When the opportunity for growth presents itself, it’s the ideal time to take a company by the reins and steer it down the path to lean. This was the message Teleflex Continuous Improvement Manager Donna Radford delivered to AME members at the AME Chicago 2012 International Excellence Inside Conference.
Teleflex is a medical device manufacturer that employs 11,200 in 28 countries and generates $1.5 billion annual revenue. Its primary focus is critical care and surgical procedures. But before 2009, the company also served the aerospace and automotive industries. While the potential for growth in these industries was stagnant, the medical industry was booming.
The company shed its extraneous businesses to focus on lower hanging fruit, explained Radford. The medical side was experiencing high margins and customer back orders. “The time was right,” she added.
The company sold many of its assets to Veethree, and recently began acquiring more medical-related companies. Most recently it acquired the anesthesia device franchise LMA International. But as Teleflex attempted to meet the increasing demand for its products, it was challenged by many self-imposed barriers and a dysfunctional culture that was resistant to change. Facilities were poorly laid out, which contributed to longer lead times. Excessive transportation costs resulted from poorly located warehouses, and excessive waste was generated in production.
To address these issues, Teleflex hired an on-site consultant and focused on continuous improvement at its Asheboro, NC, facility. It focused on creating a culture of accountability and began painting a vision for the future. It developed an employee engagement model and Key Performance Indicators. Now the company is well on its way to fully implementing the Six Sigma DMAIC toolkit, but it is proceeding slowly and cautiously.
Radford said veteran employees of 25 years or more were given quarterly profit-sharing checks. Teleflex kept its numbers in the open to show the results of its efforts. Even with money as a motivator, however, implementing new strategies was an uphill climb. Change for them was difficult. Concepts like lean and accountability were foreign to them.
The company began measuring and recording how well employees implemented suggestions. Management issued report cards based on scales of 1 to 4 to encourage compliance and address noncompliance. Those who scored highest implemented six or more of the recent suggestions. Those who scored lowest displayed no effort to change. Employees who generated their own successful ideas were rewarded with Visa gift cards. Radford recalled one implemented suggestion that streamlined the production of catheters, which saved the company $95,000 per year.
As Teleflex analyzed existing infrastructure, it discovered that the building layouts, line layouts, processes and locations had room for change. The warehouse has now been centralized. Production workers have been provided more space for operations, which has increased production. These changes would not have been possible without the advice of long-time employees, Radford said.
Manpower and overtime have been reduced, but employees still were willing to embrace the new culture. However, regardless of lean’s impact, it is essential to keep an open line of communication.
“Tell them the good, the bad and the ugly right up front,” Radford said. “And always keep them in the loop.”
Teleflex has experienced continued success with its lean implementation. “But we are still not happy,” Radford said. The company recently achieved a Six Sigma green belt and continues to move forward. She warned against trying to change an organization too quickly, saying that it is a process with no true end. Lean is about changing cultures.
