Medrad Inc., Heilman Center Plant, Indianola, Pa.
Employees: 176, non-union
Total Square Footage: 154,000
Primary Product/market: medical diagnostic-enhancing fluid delivery systems and MR coils and accessories
Achievements: 2003 recipient of the Malcolm Baldrige National Quality Award; inventory savings from demand/pull purchasing agreements with six key suppliers totaled $1 million; quality control team cut inventory from $1.5 million to $54,000 from 2006 to 2007; since 2003 has exceeded goal of increasing revenues by 15% annually
Medrad Inc.'s gleaming bright facility just outside Pittsburgh, where nearly 200 employees systematically put together medical imaging devices, stands in stark contrast to the gritty steel mills that forged this region's industrial identity. The difference isn't just the clean working environment that's inherent in producing medical equipment; rather, it's a modern-day approach to manufacturing that stresses flexibility to foster efficiency and productivity.
It's an elasticity that's evident on a mid-November afternoon when production worker Rosanne Rings builds an interface for Medrad's eCoil, a probe device used in prostate, colon and cervical examinations, just hours after working on an imaging screen display for another product at the other end of the Heilman Center plant in Indianola, Pa. Rings, like the rest of the workers at the 5-year-old facility, is cross-trained to work multiple job functions.
"Cross-training gives us the ability to move people around based on need and gives employees the opportunity to build their skill sets," says Craig Dean, electro-mechanical production manager.
This mobility is the nexus of the plant's lean initiative, which began shortly before production commenced in 2002. Even the infrastructure was built for flexibility with electrical and air lines designed for easy cell reconfiguration. At the time, the company preached a "no-layoffs" policy and instead reallocated manpower to other areas in need. The payoff has been cost savings of more than $2.5 million in 2006 alone driven by improvement projects and a multiskilled workforce.
The lean transformation is displayed all the way from the incoming inspection to the plant's packaging and shipping warehouse. At quality control where employees inspect incoming materials from suppliers, the plant reduced the amount of inventory waiting for inspection from 10 days in February 2006 to one-half day by the end of August 2007. The quality control group achieved the reduction by identifying low-risk materials that could be certified based on history and supplier performance, says Robert Kasten, quality control coordinator. The team also became more efficient by eliminating non-value-added steps and establishing a process in which they utilize a dry-erase board to notify each other of high-priority items.
Looking at the neatly stacked cartons stored within taped squares, you'd never know that quality control was once a disorganized hodge-podge of boxes. "We considered it the jungle, and this is our basketball court," observes Kasten while pointing to a before-and-after picture.
Proceeding to the workstations, material flows from the back, or closed part, of U-shaped cells to facilitate one-piece flow. The move from batch processing helped the probes line keep up with increasing demand and increased production from 65 pieces per day to 120.
"When you build in batches, if it takes three minutes to build, the next station is not getting a probe [for those three minutes]," says Shawn Simpson, process leader for the probes line.
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Medrad's New Look Never Gets Old
Heilman Center plant continues its success with an improvement program that began five years ago and is still going strong.
The year 2002 marked a new beginning for Medrad Inc.'s Pittsburgh-area operations. That was when the company relocated three scattered manufacturing processes to a 155,000-square-foot facility in Indianola, Pa., called The Heilman Center and embarked on a continuous improvement project that is still producing results.
The move set the tone for the transformation by consolidating its vascular injection system, magnetic resonance coils and accessories production into one facility. The additional space provided the company with an opportunity to improve layout and product flow, reduce non-value-added steps and further consolidate and standardize manufacturing processes.
The plant's lean initiative, known as MedFlow, helped it increase output per employee by 20%, eliminate 25,000 inventory transactions per year, reduce floor space per unit by 50% and increase overall productivity by 30%, according to the Heilman Center's IW Best Plants application.
The accomplishments weren't easy due to the plant's complex manufacturing environment.
"Unlike lean leaders such as Toyota and Dell, Medrad's Heilman Center is a low-volume, high-mix plant; it must be innovative in applying lean techniques to manufacture relatively small amounts of a wide variety of products," the Heilman Center noted in the application's supporting statement.
One of these "innovative" methods included developing a cross-functional team of employees responsible for learning and applying lean techniques rather than hiring an outside consultant. Utilizing value stream mapping, the team identified non-value-added processes that could be eliminated. It also sought help from the University of Pittsburgh's School of Industrial Engineering to develop feasibility studies of its proposed improvements.
The plant realized significant savings from the process, including a 35% reduction of assembly errors and training time from new color-coded visual work instructions. Before MedFlow, the plant used engineering blueprints with manufacturing instructions, which were complicated and difficult to follow.
The project also led to the replacement of a manual inventory replenishment system that required the plant to individually order parts from a centralized store area. Now, a just-in-time kanban system facilitates a more efficient flow of material through the entire manufacturing process.
Since 2002, the MedFlow project has continued, from the formation of cellular manufacturing in 2004 to wireless materials tracking in 2005 to the beginning of kaizen events in 2006. In 2007 the plant began the expansion of its supplier demand-pull program, which will include a total of 16 key suppliers that account for approximately 60% of Medrad's total raw materials spend.