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Baxter Mexico: IW Best Plants Profile 2008

Dec. 12, 2008
Lean Medical Marvel: Baxter Mexico transforms its production processes from the bottom up.

Baxter Mexico S.A. de C.V., Jiutepec, Morelos, Mexico

Employees: 1,339, union

Total Square Footage: 177,000

Primary Product/market: renal products, blood bags and intravenous solutions

Start-up: 1983

Achievements: 2007 Excellence in Safety (3.5 million hours worked without a lost workday incident); 2007 Industry Limpia "Clean Industry" Award; 2007 Best Baxter Value Improvement Program; 2007 Shingo Prize; 2008 100 Best Companies to Work for in Mexico

IW's 2008 Best Plants

See the other winners of IW's 2008 Best Plants award and find out how they made the top ten.

The Baxter Mexico campus radiates with a youthful energy that reflects the steady stream of investments and growth that the multinational $11.3 billion biotech and pharmaceutical company has experienced here outside Cuernavaca, 45 minutes south of Mexico City, since it bought the facility in 1983. Of the 1,339 people at this location, 819 work on the production lines or support them. Just as the local residents take pride in their rich cultural and natural heritage, Baxter Mexico employees take obvious pride in their company.

"This is a different type of facility," says Alejandro Ochoa Ortiz, plant manager. "We produce products that save lives."

The cleanroom production process starts with the extrusion and cooling of plastic film onto rolls. These rolls feed automated machines that fuse two layers of plastic into bags ranging in volume from 50 milliliters to 6 liters. Fitted with special tube connections, the bags are stamped out and filled with solutions for peritoneal dialysis, intravenous medication delivery and transfusion therapies. Pressurized, steam-heated vessels sterilize the bags before they are packed for shipment. Robots perform repetitive material handling tasks throughout the factory.

Given the volume of work at this facility, seemingly minor reductions in trim specifications or plastic thickness can really add up. For example, a recent waste elimination initiative trimmed a mere 1/8-inch off of a single connecting tube. The projected annual savings: $30,000.

Regularly recognized as one of the best places to work in the country, Baxter goes out of its way to attract the most talented and motivated people. That strategy includes hourly pay 50% higher than the local average.

Baxter Mexico employees fill IV bags.

"In facilities with the lowest labor costs, turnover is too high," says Ochoa. "The turnover in my facility is almost zero; that way we don't lose the training that we give to operators." And train they do. Every operator receives over 60 hours of classroom and on-the-job training each year. The training program covers good manufacturing practices that support the quality requirements of the medical industry, as well as behavioral-based safety methods. Employees at all levels also go through Baxter's lean manufacturing curriculum, which includes 6S, SMED, kanban methods, value stream mapping, poka yoke techniques and total productive maintenance. In addition to steady investments in automation, this training has powered a bottom-up transformation that has delivered some dramatic performance gains over the past four years.

Baxter technicians have reduced machine changeover times from several hours to five minutes or less. More frequent changeovers and kanban-based pull systems have made it possible to move from large batches to smaller, demand-driven lot sizes. Today, work-in-process inventory is one-fifth of what it was a few years ago when employees would transport material in various stages of completion up and down an industrial elevator connecting the production area to the warehouse.

Other waste elimination projects and improvements in machine uptime have reduced manufacturing cycle times over 80% and improved productivity by almost 30% over the past three years. Such accomplishments reflect Baxter's mission-driven culture that truly embraces change and opportunities to serve customers better.

Web Exclusive Best Practices

Where Continuous Improvement Is Truly Everyone's Job

At Baxter Mexico S.A. de C.V., demonstrates strong focus on collaboration.

Some companies approach the need to drive change and sustain gains the same way they address most challenges. They throw money and people at the problem. The managers at Baxter Mexico, located in Cuernavaca south of Mexico City, take a different approach.

"In many other facilities they have a specific continuous improvement department," says Alejandro Ochoa Ortiz, the plant manager. "We do not have this department because we believe that continuous improvement is the responsibility of everyone who works in our facility."

In practice this means that not only is everyone's job to think about what they do and how it can be improved, but they must also take on a wide variety of special assignments. To do that effectively requires knowledge and expertise that's too often limited to managers and supervisors. Baxter conducts regular training for employees at all levels on such topics as standardized work, the 6S's, the visual factory, kaizen, SMED, kanban, poka-yoke, statistics, Six Sigma and total productive maintenance (TPM).

"All of the programs that we have, be it 6S or SMED, the leader is not a guy from a CI department," says Ochoa. "The leader will be a production supervisor, a quality supervisor, a maintenance person. My assistant is the leader for our recognition program. It's part of our normal activities to have that responsibility."

One example is Baxter's TPM program. The company launched the autonomous maintenance initiative with some intense training, followed by implementation on a pilot line. They then applied the successes and lessons learned on that line to improve uptime in other production areas.

"TPM plays a very important role in the way we develop people, the discipline used for factory improvement opportunities and the introduction of continuous improvement, creating a culture of empowerment and ownership," Baxter managers noted in a follow-up inquiry. As a result of the teams' TPM efforts, overall equipment efficiency (OEE) has increased significantly. This has contributed to reductions in cycle times, costs and even lost workdays.

"With a strong focus on collaboration, we are able to train more people every year, supporting autonomous maintenance activities with highly motivated personnel. This culture forms part of our systematic way of working to achieve proficiency, productivity and team-based excellence," Baxter reports.

Impressive Logistics

Baxter Mexico S.A. de C.V. meets unusual challenges with unique home-delivery program.

"This is Mexico!" exclaimed the driver with a grin as he gestured at a black bull on the sidewalk. Roaming freely beside the busy street on the southeast side of Cuernavaca, we waited patiently for it to wander off before pulling up to the gates of the Baxter Mexico facility. Clearly out of place the free-range bull was a reminder of the area's rural past, which has largely been eclipsed by today's bustling local economy and traffic-clogged roadways. But it was a good indicator that, from a supply chain and logistics perspective, Mexico presents some unique challenges.

Known as "the city of eternal spring" for its year-round 80 temperatures, Cuernavaca is a popular weekend escape for Mexico City residents who come to enjoy the region's weather and many water parks. At an elevation of around 5,000 feet, Cuernavaca is 2,300 feet closer to sea level than Mexico City, which lies 45 miles to the north.

From its factory in Cuernavaca Baxter launched Mexico's first home healthcare product delivery program in 1998. Every month it delivers peritoneal dialysis bags to thousands of people living throughout the country who are suffering from chronic kidney disease. These patients must undergo in-home dialysis treatment four times a day for the manual therapy, and once during the night for the automated therapy. They receive enough solution -- each day of treatment typically requires an average of 12 liters -- to last them for an entire month. It's a sizeable shipment that in some remote locations must be flown in by cargo plane and then carried overland by rented mule.

Baxter coordinates delivery through handheld devices interfaced with its supply chain management system. It maintains an automated database that stores patient information, including doctors' prescriptions, hospital instructions, product usage and the delivery schedule. Customer satisfaction is measured through an electronic survey performed during each delivery.

A barrier to market entry for potential competitors, the home delivery program is a unique initiative that earned the company Mexico's National Logistics Award, the first pharmaceutical company to be so honored. It has other benefits as well. Baxter uses the program to connect customers to its employees. Through its "one day on the route" program, employees accompany delivery personnel on the trucks as they visit patients. It's a great opportunity for them to meet the people whose lives are improved by the product that they help to produce.

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