Case Study

     Baxter International
     Wins Team Excellence
     Award Competition
     Jennifer Buchanan,
Figure 1: Baxter North Cove Quality Leadership Process                  includes bag making, filling, sterilization, packag...
Support of Organizational Goals                              for possible improvement. We analyzed these data
        As p...
cards for each step in the production process. After
the initial mapping exercise, each step in the process
was further an...
Figure 3: Spaghetti Diagram of Product Carrier Movements      Reduced labor costs for Replenishment Center
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Baxter International Wins Team Excellence Award Competition


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Baxter International Wins Team Excellence Award Competition

  1. 1. Case Study Baxter International Wins Team Excellence Award Competition Jennifer Buchanan, B axter International, Inc., is a directly translates into market Beverly Smith, and global healthcare company share. As a result, Baxter North Andrea Williamson that, through its subsidiaries, Cove has developed a strong history assists healthcare professionals of continuous improvement and and their patients with treatment operational excellence based on a of complex medical conditions quality leadership process that including hemophilia, immune focuses on customers and total disorders, kidney disease, cancer, employee involvement (Figures 1 trauma, and other conditions. and 2). Baxter maintains 67 manufacturing Through the strategic planning facilities around the world, one of process, Baxter North Cove’s senior which is the North Cove plant, leadership team chose to apply located in the foothills of the Blue Lean methods to its key produc- Ridge Mountains in Marion, NC. tion and administrative processes. This plant was built in 1972 and is Through benchmarking and case the largest manufacturing employer studies the senior leadership team in western North Carolina. North realized that implementing Lean Cove produces approximately 300 would successfully create tremen- finished IV, peritoneal dialysis, and dous value for the organization contract manufacturing codes and by reducing inventories, providing is the world’s largest manufacturer more available floor space, and of IV solutions in flexible containers. improving product flow through This facility is challenged to remain the plant. Because these results competitive in a commodities would best address the plant’s market where product quality is strategic challenges, Lean was expected and product pricing chosen as the operating strategy 32 THE JOURNAL FOR QUALITY & PARTICIPATION Summer 2005
  2. 2. Figure 1: Baxter North Cove Quality Leadership Process includes bag making, filling, sterilization, packaging, and material transport between processes via product The Five carriers. This team was charged with identifying and Foundations removing waste from this large-scale production process. of Quality Evaluation Criteria One: ty Leadersh Project Selection and Purpose ali Disciplined A As stated earlier, North Cove’s senior leadership Baxter Qu ip Strategic Performance Process team created a vision to build a Lean enterprise in order Planning Culture to address plant financial performance and capacity. This project was selected to support this vision and the plant’s strategic objectives. Pareto analysis of all A Formal A Disciplined finished goods codes produced at North Cove indicated Deployment Operating that one-liter saline IV solution represented a large Structure Mechanism portion of both plant volume and value of production. The senior leadership team recognized that waste reduction within this process could have a significant within the quality leadership umbrella to drive the impact on meeting strategic objectives. next phase of continuous improvement. The plant began its Lean journey by creating two product and Stakeholder Analysis seven administrative value stream teams. These teams Potential stakeholders for this project included the were charged with value stream mapping each process North Cove senior leadership team, internal suppliers from start to finish. The mission for each team was to and support functions, employees, the Replenishment identify and remove waste. Center, Baxter’s corporate supply chain, and the All nine teams achieved significant results. The team ultimate end users. Because Lean methods remove waste that was recognized by ASQ as the International Team from a process, not people, production employees were Excellence Gold Award winner was North Cove’s One- involved in project implementation, but not in project Liter Saline IV Solution Value Stream Team. This team selection. Improvements made in the production was selected to represent Baxter North Cove in this process must maintain current customer service levels competition from a pool of outstanding value stream and maintain or improve product quality, therefore not and process management teams active within the affecting the end users of this product. Senior leadership facility. The One-Liter Saline IV Solution team consisted team members, representing all areas of production, of cross-functional members from all affected stake- internal suppliers, and support functions were respon- holder groups, including all areas of production, sible for selecting this project. The Replenishment internal suppliers, the release department, engineering, Center, our external customer, also encouraged the and the Replenishment Center (external customer). selection of this project because of potential efficiency The production process for one-liter saline IV units improvements within its areas of responsibility. Figure 2: Baxter North Cove Five Foundations of Quality DEFINITION Meeting Requirements Quality is meeting requirements. STANDARD Defect-Free Work Defect-free work meets requirements 100% of the time. METHOD Prevention Prevention is the way we achieve defect-free work. ORGANIZATION Total Employee Involvement Total employee involvement is essential to achieving quality. ATTITUDE Ongoing Improvement Ongoing improvement keeps us ahead of our competitors. 33
