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Haste Makes Waste: Lean Manufacturing Is growing
Lean manufacturing helps orthopedic manufacturers achieve better quality and be more cost efficient
Jennifer Whitney
Americans often are a peculiar bunch. Either we’re super-sizing our lifestyles—whether with a “biggie” fast food drink or driving a Hummer—or we’re obsessed by the latest diet craze or budget saver.
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Enter Lean manufacturing. Created by Toyota years ago, “Lean” describes a philosophy that incorporates a collection of tools and techniques into business processes to optimize time, human resources, assets and productivity, while improving the quality level of products and customer service.
At first glance, orthopedic manufacturing, which differs from other medical device markets because it is more of a high-mix, low-volume manufacturing environment (rather than mass produced), may not necessarily seem like the ideal candidate for some of the principles of Lean working. However, the industry increasingly has embraced Lean as
the solution to reducing lead/cycle times and inventory while improving customer service and profits.
For example, Vista, CA-based DJO Incorporated (formerly dj Orthopedics), a global specialist in rehabilitation and regeneration products, has received various accolades for achievements with Lean since implementing its program in 2000. According to the Society of Manufacturing Engineers, DJO Inc. improved its safety incident rate by 53%, customer complains fell by 94% and order-to-shipment lead time was reduced by 66% between 2000 and 2005. Furthermore, product development lead time was reduced by more than 50% as the number of products launched each year doubled. Overall, cost reduction projects, kaizen blitzes and vertical integration saved the company more than $16 million in that five-year period.
Like DJO Inc., many OEMs and their suppliers also have reaped the benefits of Lean working. “Any company doing manufacturing, regardless of industry, now has no choice but to adopt lean practices in a global economy where you need to reduce lead times, improve utilization of assets, etc.,” said Roy Smith, vice president of manufacturing for Smith & Nephew in Memphis, TN.
“In environments with smaller volumes, it’s even more important to ensure you have lean practices.”
A Lean Movement?
It’s unclear how many orthopedic companies are using Lean today—and whether their approach is a full-scale adoption or simply piecemeal techniques. Many people who spoke with Orthopedic Design & Technology said they believe Lean is a buzzword that has been overused by companies that aren’t necessarily faithful adopters of the true methodology.
However, various industry professionals on the frontline of manufacturing have found that the industry has grown increasingly conscious of waste and subsequently adopted some techniques—if not an entire methodology—to make itself competitive and sustainable.
“Growth in orthopedic industry over past several years has increased volumes enough to lend itself more to use of Lean. The driving forces are the competition, pricing and traditional elements that are present in a business atmosphere,” said Sam Stutzman, vice president of manufacturing for Biomet in Warsaw, IN. “Credible evidence suggests use of Lean must be used and intensified, but there’s so many different interpretations of what Lean is. I got involved in this industry over 20 years ago, and there’s always been a movement to Lean. To me, Lean means an accumulation of those very techniques and how we define them today.”
Mike Curtis, senior vice president, case division, for Symmetry Medical’s Manchester, NH-based PolyVac facility, a provider of metal, plastic and hybrid cases, has found that while various orthopedic companies may have their own names for or definitions of Lean, all the concepts and processes tend to fall under the same umbrella. “The bottom line is, today the accepted vernacular is ‘Lean,’” Curtis explained. “The idea is that if you look at one metric Lean drives, you can have reduced cycle time or another desired effect. The thought is, if you reduce this, you will impact quality…and you’ll impact cost.”
Quality and cost certainly are two of the top concerns facing orthopedic manufacturers, their suppliers and customers on a daily basis. Along these lines, everything from parts production, ordering, high inventory levels and other factors become targets for improvement when using Lean processes, according to Marek Piatkowski, a Lean management consultant at F.S.P. Consulting in Toronto, Canada. When implementing any Lean program, he said a company first must determine its business needs and then evaluate where improvements can be made.
Take customer service, for example. Piatkowski often is hired to examine shipping processes to look for any problems with deliveries or schedules and evaluate cost efficiency. While keeping the right amount of product in stock is a core philosophy of Lean methodology, Piatkowski has found that his clients often have too much of what they can’t sell (ie, waste) and not enough of the essential stock (ie, what the customer needs). One approach to this problem, he said, is to create a finished-goods “supermarket” for clients. “It’s called a supermarket because it’s based on a simple grocery store model,” he explained. “You want to have whatever is needed available—that is, try to carry as much finished goods product, so when customers call in an order, they can have it quickly.”
