IW Best Plants Profile - 1998

Baxter HealthCare Corp. Mountain Home, Ark. By William H. Miller Walk onto the production floor at Baxter Healthcare Corp.s 584,000-sq-ft plant in Mountain Home, Ark., and you immediately are struck by how clean it is. Not a speck of dirt or grime is in sight. The floor itself is polished to a mirrorlike sheen. Little inventory clutters the aisles. Employees don freshly laundered smocks and hairnets and wash their hands with antiseptic soap in enclosed clean rooms each time they enter their work areas. Finished products are sterilized, many by an innovative electronic-beam system, and await shipment in a sanitary warehouse area. But this isnt surprising. The plant makes medical products, a highly regulated industry, so you expect it to be clean. Only when you walk farther into the plant and tour several of its 16 manufacturing departments does it hit you: Yes, this truly is a world-class facility. That is apparent when you see just three things:

  • Incredible product diversity. Some 250 different disposable finished products -- ranging from kidney-dialysis filters and blood-therapy kits to intravenous needles and bone-marrow collection containers -- roll off its production lines for outside customers. Another 700 subassemblies go to other Baxter plants, 21 of them outside the U.S. This profusion of products, representing a mind-boggling number of plastic components, in turn is produced from medical-grade sheeting that is made at the plant; the facility is one of the largest medical-grade sheet-extrusion operations in the world.
  • A dazzling array of automated equipment. Much of it designed by the plants own engineers, its arranged in well-conceived manufacturing cells. Signs above the equipment proudly name the employees who "own" it -- attesting to the importance the plant puts on empowerment. All the plants 1,583 employees are members of empowered natural work teams.
  • Yards upon yards of wall space covered with bulletin boards. Some of them publicize employee teams and individuals for special accomplishment. Others carry news and announcements -- from both the plant and individual departments -- including the weekly "Hot Sheet" newsletter that flows from the weekly managers staff meeting. Still others display quality, safety, production, and other plant-floor data. Its obvious that the plant has a zealous commitment to employee recognition, employee communication, and measurement.
Clinching testimony to the plants excellence, however, comes as you pass through the long hallway leading to the cafeteria. For 40 paces -- a full 100 feet -- you stride past trophies and plaques the facility has received from various national and state organizations, as well as Baxter itself, for its quality, environmental, safety, educational, and community-relations achievements. Production manager Larry Baker, a modest man, doesnt comment as he leads you past the gallery of awards. When its pointed out to him theres no space left for IWs Americas Best Plants award, he matter-of-factly allows that "Yeah, well have to buy another trophy case." It seems to be a common occurrence. No, you dont need to be told that this is a superlative plant. But Jim Nuttall, vice president of operations for Baxters Renal Div., to which the Mountain Home facility reports, does so anyway. "I deal with 39 plants globally, and Mountain Home leads the way," he declares, "especially in the area of automation. For the last 10 years, much of the plants role has been to develop new products and processes, and then transfer them to other Baxter plants around the world. We wouldnt entrust this role to just any plant." Based in the Deerfield, Ill., headquarters of Baxter International Corp. (Baxter Healthcares parent), Nuttall points out that the Mountain Home facility consistently wins the corporations top quality award and has been remarkably successful in adapting the companys innovative Quality Leadership Process (QLP) to "drive its people." He also lauds the plants leadership in environmental, health, and safety; its inventory reduction (raw material and work-in-process inventory turns have climbed from 16.5 to 25 in four years); and its continuous-improvement program that has led to cost reductions that average 4% annually and reached 7% last year. Why is the plant so successful? Plant Manager Vick Crawley, who moved up from quality manager when his predecessor, Jimmy D. Venters, retired in July, cites several reasons. For one, he credits the plants location in Mountain Home, a city of 10,000 nestled in the Ozark hills of north-central Arkansas just south of the Missouri line. "Its a beautiful place to live," he says. "Once people get here, they stay." As a result, plant employees average 12 years in length of service (20 years on the first shift) and 40 years in age -- numbers unusually high for a manufacturing plant. "So we have tremendous experience," Crawley observes. "When we get a new product or process to develop, we have people who can do it." Second, he points to the maturation of the QLP, the structure that guides all activities of the plant. "We have been at this for 13 years now," he says. "It has enabled us to have a long history of continuous improvement." Finally, Crawley mentions the effectiveness of the plants five-year-old R+ (for Positive Recognition) program. At every opportunity, the plant pats employees and its 75 to 100 employee teams on the back. Those ubiquitous bulletin boards are just one means. "We put a lot of emphasis on recognition," confirms Jo Kasinger, a production technician who has responsibility for maintaining the boards in the Injection & Blow Molding Dept. Just keeping up the two "recognition boards" under her wing keeps her busy, she says. "I update them a couple times a