Case Study onyPractical Applications of Lean Principles

Phillip Cain, Principal EngineerPhillip Cain, Principal Engineer

Alcon Laboratories, Inc.World-Wide Manufacturing

FacilitiesNorth America (6):• California• Texas (2)• West Virginia• Pennsylvania• Mexico

Europe (6):F• France

• Belgium• Ireland• Switzerland• Spain• Germany

Asia (1):

South America (1):• Brazil

Germany

Asia (1):• Singapore

• 14 Manufacturing Plants World-Wide• Products distributed in 180+ countries

72 t i ith h i i t i i t• 72 countries with physician training centers

Purchased by Novartis in 2011

Irvine Technology Center

Facility Size: 205K sq.ftTotal Employees: 951647 Operations/Service304 R&D

Irvine Technology CenterProducts

ConsumablesInstruments

Products

Accessories

Guiding Principles: Quality Policy

• Customer Satisfaction

• Compliance

• Trust and Integrity

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• New Technologies

• Continual ImprovementContinual Improvement

Quality Culture

Lean TermsKanbanPoke YokeChaku-ChakuGembaGembaHeijunkaHoshin KanriJidokaKanbanKanbanKaizenMudaMuriMurau aGoNaze Nando: Why?

Tatemae: Appearance of Truth: façadeHonne: Real Truth

Production Process Management18 Yrs of Improving Processes to achieve Operational Excellence18 Yrs of Improving Processes to achieve Operational Excellence

Benchmarking

ToyotaSteelcase Taylor Guitars

Celestica Thales-IES

i

NestleParker HannifinBoeing C-17

B i C 17Boeing C-17

Team Alignment Process

Build status and month tracking

Finished GoodsKanban

Start/StockPlan

U it St t C tUnit Status Count

Direct Links

5S• Sort required tools • Set layout for ease of accessibility.• Shine – daily workstation cleanliness• Standardize each workstation

Sustaining 5S• Sustain

– Weekly 5S audits are performed of the

Date & Time of Audit: _______________ Name of Auditor: _____________Yes NO: # of

Occurrences

Location: ______________________

5S Audit Form

performed of the workstation and general work area.

– Manufacturing personnel l t d f

1Have safety hazards (water, oil, chemical, machines, other obstacles) been removed from work area or placed in it's designated locations?

2 Are unused or obsolete documents removed from area?

3Are all workstations clear of unnecessary documents, materials, personal items (excluding purses, wallets, and radios)?

4 Are storage areas, shelves & cabinets clear of unnecessary documents, materials, tools & equipment?

SORT (Distinguish between what is needed & not needed)

are evaluated for improving scores.

5 There are no extra tools on the work surface, station and in the drawers?

6 Are all travel paths clear of materials and equipment?

7 Do all permanent fixtures, equipment and tools have a label, parking spot (tape), & signage?

8 Do all storage bins have labels?

STABILIZE ( A place for everything & everything in its place)

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9 Is material handling/storage & other equipment in their parking spot (includes black totes and carts)?

10 Is all WIP material in appropriate parking spots (includes over building-too many systems not in taped areas)?

11 Are materials & supplies identified (ie. part number)?

12

13

14 Are floors, equipment, storage areas and work surfaces free of debris, dirt, dust, stains, fluids & trash?

15 Are cleaning supplies and equipment easily accessible (stored properly, clearly labeled and readily available)?

16 Flooring, lines, labels, signs, etc. are clean and unbroken?

SHINE (Cleaning, and looking for ways to keep it clean & organized

17 Are hardaware bin clean and dusted?

18 Are all material, equipment, fixture, and tool labels standardized?

19 Are parking spots and desinating locations clean and in use?

STANDARDIZE (Maintain and monitor the first three categories)

Sustaining 5SSustain production & manufacturingSustain production & manufacturing• Tool replenishment & monitoring

– Self Governed.

Drawer 1Tool Description McMaster # Present Needed Crib Shelf

1 Stainless Steel Shears, Length 8" 3608a24 F

2 Hard-Soft Hammer 3755a45 G

3 Phillips Round Blade Screwdriver, Length 2-3/4" 5682a36 E

TOOLING CHECKLISTSTATION 1 LINE 1

p g4 Slotted Narrow Blade Screwdriver, Length 8" 5682a32 E

5 Phillips Long Round Blade Screwdriver, Length 6" 5682a44 E

6 Slotted Narrow Blade Screwdriver, Length 3" 5682a37 E

7 Miniature Long-Nose Pliers, Length 4"" 5783a1 F

8 Diagonal-Cutting Pliers, Length 5" 3620a12 F

9 Long-Nose Pliers, Length 5-1/2" 53895a23 F

10 Wire Stripper 7294k58 F

Customized Checklist for each workstation

Tool Crib

11 Driver C/E (P/N: 409-950) I,J

• Re-order point established byKan-Ban systemOn line Tool Ordering• On-line Tool Ordering• Email verification to

