BACKGROUND
Arthrex Manufacturing Incorporated (AMI) is a medical device manufacturer specializing in minimally invasive arthroscopic surgical instruments. Arthrex had been experiencing 30% annual growth as it continued to provide a higher volume and a more extensive variety of products to keep up with global demand. Coleman Consulting Group was tasked with finding and implementing changes that would provide increased capacity for growth and support the employee environment of open communication and participation. Today, Arthrex continues to experience unprecedented growth and demand for innovative products throughout the world. Arthrex remains a privately held company with a family business culture committed to delivering uncompromising quality to health care professionals who use their products, and ultimately, to the millions of patients whose lives are positively impacted.
CASE STUDY:
Arthrex Manufacturing Inc.
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INDUSTRY: Medical Device Manufacturing
WORLDWIDE EMPLOYEES: 4,615
U.S. EMPLOYEES: 3,188
REVENUES: $ 2,616 million
HEADQUARTERS: Naples, Florida
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THE CHALLENGE
The most significant challenge during the project was designing a plan to provide incremental capacity increases to keep AMI ahead of the growth curve while planning for seasonal slow-downs from August to November. Prior to the engagement, AMI ran production for 80 hours a week by utilizing two 8-hour shifts working Monday – Friday. During the busy season (December to July), employees worked overtime on Saturdays to provide extra production. Growth was being handled by purchasing more equipment, adding building space, or adding people.
Prior to the start of the project, packaging productivity declined sharply and illuminated the importance of scheduling labor in and out of a clean room environment in the most productive manner. As the number of employees entering the clean room at one time increased to meet higher demand, there was also an increase in non-productive time due to employees waiting in line to enter the room. Careful analysis of historical production data combined with growth forecasts required expanding production to 120 hours per week. Extending production beyond two 8-hour shifts would significantly alleviate capacity constraints in the clean room.
THE RESULTS
Blending employee preferences with business needs yielded a scheduling solution with precisely one third fewer employees entering and exiting the clean room at any one time, minimizing the adverse effects of waiting in line and low productivity. The implementation at AMI resulted in a scheduling system that balanced the needs of both employees and the business, which resulted in the client reaching its production goals in the most productive and profitable manner. Through this engagement with Coleman Consulting Group, Arthrex was able to increase production by 40% while reducing total labor cost per part by 15%. The schedules provided Arthrex with the ability to stay ahead of the growth curve while protecting against the adverse costs of idle labor during slower seasons.
THE SOLUTION
Coleman Consulting Group administered a comprehensive, anonymous survey to shift workers in which schedule models developed during the data analysis phase were shown and discussed to understand their employee preferences better. Results of the survey revealed a strong employee interest in 10-hour shifts, providing more production hours that were then used to increase production levels during the week. Employees preferred more annual days off from work and longer breaks compared to their current schedules. Through different shift lengths and day-on day-off patterns, Coleman Consulting Group was able to not only meet the business needs but also satisfy employee desires. In addition to an increase in productivity, the schedule provided 5-day breaks every three weeks and required employees to come to work 20% fewer days per year than on their previous 8-hour schedules. The Coleman team transitioned 275 employees to extended shifts with no turnover! With a $40 million facility expenditure deferment, AMI still saw a 100% increase in Injection Molding Parts due to streamlining and recognizing inefficiencies in scheduling.
“Our goal was to expand capacity into the weekend and meet the needs of our employees. Implementation (of the Coleman schedule) resulted in a 40% increase in production and 0% employee turnover.”
-Andy Owen, Director of Manufacturing at AMI