week." Postings -- often accompanied by rewards ranging from free soft drinks during work breaks to free dinners -- include names and photos of employees who have perfect attendance, service anniversaries, are about to retire, or are members of production units that have gone lengthy periods of time with good quality performance. "We let people know when they do a good job, and we dont get on them when they screw up," sums up Crawley. "Its been a powerful motivator." Indeed, motivated employees are the plants biggest asset, believes Steve Hall, human resources manager, who notes that many of them are members of second- and third-generation families who have worked at the plant during its 34-year history. "By continuing to bring in new products and upgrading our processes, weve been able to maintain an engaged, participative workforce," he explains. The constant flow of new products and processes prompts the plant to put an exceptional emphasis on training and education. Employees average an astounding 20 days of formal training a year (production employees, 24), accounting for fully 8.3% of the plants annual labor-cost budget. Employees take to the training enthusiastically. "More people sign up for our in-house advanced training programs than we can accommodate," marvels Hall. "We have a long waiting list." More than 400 employees have completed the plants eight-month training curriculum, for which they now can receive college credit at the Mountain Home branch of Arkansas State University, with which the plant works closely. The intensive training is a main driver of QLPs success, plant officials stress. Launched in 1985 when key managers attended quality guru Philip Crosbys quality college in Winter Park, Fla., QLP is built on five "foundation principles": benchmarking, business/quality plans, teamwork, communication, and recognition. These principles along with nine supportive "elements" are hallmarks of training given to all employees. Another basic underpinning of QLP is a thorough knowledge of the requirements of the plants customers, 48 of whom are considered "primary," in 25 countries. "When I started here," reflects quality operations manager Carol McCorkle, a 20-year veteran of the plant, "we [in production] never, ever talked with end users; we talked only to marketing. But now, at least a third of our employees have visited customers. And customers constantly visit us." The plant adapts its processes, she stresses, to what it learns through these and a host of other customer interactions. Of all the processes that have been developed at Mountain Home, the most spectacular example is the highly automated manufacturing cell that produces the disposable version of HomeChoice, Baxters five-year-old compact device that enables patients to self-administer kidney dialysis while they sleep at home rather than making frequent trips to hospitals. The plant helped design the product and engineered the automation package. Because of the large capital investment in the equipment, much of the HomeChoice production remains at Mountain Home; the plant manufactures more than 5 million of the units per year. But now that the technology has been perfected, some of the production has been transferred to Baxters plant in Singapore. Similarly, because of the capital investment involved, Mountain Home keeps its plastics compounding and extrusion activity. And because the product is so complex, the plant also continues to produce Baxters CS-3000 Plus Separator, used to separate and collect blood cells. More typically, however, technologies developed at Mountain Home are transferred to other Baxter facilities. In one notable example, Nuttall, the Renal Div. vice president, cites Baxters UltraBag system, an earlier-generation home-dialysis unit that now is being manufactured at other Baxter plants throughout the world. The Mountain Home plants glittering achievements earn it the right to join Baxters I.V. Systems Div. plant in North Cove, N.C., which received the honor in 1994, as one of Americas Best Plants. But the plant isnt resting on its laurels. Its biggest challenge, says Crawley, is to continue to develop new products, which it currently does at a pace of about 10 a year. But, he says confidently, "If its anything to do with plastic, we can develop and make it here pretty quickly." Among other things, the plants long-term goals are to reduce customer complaints 10% a year; drive costs down by 2.5% for mature products and 10% for new products by focusing heavily on automation and supplier partnerships; upgrade the plants ISO-9002 certification to ISO-9001; become one of OSHAs Star Plants; continue to improve inventory turns by one a year; ensure that its in Year 2000 compliance; and win the Malcolm Baldrige National Quality Award. A tall order. Given the plants can-do history, however, its all achievable. Which could lead to a problem: Where will the plant put all those new awards that likely would continue to come its way?
At A Glance
  • Manufactures some 250 different finished medical products for outside customers and some 700 subassemblies for other Baxter plants.
  • Develops technologies for later transfer to other Baxter plants.
  • On a typical product that the plant continues to manufacture -- cell-separator kits -- first-pass yield improved 71% during the last five years to 99.4%.
  • Employees average 20 days of formal training a year (production employees, 24).
  • All 1,583 employees are members of empowered natural work teams.
  • 34 benchmarking studies in last three years.
  • Inventory turns for raw material and work-in-process up from 16.5 in 1993 to 25.0 in 1997.
  • Develops an average of 10 new products a year.
  • Cost reductions average 4% annually.
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