
Defining Operational ExcellenceIt’s called the ‘elevator speech.’ Try to explain to someone what operational excellence is during a short ride on an elevator, approximately 20 seconds, keeping in mind that it has to be simple and concise. “Operational excellence is when each employee can see the flow of value to the customer, and fix that flow when it breaks down.” It’s that simple.
Each operator knows the door to door value stream flow and how far their process is to the customer.
Think of it as orders flowing (from order entry through manufacturing to delivery) through a pipe. Someplace (in the office or on the manufacturing floor) the pipe gets clogged and the flow stops. The operators would know what to do to unclog the pipe and allow flow to resume without any management involvement. Employees create and maintain a lean flow, while management focuses on growing the business.
Seeing the Flow of ValueWhat if anyone could walk to any area on a production floor and visually depict exactly how many processes each station is away from the customer? From any process, they would know how long it takes to get to shipping from that point. If it is simple enough so a visitor could see the flow, then each operator can see exactly where they stand and how their operation flows in the value stream.
From a larger viewpoint, there are different levels of flow that must be considered:
- Process Level - One Piece Flow
- Connection Level – FIFO
- Supermarket Connection
- Value Stream Level
When work backs up, operators know to start manually cleaning, without seeing their supervisor.
- Building future states is not done by team brainstorming or kaizen.
- Successful VSM classes align a company in thinking.
- Takt Time - The rate of customer demand
- Finished Goods Strategy - Build to customer demand or to finished goods
- Continuous Flow - Where can one-piece flow be implemented?
- First In First Out (FIFO) – Where can FIFO be implemented?
- Supermarket - Pull systems used where continuous flow and FIFO can’t be used
- Pacemaker - The single point in the value stream that is scheduled
- Interval - The time it takes to cycle through the parts in each product family
- Pitch - Management time frame: How often do we know things are going right or wrong?
Fixing FlowIt is inevitable that value stream flow will fail; therefore, what matters is how the problem is addressed when it does happen. Standard work is the solution that drives operational excellence. So the question then becomes, “What is the standard work when flow breaks down?” In the lean environment, the answer cannot be to call the supervisor.
A value stream map shows the material and information flows required to bring product to the customer. (Click here  to enlarge)
Case in PointIn June 2005, Sapphire Engineering, part of IDEX Corporation, was a typical medical device company that built in batches for lot control and efficiency. Management was by department and each manager scheduled in batches of 500. If any mistakes were made, they would have to rework 500 pieces. This isn’t an easy task when dealing with tolerances as tight as 40 millionths of an inch in a clean room environment. “It was a lot more difficult than we thought it would be,” states Joe DiSabato, vice president of operations. “We were doing isolated improvement events for years and achieved minimal bottom line results. We had to break down some paradigms. The first step was to assign a value stream manager.”
A value stream (VS) manager is the person responsible for implementing the future state value stream from raw material to shipping. Attributes of a good VS manager include:
- Making sure everyone clearly understands the customers’ needs
- Making sure everyone clearly understands the value stream flow
- Focuses on people taking responsibility for the flow
- Knows there will be problems and teaches flow and process solutions
- Never “tells” people what to do, uses education and influence so they see what to do
- Facilitates learning by teaching and learning by doing
- Walks the value stream and asks the five whys to encourage root cause problem solving
- Has a “follow me” approach
|The Case Company|
What separates Sapphire Engineering from other companies on their lean journey is how they’ve embraced operational excellence. Once their lean flow was created in a value stream, they went beyond it by developing ways to teach the operators how to see flow and how to fix it when it breaks down. In addition, they have accomplished this with simple visual systems that allow everyone to see the flow, even if they are just a visitor.
O’Brien explained, “Each Wednesday, we do a value stream walk. People from all areas sign up for these walks. Our goals are to have the flow so visual that it can be a self guided tour, even for visitors. Once we could get people to see the lean flow, we could also get them to see when or where the flow broke down.”
“As a result of this we noticed something very interesting. Department boundaries began to informally disappear. Machinists now talk to assemblers about the flow. Our people know how far the part they are working on right now is from the customer, and they work to maintain and improve that flow.”
Sapphire’s journey to operational excellence also took them outside their four walls. “With the implementation of the fourth value stream, we began to uncover problems that weren’t able to be controlled in our facilities,” explained DiSabato. “We knew now it was time to look to our suppliers to help increase our on time delivery.”
DiSabato also commented on the overall results of their efforts. “We knew we would see good results from applying lean principles, but never expected to see results of this caliber.” He explained that Sapphire not only enhanced financial performance through current clients, but also believes they will secure new customers and bring old customers back to increase overall market share.
When asked what was next on their journey, DiSabato and O’Brien both agreed on the next step. “We need to put more flow into our business processes. The same principles will apply there as well.”
A walk through Sapphire is certainly impressive. One can see a high tech product produced in a lean flow. A talk with their operators is even more impressive, as they not only know the flow, but they can explain it and teach it. Furthermore, they know what to do when that flow breaks down. Sapphire is a company in the medical device manufacturing industry that certainly understands and applies operational excellence. The results have not only showed on the bottom line and in increased market share, but also on the customer service attitude of the employees who show up for work every day.
Author RecommendationFor additional reading material, the author suggests Learning to See, by Mike Rother and John Shook, and Creating Mixed Model Value Streams by Kevin Duggan.
OnlineFor additional information on the technologies and products discussed in this article, visit the following websites:www.sapphireengineering.com www.dugganinc.com 
Kevin Duggan is an expert on implementing lean concepts in regulated environments and a faculty member for the Lean Enterprise Institute, a non-profit organization founded in 1997 to advance the principles of lean thinking. Duggan has worked with manufacturers in many industries including makers of medical instruments, orthopedic devices, and cardiovascular devices. In 1998, he formed Duggan & Associates and began teaching and implementing lean. In 1999, he began working with the Lean Enterprise Institute running seminars on advanced lean concepts for various industries all over North America. Duggan mentors many senior executives of major companies on their lean journey towards operational excellence. Duggan can be reached at 401-826-2007 or firstname.lastname@example.org .