Cordis LLC: IW Best Plants Profile 2008

Dec. 12, 2008
Building Stability: A skilled workforce at medical-device maker Cordis LLC's Puerto Rico plant attracts new business during challenging times.

Cordis LLC, San German, Puerto Rico

Employees: 1,035, non-union

Total Square Footage: 217,369

Primary Product/market: Cypher drug-eluting stent

Start-up: 2002

Achievements: customer reject rate reduced 80.7% over the past three years; gained two new product lines between 2007 and 2008; ISO 14001 and ISO 13485:2003 certified; J&J Maintenance Excellence Gold Award winner in 2007

The road to Best Plants recognition isn't always smooth. In fact, for Cordis LLC's San German, Puerto Rico, operations you might say the plant encountered a few potholes along the way. Over the past four years, the facility that coats the Johnson & Johnson subsidiary's drug-eluting Cypher stents has endured an FDA warning letter, published studies regarding stent clotting issues, and some uncertainty about the facility's future.

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.

But through all of this turmoil, the San German operations has maintained a model of efficiency and continuous improvement that could serve as a benchmark for any facility with Best Plants aspirations.

Up until 2007, the operations, spread out over five buildings, only served the often-volatile U.S. market. Increasing competition throughout North America meant the facility needed to diversify its consumer reach if it was going to remain viable, says Luis Roman, general manager. A corporate decision was made to transfer the production of stents sold outside the United States from facilities in Europe to San German. The plant also landed a new product line for the Japanese market. The facility's history of significant improvements and workforce experience were contributing factors to the decisions, says Nitsy Soto, business excellence manager.

Recent gains at the San German operations include total documented cost savings from improvement initiatives over one year of $30.6 million and a 63% in-plant defect rate reduction between 2005 and 2008.

Part of the operation's advantage lies in its highly skilled workforce. The complex is part of a chain of 12 J&J companies on the island, which employs approximately 5,000 workers. Such close proximity to sister plants provides cross-training and knowledge-sharing opportunities. The facility also has shown resiliency throughout the years. It appears to have rebounded from an FDA warning letter it received along with several other Cordis plants in April 2004 regarding their quality systems. The FDA citing meant all product-development activities at the affected plants had to cease until the issues were resolved.

Cordis' crimp and pack lines attach coated stents to the stent delivery system and package them to be sent for sterilization.

As a medical device manufacturer entering the pharmaceutical market, Cordis wasn't quite up to FDA pharmaceutical standards. "The fact we were the first combination product out there, we had to learn the pharma element of doing business and the systems that go with that," Roman explains. J&J as a whole responded by establishing compliance teams that over a two-year period revamped the way the company handles quality issues such as customer complaints and corrective actions. On June 13, 2007, the FDA cleared the plants impacted by the warning letter, including San German.

In addition, recent studies showing that drug-eluting stents could cause a clotting condition known as late-stent thrombosis have negatively impacted revenue. But Roman says the additional volume from the new product lines and a more diversified market portfolio should provide a significant boost and some stability.

Looking ahead, the San German operations should remain viable for years to come, even with plans to develop next-generation stents at the company's new Cashel, Ireland, plant, Roman says.

"You're always going to have two tiers of products," Roman explains, characterizing some customers as "Mercedes" buyers and others as "Toyota" buyers. "You need to balance your marketplace out that way, and that's what we're going to offer -- be it a Toyota for developing countries, or be it the middle ground in the U.S."

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Cordis' Talent Pipeline

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Cordis LLC's stent coating operations in San German, Puerto Rico, doesn't have to look very far to fill skilled positions. For one, the plant engages in talent sharing with 12 other Johnson & Johnson companies that comprise what's known as the Johnson & Johnson Puerto Rico Campus. J&J, the parent company of Cordis, employs approximately 5,000 people on the island, providing ample opportunity to transfer knowledge between the different operations.

Inside its four walls, the San German facility taps into its own workforce through succession planning and talent identification programs to develop future managers and skilled workers. Each employee at the plant undergoes a growth-potential evaluation, says Irma Quinones, the plant's human resources manager. After an assessment the management team assigns growth-potential levels for each employee.

For instance, "level two" means the employee could move laterally, while a "level three" worker may be able to progress to a significantly higher position within one to three years, says Quinones. At "level four" an employee has the potential to move up two higher positions in one to three years.

"So each functional area within the company goes through the exercise of trying to understand if you have ready-now-type backups or ready-later-type backups, and what do we need to do to bridge that element of getting there," explains Luis Roman, general manager.

If there aren't enough employees who are ready to fill available positions, the plant still has the option to pull from its sister plants on the island, Roman says.

Regardless of whether an employee is ready to progress a level or not, each worker still has a development plan, according to Roman.

As part of that development plan, managers ask employees where they would like to be career-wise because not every worker wants to be a supervisor, notes Noberto Lebron, worldwide compliance director.

"There are positions where you can move lateral and not only learn, for example compliance, you can go into manufacturing in a rotation, you can go into the quality lab -- if that's what you want to do with your life -- so the program enables you to grow laterally as well," Lebron explains.

Another way the San German operations is evaluating potential successors is by having employees in one department work with associates in another area, says Quinones.

"We're mixing different departments together to get their input," she says. So, the quality department provides feedback for operations, operations for quality and so forth. "We want to make sure that the internal customers are providing feedback so we can evaluate their potential in the right way."

About the Author

Jonathan Katz | Former Managing Editor

Former Managing Editor Jon Katz covered leadership and strategy, tackling subjects such as lean manufacturing leadership, strategy development and deployment, corporate culture, corporate social responsibility, and growth strategies. As well, he provided news and analysis of successful companies in the chemical and energy industries, including oil and gas, renewable and alternative.

Jon worked as an intern for IndustryWeek before serving as a reporter for The Morning Journal and then as an associate editor for Penton Media’s Supply Chain Technology News.

Jon received his bachelor’s degree in Journalism from Kent State University and is a die-hard Cleveland sports fan.

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