Measuring Up Lean: The Journey Towards Operational Excellence

“It’s a challenging industry. One defective product gets to a customer, the results could be life ending. Quality is the number one concern. Without a quality reputation, there won’t be a business. And you want us to focus our efforts on lean?”

Create an appropriate response to this question. A speech about how lean and quality go hand in hand might be one answer. Building in quality and not inspecting it in or how flow cannot be achieved without quality are other possible replies. While these are all good answers that are actually factual statements, they aren’t the only options. An excellent alternative would be, “No, I would like you to focus your efforts on achieving operational excellence.”

It’s time to think differently about lean in the medical device manufacturing industry. Lean books and teachings are not doing it. Learning about Toyota’s success with lean doesn’t excite this industry, and for good reason—they are not car companies. With the best intentions, some medical device manufacturers have applied lean in the form of kaizen (continuous improvement) and value stream mapping. Yet the bottom line has not changed as the company has not aligned itself around the lean way of thinking; they have only adopted lean tools. This has happened in the medical device industry for many reasons but it can be explained in one statement: Most medical device companies have difficulty seeing where lean principles will lead them in their challenging environment. The counterpoint to that is: Applying lean principles will lead them to operational excellence.

Defining Operational Excellence
It’s called the ‘elevator speech.’ Try to explain to someone what operational excellence is during a short ride on an elevator, approximately 20 seconds, keeping in mind that it has to be simple and concise. “Operational excellence is when each employee can see the flow of value to the customer, and fix that flow when it breaks down.” It’s that simple.

What this means is that each employee knows that the product moves from process A to process B in a specific quantity, at a specific time, to a specific location; otherwise, something is wrong. Additionally, when something does goes wrong (and it will), they know what to do to fix it, without seeing their supervisor, reporting to management, or having a meeting. This happens in the office as well, where employees can see the flow of a customer order through several business processes and fix that flow when it breaks down in the same manner.

Think of it as orders flowing (from order entry through manufacturing to delivery) through a pipe. Someplace (in the office or on the manufacturing floor) the pipe gets clogged and the flow stops. The operators would know what to do to unclog the pipe and allow flow to resume without any management involvement. Employees create and maintain a lean flow, while management focuses on growing the business.

Seeing the Flow of Value
What if anyone could walk to any area on a production floor and visually depict exactly how many processes each station is away from the customer? From any process, they would know how long it takes to get to shipping from that point. If it is simple enough so a visitor could see the flow, then each operator can see exactly where they stand and how their operation flows in the value stream.

In the one piece flow cell, an operator assembles, tests, and packages in a batch size of one.

From a larger viewpoint, there are different levels of flow that must be considered.
• Process Level - One Piece Flow
• Connection Level – FIFO
• Supermarket Connection
• Value Stream Level

The lean tool of value stream mapping (VSM) is intended to do just that. It teaches how to develop product families, create a current state map of the existing flow (or lack there of), then develop a future state based on lean guidelines, along with an implementation plan that gets it done. There are two main points in value stream mapping that most companies miss.
• Building future states is not done by team brainstorming or kaizen.
• Successful VSM classes align a company in thinking.
Lean future states are designed to flow. Using the eight lean guidelines of a lean value stream, the intent is to connect processes and provide a lean flow to the customer with very little waste. A lean value stream that followed these guidelines would have:
• Takt Time - The rate of customer demand
• Finished Goods Strategy - Build to customer demand or to finished goods
• Continuous Flow - Where can one-piece flow be implemented?
• First In First Out (FIFO) – Where can FIFO be implemented?
• Supermarket - Pull systems used where continuous flow and FIFO can’t be used.
• Pacemaker - The single point in the value stream that is scheduled
• Interval - The time it takes to cycle through the parts in each product family.
• Pitch - Management time frame: How often do we know things are going right or wrong?

Implementing these lean guidelines results in a value stream that flows. All that is left is to create it in a way that each employee can see it. Enter visual systems. The myth is that visual systems organize a factory and make it look nice and neat. Everything is labeled and everyone knows where everything is. It’s time to break that myth. Visual systems should be designed to allow everyone to see the flow, even visitors. They should allow everyone to have the capability to answer the questions, “Are we on time to customer demand?” and “Is everything flowing the way it should be?” Simple ways to accomplish this can be color coded FIFO lanes, colored zones in supermarkets, and identified areas of overproduction indicating a problem.

Fixing Flow
It is inevitable that value stream flow will fail; therefore, what matters is how the problem is addressed when it does happen. Standard work is the solution that drives operational excellence. So the question then becomes,
“What is the standard work when flow breaks down?” In the lean environment, the answer cannot be to call the supervisor.

The key is to keep the decision making to a minimum, and that can be illustrated in a simple example. Two processes are connected by a FIFO lane that is divided into three zones—green, yellow, and red. If parts are backed up into the green, everything is normal. If parts are backed up into the yellow (caution), something is going wrong. The consuming process may have standard work that tells them to rotate breaks to catch up (without asking a supervisor). If parts are backed up to the red section, the operator would go to the phone and call in second shift early, again, without asking a supervisor. Other methods include an escalation method to let management know that flow broke down and a fix is in process.

Case in Point
In June 2005, Sapphire Engineering, part of IDEX Corporation, was a typical medical device company that built in batches for lot control and efficiency. Management was by department and each manager scheduled in batches of 500. If any mistakes were made, they would have to rework 500 pieces. This isn’t an easy task when dealing with tolerances as tight as 40 millionths of an inch in a clean room environment. “It was a lot more difficult than we thought it would be,” states Joe DiSabato, vice president of operations. “We were doing isolated improvement events for years and achieved minimal bottom line