rapid response supply chains at cordis

Lean Thinking At J&J Cordis (& How It Can Apply to You)

Vic ChanceVice President, World Wide OperationsCordis, a Johnson & Johnson Company

Medical Devices & Diagnostics Group

7/5/2007 2Medical Devices & Diagnostics Group

What is Lean Thinking?

- An integrated approach to utilizing capital, materials and labor to produce just what is needed only at the time it is needed.

- Eliminates inefficiencies and the underutilization of people to create a flow of value adding activities.


The New Economics

Why is Lean Thinking Important?

Because of the New Economics:From: Price = Cost + ProfitTo: Profit = Price – Cost

Prices are fixed or falling. Payers have choices, unprecedented access to information and demand excellence at a low price.

In this environment the only way to improve Profit is to Reduce Cost


Cordis Lean Journey

• Journey started by adopting the principles of the Toyota Production System in conjunction with a pre-existing 6 Sigma implementation.

• Vision: Provide the highest quality at the lowest cost in the shortest time through the elimination of Waste.

• Focused on Working “Inside Out”, that is Fix Yourself First!

A never ending process, but significant results were achieved in 6 months


The Wins – Cordis de Mexico

2003 2006 % IncreaseVolume (units) 6MM 15MM 150%

W/O Lean W/ Lean % Imp.

Floor Space (Sq, Ft) 185K * 112K 39%Inventory $48MM $19MM 60%Labor 2680 1450 46%Yield 85% 92% 7%Total Productivity (2003-06) - $73.4MM

• Recognition– Industry Week, “2006 Plant of the Year” Award – Shingo Prize

.


Leveraging Lean Skills

Once You Have Acquired a Base of Lean Skills, there are ample opportunities to use them throughout your organization, For Example…

• New Facilities Design• Transactional (non production)• New Product / New Process Design


Cashel Plant Design

Objectives•Develop a facility layout based on the flow of Product, People, Material, and Tooling

• Link the entire value stream into a synchronized production plan

• Design equipment to incorporate Lean principles

• Design a flexible factory to accommodate future products

• Optimize design with computer simulation models

Current Process Cashel % ImprovementDistance 5500 ft 500 ft 91%Cycle Time 51 days 52 hours 96%Labor / Device 65 minutes 7 minutes 89%


Lean in a Transactional Setting

Computer Systems Validation ProjectLean Tools Utilized:• Value Stream Mapping• Product – Process Flow Analysis• Group Technology Matrix• Standardized Work

3% value added processing timeResults• Consolidated Process Steps• Streamlined System Classification Process• Streamlined Document Review & Approval• Simplified / Combined Deliverables• Improved Report Generation & Approval Process

$4.7M Annual Save - 6 Weeks Cycle Time Reduction


A Personal Story


Emergency Room X-Ray

DispatchDesk (?)

Examination Rooms

X RayX Ray Mach

Desk

Supplies

Nurses

DoctorsDoctors

Me

X4

Intake InitialExam

Move toX RayI

X Ray Treat Release

I I

I I

DispatchDesk

Physical Movement

Information Flow


How Many of the 7 Wastes Are In This Story?

• Overproduction – People / activities were processed with no acknowledgement of when needed

• Waiting – And How!!• Transportation – Lots of movement into and out of

“inventory”• Over / Incorrect Processing – Evidence of unneeded

tests / examinations• Excess Inventory – And How!!• Unnecessary Movement – A hallmark of this process• Defects & Rework – Plenty


Lean Tools


Lean Tools

The Lean Toolset is Rich & Long…The Ones I Think are most applicable in any situation:

• Continuous Process Flow• Standardized Work• Visual Control• Material Presentation• Rapid Set Up• Mistake Proofing• Rapid Response Teams


Continuous Process Flow

The Linking of Processes & People together so that there is a Flow of Value Adding Activitiesthat transform the target of production

• The objective of creating flow in a process is to eliminate the time any work sits idle

• Sustaining continuous process flow will highlight any problem that inhibits the flow and will forcecorrection of the problem(s)


MaterialArea

KittingArea

MoldingMachineII Molding

Assembly

Finished GoodsHolding Area

Assembly 1

Ass

embl

y 2

Ass

embl

y 3

II

II

II

IIII

II

Headcount27 per line per shift

Space12000 sq ft

Pieces per Hour180

3 SubAssemblies3 Lines

Production Line Base Condition

WIP 231 hrs

Headcount 279

Output/hr 180

Productivity 4 pcs/hr/op

Yields 57%


Production Line Lean Condition

Molding& Assembly

Flowing

StagingArea,

Finished Goods

Line

side

War

ehou

se3 Assemblies

Into1 Integrated Line

Headcount27 per line

per shift

Space9700 sq ft

Before After Improvements

Thru-put Time 162,000 2,115 99%

WIP (Hrs) 231 1 99.5%

Headcount 279 161 42%

Output/hr 180 211 17%

Productivity (pcs/hr/op) 4 8 100%

Yield 57% 90% 33%

Space Utilization 12,103 Ft^2 9,709 Ft^2 20%

Storage 94.47% 43.51% 54%

Value Added 2.58% 37.18% 960%

< =Reduction

< = Increase

< = Increase

< =Reduction

< = Increase

< =Reduction

< =Reduction

< = Increase

< =Reduction


Standardized Work

Job Standardization: the Keystone of Effective Lean Production• Standard Work Defines the One Best Way of Producing

the Product with the Least Waste and Highest Source Quality

• Standardizing today’s best way sets a foundation for Continuous Improvement (tomorrow’s best way)

