Instrumentation Laboratory, A fresh look

Manufacturing in Action, Source : The Manufacturer US

Instrumentation Laboratory set out on its lean initiative to boost its flexibility and responsiveness to customer needs. Keith Regan finds out how the 46-year-old business reaped plenty of other benefits along the way

From the outset at its founding in 1959, Instrumentation Laboratory has taken pride in its innovations. The Lexington, MA-based firm was founded by an entrepreneur who developed novel techniques for analyzing blood gases. The firm is credited with inventing a widely used technique known as CO-Oximetry. Instrumentation Laboratory holds more than 100 patents in the blood testing area.

In some ways, IL, as the closely-held company is known, is two businesses in one today. At its Lexington US headquarters, some 400 employees produce instrumentation that is used to conduct blood gas and coagulation analysis. At a facility in Orangeburg, NY, test kits themselves, which are the consumable counterpart to the testing machines, are made by a workforce of around 180.

The fact that IL makes both components is one of its unique differentiators in the marketplace, says Doug Ward, vice president of operations. “We take a system approach,” he says. Most competitors offer either the consumable reagents or the instrumentation but rarely both. “We’re offering a system and that means our two product lines are optimized to work with one another.”

IL realizes that responsiveness to customer needs is another necessary element to remain competitive. The company sells two main product lines to private, stand-alone labs as well as testing facilities inside major hospitals in North America and, through affiliates and partnerships, around the world. One line of products deals with critical care blood gas tests and is used in emergency room and intensive care, as well as general laboratory settings. The second tests blood for coagulation properties, or its ability to clot, a key consideration before undertaking surgery and other procedures. While the testing agents are true consumables, the testing machines do have a useful life of from five to 10 years, determined by how much use they receive, and existing customers are frequently replacing their devices.

To boost its ability to adjust quickly to the changing needs of those customers, IL turned to lean manufacturing techniques. The company started by screening a number of lean operations consultants, eventually choosing an individual who mainly helped establish a process for value-stream mapping that the company has used repeatedly since. Because the two plants have very different processes and products, most of the efforts have focused on the Lexington facility, where there is more assembly and integration of parts as opposed to the New York plant where chemicals and processing dominate.

“Mainly, we wanted to gain flexibility within the manufacturing group to make sure we could meet changing customer needs,” Ward says. “By way of side benefits, we’ve also seen process step reduction, setup time reduction, inventory reduction, all those other nice results we’ve been able to achieve.”

Much of the change dealt with how the company thought about targets. While it had monthly production goals that it consistently met, those numbers often didn’t tell the whole story. “We might have a goal of 30 units a month in a product line and we’d be able to go through and check it off at the end of the month. But what that didn’t tell us was that we were finishing 29 units on the last day of the month and calling our goals met. Technically, we were meeting our targets, but there was an enormous hockey stick effect in the numbers if you looked at them.

“We were primarily trying to get to a point where, if our volume needs changed by 30 percent in a month, we would be able to accommodate it quickly and without any disruption.” About two years into the effort, the value-stream-mapping remains a key component, one that has helped identify a number of areas ripe for streamlining, especially on the supply chain and inventory side.

One innovation involves the company’s ordering process. The Lexington plant has been redesigned with local kanbans on the floor. Using its existing ERP system from SAP, IL created blanket orders with suppliers and used the software to create and send e-mails to those suppliers telling them to send a round of materials. Those e-mails are sent whenever a designated worker on the line scans a barcoded card through the kanban system.

Director of Operations Hossein Maleknia says the approach combined innovations from the assembly line with existing technology. “We knew SAP had the ability to do e-mails and we thought it would be nice if we do it with just a scan,” Maleknia says. “We checked with IS and they said it would be very possible.”

“It’s very innovative,” adds Ward. “It creates a completely hands-off ordering system. It was really a homegrown system that used existing tools available to us.” Ward says the purchasing group and other key players had a hand in the system’s design, which came about without direct involvement from the company’s lean consultant, evidence that employees were taking up the lean cause on their own. “The consultant came in and got us started and was valuable for giving us the tools to see our processes in a new way,” Maleknia says. “He provided us basic training.” But Maleknia says neither he nor other managers at the facility have become “lean experts.” “We’re still learning, but we understand enough to see how it can improve what we do on a daily basis.”

Elsewhere in the supply chain, IL created a “supermarket for spare parts,” where many of the parts that enable different versions of tested products to be made are kept. About two weeks of supply based on steady demand is kept on the shelves. Again, automated e-mails are used to alert suppliers when re-orders are needed.

That technique meshes well with another approach, to create a “generic form” of tested product that can then be customized as needed. “That way, instead of maintaining a huge inventory of different versions that we might not necessarily get orders for, we can go through and customize from that basic stock as the orders come in,” he says.

IL recently launched into its latest round of lean efforts, this time focusing on putting a more formal process in place for continuous improvement. Based on the same value-stream mapping foundation, the effort requires employees to do what’s called “home work” but actually takes place during up to an hour of on-the-job time set aside for focusing on lean ideas. “They are expected to bring, on a monthly basis, two to three opportunities for improvement,” Maleknia says. From there, ideas will be shared in meetings and prioritized based on their impact on the value stream and people will be assigned to carry them forward. “The next step is to attach reward programs to help carry this forward.”

One of the hurdles to overcome has been a “shyness,” or reluctance to speak up, among manufacturing employees. But that is starting to change as people see the results of past lean efforts and start to focus on the rewards for bringing forward new ones.

“It’s been very, very interesting for us,” says Ward. “We’re definitely still on the journey, but we’ve achieved tremendous advances. Like every business, we’re continually distracted by priorities but now that some of basics are

in place, the thrust this year is to continue to value-stream map processes with some regularity and enhance the continuous improvement process.”

The process has been helped by strong employee support. “When we first started, everybody was very willing to try to understand what we were trying to do,” Ward says. “The way that we kicked off general training was to talk about what our motives were and what results we might expect to achieve. The tool of value stream maps really helped us kick it off and target areas we knew we could improve on.”

Some of the foundation and frameworks were in place from the outset. In addition to the SAP technology to help it communicate with suppliers, IL had a plant that was already set up with a “cellular environment,” and was already using its own version of point-of-use inventory. Still, when processes were examined through the lens of value stream maps, they found that some processes were displaced. “There were some things that we felt it was critically important that we do in a controlled environment, so we were taking it off line,” says Ward. “But when we did value stream mapping, it ended up that we re-inserted them into the line.”

One goal going forward is to have “more obvious employee participation” so that team members who notice opportunities for improvements even in their daily work have the motivation and processes in place to bring them forward. At the same time, the company is working on cross-training more employees to boost awareness of how specific jobs work and make each employee more valuable. “We want our employees to be more flexible and more valuable,” says Ward. “They are the most important resource for us.”

Comments on this story

click here to add a comment