Fusing the Components of a Successful Future at Medtronic Advanced Energy
"The NHMEP has been a diligent advocate, not only for our business, but for all businesses in NH, who are interested in improving their global competiveness. They have patiently worked with us through demanding times, and are always eager to challenge us to keep our Lean initiatives in the forefront of our thought processes. We are grateful to always have the resources the NHMEP provides available to our business and our suppliers." — David LeGault, Medtronic Advanced Energy
Salient Surgical Technologies, now Medtronic Advanced Energy (Portsmouth, NH), was established in 1999 as TissueLink Medical, a medical technology company that developed applications to control bleeding, primarily during liver cancer surgery. Today, they develop, manufacture, and market several patented advanced energy devices used in surgical procedures.
One such product platform, the AQUAMANTYS® System, uses their patented Transcollation® technology to haemostatically seal soft tissue and bone during orthopaedic reconstruction or joint replacement in the hip and knee, as well as spine surgery, orthopaedic trauma, and surgical oncology. This technology allows the surgeon to control and prevent blood loss, providing many health and cost saving benefits. Medtronic has 150 in-house employees, in Portsmouth and an external sales force of close to 200.
The acquisition of Salient by Medtronic will provide the resources for additional new product lines and increased employment. The company's products are distributed throughout North America, Europe, and Asia.
From Design to Lean Clean Room
In their early days, Salient consisted of an office and distribution only. No actual manufacturing was done in-house. Engineers developed ideas into prototypes, which were produced through a select group of contract manufacturers. The product was sent back to Salient for order fulfillment and distribution.
The rapid growth of the company triggered plans to construct a new facility that would include a clean room to accommodate in-house production. Although a Lean culture had been considered but not really practiced before their entrance into manufacturing, Medtronic wanted it incorporated as they transitioned to their new building at the end of 2008.
Throughout construction of the new building, Facilities Manager and Lean advocate Dave LeGault made sure that Lean manufacturing ideas were incorporated into the conceptual layout of the clean room and the design of cellular work areas to produce optimal flow that incorporated waste reduction and other efficiency measures. These enhancements would provide for a smoother transition into manufacturing. LeGault also felt that the training Christopher Tasikiris and the New Hampshire Manufacturing Extension Partnership (NHMEP) offered, would be instrumental in teaching Medtronic employees the basic Lean tools and terms to help them identify waste and how to remove it from the manufacturing processes .
Basic Lean Training began in early 2009 with classes of 20 individuals, including a cross section of direct manufacturing personnel, manufacturing engineers, design engineers, quality, operations people, individuals from inventory control, office, clerical, sales and marketing, and customer service. The Lean training events paid off, as employees enjoyed the classes and recognized that Lean applies to any process driven activity, not just manufacturing.
Since Medtronic was still purchasing nearly 100% of their product from contract manufacturers, it made sense to assist those contractors by improving their processes to reduce costs, so they invited them to participate in the Lean training events.
"One particular supplier's president 'saw the light' at our event and proceeded to implement Lean at their facility," shared LeGault. "The fact that we have been training our people and our supply chain at the same time has certainly had a positive effect on our success!"
Training Supply Chain
In total, Medtronic did six basic Lean events with the same kind of cross-functional classes and supplier guests. In the meantime, their clean room continued to take shape. Space initially planned for prototype building by a five-employee team, quickly became a production area once they discovered that they excelled at building their own devices. As the company grew, they added more product lines and trained more people to work on the lines. New employees receive the same Lean training so they can contribute as well.
The clean room has ramped up to 20 people and so has Medtronic's production. According to LeGault, "When you build your own product in-house you learn more about them than you would having someone else build it. You have constant and immediate feedback, and can see improvement opportunities more quickly and clearly."
In the three years since bringing production in house, Medtronic now produces nearly 60% of their own product as opposed to outsourcing 100%, and it's cost effective to do so, thanks in part to Lean initiatives.
Bridging the Gap Between R&D and Manufacturing
During this period of rapid growth the company introduced new products and increased sales of existing products. Lean training and the NHMEP helped them successfully bridging the gap between R&D and manufacturing. Medtronic's contract manufacturing partners continue to embrace Lean initiatives and are a strong player in the growth of the business. It's mutually beneficial.