  3. 3. Support of Organizational Goals for possible improvement. We analyzed these data As part of the annual strategic planning process, to understand the potential effects on our strategic the North Cove senior leadership team developed five objectives. strategic objectives. After considering the impact of In addition, managers and key value stream team this project on each objective, the team realized that members attended “Lean Boot Camp,” a highly inten- the project would significantly impact three of the sive, off-site, one-week training course. A key element of Lean Boot Camp was that current organizational five strategic objectives, thus providing justification leaders, not consultants, conducted all instruction. for its launch. Participants learned to identify and eliminate waste using Lean techniques. Each attendee also studied the Stakeholder Impact book Lean Thinking by Jim Womack. Stakeholder impact was determined by evaluating the degree of job change for the internal stakeholders Final Improvement Identification and impact to service levels for external stakeholders. Of all the metrics identified, our team determined • Managers and production employees would see that improvements to cycle time, inventory, cost per a high degree of impact as a result of significant unit, and service level would have the greatest impact reporting structure and job sequence changes. on meeting the metrics associated with our strategic • Internal suppliers and support areas would see more objectives. We utilized the value stream map as the consistent demand and therefore a medium degree primary tool to illustrate these data and evaluate the of impact. current-state process. • The Replenishment Center and corporate supply chain would see a significant benefit through Final Improvement Validation decreased labor costs and reduced inventory. An ideal state process was then developed. Analysis • One-liter saline IV solution is a critical code for of the ideal state indicated that by achieving best-case our end users. Therefore, it was imperative that cycle time, in-process inventory and cost per unit any changes made during project implementation would be reduced with no impact to service levels. As could not disrupt current world-class service levels. a result, cycle time reduction was chosen as the final improvement opportunity. Evaluation Criteria Two: The team borrowed the capability study from the Six Current Situation Analysis Sigma toolbox to evaluate product release performance We began by performing case studies and bench- in number of days. This study indicated that current marking companies that had successfully implemented performance was equivalent to a 0.1 sigma quality Lean. During benchmarking visits, we observed real-life level. In other words, batches were released within the applications of Lean tools, which resulted in increased Replenishment Center’s requirement only 8% of the available floor space and reduced inventory. Like time. This study revealed that there was significant these facilities, to understand our current situation room for improvement. we chose to value stream map the one-liter saline IV production process. A value stream is defined as all Evaluation Criteria Three: actions, both value added and non-value added, Action Plan Development required to bring a product from raw material to the The initial step in the improvement process was to customer. The value stream map was the primary implement 6S. The 6S’s for North Cove are: safety, sort, tool used to identify improvement opportunities straighten, shine, standardize, and sustain. 6S was the and served as our blueprint for prioritizing Lean foundation for Lean implementation at North Cove improvement activities. as it created the mental state of refreshment necessary Brainstorming sessions were used to identify and to implement standard work and other Lean tools. evaluate value stream data. Output, cycle time, cost The team then performed the value stream map per unit, inventory, service level, batch size, production during a two-day focused improvement Kaizen event. time, and distance between production areas are a Data such as cycle time, production triggers, and num- few examples of process data that were considered ber of operators were documented on data collection 34 THE JOURNAL FOR QUALITY & PARTICIPATION Summer 2005
  4. 4. cards for each step in the production process. After the initial mapping exercise, each step in the process was further analyzed to generate ideas for removing waste. These ideas were documented on “starbursts” and added to the value stream map as potential improvement opportunities. A few examples of improvement opportunities include: use of kanbans, cellular flow, pull systems, and production triggers between departments. Validation of Action Plan The team validated potential improvement opportunities against stakeholder requirements. GOLD AWARD WINNERS: Capturing the coveted Gold Award for the Improvement opportunities that did not remove waste International Team Excellence Competition does indeed take a team from the process, improve release time, or reduce effort as demonstrated by members of Baxter Healthcare’s winning team. product cost were not considered. Any solutions that Team members pictured are (front row, l to r) Chuck Nelson, Andrea Williamson, Beverly Smith, Jennifer Buchanan, and Dennis McKinney. might compromise end user service levels were also (second row) Mark Smith, Mike Banner, Doris Smith, and Jeff Higginson. disregarded. The team also used paper layouts to (third row) Janet Clark, Gene Gordon, Donna Davis, and David Boone. model proposed product flow through the value (back row) Chris Gladwell, John Cone, Wyatt Younts, and Terry