Want to get the CFO’s Attention? Try Operational Excellence

Contributed by: Michael McVey | Vice President of Manufacturing, CIVCO Medical Solutions

At my organization, focusing on removing obstacles and flowing sales to the customer has been the greatest motivator to achieve Operational Excellence.

We had become complacent about the inventory investment it takes to be in “the business,” resulting in a pile that grew bigger and moved slower. By designing for flow, we:

• resolved some critical capacity issues
• have become more agile at managing mix through the design of the process
• now see that inventory is more about buffering us from our supplier’s varying lead times rather than protecting our internal capacity from customer demand variation

We’re also seeing the impact of our product line management strategy on the cost to manage variations, meaning, the OpEx design principles help us evaluate the positive and/or negative impacts of product design and either make changes or at least be better prepared for product launch.

As a result, OpEx has played a significant role in our transformation strategy. We started with an emphasis on designing lean flow from the point where customer demand occurs and then back all the way through the whole supply chain. We then focused on making flow visible, understanding the value of the interval and managing the pacemaker. Finally, we strove for a Guaranteed Turnaround Time, a consistent, reliable lead time for internal and external/outsourced processes. The result?