DePuy Orthopaedics, a Johnson & Johnson company based in Warsaw, Ind., is a manufacturer of orthopedic implants, medical devices and instrumentation. The company's manufacturing facility in New Bedford, Mass., consists of a single-story building some 90,000 square feet in size and employing about 300 people.
Early in 2003, as the company's management looked for ways to reduce costs while also improving productivity and output at the New Bedford plant, DePuy executives turned their attention to the consumable supplies used in the manufacturing process at the facility.
At the same time, they saw opportunities to improve the process used at the facility for handling the consumables. Supplies were distributed from one centrally manned stock location called the "tool crib." Excessive quantities of inventory were required to guard against stock-outs and machine downtime, and employees maintained "private stocks" of tools at their work areas, adding to the excess consumption numbers.
In addition, operators had to make frequent visits to the crib to request tooling and supplies, but they were required to shut down their machines while they were away and turn them back on when they returned. This machine downtime would average 10 to 15 minutes per visit, and with approximately 200 machine operators making up to three trips per day, the facility was experiencing a substantial amount of machine downtime.
Focusing on Point-of-Use
The production and supply chain management team at DePuy took on the challenge of re-engineering the consumable supplies process, and they developed a list of five major goals for the project, including: reducing machine downtime due to operators awaiting needed tools and supplies; ensuring round-the-clock access to required materials for employees; reducing on-hand inventory; empowering employees while providing end-user accountability for supplies; and effecting a substantial increase in reporting accuracy around consumable supplies.
Surveying the landscape of potential solutions to their consumables challenge, the DePuy team came to focus on automated point-of-use dispensing technology. Richard A. Perry, manager of MRO strategic sourcing at DePuy, had become familiar with the point-of-use dispensing solutions — essentially, large cabinets with a varying number of access-controlled drawers — while visiting various industry trade shows, and he came to believe that this technology could be the right solution for DePuy. Subsequently, David Rivers, a systems engineer with DePuy, found an automated point-of-use dispensing exhibit at a conference organized by APICS, the operations management association formerly known as the American Production and Inventory Control Society.
Running the Pilot
After an exhaustive study conducted by Perry and Rivers to learn about the specific technology provided by the major suppliers in the automated, point-of-use dispensing industry, the New Bedford facility elected to go with a provider of the solutions based in Southern California. Perry said that the selected provider met the following criteria on DePuy's requirements list: modern, state-of-the-art cabinet designs; no in-house server required; Web-enabled solution; user-friendly operation; superior management reporting features; proven track record; and low overall cost.
DePuy's production floor is organized into six business units, and the production and supply chain team selected the largest business unit in the plant for the first implementation of the solution at DePuy. Then they set a 90-day period to validate the project, beginning in July and ending in October 2003. The test unit was programmed to provide users with access to the tools and supplies they required to do their specific jobs, while the employees were empowered to take whatever they needed, whenever they needed it, directly at the point-of-use. With the automated dispensing system connected to the Web, the solution provided management with up-to-the-minute inventory information, as well as extensive reporting and accurate accounting.