Lean Lessons Help Medical Device Manufacturer
How medical supplier DJO Inc. improved processes with lean manufacturing and received the Shingo Prize
By Patrick Waurzyniak
Bone-crunching hits resulting in devastating knee injuries often end a football player's career in an instant. But by wearing the protective carbon-fiber composite knee braces made by medical device manufacturer DJO Inc. (Vista, CA), more than one college football player has gone on to play the game at the professional level. A keen advocate of lean manufacturing, DJO, formerly dj Orthopedics Inc., began its lean transformation more than five years ago, and earlier this year the company was awarded the 2006 Shingo Prize for Excellence in Manufacturing for its work implementing lean techniques at its Vista, CA, headquarters manufacturing facility located north of San Diego.
DJO manufactures several types of its DonJoy Defiance line of custom knee and elbow braces used by amateur and pro athletes, as well as its DonJoy Regeneration bonegrowth stimulation products. The company was started in 1978 in the garage of former Philadelphia Eagles football player Mark Nordquist, who was seeking a way to support his unstable knee. DJO's current Defiance line of custom carbon-composite knee braces traces its lineage to the company founder's use of neoprene sleeves for knee stabilization. DJO recently announced a sponsorship with Cincinnati Bengals quarterback Carson Palmer, who wore the Defiance knee brace while playing for the University of Southern California, and which he now wears in the NFL.
With lean manufacturing efforts, DJO employees have developed and implemented continuous improvement projects that have saved more than $21 million since 2000. The company has conducted more than 250 formal kaizen blitzes company-wide since 2000, and DJO employees receive more than 94 hr of on-the-job and classroom training per year.
Today, DJO is a publicly traded company, and its revenue grew 11.8% to reach $286.2 million during its fiscal year 2005. The company's lean achievements in receiving the Shingo Prize include reducing OSHA incident rates by 53% in 2002–2004; lowering workers' compensation costs by 91% in 2002–2004; reducing customer complaints by 94% over the past three years; reducing cost of poor quality by 51% in 2002–2004; reducing plant defects by 45% since 2002; and increasing first-pass yield from 71% to more than 94% over the past three years.
Its lean transformation also helped DJO reduce order-to-shipment lead-times by 66% in the past three years, and the company improved fill rate by 92% since 2001. DJO has increased its value-added productivity per employee per year by 50% and reduced cycle time by 40% since 2002. It doubled both raw material and finished good inventory turns in 2002–2004.
The lean efforts have paid off for DJO in many ways, so much that the company recently moved its Vista operations into a new location in a smaller 115,000 ft2 (10,695 m2) headquarters building across the street with less manufacturing floor space, while shifting distribution activities from the Vista plant to a facility in Indianapolis, IN. DJO's Vista headquarters employs about 320 people, including about 175 manufacturing employees, and the company has roughly 3000 employees worldwide, including 2000 employees at DJO's manufacturing facility in Tijuana, Mexico.
Out on the factory floor, the Vista plant's manufacturing area currently encompasses about 15,000 ft2 (1395 m2), plus a separate 8000 ft2 (744 m2) toolroom with machining equipment and another 3000 ft2 (279 m2) in the model shop, where engineers produce rapid prototypes on a 3D Systems Sinterstation selective laser sintering (SLS) machine. The toolroom's manufacturing equipment includes two Haas CNC machines (a vertical mill and a horizontal mill), three Sodick EDM machines—one a sinker that produces molds—and several pieces of grinding equipment, including a very large surface grinder to handle sharpening the large stamping dies that are made in the toolroom.
"We have a tooling area in our plant here where we actually build all of our tools, like injection molds and progressive stamping dies," notes Jerry M. Wright, DJO director of operations. "We make those different tools and use them in our own injection-molding machine on the floor located next to the cell that molds a lot of the plastic components we use on the Defiance brace."
To produce the carbon-fiber composite components used in its knee braces, DJO's Vista plant uses a bladder-molding process. "It's a proprietary process. We make them very much like you'd make a bicycle frame, or a tennis racket, or a golf shaft out of carbon-fiber composite," Wright says. "It's extremely lightweight and very strong."
