IW Best Plants Profile - 2003

Straight To The Heart Double-digit process improvements clear the way for Boston Scientific's biggest challenge yet. By David Drickhamer Boston Scientific, Maple Grove Operations, Maple Grove, Minn. At a Glance

  • Plant: 115,000 square feet
  • Start-up: 1998
  • Achievements:
    • 100% reduction in manufacturing-related customer complaints over three years;
    • 95% improvement in first-pass yields over five years;
    • 20% reduction in costs year over year for three years running;
    • 2002 Manufacturer of the Year Award from the Manufacturers Alliance of Minnesota
There's an event at Boston Scientific's facility near Minneapolis known as the "Passing of the Pillars." It's really the opposite of an award ceremony. When someone has a tough project or challenging assignment, he or she is presented with a small pillar. Made of plaster of Paris and about 2-feet high, nobody really wants to have one weighing down the corner of his or her desk. "You know you have good support behind you, but you want to get rid of it as soon as possible," agrees John Van Allen, manager of training and special projects. Those small pillars are nothing compared with the Parthenon-sized column the folks at Maple Grove are carrying today. Its name is Taxus, and it's a new drug-coated stent awaiting final Food and Drug Administration (FDA) approval for treatment of cardiovascular disease. Cardiologists insert the stents, tiny wire mesh tubes several millimeters in diameter, into the heart's blood vessels during angioplasty to hold them open. Last year, when Boston Scientific launched its Express II stent-delivery system, its domestic market share jumped from 5% to 25% in six weeks. The U.S. market's embrace of the new drug-coated stent, which dramatically improves surgical success rates, could be much greater. Success will hinge on how well the company's production operations handle the Taxus ramp up. Accounting for 18% of the company's $2.9 billion in annual sales in 2002, the products made at the Maple Grove facility included more than 1 million balloon and stent-delivery catheters. The factory and a sister plant just down the road, where workers laser-cut the bare-metal stents from stainless steel and nickel-titanium alloy tubes, are frantically tooling up for production of the drug-eluting stent. Windows have been masked to keep out prying eyes, and they've invested more than $50 million in new production, laser cutting and stent cleaning equipment, as well as an analytical lab. It's a huge undertaking that, so far, hasn't required additional floorspace. Managers have some radical process improvements to thank for that. During the 1990s, Maple Grove dabbled in a number of strategies, including JIT, demand-flow technology and various aspects of lean manufacturing. Isolated improvements resulted, but nothing really revolutionary. That changed in 2000 when plant managers hammered out a new framework for running the business. The resulting "strategic quality process" helps everyone understand where to focus energy and, equally important, where not to. The guidelines essentially provide a means for prioritizing and reviewing process-improvement projects, business improvement initiatives and new products in the pipeline. Operations managers at Maple Grove invoke their waste-elimination strategy with the mantra, "simple systems done with discipline." The techniques they use have been adapted to the peculiarities of the medical-device business. For example, they achieve one-piece flow within cells, but for regulatory tracking purposes they work with standard lot sizes of 50 to minimize the cost of filling out the necessary paperwork, which runs to 40 pages per batch. Through various initiatives, the plant has recorded 20% annual cost reductions three years running, more than $22 million from 78 improvement projects in 2002 alone. The transition to cells from ad hoc material flows has cut overall floorspace requirements in half, making way for new products such as Taxus. Manufacturing-related customer complaints have been reduced to zero, and manufacturing cycle times have been cut by 95%. Built To Launch New Products Boston Scientific designed the Maple Grove facility with 13 feet of interstitial space between the two floors that allows contractors to reroute power lines and perform other construction activity behind the scenes. Such built-in flexibility is essential in an innovation-driven market where the product life cycle from introduction to retirement averages 18 to 24 months, and where half of all products have been introduced in the previous year. "We're a new product company that happens to make medical devices," quips Terrance Brick, director of production. The onslaught of new products only adds to the passion and sense of urgency that pervades Maple Grove. After all, the plant's products are used to treat cardiovascular disease, America's No. 1 killer. "We get excited about our jobs," says Aaron Milton, vice president of operations. "The products that we build save lives." Thinner and more flexible than a piece of angel-hair pasta, the balloon catheters are deceptively complex. To function, various components must be attached, including gold and platinum marker bands that stand out on an x-ray image to help cardiologists find their way during surgery. The purple tips of the devices have been meticulously designed to be flexible, yet stiff enough to pierce blockages. The balloon itself, pressurized by a saline solution, must expand and deflate on cue. After final assembly and testing, certain sections of the catheters must be coated with a hydrophilic solution to make them slippery as they move through the body. Throughout this progression, Boston Scientific's process development efforts have focused on removing as much human labor as possible, thus increasing predictability and improving quality. The largely automated laser welding process incorporates some machine vision devices that dramatically improve repeatability; it also eliminates 10 hours of adhesive cure time. "The manufacturing floor is born in the lab," notes Phil Ebeling, director of process engineering. This means that new production lines are designed to be "born lean." When released to production five years ago, a stent-delivery system recorded 70% assembly yields and a 20-day cycle time. When Maple Grove released the Express II stent-delivery system in 2002, it achieved assembly yields of 85% and a cycle time of 2.4 days, which improved to 90%-plus yields and a 1.1-day cycle time within one month. The next-generation products are being designed to achieve 95% yields and one-day cycle times out of the box. Today Maple Grove is able to fill customer orders in a less than a day, compared with two weeks previously. Looking at the financials, already high-gross margins have improved 12% since 2000, which is doubly impressive considering that price erosion is part of the market dynamic, to a tune of 4% to 5% per year. All of this bodes well for the U.S. launch of the drug-eluting stent. Still, pharmaceuticals are unfamiliar ground. To fulfill strict traceability requirements, rather than having two people doing the job of one, each signing off on the other's work as is frequently done in pharmaceuticals, Maple Grove will track each stent using radio-frequency identification (RFID) technology. The new operation should be near paperless as well. Just a couple of recent examples of what it means to be a market innovator.