At the same time, you don’t want to flood your supermarket with anything that’s wasteful. This is why companies should only have small quantities of each item in stock, so the right parts have space available for storage at all times.
Similar to the finished-goods model, Piatkowski also creates another “supermarket” for storage of raw materials and components. “We live in a very impatient world, and people don’t want to wait very long,” he said. “To respond to customers, a company needs to have parts available quickly. In our kitchens at home we have learned what to keep in stock in our refrigerators in order to meet the needs of our family, without going last-minute shopping (producing or purchasing items) and creating last-minute changes to our schedule. We should learn how to transfer this methodology onto our manufacturing shop floor. By keeping in the finished goods supermarket what the customer needs, we can reduce long lead times and improve customer satisfaction. Lean methodologies allow you to develop this model.”
Before a company can worry about inventory, though, the product has to be manufactured. As such, many top orthopedic OEMs have been using Lean techniques to streamline operations and subsequently improve cost, lead time and productivity. For example, Biomet has used demand-flow concepts, which resulted in the restructuring of the manufacturing floor into individual cells. In each cell, a product can be machined, polished and maybe even deburred, so multiple processes can be completed in one place and not have to waste valuable time in circulation.
In conjunction with this setup, Biomet also has become more time- and cost-efficient by improving its equipment and expanding each machine’s capabilities. For example, an Okuma lathe that used to be just a turning center now doubles as a turning and milling center.
“We have fostered a culture of change here,” Stutzman remarked. “What we’re doing here today might not be what is tomorrow. It’s not uncommon to pick up machines and move them. If we want to augment a cell, we can do it at the drop of a hat. And if we need to construct a cell, we can get started today.”
Lean application isn’t just limited to what’s happening on the manufacturing floor, either. Darren Dolcemascolo, senior partner with Carlsbad, CA-based EMS Consulting Group, which specializes in Lean training and implementation, said many of his clients approach him to determine why their product-development stage takes so long. He has found that one of the most common reasons is the failure to involve manufacturing personnel early in the process—since new designs often turn out to be non-manufacturable, they often have to receive multiple reiterations be-fore they’re ready for production. Removing such bottlenecks, he explained, will help the design be ready faster and, ideally, get the product out before the competition.
Clearly, Lean methodology can make a huge difference in any number of business processes, with quantifiable results. Ron Green, director, operations excellence at the Mahwah, NJ facility for Stryker Orthopaedics, noted, “Where we have deployed Lean, we have reaped a 20% reduction in inventory, up to 58% reduction in lead time, a 10% gain in productivity and a 10% improvement in first-pass yield.” Getting to the payoff wasn’t easy, he added, but the company used a roadmap to look at areas targeted for improvement and held fast to its commitment to the program.
Driving Change With Lean
Whether one’s approach to lean is piecemeal or a full-on strategy derived from adoption of numerous Lean techniques, the overall philosophy in adopting any approach must be one of fostering change. After all, experts say, Lean is a cultural change—a total shift in the way workers think and operate.
That’s usually what most companies tend to find the most difficult.
Lean can be notoriously difficult to implement, as it requires a tremendous amount of patience and constant monitoring, not to mention dedication from everyone in an organization. Piatkowski compares the adoption of Lean techniques to going on a crash diet; you get fully onboard at first, but over time fluctuations in activity start creeping up…maybe an isolated setback here or there. The reason many companies fail, he said, is that people stop paying attention to all the little reversions back to the way things were previously done and eventually the entire lean strategy falls apart.
In fact, many experts noted the word “sustainability” as the key to success.
Joe Burke, operations director at Stryker’s Cork, Ireland-based facility, noted that anyone spearheading a Lean initiative must communicate openly with employees at all levels of the organization from the onset. “If your approach is not made clear, you’ll encounter a stumbling block,” he explained. “We’re in a growth industry and easily able to pick up slack we create with additional business, but it’s important to know that you have to be on a certain track to be successful.”
Securing commitment from top management to see the effort through is the first necessity. This will help balance the inevitable resistance to change that is bound to crop up from workers, Lean experts said. Furthermore, dictating change, rather than involving people in the evolving process, can be a major mistake and only serve to reinforce the resistance.
