Cardinal Health Alaris Products, which makes pumps and disposables used during infusions, was in critical shape in the late 1990s and needed to address improvement on all fronts. The prescription included improvements in customer satisfaction and in the company’s finances, which required the company’s leaders to rethink their roles and forced them to create a culture that would encourage everyone to work toward the same goals. The company had to use lean manufacturing principles to yield sustainable improvements quickly by changing its culture and involving each employee. It launched a lean implementation in all five manufacturing sites simultaneously to gain as much benefit as fast as possible.

David Schlotterbeck, then president and CEO of Alaris and currently CEO of clinical and medical products for Cardinal Health, was instrumental in obtaining the alignment and engagement of senior leadership, and he continues to be a key leader in lean Six-Sigma implementation at Cardinal Health. Managers knew that they had to learn more about the company’s customers, what did they thought about Cardinal Health and how well the company compare with its competitors? So the company asked the customers. It chose to work with TARP, a major customer satisfaction firm, to create and conduct customer satisfaction surveys.
 
At Alaris, top management engaged the American Society for Quality to provide a one-day Six Sigma executive leadership session for a cross-functional group of leaders. The leaders set a number of objectives, including:  

• Clarify why lean Six Sigma was being implemented
• Identify the strategic implications
• Explain the value and the appropriate usage of the tools
• Internalize lean Six Sigma thinking into the operational philosophy
• Identify the metrics used and needed
• Identify a deployment plan

The company questioned if its 98-percent order fulfillment was acceptable to its customers, and focused on the difference between perceived quality and value against actual number of customer complaints and customer retention.
 
A lean program not centered on the value provided to customers is only making nonvalue-added processes better at being nonvalue-added. During the training and customer research the plants were moving ahead with implementing 5S, kaizen, and breakthrough-improvement events and then implementing define, measure, analyze, improve, and control (DMAIC) methodologies.

Focus on 5S
The 5S principles of sort (seiri), set in order (seiton), shine (seiso), standardize (seiketsu), and sustain (shitsuke), provide a methodology for organizing, cleaning, developing, and sustaining a productive work environment throughout all areas of the company including manufacturing lines, offices, and even mailrooms.
 
The 5S philosophy focuses on effective workplace organization, simplifies work environments, reduces waste while improving quality and safety, and offers prerequisites for any improvement program. Management at Alaris’s Mexico plant was the first group trained. Management knew that to be successful they had to set an example by applying 5S in their own work areas. “The 5S principles are pretty basic, and they have contributed a lot to the improvement and evolution of the employee engagement and overall performance of the Mexico plants,” says Fidel Flores, production manager of the Tijuana, Mexico plant.

Next were the 5S teams, supervisors, and line leads. As this group began to implement 5S they realized how seemingly inconsequential factors impacted work flow. For example, long lead times were partially the result of items being difficult to find in the clutter, which also stole precious work space.
 
Management split the plant into sectors, and responsibility for 5S was split among teams. The teams took pictures to capture the original state and collected more pictures as the process went on. First actions consisted mainly in cleaning, sorting, and eliminating items that didn’t belong in the area.

To activate the first S, the team attached red tags to all unnecessary machines, cabinets, tables, material, tools, etc. The teams verified and recorded all red tags on a log sheet and then disposed of each item as necessary.
 
Progress was monitored monthly. Each team presented to management its improvements, progress, and process, including:

• What was red-tagged
• Disposition of the items on the logs
• How they cleaned up the areas
• How they standardized across similar areas
• How they were going to sustain the new state

These presentations sent a message to management about the pride the teams took in their work and their environment. Rather than conference-room presentations, presentations to management became walk-throughs in the work areas, where the teams explained their progress.

The teams created a before-and-after board and posted it in the main hallway of the plants, keeping 5S upfront in everyone’s mind and stimulating improvement ideas from those not on a team. Management was able to see what was accomplished, to identify who the team members were, and to motivate the teams.
 
Manufacturing applied the 5S program first. The pilot lasted about five months and the complete rollout was an additional three months. Today, this plant is one of the showcases for Cardinal Health, and employees continue to make changes using 5S and other lean tools. The teams are still working on the 5S program but most of them actually implement the 4Ss. They don’t stay on the sustain mode long, because everyone is always looking for ways to improve their work areas.
 

Breakthrough events
Implementing 5S revealed bottlenecks, uneven workstations, inventory build up, etc. This led the team to use kaizen, which was successful in reducing waste, freeing up floor space, gaining efficiencies in labor and, most important, reducing opportunities for mistakes. Breakthrough events involve a dedicated team working a specific number of days in a structured manner to create incremental improvements with no more than 30 days’ worth of homework activities.
 