Web-Exclusive Best Practices
By David Drickhamer Benchmarking contact: John Van Allen, manager operations training and special projects, [email protected] 763/494-1451 Non-Stop Innovation "You have to be a great company to be in this business," states Kevin Ballinger, director of program management at Boston Scientific Corp.'s Maple Grove, Minn., facility. In the medical-device business, that greatness is dictated in large part by new product development. At Maple Grove such efforts are currently focused on bringing a drug-coated stent to market. Worldwide doctors perform around 2 million percutaneous transluminal coronary angioplasty (PTCA) procedures every year. The treatment is a less invasive alternative to bypass surgery, which it surpassed in popularity not too many years ago. In about one of every four cases when bare-metal stents are inserted, the coronary arteries reclog, and patients have to undergo angioplasty again. Drug-eluting stents, which minimize cell regrowth, have been shown to reduce that repeat procedure rate to less than one in 10. It's a dramatic improvement and a huge market opportunity -- annual sales in the billions of dollars -- that has attracted some heavy-hitting competition. Priced at over $3,000 each, about three times higher than the market price of standard devices, Johnson and Johnson began selling its own drug-coated stent in the United States this past spring. Guidant and Medtronic aren't far behind. Although BSC's Maple Grove facility is currently wrapped up in the launch of the new drug-coated stents, research and development never stops for all the company's product lines, which have life cycles typically ranging between 18 and 24 months. In bringing new designs to market, the company follows a five-stage gate process: proposal, definition, development, validation and scale-up, and commercialization. The formal process helps core teams, which can have 100 or more members, plan and launch new products from the initial concept all the way through stable production. They track the results of design-for-manufacture efforts by monitoring Cpk levels and quality yields of new processes, which are expected to exceed 90%. To accelerate the launch process, the folks at Maple Grove have eliminated a stand-alone pilot facility that only added time to the product-development cycle. The product builders themselves are now deeply involved in the product development process, beginning with the initial qualification. They help engineers design work layouts, build prototypes and assemble the necessary lots for clinical trials. Process Improvement Inspired By The Gods When employees at Boston Scientific's Maple Grove facility walk in the door they pass by a large illustration resembling the Parthenon that illustrates the operation's strategic quality process (SQP). If they need to be reminded of any of the key components, they can refer to the magenta card that hangs around their neck along with their employee identification. At the top of the SQP Parthenon is the organization's vision: "to be recognized as the best medical device producer in the industry." That vision is supported by 10 columns, or core strategies, which for 2003 include quality systems effectiveness, best practice benchmarking, customer focus, employee ownership, lean operations, Six Sigma methodology, core technology, equipment effectiveness, value improvement and being a community citizen. These strategies aren't constant. They're revised every year as the organization's focus and needs change. Each column has a manager with individual responsibility for annual objectives. The whole structure stands on a foundation of fundamental values that BSC defines as meeting customer requirements, defect prevention and error-free work, total employee involvement and continuous improvement. The company has long employed many of these strategies. What the illustration does is put them all in context, showing how they support objectives and creating a shared vision among site leaders on how they should be applied. Harnessing The Passion "I came here for just a job; now I have a career and I enjoy it," says Karen DuChene, a product builder at Boston Scientific's Maple Grove facility near Minneapolis. DuChene was referring specifically to her role on one of the employment involvement teams (EITs). Production employees make a one-year commitment to the program. They receive yellow-belt Six Sigma training and use the methodology and quality tools that they learn to improve quality, enhance customer service and reduce costs. In 2002 one EIT team project yielded over $100,000 in annual savings. The team used the standard six-step problem-solving process to identify root causes of tip damage on one of the company's cardiovascular stent-delivery products. Caused by the processing equipment itself, the team implemented a permanent solution that has completely eliminated that particular product defect. Throughout Boston Scientific there is a sense of purpose and urgency fueled by the life-saving nature of their products. To further capitalize on this passion, the Maple Grove facility has implemented a shared leadership model where responsibilities once handled by supervisors (before 2001) are now handled by line associates. These include equipment calibration, chemical storage and disposal, record keeping, product scheduling, vacation scheduling and material supply. The leadership positions rotate on a monthly or semi-annual basis. The end result is employees who have a broader understanding of the entire business. Each work cell in the production facility is responsible for a visual staffing plan, downtime response plan and training. Cell performances are measured and posted using five core metrics: quality yield, output plan vs. actual, throughput time, labor efficiency and in-process non-conformances. Each month work-cell results are recognized and rewarded through a financial payout plan. Depending on how many of their targets in the five metrics they hit, team members receive one to five hours of pay at time-and-a-half. The site also has a twice-yearly event where it recognizes the efforts of the product builders and awards additional prizes for achievements.
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