Excellence in Action: Philips Respironics

Of these factors, which one plays the biggest role in a manufacturing operation's success: quality, cost, delivery, safety or morale?

Philips Respironics' Sleep Therapy manufacturing facility in New Kensington, Pa., believes the answer is "all of the above." The plant, which employs 250 people, measures all five factors in a process it calls "QCDSM."

"It truly is the backbone of our continuous improvement," Erik Kulikowski, director of North American operations for Philips Home Health Care, told a group of manufacturers who visited the plant on Sept. 24 as part of IndustryWeek's Excellence in Action Series.

QCDSM focuses on measuring and improving the five metrics through visual reminders, employee empowerment, structured reviews of progress and an emphasis on problem solving at the lowest possible level.

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Visual displays called glass houses show how various areas of the plant are performing against the five key metrics.
The system helps create a "what gets measured gets done mentality" in the plant, Kulikowski said. The QCDSM metrics are the basis of the facility's quarterly profit-sharing program and provide the foundation for the plant's team-based communication and team-based problem solving, he said.

"It's a balanced scorecard that enables us to figure out where we need to be working on things," Kulikowski said.

QCDSM is "the systematic elimination of waste through the teamwork of all associates, engaging in continuous improvement and problem-solving activities every day," Stefanie Lozito, continuous improvement leader for Philips Home Healthcare Solutions, explained in a presentation on the process. The problem-solving tools used by the facility to meet its objectives for the QCDSM metrics include:

Kaizen events.
Six Sigma methodology.
Pareto charts and error trending.
Layered process audits.
Human error and fault-tree analysis.

QCDSM utilizes structured team reviews of progress ranging from Level 1 area reviews led by manufacturing associates to Level 4 weekly plant Gemba walks by the leadership team. At the lowest level, every team in every line meets daily to review the QCDSM metrics; each letter has a representative to report on his or her team's performance for that metric (for example, assembly errors in PPM for quality or units per labor hour for cost). Thanks to QCDSM, the high-volume, low-mix plant, which makes devices that treat and diagnose sleep disorders, among other health care products, has seen improvements in most of its key measurements, including assembly errors, backorders, recordable injuries and kaizen participation rates, according to Kulikowski.

The foundation of the system is that employees are empowered to lead, communicate and suggest improvements; enabled with the right tools to make changes happen; and engaged in active participation, according to Lozito. It's a philosophy that forces managers to shift their thinking to a mindset that "no longer are we the experts and no longer can we tell people how to do their jobs," Kulikowski said.

"People want to help. We know that. We've proven it," Kulikowski said. "Don't ask them to check their brains at the door. That's the stupidest thing you could do."

While the New Kensington facility was just commissioned in August 2009, the QCDSM process is nothing new to Philips Respironics. Its nearby Murraysville, Pa., facility, which was named an IndustryWeek Best Plants winner in 2009, also uses QCDSM and has seen significant improvements in assembly errors, labor efficiency and other measurements.

At a Glance

Philips Respironics' Sleep Therapy facility

Location: New Kensington, Pa.

Start-up: August 2009

Products: Devices that monitor, treat and diagnose sleep disorders; ventilators; devices that monitor the health of newborn babies; fall detectors; medication dispensers

Employees: 250

Square feet: 172,000

Revenue per square feet: $11,000