By Eric Hinrichs, Senior Principal Quality Engineer (retired), Ethicon, Johnson & Johnson
Continuity, by definition, is the state or quality of being continuous. To a company, continuity could be the ability to provide a product that consistently performs as expected with consistent quality. It could also refer to a company’s ability to consistently make a product available without supply chain disruption. Financially, continuity could refer to a company’s ability to continuously return an increasing profit.
Critical to continuity in these aforementioned objectives are a company’s short- and long -term plans that provide the approaches on how to fulfill the overall company strategy. It is easy to see that continuity in various areas is key to a company’s well-being. The challenge for medical device manufacturing and medtech companies is maintaining continuity in all of these areas simultaneously. This is not an easy task because it takes coordinated efforts throughout a company’s infrastructure that are tied back to the comprehensive company strategy. Continuity can be impacted by cost-containment initiatives or by cultural factors.
How Is Continuity Impacted By Cost-Containment Initiatives?
When a company focuses on “improving” its bottom line, this is generally done by reducing overhead costs. One common method is to reduce the size of the workforce through layoffs and retirements. Sometimes, a company replaces those employees with contracted services. Contracted services costs can be expensed, which effectively moves a bottom-line cost into the expense column. This move could also result in tax benefits.
Another cost-containment initiative that impacts a company’s continuity is when a company divests itself of direct manufacturing responsibility. Contracting out specific manufacturing processes not only eliminates the associated workforce as a cost burden but also removes direct production responsibilities. In essence, this strips down the company to the perceived minimum needed to maintain or improve current financial metrics.
Workforce reduction or conversion to contract or third-party services does improve the company’s bottom line in the short term, but this approach can be disruptive over the long term if the necessary planning is not put into place. What is concerning about these short-term solutions is their potential to dilute a company’s depth of experience. Outsourcing manufacturing, the increased reliance on contract services, retirements, buyouts, and layoffs all reduce a company’s experience levels. In some cases, a company will gradually return to the pre-cut conditions to compensate for issues and emerging directives.
How Is Continuity Impacted By Cultural Factors?
The dynamics of the work environment are evolving. Gone are the days when a person landed a job and stayed with the company until they retired. A company’s allegiance to its workforce is diminishing while a worker’s allegiance to their employer is likewise diminishing. As soon as an employee lands their current position, they are typically searching for their next job or promotion to improve their earnings or to land a higher-level position. This is quickly becoming the inherent cultural persona of the typical worker. It is not about “what you have done for me?” but more of “what are you doing for me now?”. Resting or relying upon past accomplishments is no longer de rigueur for companies or employees. This lack of mutual commitment translates into a revolving door of personnel, and it is not solely a workforce issue — it is seen in upper management as well. Upper management have similar career desires and shift into different roles within a company or move to different companies as opportunity presents itself. This creates a lot more disruption than at the workforce level because changes in upper management usually result in changes in the company strategy.
What Can A Company Do To Address Knowledge Drain?
The subtle knowledge drain caused by cost-cutting initiatives and cultural changes can affect a company in the long term through lost time, wasted expenses, delivery issues, and manufacturing and quality issues. Employees or management struggle to resolve problems that experienced or well-trained associates could have solved immediately. Without the proper training or experience, new employees or contractors may not have the intimate knowledge of the company’s product(s) or manufacturing processes necessary to avoid needless delays or unexpected costs. If new employees or contractors do not have access to comprehensive documentation, then the typical reaction to resolve a problem is to conduct trial-and-error solutions; these typically do not lead to a prompt solution and often generate additional problems to be resolved.
In one situation I observed, an overseas manufacturing site was struggling for months with a process step. The step was well-defined in our domestic operations but not at this overseas locale. When I visited the site with an associate about an unrelated issue, the problem was brought to our attention. We both had extensive experience in the process they were struggling with. In less than an hour, we had identified the root cause of their problem (there were several problems confounding the situation) and we were able to get them back on track and eliminate the manufacturing issues. In this example, the site had no visibility to the knowledge base of other manufacturing sites performing the same manufacturing steps, nor did they have adequate internal documentation to guide associates on how to resolve the problems they were facing. Management was fairly new as the site had significant turnover, so they were not able to help. If the team had access to a company database or a directory of company resources or had better overall documentation, they could have resolved their issues quickly rather than having months of frustration. We held impromptu manufacturing training and awareness sessions and showed where they could improve their manufacturing documentation. The problems are no longer an issue.
Manufacturing problems can potentially lead to quality issues that could negatively impact the consumer’s perception of a product’s efficacy or performance. Therefore, the two key denominators contributing to a company’s sustained continuity that are often overlooked or marginalized is knowledge retention and comprehensive training. Elements that should be integrated into the company’s short- and long-term plans accordingly. This is especially vital when a company operates globally with manufacturing sites having similar operations. In this instance, it is imperative that test methods, manufacturing processes, and accept/reject criteria be the same. I often saw different manufacturing sites that did not communicate with each other, reject product that another site would accept and vice versa. I like to refer to these scenarios as gems. They represent situations that can be easily resolved that immediately result in two forms of cost savings: reducing product waste and freeing up manufacturing capacity.
While it is true that product evolves by the application of emerging technology and techniques, there are basic elements that tend to be present with any project, and experience can help avoid delays when implementing these new technologies and techniques. Companies should utilize their experienced workers to develop or add to their product and process knowledge prior to leaving the company in the form of thoroughly documenting processes, development work, and troubleshoot techniques/solutions. This creates a solid knowledge base for a company that could also be tapped into during the development of new products and processes to avoiding an unknowing repeat of past negative efforts.
In another example from my experiences, my team was working on developing a new material for a current product line. The material was so unique that current methods did not work. We had to develop almost all new manufacturing techniques. However, we had a lot of experienced people at the time. By culling together all of the product and process experiences, we were able to identify the most promising approaches. These proved successful and saved the project team from very prohibitive delays.
Before enacting significant forms of cost-cutting techniques, a company should have a well-developed product and training/education program for new employees, contractors, and consultants. If a company is global with manufacturing sites around the world, it is imperative that a universal database be implemented for knowledge sharing. Sites performing the same processes should use the same documents. This way, as changes are made and improvements are identified, all sites benefit from the efforts of one site since they are using the same documents. This is especially true for test methods, acceptance criteria, and operating parameters.
In summary, cost-cutting initiatives and high levels of workforce and/or management turnover can be disruptive to a company’s continuity, competitiveness, and long-term vitality. Companies need to develop a flexibility to accommodate and adapt to management and workforce fluidness. It is okay for a company to be aggressive in cost cutting initiatives. However, in order to avoid paying the price down the road, a company must have comprehensive documentation and a thorough workforce training program in place, as they are ideal vehicles for a seamless transfer and retention of knowledge and experience from one “generation” of the workforce to the next. This basic approach could have far-reaching positive impact on companies and bridge the gap between short-term focus and long-term objectives.
About The Author
Eric Hinrichs has more than 31 years in the medical device field in research and development on new products and processes, in operations on improving processes, and in quality on leading process and product validations and performing data analysis. He developed and led the implementation of numerous process redesigns while at Ethicon to improve product support execution. Eric authored an ASTM standard, worked on updates to United States Pharmacopeia (USP) medical standards, and helped developed new medical standards for the European Association of the Surgical Suture Industry (EASSI) in Europe. He has also co-authored a medical standard for India that is currently under consideration for adoption. He recently released a book on career advice, Perceptions and Expectations.