Creating a Multinational Lean Culture

Medical Product Outsourcing

April 8, 2014

As is the case with most medical device contract manufacturers, Singapore-based Forefront Medical Technology strives to develop a culture committed to world-class manufacturing. But most companies, develop their own approaches and internal processes to achieving manufacturing goals.

Forefront, which focuses on disposable diagnostic, drug infusion and medical device systems, has a simple metric it uses to achieve its lean manufacturing objectives: Customers drive the key performance indicators and must see a cost benefit.

Achieving that goal requires a holistic focus on quality and efficiency, since cost reduction is achieved through faster product development cycles, optimized tooling and automation strategy, robust supply chain management, manufacturable products, superior quality and efficient logistics. It's not surprising that lean manufacturing principles are used as a foundation for this effort. These lean principles came into play as the company looked to broaden its footprint abroad.

Location, location, location

Where to set up shop, particularly in today's challenging market is no small task.

When the decision was made to build a new factory in the city of Changzhou in the southern Jiangsu province of China, the company's management team decided to integrate lean principles in the overall facility and business process design. The Jiangsu location was chosen, in part, because of its location in one of China's "green" economic zones. Companies in this zone are subject to more stringent regulation in terms of environmental regulations, and worker health and safety practices. The goal was to build a factory that excelled in terms of the health of its manufacturing and corporate citizenship, since contract manufacturers have become extensions of their customers' reputations.

Jiangsu also provided both logistical and tactical advantages. The facility is located in the Jiangsu Wujin Economic Zone in the West Taihua Lake International Medical Industrial Park, which is in close proximity to medical clusters in Shanghai and Suzhou. There is a globally renowned sterilizer in Suzhou and a China Food and Drug Administration (CFDA) office in the park. The park is located within approximately 16 miles of local air and seaports, and it's near the Yanjiang highway, which is the one of the main routes between Nanjing and Shanghai. Changzhou University Town also is near the park and features six schools that support the region's vocational training needs.

It's critical to explore such resources when making the decision for a facility—whether it's your first or your 10th. Taking advantage of local synergies definitely helps with the lean process.

Alignment with the company's other operations also were analyzed.

The firm maintains its engineering and tooling fabrication capabilities for prototypes, less complex molds and liquid silicone rubber molds in Singapore. It also has a manufacturing facility in Xiamen, China. Since the markets the company serves have a high degree of custom tooling as well as assembly and packaging automation, Forefront Medical typically supports its customers' full product life cycles and often is the sole source for production. Product development and tooling design/validation are critical elements in taking both measurable and hidden costs out of the product. A flexible research and development structure was designed to leverage existing engineering infrastructure, while localizing some tooling fabrication and maintenance functions.

Jiangsu has a full-scale commercial tool room with integrated support from the Singapore team. This provides the resources necessary to maintain tooling on-site, while tapping the resources of the Singapore engineering staff for new tool design. Actual tooling fabrication may be done in Singapore, Jiangsu or at third-party suppliers depending on complexity of the tool and project requirements. Jiangsu's engineering team uses the same design and mold flow analysis software found in Singapore for collaboration during the design and development phase. The Jiangsu team handles product prototyping, the scale-up of molds and tools, pilot runs, validations and product life-cycle management activities, accessing Singapore team resources as needed. This strategy also eliminates three potential sources of hidden costs.

First, leveraging the Singapore team's expertise and resources eliminates the learning curve of a green field operation, and plus, provides Jiangsu with the ability to pull specialized resources as needed from a centralized product development organization. Second, the on-site tool room facilitates regular preventative maintenance, which translates to less unscheduled downtime and higher product quality. Finally, an in-house facility also significantly shortens the amount of downtime for tool repair, compared to the time typically required by third-party tooling repair facilities. Plus, it eliminates the transport costs associated with using a third-party firm.

The company's product development processes reflect lean manufacturing philosophy in three ways.

First, all processes and design tools are standardized so internal teams collaborating globally have the same frame of reference. In addition, customer teams have a clear understanding of the critical path and key review points. The company also operates a technical center in the United States to better support customer design teams in their time zone.