Medtronic uses the same suppliers as their contract manufacturers when they build in-house, which keeps them engaged with their suppliers and helps control quality. Because of this relationship, they are easily able to make changes and work closely to avoid non-conformances.
Reducing Product Release Time, Cycle Time, Inventory
Lean Improvement work is ongoing at Medtronic with positive results. LeGault, who was in operations during the move, can attest to the history and the impact Lean implementation has had at the company. Recently, an employee team using their Kaizen training committed to working together in a room for a week and was able to reduce release time on products by more than 50%. They also found ways to reduce cycle time and inventory levels, thus improving inventory turns and cash flow.
With the acquisition by Medtronic, more product lines are being added to the clean room, and Lean concepts are incorporated in the layout redesign to maximum efficiently. Value Stream Mapping activities also helped sales and marketing plan the purchase and storage of marketing materials and collateral. Reducing waste from obsolete and damaged materials resulted in cost savings and cost avoidances
Increasing Business 3300%
Since 2003, as the company expanded globally, business has increased by 3300%! While this is largely due to offering outstanding products through a highly trained and dedicated sales force, the continuous improvement activities and relationship with their suppliers allowed manufacturing to keep pace with the increasing demand for product and maintain cost targets.
As volume has increased, Medtronic has had to diversify their supplier base, but prefers to work with local business partners whenever possible. They are building more product, adding new suppliers, and helping those suppliers become better. Helping their suppliers decrease the cost in their products, has in turn, reduced cost to Medtronic as well as their other customers. This "sharing the wealth" makes financials stronger and provides opportunities for the suppliers to expand their businesses.
"We can't have our suppliers put all their eggs in one basket and only supply Medtronic - that would be dangerous," cautions LeGault. "We rely on our suppliers, and know that pulling our business could destroy them. There is a balance. We are consistently trying to improve and innovate both with our devices and our relationships."
Expanding Lean Activities
Typically Medtronic tries to do training across the board so that everyone benefits. Last year they did several self funded events as well as some partially paid for through the state job training fund. Six Sigma and machining training were offered in addition to Team Involvement Problem Solving, Supply Chain and other Lean activities.
"Even though our project work has been successful, it is always a struggle to find funding and time," said LeGault. "Medtronic is a very high growth company, more than 30% per year, and it is hard to take the time to stop and think about something and make plans and take action. It is way too easy to do the ready, fire, aim. We still need to do things more effectively."
"Zenagui Brahim (Director at NHMEP) tries very hard to get manufacturers together to share ideas and best practices," adds LeGault. "Everyone has basically the same problems and can learn a lot by sharing their experiences."
Medtronic has partnered with NHMEP by hosting round tables and other training events. They support the NHMEP's work and recognize its value and importance.
Celebrating Customer Success
Every January Medtronic employees kick off the new year with "The Patient and Surgeon of the Year Banquet." It features surgeons and their patients whose lives have been changed because of Medtronic's medical devices and technology. Employees find it extremely gratifying to meet these people and hear what a difference the products have made in their lives – from replacing a hip to a successful liver cancer operation to enabling a teenage girl to wear her first prom gown.
"It's a good reminder to all of us of why we do what we do," adds LeGault.
Sharing success happens outside Medtronic's annual event as well, here is their "Checklist for Success".
- Work with suppliers/involve them in Lean training to help them improve
- Constantly work on and invest in R&D, prototyping, and innovation! Medtronic was able to utilize their original technology to branch into hip, knee, and spinal surgery.
- Partner with NHMEP by hosting events and roundtables to encourage and inform other manufacturers and learn from shared experiences.
- Continuous Improvement of quality and processes throughout the company.
- Investing in the company and employees through employee training and advanced technology.
- Lean is part of everything - it enabled the company to transition from R&D to manufacturing and increase in-house production 60%, to help their suppliers control costs, improve their businesses, and pass the savings along and to smoothly increase product lines and employee numbers as the company has grown from Salient to Medtronic Advanced Energy.
- Continue to strive to make things better for everyone.