How to Pivot Your Manufacturing to the New Reality
The past two weeks have seen all of our worlds turned upside down. Many of us are working from home, all social and sporting events are shut down and, most seriously of all, thousands of people are becoming sick and dying all over the world.
For manufacturers, the change in their businesses is also dramatic. From panic buying to logistics bottlenecks and interruptions of international supply, every aspect of our business is under challenge. However, in the midst of this disruption there are opportunities and a national imperative to address global shortages in key medical supplies and equipment.
However, if you are not already a manufacturer of medical devices or equipment you can’t help right? WRONG!
There are in fact many ways in which manufacturers can pivot their operations to help meet the supply shortage of critical items such as ventilators, surgical masks, gowns, and hand sanitisers. Governments all over the world are reaching out to manufacturers who can help contribute to the effort to increase supply of these precious commodities. For businesses facing a rapid fall in orders it also provides a unique opportunity to maintain cash flow while developing new capabilities that can you can continue to leverage after the end of this crisis.
Where Can You Help
The device that is getting the most publicity is the ventilator. This is a complex and specialised medical device requiring considerable specialist manufacturing expertise. Relatively few companies will have the capability to ramp up manufacturing ventilators.
I am aware of a manufacturers of sleep apnoea equipment who is gearing up to manufacture them and even this is challenging despite the obvious similarities between sleep apnoea equipment and a ventilator. However, there is more to making a ventilator than just final assembly.
Ventilators contain pumps, hoses, filters, displays, sensors, valves and a host of other parts. Metal or plastic enclosures and machined parts are also required as are printed labels and membrane keyboards. Even packaging is needed to transport the new ventilators to their users.
Therefore, there are a huge range of potential inputs that manufacturers can provide and just because you are not equipped to assemble ventilator does not mean you can’t contribute. However, it is not just ventilators, manufacture of hand sanitizer needs containers, cartons, labels, chemicals, closures while diagnostic test kits, surgical masks, clinical spill kits, waste bags, thermometers, goggles, gloves and gowns also have multiple inputs. So, there are many ways to contribute and don’t rule yourself out too quickly.
Where to Start – Data
Once you have put your hand up and been selected the first step is really to develop the product and verify that you can actually make it to the quality required. In the case of the medical items currently in short supply they are likely to be established products with established designs and specifications, so you need to start with these.
One assumes that the government will have resolved intellectual property issues with the original equipment manufacturers of these products and that you will be provided the right to manufacture under licence. Once you know exactly what it is you need to make, you need to develop an indicative:
- Bill of Materials – a list of all the raw material items (and work in progress items if required) to build the item you are manufacturing.
- A simple routing outlining the manufacturing steps that need to be followed and the work centres likely to be involved.
- Any tooling, jigs or fixtures you are likely to need for the manufacturing. These are likely to be the longest lead time items required to start manufacturing, so if tooling is needed, getting this underway quickly is critical.
The next piece of information you need is an idea of the likely demand that you will be required to supply.
Building a Manufacturing Model
Once you have all this information you should then build a manufacturing model. The most effective way to do this is using a value stream map. This is a map of the end to end process from receiving raw materials to shipping finished goods. Importantly the value steam map also shows the information flow that will control the process. In setting up a new process, our tendency is to focus on the value creating steps – the ones that actually transform the product from raw materials to finished goods, but it is usually the information flows and the non-value added waste that trip us up when we try to ramp up production. This value stream map needs to consider how we manage different product variants or, where manufacturing resources are to be shared, how production will be scheduled.
If you are setting up a new production line or modifying an existing line the value stream map then provides a good start point for developing a Lean Facility Layout.
Consider the Impact on the Office
The value stream map also allows you to design the optimum information flow, ensuring you have considered how orders will come in to the business, how they will be handled and how production will be scheduled to ensure that the needs of your new customer will be met on time in full without impacting your ongoing business.
Often people forget about the impact on “office capacity” in taking on new projects, but if the orders are delayed in the office, people get overloaded and errors occur, this can have as much impact as problems in the factory. It can also have a catastrophic financial impact as failure to send timely or accurate invoices, properly control supplier ordering, manage accurate inventory, pay suppliers or collect receivables can quickly bring a business undone, even if sales are going through the roof.
Make Sure Your Suppliers are On Board – both New and Existing
Beyond your factory, you also need to consider your supply chain. Who are the suppliers that you will be working with, where are they located, what is their lead time, what quantities do you need to order, how often will you order and what information do they need from you? This information will help you determine what raw material inventory you need to help and enable you to set up a simple service level agreement laying out the ground rules about how you will work with your suppliers.
Using your knowledge of demand for the final product and your bill of materials you also can calculate how much your supplier will need to deliver to you and over what period. It is good to share this with your supplier as soon as possible so they can gear up to meet your needs (or if they can’t give you time to look for alternative suppliers).
Quality – The Ultimate Test
There are multiple levels of quality challenge involved in manufacturing medical supplies and devices. The first and the most important is actually delivering a product that is safe and meets the customer’s requirements. This means developing clear specifications and quality requirements and communicating them effectively to all staff along the manufacturing process.