• If you can’t predict the timing and output of your process (every cycle is different), you have no baseline for improvement

• You need repeatable work tasks, reliable equipment and minimal quality issues


Standard Work Development

Standard Work Job Guidance Sheet

Job Standardization:The baseline for continuous improvement


Standardized Work Can be Applied to All Activities

Agenda Frequency (per month)

Allotted time

Quality Issues - Documentation errors E DR- - Acceptance Rates - Parts Issues- Troubleshooting

2 5-10 min

Delivery to customers LFR/Perf to Schedule - Obstacles

2 5-10 min

Productivity Review 1 10 minHR Communications 5 min

Mandatory Trainings - Safety/Ergo - SOP's

A/R A/R

News - Guest - General

2 5 min

Lean/PE 2 5-10 min

MRR’s

- Safety/ Ergonomics

Work Cell MeetingsDaily WalkthroughsWeek # _________, Week of _________

Supervisor Walk-through ChecklistBeginning of Shift Mon Tues Wed Thurs Fri Key Notes, Issues

Staffing levels

Part status - bins, critical issues

WIP levels for modules & machines

Enter required Production Control Board data

Rapid Response Team notes/walk through

Time SheetsMid-ShiftReview daily walk-pattern tracking sheets


Enter required Production Control Board data11am: 15 Min Team Huddle: production status, MRR, staffing issues/assignments, critical issues, hot news.End of Shift5S review and corrective action as requiredCollect/review daily walk-pattern tracking sheets

Enter required Production Control Board data


Daily status report (or @ end of shift)

Daily Status Summary (email)


Visual Control

Ability to Completely status the process through VisualExamination of the Work Area

Visual information on the status of the line, real time available for operators and supervisor


Material Presentation

Operator Work Station• All Items readily at hand• Ergonomically designed• No searching time

Line Side WareHouse• Standard storage bins• Flow racks, 2 bin system• Water Spider Replenishment• 2 Hours on Line, 2 days Stores


Rapid Set Up

Before After

Pre Heated Die’s

Seal Tool

Base: Sealing Die’s are stored at room temperature, distant from the seal operation; requires pre-heat to use

Lean: Die’s are pre-heated and co-located at sealing operation, ready for use

Total Reduction in Set Up Time from Last Part of Previous Run to First Part of Next Run: 88%


Mistake Proofing

• Mistake Proofing Devices Eliminate Opportunities for Human Error – People Will Make Mistakes!!

• Objective is to Prevent Defects from Occurring

“Muffs” Cover Knob - Operator CannotAdjust Magnification.

Magnification Adjustment Knob Exposed, Defects Result from Operator Using Wrong Magnification Setting.

Base Condition Lean Condition


Rapid Response Teams

• Formally designated cross functional teams designated toaddress a flow stoppage

• Team must be capable of reaching the process withinminutes (seconds are better)

• Co-Location adjacent to the process is important• Visual Control and employee empowerment are

critical to success


Revisit: Personal Story With Lean Thinking


Emergency Room X-Ray

DispatchDesk (?)

Examination Rooms

X RayX Ray Mach

Desk

Supplies

Intake InitialExam

Move toX RayI

X Ray Treat Release

I I

I I

DispatchDesk

Doctors

Nurses

Doctors

Me

X4


Emergency Room X-Ray –Redesigned With Lean

Examination Rooms

X Ray

X R

ay M

a ch

DeskSupplies

Me

Dr’s / NursesReact to Patient Visual Control- “Pulls” Treatment to Patient

“Patient Mover”

X Ray Andon

DownIdle

Running

Avg CT / PatientPatient CO TimeDown Time Tracking

Paperwork

Visual ControlPatient Status Light

Paperwork Kept atPoint of Use –“Patient Mover” movesWith Patient

Waiting TreatmentWaiting MoveTreating

Patient Status Bd


Lean Leadership


The Basics for Success

You Have To:• Gain an understanding of the primary concepts• Develop an effective strategy to implement • Have a method to apply the lean tools• Deploy effective measures

Do Not Attempt to implement a tool before you understand how it’s used, when and whyDo Not use “point Kaizens” in the absence of an overall game plan


Innovation – Execution Model

Allows For

InnovationExecutionIntegration

Strategy ResourcesTrainingEmpowerment

Enables


Our Keys to Success

• Leadership Ownership, Involvement and Accountability –Top Management to Shop Floor

• A Long Term Vision & Stretch Goals that Had to be Met• Employee Involvement• Proven process for Implementation• Quality Outside Help (Used When Needed but Never

Allowed to do the Work for us)• Relentless Search for Best Practices – Internal and

External• Investment in Developing our own Lean Subject Matter

Experts

Final Thought:I invite you to joinme on a Quest…

Muda Stamp OutMUDA WhereverYou Find It!!

rapid response supply chains at cordis

Education

lean principles

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lean thinking important

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flow of value

new economics

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