Lean Principles

DJO Applies Lean Thinking to Distribution

Mitch Rosenberg, Kiva Systems

DJO Incorporated, a leading orthopedic device manufacturer based in Vista, Calif., bases its manufacturing standards of excellence on a set of principles called kaizen.

“Our motto here at DJO is to ‘never stop getting better,’” said Steve Martin, director of operations at DJO’s Indianapolis, Ind., distribution center. “Kaizen, a management philosophy that focuses on continuous improvement, is really the heart of our culture here at DJO.” And these principles ultimately led DJO to implement robotic fulfillment from Woburn, Mass.-based Kiva Systems into its materials handling operation in the Indianapolis facility.

DJO holds kaizen events in which it studies an existing process, breaks it down to its component steps, and identifies opportunities for either streamlining or eliminating those steps. According to Chief Operating Officer Luke Faulstick, it mainly comes down to a simple equation: “Is each step adding value or not adding value as perceived by our customers?”

Faulstick noted that kaizen is what forms the company’s entire lean methodology, and that was what led them to partner with Kiva. Faulstick added: “Our mentality is, ‘What’s the latest technology that enhances one piece flow and reduces lead time?’”

Bringing the Product to the Worker

When DJO analyzed its order fulfillment practices, they found one area ripe for improvement: the picking
workflow. Previously, DJO used static rack storage for product inventory, and associates would walk through the aisles, shepherding the order from pulling to packing to value-added services such as heat transfer labeling to shipping. This reflected the one-piece-flow method of kaizen, in which a single unit moves through the supply chain to fulfill a customer’s order. But without automation, DJO’s labor costs were high, and each associate walked an estimated two or three miles of hard concrete each shift.

To address this productivity bottleneck, DJO implemented Kiva’s “goods-to-person” picking solution in its Indianapolis distribution center. The system uses autonomous robots called drive units to pick up and deliver mobile storage shelves called pods and bring them to the associates for replenishment or picking. Instead of endlessly walking the floor to find the products they need, associates remain at workstations and the product comes to them. They pick, pack and send the orders off to shipping without moving from their workstations, preserving the one-piece flow and vastly improving throughput. Faulstick estimates that the Indianapolis facility has reduced cycle time for orders by 30-40 percent.

“If there’s one thing that we like, it’s that the product is now traveling to the workers,” Martin said. “We did look at voice recognition and other systems that allowed us to pick more quickly or have a solid quality rate, but it didn’t eliminate that one big factor of people spending most of their days walking and not picking product and not shipping it to the customer. That virtually has been eliminated because now the product comes to them.”

DJO considered other, more conventional methods of warehouse automation before choosing the mobile robotic system. “We’ve looked at conveyorized systems, inventory towers where product is stored in an elevated state and then the conveyor goes up and pulls product out item by item. All of these are much more capital-intensive,” said Faulstick. “More importantly, for our particular order processing workflow, conventional automation required us to batch orders, resulting in a longer lead time and more potential for errors.

“Because it functions in a one-piece-flow pick process, it really fit our model of how we pick an order. One operator has one order and picks that order from start to finish, so you have accountability. Mobile robotic automation fits that model in terms of how it operates. And then when you look at the amount of time that is spent walking and finding the product, bringing it to the pack station and ultimately putting it on the truck, all of that unproductive time has been taken out of the interaction that the associate has to make with the order.”

Accuracy and Speed

As with many medical device manufacturers, DJO has two critical factors of success: accuracy and response time. Martin said: “The two main measures here at the DJO Indy facility are: Do I ship exactly what the customer wants the first time, and do we get it to them in a timely manner? We have to get every order received by 4 p.m. out the same day.”

In addition to being fast, the new automation system is highly accurate, according to DJO. At every step of the process, the associate confirms that he or she is picking the correct product and the correct quantity. It employs a unique “pick-to-light” system, which requires no expensive light fixtures at every bin location. When a pod arrives at a station, an automated laser pointer indicates from which bin on the pod the associate should pick the product. The associate then scans the product and confirms that the product has been placed in its shipping container by pressing a rack light or touch-screen button.
“The way the system designates with the laser pointer which product should be picked really makes it mistake-proof,” said Faulstick.

This process also has the side benefit of improving working conditions for the company’s employees.

“It’s much easier,” says Martin. “It is easier for them to identify the product, it is easier for them to identify the right quantity of product. They are scanning each part, so it’s easier for them to perform at a high level of quality for our customers. It just simplifies their jobs.”

Responding to tight turnaround is critical for DJO. As a result, any system implemented would have to give the medical device manufacturer the speed and flexibility it was looking for.

“A lot of our customers don’t maintain inventory at high levels, so when they have a surgery and they place an order, they need it to be shipped the same day. And it needs, often, to arrive the next day. Now, we have the ability to assign priorities to those orders. When orders come in, 20 minutes later, they are actually on a UPS truck and being shipped to the customer.”

Never Stop Improving

Of paramount importance to DJO’s kaizen methodologies was to use an order fulfillment system that could keep changing and improving with evolving business needs.

“Our order volume changes every day,” Martin explained. “We could be at 2,000 orders one day, and the next day it’s just a thousand or 1,500. We can change the stations on the fly, based on the order volume. If we get hit with a ton of small orders, then I can change stations that focus on picking just those small orders to help us get those products out very, very quickly. Or if I get a large distributor order, or two or three of them back to back, then I can set up other stations that handle those types of large orders, and that allows us to react more quickly to changes in customer demand. Long term, we need a system that’s going to change just like our customers do.”

One way to think about robotic material handling is that it embodies the kaizen philosophy of continuous improvement. With every software release, for example, engineers can improve upon the robots’ algorithms and workflows to “fine tune” how fulfillment gets accomplished. For example, the robots themselves will change their behavior in step with real-time supply and demand shifts; they automatically will store faster-moving products closer to the workstations, while slower selling items get replaced deeper within the inventory stacks.

“Being able to react quickly, being able to make changes, that was really the heart of it,” said Martin. “Obviously, there were some huge wins when we installed the robots, but that doesn’t stop the continuous improvement process. We’re still able to make the tweaks and adjustments.It’s not so rigidly built that we no longer have the ability to change the physical warehouse environment. On the contrary, we can make a lot of adjustments that help us adapt to changes in customer demand or customer performance requirements.”

According to Martin, DJO plans to consolidate its distribution in the eastern U.S. at its Indianapolis facility. “We’re going to be growing, and our goal is to reduce our inventory levels so we can bring in other product lines from other facilities within the company,” he said. “We’ll be adding a mezzanine in the near future, which we’ll also be able to populate with robots and mobile shelving, so we can bring in more products but yet not have to knock down walls or build out more brick and mortar to create a larger facility, or move into another facility. Also, if our customers change, we can’t have a system that doesn’t change with us. Our environment literally changes daily.”

In short, modular robotic fulfillment gives DJO the flexibility to keep up with changes in customer needs. In true kaizen spirit, the approach not only allows but encourages continuous improvement, meeting each new challenge with fresh ideas, configurations and implementations.

Mitch Rosenberg is vice president of marketing for Kiva Systems. For 25 years, he has focused on bringing disruptive technologies to market at companies such as Imaging Automation, MultiLink, PictureTel and Kurzweil Computer Products. He has served in roles throughout the product innovation cycle, including design engineering, engineering management and product management. Rosenberg holds BS and MS degrees in electrical engineering from the Massachusetts Institute of Technology, and a MBA from Boston University.