Don’t just check the quality of the finished goods but aim to assure quality at every step of the process. When things go wrong and you do find defective product, put your team to work to find the root cause and develop and test permanent fixes to prevent a reoccurrence. Sometimes it is hard to find the discipline to do a root cause analysis exercise when everyone is busy, and things are going crazy in production.
However when you start up a new product it is important that you keep on top of every quality issue that you find at every step of the process and put in place permanent fixes otherwise you will quickly find your factory and your business profits disappearing under a mountain of defective product. There will be huge pressure to just ship the orders and to keep the production going. However, especially when starting up a new, unfamiliar product, it is vital that you send a clear message that if the product is not right at any point in the process, STOP, and fix it.
The second aspect of quality will unfortunately be the one that gets the most focus. That is compliance. In my view you can have all the compliance paperwork in the world, but you can still make a defective product that hurts someone.
However, compliance is a necessary part of manufacturing in a medical environment and it is aimed at protecting end user. It saves lives and many of the rules have been developed from bitter past experiences. Manufacturing of medical products such as medical devices is governed by the Therapeutic Goods Administration in Australia (TGA) and the Food and Drug Administration (FDA) in the USA.
These are the two regulating bodies that get mentioned the most in the Asia-Pacific context as they are seen as benchmarks for other countries in the region. There are different levels of compliance regulation depending on what you are manufacturing and where you sit in the supply chain. So, for example the regulatory burden on a final manufacturer of an intravenous drug will be much greater than it would be on the packaging supplier that prints the carton or even the manufacturers of some of the non-active (excipient) ingredients.
Likewise, the regulation around hand sanitiser manufacture or the manufacture of sharps containers or waste bags is different to that for drugs or for a complex critical medical device like a ventilator. The reality is the level of regulation for lower risk inputs and consumables such as protective clothing may not be excessively onerous and a manufacturer with good hygiene controls and a good quality system may find compliance easier than they expect.
Often if you are supplying inputs to an OEM, most of the regulatory burden will fall on that OEM and they are usually well equipped to manage this and to support you to comply with what you need to comply with. At the core of medical manufacturing regulations is what is called Good Manufacturing Practice or GMP.
This is more than just wearing hairnets and washing hands, it is comprehensive approach to manufacturing that is aimed to minimise or eliminate contamination, mix ups and errors in production. It covers issues such as keeping records, product traceability, hygiene and cleanliness, verification and maintenance of equipment, qualification of personnel, process validation and complaint handling.
How you implement GMP is up to you and you are generally allowed to interpret the requirements in a way that suits your business and level of risk, provided you can satisfy the TGA auditor.
If it all sounds a bit daunting, there will be support available for companies to get to grips with their compliance requirements and most of the products to be manufactured present relatively low risks to the end consumer and so GMP requirements may not be excessively onerous or expensive.
Developing the Team
You now know exactly what you are going to manufacture, how you are going to manufacture it and what your quality and compliance requirements are. So, you are ready to go? Not quite, the most important element of any successful manufacturing operation is its people. Ramping up production quickly can really put this to the test.
Start with communication. Get your staff together regularly and explain to them what is happening. Be prepared to listen to their suggestions and involve them in the processes outlined above in developing your new production process. At TXM we would normally get our clients to form a cross functional team with people from different levels and different functions in the business to work on a project like this. These people would provide their input and expertise in the planning process but also be responsible to keep their peers in their work areas informed on what is happening and to get their input.
Firstly, from our value stream mapping process we need to determine how many people we need to meet the expected demand and what their roles need to be. It is good to write down simple job descriptions for each role – just lists of the major tasks involved at each workstation. Even better, build a skills matrix of the different skills required and get your existing staff to fill in their skills. This will give you a picture of who can do what and what gaps you have.
It is likely that you will have to increase staff by engaging temporary staff initially. It is important that that this is done in an orderly way and the new staff are treated with respect, inducted properly, have their tasks clearly explained and are properly supervised. People, even temporary employees, are no machines, you cannot just plug them in and switch them on.
To make the task of ramping up your team safer and smoother, focus on developing standardised work procedures for the new process. The more you can define the tasks that your team needs to do, the easier it is to train them and the more likely that they will produce a quality product.
Be prepared to take a little bit of time to ensure that your staff are fully competent and only ramp up production in line with the trained staff you have, otherwise the result will be poor quality, injuries and staff turnover, which will make the problems worse.
Consider Getting Help
The team at TXM have a combined 400+ years of manufacturing experience across a huge number of industries and manufacturing challenges. We have helped many companies start up production or ramp up to meet demand efficiently, safely and with high quality. We are happy to talk to you and share some ideas on the phone free of charge.
However having one of our skilled manufacturing supply chain coaches on site for a few days to help you develop your manufacturing plan and get set up can get you up to full production weeks earlier and avoid problems down the line that might cost you tens of thousands of dollars. Please give us a call.
And of course – if you think you cannot help out in the current crisis – think again – your country needs you!