“The message surrounding Lean initiatives has to be non-threatening,” said Smith, whose company, Smith & Nephew, has been dabbling in Lean since the 1980s and fully implemented it system-wide in 2003. “You have to explain that competition is getting intense in the global arena but also explain the personal benefit to employees [not just the company]. For instance, if a worker doesn’t have to spend time looking for a tool to run a machine, his or her task can be completed sooner. Not only does the operation run smoother, the employee may not need to work overtime or be stressed about all the different tasks needed to be performed for one product.”
Many employees hear the word “lean” and wonder if their participation in these measures could eventually leave them out of a job—ie, if they improve a process, suddenly they could find themselves less valuable to the organization. “If you implement ideas that eliminate jobs, people will take notice. You have to say, any improvement we make will not result in job layoffs,” Dolcemascolo advised.
When looking out for the “little guys,” don’t forget their bosses, either. Experienced Lean users have found that managers leading an effort tend to think more about their immediate satisfaction rather focus on the big picture. Since many workers tend to be most motivated by a big bonus at the end of the year, the idea of waiting a few years to see the full impact of Lean changes can cause managers to lose steam while waiting for that long-term payout.
The way to counteract this potential challenge may be to set up an incentive structure that rewards people sooner, rather than later, for their efforts along the way. Toyota, the founder of Lean methodology, has found that incentives are a huge motivator for ensuring Lean efforts stay focused. The company offers a lot of cash incentives (even smaller, token gestures) for Lean demonstration to show workers that their contributions are valued.
Curtis has found that even the most practical and dedicated managers often overlook a certain reality when measuring results: Every time you implement change, your performance is going to go down before it goes up. “There’s a lot of training and a learning curve,” he explained. “People look at that as a reason to revert back. One of the biggest stumbling blocks is changing the mindset of folks working on the manufacturing floor. Most people want to revert to their comfort zone.”
For example, PolyVac had switched its scheduling from a spreadsheet to an electronic-based platform. People initially preferred to go back to the spreadsheet, until they got through the learning-curve hump and realized that the new process was easier. “Once people start seeing that some of the changes are effective, and are easing their job or making sense, you get the snowballing effect,” Curtis explained.
Thinking About Adopting Lean?
While the benefits of Lean manufacturing are undeniable, many companies may find it difficult to figure out the best approach for identifying waste.
A vast number of books are available on Lean, as are Web sites, industry workshops and other resources. Outside expertise may be another approach to reaping benefits within. Following are some practical some tips from Smith:
• Start with a vision of what you want to accomplish.
• Establish metrics you’ll use to measure progress toward that vision.
• Have an overall understanding of the organization and its commitment.
• Continuously evaluate and facilitate the organization’s appetite for change, because a lot will be required.
• Overcome organizational resistance to certain things always being done one specific way.
• Keep enthusiasm up through the active engagement of all employees, and provide some incentives for them to be dedicated to removing excess.
• Zero in on activities that add value that customers are willing to pay for—and stop doing things that aren’t adding value.
When starting out with a Lean initiative, one of the biggest mistakes a company can make, Dolcemascolo believes, is to try to copy what another company did. “If you’re making a product that’s totally different from that company and look at the other company’s [Lean] tools, it doesn’t necessarily work,” he explained. The fallout is that the firm could end up thinking that Lean tools aren’t really beneficial after all and abandon the cultural shift in the workplace.
“It takes a lot of trial and error, but you have to keep focused on the goal and plan. It will work, but it’s not an overnight thing. Most American managers have a short-term perspective, but a long-term perspective is important,” he added.
Symmetry, having been pleased with the results of its Lean implementation at the PolyVac facility (among others), has been evaluating even more processes and procedures to see where additional improvements can be made using Lean tools. According to Frank Milne, director of operations at PolyVac, his company is currently focused on improving front-end efforts such as engineering design and prototyping. Noting that customers now regularly seek delivery within a week and quotes within a day, the company is looking into methods for continually meeting the demand.
Stutzman agreed that companies can’t afford to maintain a business-as-usual attitude. “Generally, the caution would be not to rest on your laurels,” he said. “You need to keep pushing the productivity curve forward. You don’t want to be linear. You have to move forward. If you improve your lead times by half, that’s great, but you have to do more. We are in a race and you can’t stand still.”