Second, design processes are focused on eliminating as much nonvalue-added time and cost as possible. In the past three years, the company's engineering team has introduced nine new products in product development cycles that averaged eight to nine months. Materials expertise, in-house rapid prototyping capability and in-house tooling fabrication capabilities are key factors in achieving this speed.

Finally, the team is focused on design for manufacturability at both the product and tooling level. Mold-flow analysis is used to ensure efficient molding with minimal scrap and minimization of secondary finishing processes. The design validation process looks closely at design assumptions on target labor use and run rate, and changes are made if that analysis indicates the initial assumptions were incorrect.

Lean philosophy also was applied in facility design. The facility is approximately 76,000 square feet and has Class 100,000 and 10,000 clean rooms. The layout is designed to support a smooth production flow by sequencing operations in the order they typically occur in the manufacturing process. Production areas are designed with line-side stocking of raw materials. In molding, there is a centralized feeding section for high-volume production and batch support for high-mix, low-volume production. The layout is designed to minimize work-in-process queues, operator movement and finished goods transport distance. Facility manufacturing capabilities include injection molding, extrusion, blow molding, assembly and packaging.

The quality portion of the equation

The focus on quality is driven by standardizing processes at all facilities and aligns closely with lean manufacturing philosophy and tools. The 5S (also called "five pillars") philosophy (sorting, set in order, sweeping or shining, standardize and sustain) is used as the foundation to create a well-organized, visual factory environment where inefficiency becomes very obvious and quickly is eliminated.

Six Sigma tools such as define, measure, analyze, improve and control are used in kaizen events to rapidly address areas targeted for improvement. All managers are either green belt or black belt certified and experienced in use of lean manufacturing principles.

All facilities, including Jiangsu, are registered to ISO 9001:2008 and ISO 13485:2003. The focus on third-party quality certifications does not stop there. All facilities also are compliant to MDD 93/42/EC which is the Medical Devices Directive for the European Community; MHLW Japan's Pharmaceutical Affairs Law and Ministerial Ordinance #169; ISO 15378, which is focused on primary packaging materials for medicinal products; ISO 14001, which is focused on environmental management; ISO 18001, which is focused on occupational health and safety management; and ISO 27001, focused on information security management.

All facilities are U.S. Food and Drug Administration and Japan registered as foreign contract manufacturers. The Jiangsu facility currently holds a CFDA manufacturing license for Class 2 manufacturing.

The focus on supplier quality includes a stringent supplier selection process plus the regulatory materials qualification process related to each product. Suppliers are required to undergo a monthly assessment of quality and delivery performance. There also is a rigorous incoming inspection process to ensure that every batch/lot meets acceptable quality levels.

Finally, there is strong focus on providing expertise on the global regulatory standards that customers' products must meet, since that is integral to rapid product development cycles and long-term quality compliance in customer end markets. There is a dedicated regulatory affairs team whose responsibilities include: product registration and CE marking; maintenance of the device history record and technical file; biocompatibility testing; validation and support sterilization; updates on regulations and communication of new/revised regulations; and intellectual property protection.

The benefits of a holistic focus on world-class manufacturing

The foundation of a solid manufacturing philosophy is to eliminate hidden costs before they occur.

This focus includes:

  • Clear understanding of regulatory requirements for product end markets.
  • Strong linkage between design assumptions and manufacturing outcomes.
  • Manufacturing and business processes aligned to a lean manufacturing philosophy.
  • Facilities designed to incorporate Lean principles in basic layout.
  • Use of Six Sigma tools to drive continuous improvement efforts throughout the organization.
  • Identification and management of a global network of trusted suppliers.
  • Focus on protecting customer intellectual property through a strong internal control system.
  • Efficient post-manufacturing logistics to a global customer base, provided by a network of strategically located resources.

A focus on developing an internal best-in-class manufacturing roadmap has ensured that the Jiangsu facility is lean from the ground up, applying all the lessons learned in the company's journey to differentiate itself on the basis of quality, speed and agility.

The end result is rapid product development or production transfer cycle times, high quality, efficient production and optimized logistics strategy, which achieves far greater cost savings than would be found with a focus on lowering unit price alone.

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