1) The project aimed to improve the material flow process for raw materials at Thermo Fisher Scientific's Protein Standards Manufacturing Lab in Carlsbad, California. 2) Currently, when materials are missing, it causes bottlenecks and delays as staff have to locate materials through emails and walking around the facility. 3) The team implemented a two-bin Kanban system to store room temperature and -20°C raw materials, using visual signals to trigger replenishment. New locations and procedures were created, and staff were trained. 4) Initial results showed the lead time for materials was reduced by 50% (from 4 hours to 2 hours) and the distance walked decreased by 2,500 feet per week

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Improving Material Flow at Thermo Fisher Scientific
Yousif Al-Roumi, Ana Soloviov, & Ammar Sabano
Shiley-Marcos School of Engineering, Industrial & Systems Engineering
Executive Summary
Current State
Material Flow Background
Kanban System
Control
Improvement Opportunities
Verification & Results
Thermo Fisher Scientific (TFC) is a world leader in laboratory equipment for the biotechnology industry, with revenues
of $17 billion and 50,000 employees in 50 countries. The site we worked at in Carlsbad was Life Technologies until the
company was acquired by TFC about a year ago.
To ensure that the Kanban does what it is supposed to do, a couple of things were tested to evaluate the Kanban’s
compliance with its specified requirements. First, the barcodes on cards have been scanned to verify functionality. Then
the materials and proper bin location had been verified, and the flow has been tested against the flow chart. However,
the Picking time in REC was not reduced. The walking distance per week was reduced to approximately 2,500 feet. The
lead-time reduced to 0. There are 0 emails and Work Orders in the new system. Moreover, a stocking location has been
removed.
The Material Resource Planner (MRP) from Protein Standards raw materials causes bottlenecks and high inventory
because of unreliable usage predictions. This results in lack of raw materials causing starvation. The Protein Standard
raw materials (RM) are currently stored in multiple locations, such as receiving warehouse, and staging. This causes
high amount of inventory and long material replenishment cycle time (MRCT). The objective of this project is to improve
the material replenishment process.
New E1 Kanban locations for RT and (-20) raw materials were created. A new Standard Operating Procedure (SOP),
which is a set of clearly written instructions outlining the steps or tasks needed for Kanban, was created. All personnel
who are using the RM need to be trained in how to use the Kanban, and are responsible for following the SOP
document. Inventory audits have to be made regularly to compare the amount of materials in the Kanban to the data in
E1 system. Regular gemba walks shall be made to observe the functionality of the Kanban, and to interact with all
responsible staff.
May 8, 2015
In the Protein Standards Manufacturing Lab (PS) Kanban should include all RM which are stored at -20 C temperature.
The process boundaries are from work order received to Kanban replenished, excluding hazardous materials. The
Metrics are two. First, to reduce the lead-time of Raw Materials (RM) delivery from Receiving Warehouse (REC) to
Protein Standards Manufacturing Lab (PS) by 50%, which was from 4 hour to 2 hours. Also, to reduce the email
ordering of (RM) from (REC), the distance walked by floor controller, the picking of RM in REC warehouse, and the
number of stocking points.
When Protein Standard Lab Operator learns that a certain raw material is missing, he e-mails the Flow Controller (FC)
who searches for the RM in the area. If the RM is not onsite, then Flow Controller (FC) emails planning with missing
SKUs. If RM is in REC warehouse the (FC) e-mails REC to request material replenishing. The Lead time for a complete
trip of FC is 4 hours. The average time to pick 1 SKU in REC 1.8 minutes. There are 15 deliveries per week from REC
to PS, which constitute to about 30,000 ft. And there are 2-3 back order incidents per month.
Analysis
The data that were collected from E1 are the number of replenishing request per each Room Temperature and (-20C)
SKU was collected. In addition, the historical usage of each Room Temperature and (-20C) Protein Standard Raw
Material. From this baseline data, the team was able to the average, the maximum, and the minimum usage per year
and month of each SKU. And through using Pareto Charts, the team was able to see which SKUs were present in
historical Work Orders. In addition to that, the team has also analyzed PS raw material usage of each SKU versus
remaining Site usage. The team was able to sort these data along with the user’s (PS Lab Operator) preference using
ABC analysis to see which RM had the most frequent usage to focus on.
Room
Temp:
18 % SKU’s~ 54% WO
-20 C°:
26 % SKU’s~ 50% WO
Solutions
Kanban is a tool to achieve Just in Time (JIT) production through inventory control by visual record. Kanban is a visual
material replenishment system that shows what to produce? How much to produce? When to produce? Based on the
analyzed data of usage, lead time, adding a safety factor, in combination with current container size of each Protein
Standard (RM), the team chose a 2 bin Kanban method to be selected. The Two bin System is an inventory control
method where the second bin contains enough inventory to last until order quantity arrives. A new, simplified, design of
Kanban cards, the visual signal that includes the information of a certain SKU, a picture of RM, and the barcode
quantity. Also, a location of the Room Temperature and (-20C) Kanbans was identified in the Protein Standard area and
in E1 system. Both Kanbans materials were sorted using the 5S method, which is is a cyclical methodology: sort, set in
order, shine, standardize, sustain the cycle. Also, both kanbans contained a card holders: 1 for the operator where he
puts the Kanban cards of that he does not find. And, 2 for the REC personnel who searches for SKU in REC area and
put them in their proper location; if he does not find them he put the card in a proper location. The last cardholder is for
the Floor Controller (FC) to search for it and ask planning to order the missing SKU. However, the Kanban card for (-
20C) size was reduced, and it does not have a picture of the raw material. This change was due to the size of fridge of
the (-20C) is less than the stocking area of the RT Kanban.
Part Number (SKU):
600351
Part Description:
GLASS BOTTLE
Quantity:
1 BOTTLE
Protein Standards
First, the quantity and size of containers in bins can be updated based on future change in demand. Apply the Kanban
system in other areas on site. Reorganize inventory in REC to reduce picking time. Improve tracking method of usage.
Acknowledgment
We would like to take the opportunity to thank the following for their support of this project:
• Dr. Bradley Chase, Executive Champion and Professor & USD ISyE Faculty
• Thermo Fisher Scientific Management & Team Members