Collegiate athletes have had a number of catastrophic injuries averted due to wearing the protective braces, which weigh just over 1 lb (0.45 kg). "The thing that's important to note is that in college, they're amateur athletes and they're not making any money, so protection is the name of the game to get them to the next level of competition, being the NFL," observes Michael Chunka, DJO manufacturing manager. "That's why the colleges widely use the brace. Pros don't use it as widely, because wearing a brace may be perceived by running backs or wide receivers as a performance inhibitor."
"The risk for the linemen is that they always get folded in odd shapes in these dogpiles, and knees get really bent out of shape," Wright adds. "We have a football out here that was signed by Alex Stepanovich, the Ohio State University All-American center when they won the national title in 2002. He was wearing our brace, and took a major hit from the side. The brace broke, but he walked off the field. The football, which actually says 'Thank you for saving my knee,' is in our display case. He went on to the pros, but it could've been career-ending; instead, he won the national championship."
Being vertically integrated offers DJO an advantage, as the company does almost all of its prototypes, tooling, and metalworking in-house, Wright adds. "We rarely ask a molding house or a stamping house to make dies for us—we make them ourselves because it's a significant cost advantage over our competition."
With its SLS machine, DJO produces robust prototypes that are field-tested prior to putting the component into final production. "The SLS basically builds up, layer-by-layer, a nylon part that's fairly durable," Wright says. "We'll come up with an idea for a new product, maybe a new cover for one of our hinges or something, we'll make it on the SLS, then we'll actually put it on braces, and test them. Our engineers will wear it, slide on the field, and do things with it to verify that it is going to be pretty good before we actually build a mold."
Embracing lean manufacturing didn't happen overnight, as is the case with most companies embarking on a lean transformation. In 2000, the company began running kaizen events, after Wright and Chunka were trained on how to conduct kaizen blitzes. "We were a batch-and-queue company—build a thousand at a time, put them in stock, and sell them over the next five months or something," Wright explains. "While we had the Defiance custom brace process, that was typically a threeday turnaround. You'd call it in on a Monday and we'd ship it on Thursday.
"By using it lean and what we learned from the kaizen events and other lean techniques, we were able to eventually get that brace process down to where you could order it on Monday and it'd ship on Tuesday," Wright recalls. "This was a huge deal for customers—all of a sudden, we started going from making 150 units a day to 175, then 180, and on up."
With its lean efforts, DJO also dramatically reduced its manufacturing floor footprint, leading to the move to its new headquarters in late July/early August. Wright estimates that the leaning process and subsequent reduction of floor space freed up about 50,000–60,000 ft2 (4650–5580 m2) on the factory floor alone.
Initially the lean techniques were greeted with skepticism by some employees. "It depends on your perspective. We were interested in it because it allowed us to make changes to things we'd always been frustrated with, so from one perspective we were pretty jazzed about it," Wright recalls. "Employees initially thought: 'What are you doing?' They actually were fairly incredulous at the beginning, but then we got them involved in kaizen events. We said, 'Look, you guys can make changes, you have input, and you can make decisions.' Later on, you'd know that the lean was really starting to catch on when people would say, 'I want to do a kaizen event in my area.'"
A key process change happened when DJO management converted the brace assembly operation from a sitting process to stand-up operations. For years, the process of sewing some of the straps on the composite braces was a sit-down process. "On the floor, that actually started out as resistance to change," Chunka recalls, "and then it became a positive, because when they first heard about it they weren't interested, but then when they started doing it, they recognized the benefit and embraced it. Much of our operation went from a sit-down assembly process to stand-up.
"You have an operator who's used to using their knee and their foot to control the pedals, and you take them to a stand-up position, every single one of them resisted that change tooth-and-nail," Chunka says. "But just several weeks after implementing some of the cells, the employees started to notice the benefits. You think standing is possibly worse than sitting, but there are many health problems related to sitting, in terms of posture and back problems.
"Once they started getting up in the stand-up position with all of the proper ergonomics—we had ergonomic matting on the ground—and they were moving, they were actually moving between machines and moving down the production line. After just a few short sessions, they started to notice that not only they were more energetic, but they were working faster and more efficiently, and we saw the benefits almost immediately."
