Perfecting Product Transfer

Lessons learned from successfully transitioning multinational projects.

Tom Ferris, Kimball Electronics Group

Medical original equipment manufacturers continually face the challenge of reducing costs while maintaining quality. High-volume medical disposables comprise an area in which costs can be lowered both in terms of automation strategy and geographic build site. This case study looks at the program management and product qualification issues associated with migrating a medical disposables manufacturing and packaging operation from Wales, in the United Kingdom, to Poland as part of a cost-reduction effort.

Project Overview

The production lines in question supported fabrication and packaging of disposable test strips used by hospitals, doctors’ offices and consumers. A decision was made to move the product to a lower cost labor market and to upgrade the production line as part of that process. The existing production equipment had been in service for more than 30 years, and it made better economic sense to upgrade the line than try to support the disassembly, transport and reassembly of an aging line. This strategy also enables production on the old line to continue uninterrupted as the new site and equipment is fully validated and can demonstrate 100 percent production capability. Maintaining production redundancy during transition was key as the shelf life of the product is relatively short, which limits the ability to hold safety stock.

The production process consisted of two stages. In the first stage, cards were laminated, slit into 50 individual strips, placed in a bottle, capped and inserted in a semi-finished tray. Once orders were received, the semi-finished trays were put into the second stage of the process where the bottles were labeled, put in cartons and palletized. The first stage was customized to the specific product, but the packaging stage supported a range of products.

Transition Challenges

The new project was not simply a re-automation, but rather a re-automation at a new site. This meant that not only did the process and equipment need to be fully validated, but the site needed validation as well. Additionally, a team of new personnel needed training, documentation required translation, and the facility needed to be certified to ISO 13485.

The Wales facility where the product originally was built had a production team that was highly experienced with the current automation strategy, along with its efficiencies and inefficiencies. They also were experienced with regulatory constraints associated with the product and manufacturing process. The Poland facility’s engineering team previously had been focused predominately on automotive electronics production rather than medical disposables. However, it had significant experience in Kimball Electronics’ transfer of work (TOW) process, applying Lean and Six Sigma principles in achieving continuous improvement and working in an industry with very precise customer product acceptance testing and configuration management requirements. The Poland facility previously had been certified to ISO 9001:2000 and ISO/TS16949, making adding an ISO 13485 certification relatively easy, since well-documented processes and a robust traceability capability were already in place. The project needed to be in compliance with FDA quality system regulation requirements. Since the project involved fulfillment as well as manufacturing, the facility’s quality management system also needed to support the regulatory requirements of all end markets to which the products shipped.

Another challenge was that many people on the Wales team would lose their jobs once the project transferred. It is significant to note that the Wales team has taken a highly professional approach in sharing their expertise during the TOW process, putting quality of the end product and process first, even if success translates to loss of their jobs. The Polish team was equally committed to project success. This translated to a robust analysis during the TOW planning phase. The Polish team questioned why the new production process couldn’t perform at the efficiency levels they saw in electronics manufacturing. The Welsh team provided excellent input on what could feasibly be changed and where industry constraints should be more carefully considered. Customer input on past issues and new desires also was considered.

While the production line was specific to a single customer, the packaging line could serve multiple customers. Quality standards were subjective, and customers had different interpretations. This meant that managing the overall transition process and validating the new line was quite a challenge.
Additionally, language differences needed to be addressed. While the Poland facility’s engineering and facility management personnel all spoke excellent English, the production operators spoke only Polish. This meant all the documentation needed to be maintained in two languages with both sets adequately approved by customers. Ensuring that customer concerns in this area were adequately addressed required close communication.

Finally, since the product was a cross between a pharmaceutical and a medical device, additional quality assurance measures applied. For example, the product required accelerated shelf life stability testing, along with an additional product test following stability testing. And, in some cases, there had to be 13 weeks of stability testing, even though standard finished goods stocking is four weeks. Consequently, careful inventory planning was important in terms of transition validation testing.

The Transition Roadmap

Kimball has two key processes that applied in this situation: new product introduction (NPI) and TOW. While NPI is applied to new projects and TOW typically is applied to existing projects transferring between facilities, this transition of an old project to a new line drove use of both disciplines.
The NPI process addresses the issues that arise as a new product is entering the facility. Its goal is to ensure that all issues associated with project startup are addressed.

In a new project, the NPI process begins during the bid phase with a concept feasibility review. In this case, that process was used to analyze the cost benefits of the transition. Once a decision is made to move forward, there is a design concept review, which may include design improvement recommendations or simply validate documentation and quote assumptions, depending on the project requirements. In this case, adopted design change recommendations focused on modifications to production equipment that improved efficiency or reduced scrap, rather than changes to the actual product design. Critical to quality (CTQ) elements also were analyzed and incorporated in the capability and entitlement plan.

The production launch phase may include a product verification review and/or a product and process validation review. In this case, preliminary failure mode effects and analysis (PFMEA) studies were run on the product and the new equipment design to test assumptions on the new process. There was a multidisciplinary team put in place consisting of Welsh and Polish engineers and managers. The analyses were performed right after the kick-off meeting took place and before equipment design was frozen. Previous lessons learned by the Welsh team over many years of experience in manufacturing the product and solving process issues were taken into consideration during the PFMEA studies.
Once the project enters production startup, the focus is placed on executing and controlling production. During the product and process validation review, there is focus on creating systems that monitor internal CTQ metrics and customer feedback and tie to a corrective action process. There also is focus on measuring quote to actual costs and in measuring progress toward jointly agreed upon cost reduction goals.

In the Flow Production phase, the emphasis expands to include a focus on field performance and continuous improvement.

The TOW process is designed to support transition between facilities to support product needs such as volume changes, cost reduction, etc. It starts with an internal analysis by the program manager, which defines costs, risks, needed team members and action plan. Once the analysis is approved, the team is identified and strategy meetings begin. In this case, the TOW process was used to drive knowledge transfer between the two facilities.

TOW is a pull process with the program manager at the receiving facility driving the TOW. There is a kick-off meeting to make initial assignments, and a color-coded (red-green-yellow) action register is used to monitor activities. The register is available via the company’s intranet to all project personnel. There is a formal weekly and, in some cases daily, review depending on project requirements.
In this case, the Poland facility sent a team of engineering, quality and other key personnel to the Wales plant to begin knowledge transfer. During these visits, the team observed production, reviewed prior corrective actions and documented potential issues.

Once NPI and TOW assumptions were validated, a safe launch plan was created. This plan defined a product validation process which then when through customer approval.

The end result of this focused process has been:

• Early identification and resolution of potential project issues
• A robust information sharing process that provided continuity in terms of critical processes, but also drove some process improvements
• Excellent transfer of knowledge between the two teams
• Inclusion of customer input
• Achievement of cost reduction in both scrap and labor cost
• An increase in automation levels, which ultimately drives more consistent processing and concomitant quality improvements.

While the TOW process is not fully complete until production ramps to full volume in Poland in Q3 2010, the result of both team’s efforts has been better than either team would likely have achieved entirely on its own.

Tom Ferris is a Kimball Electronics Group Medical Solutions business manager and can be reached at [email protected].