Foxx. stream to ensure other production lines would not be negatively impacted. the facility; however, this investment in our people and the potential for future savings through other Lean Selection of Final Improvement Action initiatives easily justified the training costs. The final improvement actions were selected based on the potential to reduce waste, and as a result, Evaluation Criteria Four: Project Buy-In, improve release performance and overall cycle time. Implementation, Progress, and Results Improvement opportunities that met these criteria Stakeholder buy-in was achieved as a result of were evaluated according to feasibility, cost, time communication, Lean training, and the potential of to implement, and potential benefit. Based on this the project to drive results tied to strategic objectives. information, opportunities were ranked in a matrix The team’s involvement of all affected stakeholders in and then prioritized on a 6-, 12-, 18-, and 24-month every aspect from project selection through implemen- plan. The team used this priority list as a working tation was key in achieving buy-in and preventing plan to track the status of process improvements and resistance. to measure its performance. As implementation progressed, our team identified “rocks in the stream.” Rocks in the stream are simply Expected Benefits and Justification obstacles that are disturbing the flow of product Expected benefits included a reduction of work-in- through the value stream. As these rocks were identified, process, cycle time, and required product carriers, as responsible parties participated in team meetings to well as increased inventory turns. The team realized that these metrics tied directly to the plant’s strategic help resolve issues. objectives and had the potential to drive bottom-line Validation Buy-In Existed plant financials. We also expected intangible benefits We implemented these changes over a short period like a significant reduction in non-value-added of time and maintained day-to-day discipline to activities, and therefore, more time for 6S and safety manage our new Lean process. Soon after the initial initiatives throughout the plant. implementation, employees from other production Opportunities identified during the Kaizen event areas began inquiring about when Lean product flow involved optimizing current resources and equipment would be implemented in their areas. This proved to and did not require capital expenditures. There was a our team that we had buy-in from employees. small cost associated with Lean training throughout 35
  5. 5. Figure 3: Spaghetti Diagram of Product Carrier Movements Reduced labor costs for Replenishment Center • (external customer). • Reduced finished goods inventory by 9%. Summary These changes required no capital and have increased available assets, decreased labor costs, and improved cash flow. Most important, this was accomplished without impacting one-liter production or customer service levels. One of the project’s biggest intangible results was improved employee morale. By removing non-value-added tasks, we increased available Before After time for value-added activities, such as 6S and safety programs. Employees now work to optimize the entire Implementation product value stream, rather than internal department Our initial change was to streamline product efficiencies. The success of the One-Liter Saline IV through the plant by creating a product cell with Solution Value Stream Team has solidified Lean as the dedicated equipment and floor space for the one-liter operating strategy to achieve continuous improvement saline IV product value stream. This reduced non-value- and meet our strategic objectives. We have created a added product movements (see Figure 3) and made passion for Lean enterprise improvements where all control of product through the cell much more visual. team members have developed genuine “eyes for value” Another significant change was to implement a and “eyes for waste.” “pull system.” A pull system exists whenever there is an explicit signal from the downstream operation to produce. Kanbans were established between depart- Jennifer Buchanan is a quality manager at Baxter ments to provide this visual production trigger. Healthcare, North Cove facility. She has held various Batch processing was eliminated in order to smooth positions in quality management operations at North process flow. Cove for more than five years. Buchanan earned a bachelor’s degree in pharmaceutical sciences from Measuring Results Campbell University School of Pharmacy. She can The following results were measured to ensure be contacted by e-mail at expected cycle time reduction was achieved without impacting customer service levels: Beverly Smith is the supply chain manager at Baxter • Release performance. Healthcare, North Cove facility. She joined North • Last hold for batches. Cove in 1997 as an analytical chemist in the quality • Customer service levels. department and has held various positions in • Total one-liter output. manufacturing operations for more than six years. Smith earned her bachelor’s and master’s degrees in Results Realized chemistry from Western Carolina University. She can be contacted By implementing Lean techniques this team: by e-mail at • Improved overall cycle time by more than 70%. Andrea Williamson is a manufacturing manager at • Reduced required product carriers by 25%. Baxter Healthcare, North Cove facility. She has held • Eliminated 2,400 wasteful product moves per day. various positions in manufacturing operations at North • Reduced work-in-process by 30%. Cove for more than seven years. Williamson earned a • Increased process WIP turns by 64%. bachelor’s degree in chemical engineering from Clemson • Increased available floor space by 22,000 square feet. University. Williamson can be contacted by e-mail • Eliminated two daily production schedules. at 36 THE JOURNAL FOR QUALITY & PARTICIPATION Summer 2005