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MEDICAL DEVICE AND LIFE SCIENCES INDUSTRY :
Manufacturing Performance: Facilities Consolidation and Inventory Reduction |
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Client: |
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A
division of a leading Pharmaceutical Company producing needles, sutures,
and other products for the healthcare industry. |
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Problem: |
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The
division’s facilities were at five locations in two states with high
labor, land and building costs. To be more competitive, the division
needed to consolidate operations, relocate to an area in the northeastern
U.S., and lower labor, land and building costs. Also, there was pressure
from corporate to use land and buildings the company owned in a very
expensive location. |
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Approach: |
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Tunnell Consulting assisted the division in locating areas that met
their specific requirements and then did a comparative analysis among
the sites. The analysis indicated that the site in Massachusetts was
the most cost effective. Tunnell developed the block plans, layouts
and detailed move plans.
During the planning phase, Tunnell’s analysis revealed that needles
were being produced in a way that optimized work center performance
but sub-optimized the whole production operation by building unnecessary
inventory which was increasing costs, creating bottlenecks, and ineffectively
using equipment. Tunnell was also asked to develop a “pay-for-knowledge”
compensation system for the division as a strategy to manage cost,
quality and productivity. |
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Results: |
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Production
costs were significantly reduced due to lower labor costs, less inventory,
increased workforce flexibility, and more efficient use of equipment.
Parts were produced on a JIT basis and cycle times were reduced. Layouts
using work cells improved work flows and material handling was reduced.
Because jobs needed to be clearly defined to satisfy the pay-for-knowledge
system, some jobs were eliminated and the overall documentation of
work instructions was improved. |
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