Growth Manufacturers Case Studies
Implementing Change at American Surgical Company
By Kathie Mahoney, Marketing & Administration Director, MassMEP
Shortly after its acquisition by the current owners in 2009, American Surgical Company (ASC), located in Salem, MA, realized it needed to make strategic changes if they wanted to grow their business and expand into new markets. They applied for a Workforce Training Fund grant in 2010 to provide continuous improvement training for their employees and ultimately hired MassMEP to provide the training.
They recognized the importance of implementing change within the organization if the company was going to be able to achieve sustainability. The first step was to educate the entire staff in the language of continuous improvement and work towards improving the culture within the organization.
On the Delicot Line, they first conducted a Value Stream Mapping, then a Kaizen event with teams of workers, supervisors, and managers. The training followed the partial lecture and partial hands-on approach that's typical of MassMEP engagements. This was instrumental to implementing key process improvements within the company. The training approach, together with ASC's management commitment, has helped ASC to sustain the improvements.
The employees were very receptive to change and recognized the importance of changing in order for the company to grow. "It was like a light switch went off and everyone saw the benefit." The training provided everyone with a common understanding of process improvement. Additionally since the company had no intention of outsourcing any of their manufacturing production, they knew that in order to be competitive worldwide while keeping manufacturing here in the U.S., they had to improve internally.
Overall Improvements in Productivity
- 40% improvement in units per man hour
- 25% increase in productivity
Specific results ACS reported in 2013, approximately six months after completion of the training, include:
- Enhanced efficiency reduced labor costs by 25%
- 5 people can now produce 36 units per day freeing up two people for other projects
- Doubled finished goods inventory turns from 14 to 28
- Increased raw material turns from 2.3 to 6.4.
- Reduced finished goods inventory by $21.5k
- Reduced raw material inventory by $20k+
- Reduced cycle time by 40% by redesigning layout, optimizing processes, and eliminating waste
Taken together, process improvements implemented as a result of their Kaizen training helped nearly double daily Delicot production. At the same time, this freed up Delicot line 2 employees for other work in the facility.
Since their Lean training, American Surgical Company has taken the lesson learned and run with them, applying similar improvement techniques to their other product lines. ASC's target is to reach a 67% improvement in production across their product lines. The company has a strategic plan with 10 objectives for future growth and is continuing to work with MassMEP to achieve these and other goals.
With the improvements they have made, American Surgical launched one new product in 2013 and two in February 2018. These new products represent new markets for American Surgical. The company's products are now sold to 44 companies on 6 continents and ASC's goal is to boost that to 50 countries by the end of 2018.
None of this growth would have been manageable without process and culture changes. One of their key objectives was to keep all manufacturing within the U.S. and they are one of a few companies in their market that can say that. Pretty impressive for a 30-person company.
In addition to the improvements on the shop floor, they have also expanded within the company as part of the growth goals. They now have internal R&D, quality, and sales and marketing departments. Staffing has remained about the same since 2010 with a small amount of natural attrition. In addition to incumbent worker development, the new employees ASC is bringing on are higher skilled. This has resulted in productivity improvements which help the company to provide higher wages.
When senior management attended MassMEP's "Lean Management in the Fast Lane" session, they experienced best practices in work efficiency and quality checks on training. Since implementing these practices, American Surgical has developed better internal training programs as they bring on additional staff.
American Surgical Company is one of two companies sell an X-ray detectable cotton ball line and they are the only company in the U.S. that manufacturers the product. While comprising about 10% of their sales, ASC found that this product provides an entry into hospitals. This 'foot in the door' has resulted in additional sales of other products as once a hospital designates a company an approved supplier, it is easier to sell additional products.
ASC's customers are helping the company and provide recommendations. On a recent visit, one international distributor stated, "Their products are like the Rolls Royce of neuro sponges."
About American Surgical
American Surgical Company is a global medical technology company focused on developing and selling creative and smart surgical technologies. ASC recognizes the challenges of surgical procedures, and meets those challenges by working directly with physicians, operating room personnel, and building corporate partnerships. ASC has established a global presence across 6 continents. ASC's manufacturing facility and corporate headquarters is based in Salem, Massachusetts, USA. All ASC products are made in the United States. Certified to ISO 13485 standards.
ASC strives for unequivocal product quality and manufacturing excellence with a Six Sigma quality target of ≤3.4 defects per million opportunities. They continue to put the patient first.