From 2000 to 2002, DJO spent nearly $3 million converting its sit-down sewing machines to stand-up workstations, as well as assembly workstations, Wright notes. "Part of the reason that was driven is that you really can't do onepiece flow if no one moves," he states. "We don't follow the traditional takt time model where everybody has to fall within the takt time. We start a product and you keep moving until you run into somebody, and then that person will take over and you go start another part, so the line is more or less self-balancing. But they only build one item at a time, and that makes a huge difference in terms of productivity as well as ergonomics and everything else."
Eyes on the Prize. DJO started its efforts to challenge for the Shingo Prize after Wright attended the 2003 Association for Manufacturing Excellence (AME) annual conference in Toronto. "I was supercharged with excitement about how we could take lean to the next level at our plant in Vista," Wright recalls. "I had met Ross Robson, executive director of the Shingo Prize, and we both felt that we would really benefit from the Shingo Prize framework, which seemed fairly well-aligned with our company's developing strategic framework. Upon my return to Vista, I presented a plan to 'Rise for the Prize' that involved all operational areas, and we had improvements to make on a number of fronts, including training, development, and other metrics."
By late 2003/early 2004, company management had developed its Make Shingo Happen (MSH) Training program. "We added MSH to our scorecards and bulletin boards, and we spent time developing those areas that we felt were not strong enough to meet the Shingo framework criteria," Wright adds. "We had to add some new measures to our scorecard, and track those each month. One was value-added per payroll dollar. It's calculated as total revenue/total wages, and this measure basically told us if we were 'leaning' in the right direction on labor in our products."
By late 2004, DJO had nearly everything moving in the right direction based on various measures, results, and culture of change, Wright notes. "Through 2005, we continued to hone and improve in all areas that we could. Since reaching the Shingo Prize milestone, everyone in the plant has found that the work to get going in the right direction was not that hard, and now it was paying back in big dividends—great teamwork, common understanding of lean, and renewed sense of purpose to keep moving ahead.
"It's important to note that we don't enter competitions like the Shingo Prize to win awards—we do it to benchmark ourselves against the best operations we can find, so that we can try to be the best possible plant that we can be. Winning is nice, but it's not the reason to vie for the Shingo Prize, it's making your plant better, making it a better place for everyone to come to work. Lean is a journey, not a destination. Our company's motto is 'Never Stop Getting Better,' and that pretty much says it all."
The lean manufacturing toolkit at DJO includes not only the kaizen blitzes but also extensive value-stream mapping, visual factory tools, company-wide scorecards, and 5S+1, which is 5S plus safety. "A lot of places call it 6S, but we call it 5S + 1 because we really want to emphasize that plus 1 is safety," Wright notes. "When our factory was measured by OSHA back in the 2000–2001 timeframe, when we were still early on in our lean efforts, our recordable incident rate was pretty bad. But just this past year in 2005, we were awarded the Cal-OSHA Golden Gate award, which is that first step toward Voluntary Protection Program [VPP] status, where OSHA's certifying you as being one of the best operations related to safety in the country."
"When we started back in 2000 with the value-stream mapping of the whole business, we tried to understand what we needed to change as we went forward with our lean roadmap. Honestly, it took us five years, until the end of 2005, to complete our future-state value-stream map. We did it at a grand level on all the products, and that future state basically moved a lot more of our simpler assembly products to Mexico. It brought the tooling here into the Vista operation, and it also moved a lot of our heavy-grade stamping and injection-molding to our Mexico operation, so that we were actually reducing the total lead time of all our processes."
Kaizen events had a big effect in terms making process improvements at the cell level or at the operational functional-area level, Wright adds. "We probably did 200 kaizen events over four years or so, to be able to get everything aligned, and when we did a kaizen event, that's when we deployed all of the lean tools. We'd do the value-stream map, and define where we were and where we should be. We eliminated waste, put in 5S programs, and did the visualization and visual factory during that time. We'd label everything, put everything in its place, and set up shadow boards, whether it was on the manufacturing floor or in the offices, and that's how we employed the lean tools, one cell or one process at a time."
The lean lessons learned in the transformation keep DJO on track today. "There's nothing complicated about lean, but it sure isn't easy," Wright adds. "It just doesn't happen because you read a book and did a kaizen—there's a lot of effort involved. But once you've started thinking lean, you can never go back.
This article was first published in the November 2006 edition of Manufacturing Engineering magazine.