The process for breakthrough events included defining the scope or clarifying the problem statement. The process addressed a variety of issues such as:

• Excessive inventory in process at a specific station
• Excessive time for line changeovers from one product to another—known as line clears (the line must have a clear barrier between the product of the last lot and the start of the new lot)

Once the scope was clear, the team collected baseline data of that process to understand the starting point. How long does it take to change over a line? How much inventory is in process? What is the cost of the inventory? How much space does it take up?
 
The team established targets for improvement, such as reducing inventory by 50 percent or cutting the time it takes to change over a line by 30 percent, and all targets were exceeded.

Selecting the team to work on the event was very important, because team dynamics drive results. Team members included:

• Stakeholders
• People not connected to the process who can lend a fresh pair of eyes
• The employees in the process
• Management and supporting functions

Working around a participant’s duties can be a problem. The team alerted the work areas and supporting areas of the event as soon as possible and let them know that they might be needed during the event.
 
The duration of the event is based on its scope (most run three to five days). Events start with a three to four hour training session on the breakthrough methodology and on the process. This helped everyone understand their roles and responsibilities, get grounded with the scope and objectives, and speak the same language.

Selecting the right process to work on is important to drive improvements, to ensure the success of future events, and to obtain buy-in. For the first few events the team selected areas they knew would bring significant success and encourage more employee efforts.
 
Once a process was selected, we kept the team focused during the event to avoid risking failure by trying to improve everything. By scoping and using a parking lot (a place to record items that come up during the event) the team could focus on what they could achieve within the boundaries of their process and project. Parking lot items can be dealt with at the end of the event, and some items may be incorporated into the new process or as future opportunities for events.

Reporting the results to management gives the team a chance to shine and lets management see who achieved what results. This report is an example of one event in our Tijuana, Mexico, plant.

Example of an Individual Results – report out on targets:

“The effect of continuous improvement,” Flores says, “leads to less waste, better quality, and more reliable processes with less variation and faster lead times.”

Next, the team applied DMAIC (Define, Measure, Analyze, Improve, Control), sending many directors and managers to ASQ’s Six Sigma champion week-long training class. DMAIC is a disciplined approach to problem solving that ensures root causes are identified and that actions are taken to resolve root causes and prevent recurrences of problems.
 
The leadership group that attended the Six Sigma champion training was the first to start applying the DMAIC approach by asking questions and requiring reviews before teams could move forward. Along with the other lean Six Sigma tools, this approach has resulted in the following improvements in the Tijuana plant:

• Defects per million—88-percent improvement rate
• Order fulfillment—99-percent improvement rate
• Inventory levels—50 percent less
• Cycle time—70-percent improvement rate

In disposables manufacturing in North America, the company has trained:

• Four Six Sigma Black Belts (trained at Cardinal Health and outside)
• Ten Six Sigma Green Belts (trained at Cardinal Health and outside)
• Twenty-six lean or kaizen leaders
• Three champions trained by ASQ
• All managers trained as lean Six Sigma project sponsors

Changing the culture was essential to the transformation. The culture now reinforces lean thinking at all levels as the company continues to organize kaizen events, use lean tools, and encourage total employee involvement.
 
Teams have used 5S, cellular manufacturing, machine and line change over, inventory pull systems, pokayoke, and the DMAIC tools and methodologies to drive:

1. Customer Satisfaction: The No.1 goal is to maintain and improve the quality of the company’s products and processes to drive customer satisfaction
2. Delivery: The second priority is to have world-class delivery metrics to ensure the customer has the product when they need it.
3. Cost: Reduce costs by reducing process variation, having fewer quality problems, lower inventory, and shorter cycle times.

The highly regulated medical device field requires that when the company makes process changes, it ensure that the processes are repeatable and have no effect on the form, fit, or function of the product.
 
When a nonmedical industry alters a process it can move equipment around on the product line, run production, and ship the product out to the customer without much testing. A medical device company must perform an operation qualification and validate that the product is at least as good as the one shipped before the change.

Alaris’s focus is to have the most repeatable processes with the least amount of variation that yields the highest quality level. It uses Six Sigma to reduce the variation in the process and to keep the product well within the specifications.

It is the company’s belief that if products are produced with the highest levels of quality, then the processes, tools, and equipment have the lowest amount of variation and the costs take care of themselves. When management asks questions that focus on customer value, it drives employees to focus on customer-centric decisions.
 
Much of Alaris’s lean Six Sigma improvements have been through culture-changing work by all of its employees, not just the use of the tools. In fact, in making these necessary changes, employee involvement has been the most effective tool of all.