Monozukuri for procurement in the healthcare industry

The optimization of purchases is one of the levers of profitability of a company and this requires good relations with suppliers.

When a company buys from a single supplier, it is even truer that the monopoly situation can quickly lead to much less competitive pricing practices.

In order to have long-lasting customer-supplier relationships, it is essential to optimize purchasing and allow to have a win-win situation, both on the supplier’s and its customer’s sides.

To this end, one of the major players in the healthcare industry asked us to set up a Monozukuri workshop with a supplier in a monopoly situation to enable it to rationalize costs and achieve savings of about 2 Million Euros per year.

While this method has been known for some time in the automotive industry, it is now being deploying to other industries, as it is a very powerful tool to identify savings both for the supplier and its customer.

Mission Overview:

With seven decades of industrial expertise, SNECI proposes to implement an intensive Monozukuri workshop.

The Monozukuri method comes from the Japanese TPS system in Lean Manufacturing and means “Product Manufacturing Process”.

The realization of Monozukuri is a cost reduction objective through collaborative supplier improvement and breakthrough activities

The objective of this SNECI Monozukuri workshop is a cost reduction plan validated by both parties and implemented in Gemba.

Introduction of the mission:

Our Monozukuri workshops at a glance:

• Acceptance of the Monozukuri by the different parties and signature of the agreement
• Evaluation before the visit
• Preparation of an intensive activity
• Intensive days of workshops
• Follow-up of the activity
• Closing of the program

A detailed look at the different stages:

• Monozukuri Agreement:

A key success factor is in the first phase of this “agreement” that gets the supplier involved and committed to this win-win project.

This phase requires standard operations such as a formal exit memo, an alignment conference and a contract that includes shared savings.

• Pre-visit activity:

A first visit of the plant allows having a first concrete overview of the Gemba situation (master KPI). An ideal phase to share and agree on the scope of the activity (parts, schedule of intensive days, cost savings).

• Intensive preparation of the activity:

During this phase, all team members gather documentation from the supplier (flow charts, cost breakdown, specification table, operational production ratio, direct quality…).

• Intensive days – Workshops:

A precise program managed over several workshops:

• Process and production engineering: review of process conditions (material flow, …).
• Quality: standards, monitoring plan, internal ppm of suppliers
• Supply chain: packaging, inventory, synchronous flows, automation
• Part variation: waste recycling, material flow optimization, specification integration
• Technical: raw materials, correct sizing, value-added opportunities, diversity reduction

• Activity monitoring:

A phase managed by the shop floor managers to check the progress of the action plan and compile the results obtained.

• Program closure and award reflection:

Closing session including executives from our client and the supplier to validate the rate of achievement of objectives.

To achieve sustainable and successful results, the SNECI Monozukuri Method requires the support of our customer and supplier expertise in all phases:

• Quality, product & process experts and control plan (customer and supplier)
• Maintenance and process specialists (supplier)
• Manufacturing management (supplier and customer)
• Supply chain specialists (customer and supplier)
• Raw material purchasing teams (supplier)
• Cost controlling (supplier)

The planning of the mission :

• Week -4:

Our mission started 4 weeks prior to a kick-off meeting involving the supplier’s managers to prepare with our client the data, communication and contract or agreement to be proposed to the supplier.

• Week 0:

A kick-off meeting was held to bring together all executives from our client and its supplier to align the teams in a global and common performance project.

• Week 1:

The supplier assessment was done by a pre-visit to get an overview of the actual KPIs of the Master through a shop floor tour. Depending on the location of the supplier’s 3 factories, the pre-visit was done on the best performing factory (1 day). During this visit, the supplier presented the plant organization, product and process, KPIs, production system, supply chain, value chain mapping and cost breakdown.

• Week 2:

Evaluation of our client’s shop floor was necessary to get a comprehensive view of the total cost of delivery including scrap, RPOs, diversity.

• Week 3:

All mentioned experts and specialists from our client and its supplier participated in these intensive days of workshops.

The workshops were organized in 2 phases:

• 2 intensive days of workshops in the factory of the high performance supplier
• 2 intensive days of workshops in our customer’s factory

These two complementary operational phases (different contents of the workshops) allowed to involve all the competences and all the persons in charge in order to share the maximum of contributions and results.

Our client’s team and its supplier’s team participated in the 4 days in the 2 factories.

The workshops allowed to share the mapping of the value chain in order to improve the total cost of delivery. The participants at our client and its supplier had to dive into logistics (inbound/outbound), quality controls and results, packaging, warehouse, maintenance results, cost analysis. The observations of the production were essential.

• Week 4:

This week was crucial to finalize the action plans. Each workshop manager had to manage his team and validate the feasibility of the actions.

• Week 5:

Savings were consolidated and validated by the two cost control teams.

• Week 6:

Closing phase! All managers validated the program proposed by the two teams and accepted the new performance offer.

Result:

Out of the 2M€ savings expected by our client, SNECI’s Monozukuri Workshop allowed us to achieve 1.6M€ savings, which represents 80% of our client’s expectations, in less than 2 months.

SNECI and Monozukuri:

With 450 technical experts within the SNECI Group and 10 subsidiaries around the world, we can offer tailor-made, responsive, local and agile support in improving industrial performance.

We support you on industrial projects (launches, transfers, optimization,), thanks to our experts in process engineering and supplier development, in order to control the quality, cost and deadline aspects.

We also accompany professionals through Monozukuri workshops that we carry out by mutual agreement between supplier and customer, but also by offering Monozukuri training. This training allows the organization, the accompaniment and the piloting of a Monozukuri site in your factories and/or your suppliers. At the end of this training, validated by a QCM and a quiz, you will be able to pilot a Monozukuri process.

If you also wish to benefit from our Monozukuri coaching, do not hesitate to contact Laura by email laura@sneci.com or directly on our website via the contact us tab.