production lead

Poka YokeMotor Gear Box Latch Disk

Mistake Proofingg

Current State Future State

Value Stream MappingCurrent State Future State

Future State

3 3 D

Metrics

C l Ti

Current State

7 7 D

% Change

57 %3.3 Days

0.58

$19,513

Cycle Time

Defects per Unit

Standard Cost

7.7 Days

1.68

$23,930

57 %

65 %

18 %

$11783/sqft

10.56 Turns

Floor Space Utilization

Inventory Turns/Year

$4110/sqft

5.61Turns

287 %

88 %

Supplier Smart Carts (SSCs)– Direct to floor Delivery from

Value Chain Supplier– Reduced POs– Increased Turns

Shi d– Elimination of trash– Optimal daily deliveries to

support production

Shipped to customer before Invoice Due

– Decreased Inventorysupport production. yFind and resolve issuesquicker

Assembly Stations

DESIGN PROCESS

1. IDEA2 CONCEPT ITERATIONS2. CONCEPT ITERATIONS3. IMPLEMENTATION

Applying SkillsCASE STUDY: IMPROVING CUSTOMER SATISFACTION USING LEAN TOOLS

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IMPROVING CUSTOMER SATISFACTION USING LEAN TOOLS

The PurePoint® and Eyelite® lasers provide a unique combination ofp q

features designed to enhance surgeon control during vitrectomy surgery.

Customer Focus

CATEGORY INITIAL STATE

EYELITE 100 BACKORDERSEYELITE 100 BACKORDERS

PUREPOINT 43 BACKORDERS

PUREPOINT SALES 8% MARKET SHAREPUREPOINT SALES 8% MARKET SHARE

CONTINUAL IMPROVEMENT SAVINGS

$0

CUSTOMER SATISFACTION DISAPPOINTMENT

ProcessValue Stream

Initial State

19

Value StreamLaser Production Line

Initial State

ALL PRODUCTION WITHIN CLEANROOM ENVIRONMENT

Value StreamLaser Production Line

SEPARATED PUREPOINT LASER PRODUCTION FROM CLEANROOM ENVIRONMENTFinal State

ProcessValue Stream

Final State

Value StreamAdvantages

• Eliminated unnecessary gowning– Saved 35 min/day per technician– 17 technicians ~ SAVE 9 hrs/day!

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17 technicians SAVE 9 hrs/day!• New layout for process changes

– Improved efficiency• Reduced clean room space requirement 2/3• Improved visual management• Reduced production cycle time

5SHousekeepingp gInitial State

DisorganizedDisorganized

5SHousekeepingp gFinal State

• Saves Space • Protects Equipment • Standardize

MaterialManagementMaterial Flow

Initial State

MaterialManagementMaterial Flow

Final State

Team CommunicationVisual Managementg

Initial State

Team CommunicationVisual Managementg

Final State

Supervisor

Work Stations

Customer Focus ResultsCATEGORY FINAL STATEINITIAL STATE

EYELITE 100 BACKORDERS IMMEDIATE AVAILABILITYNo Customer Backorders

PUREPOINT 43 BACKORDERS IMMEDIATE AVAILABILITYPUREPOINT 43 BACKORDERS IMMEDIATE AVAILABILITYNo Customer Backorders

PUREPOINT SALES 8% MARKET SHARE 24% MARKET SHARE

CONTINUAL IMPROVEMENTSAVINGS

$0 $1.1M

CUSTOMER SATISFACTION DISAPPOINTMENT DELIGHTED

CORPORATE OFFICE ECSTATICCORPORATE OFFICE ECSTATIC

Customer Focus Results

41 38

5060

PurePoint Finished Goods Inventory ‐ 2009

Lean Value Stream 

‐2

22 25

38

20

40

B k d

Initiative

‐20

0DEC JAN FEB MAR APR MAY JUN JUL AUG SEP

Backorders

Availability

57

‐47 ‐50

‐35

‐60

‐40Eliminated Backorders

‐5760

Customer Focused Results

C l i t (% f i t ll d b )C l i t (% f i t ll d b )Complaints (% of installed base)Complaints (% of installed base)

2008 2009 2010

Complaints Reduced significantly from 2008 to 2009

Business Metrics:

12%16%

Average Defect Per Unit (DPU)

100%

Product Cost

7%

4%

8%

12%

94%

96%

98%

2008

2009

0%2008 2009 92%

2008 2009

2009

Resources

$400 

$500 

usan

ds

Total Overtime Labor Cost

2008

2008

2009

$0

$100 

$200 

$300 Thou

20 22 24 26 28$0 

2008 2009 2010

Lean AdvantageFloor Space UtilizationFloor Space Utilization

Cataract Floor Space EfficiencyCOGM per SqFt

$15,637.0916000

18000

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$9 222 6110000

12000

14000

$9,222.61

6000

8000

10000

29814127

3345$4,110.37

2000

4000

01999 2007 2010

Total Sq.Ft COGM/Sq.Ft.

Alcon Laboratories

Questions & Answersphillip.cain@alconlabs.com