By Adam Prime, President
Phase 2 Medical Manufacturing, Inc.
Cost has always been an important factor in determining the viability of launching a product into the medical device marketplace. At the center of any OEM/Supplier plan for manufactured goods is the understanding that over time, as volumes increase and a product becomes more mature, the cost needs to come down to remain competitive and increase market adoption.
The challenge in greenlighting a project is that success is predicated on a reduction in manufacturing costs for the product at some projected volume. In order to split the risk and resource allocation fairly, the OEM needs to be focused on accessing the market to achieve those sales volumes and the supplier should be able to demonstrate an improved manufacturing methodology that provides confidence in the ability to get the target costs. The confidence part of this is based on a supplier being able to demonstrate that improvement methodology is part of its culture.
LEAN manufacturing could be a key tenet in the success of a supplier’s relationship with medical device OEMs. However, companies have been burned with LEAN due to poor execution of the principles. One of the challenges is the overuse of LEAN or other improvement methodologies with no real way to evaluate whether they actually improve processes over time.
LEAN takes a lot of work and commitment from the management team. Often the operations professionals that have “mixed reviews” about LEAN have formed those opinions based on a tiptoe LEAN operation– not a fully committed program.
Companies that adopt LEAN need to understand that the work is never really done.
In evaluating LEAN among suppliers, assessing supplier’s adherence to the golden triangle can help OEMs determine the level of commitment. The golden triangle consists of standardized work, standardized management, and visual management.
Of the three, visual management is the key to that ability to analyze improvements. One of the simplest visual cues for observation is the use of metrics and visual standards of the operation as a whole. If a vendor is not displaying data/dashboards associated with their performance, it means visual management has not been achieved. Manufacturing partners that are committed to LEAN should be able to show OEMs how they measure it using some of the typical metrics that allow managers and manufacturing employees to know when performance is out of standard. Suppliers should be able to show they focus on adherence to the golden triangle to identify things that are out of standard and have additional tools to identify how to get the process back into standard. Phase 2 uses tools such as Kanban, kamishiabi, and kaizen events to bring processes back into standard.
The culture of LEAN manufacturers should primarily be focused on being on the journey of continuous improvement. There is no “we are LEAN” in the terminology, because, as the definition implies, there is always room for to do better.