The first apparent solution in such cases is to outsource in turn; however, the challenge arises of what to produce in European plants. A slow decline towards closure loomed, as orders for basic products would decrease first, and gradually for all others. This is due both to the increased overhead costs on the remaining products and to the logistical complexity and expense of sourcing from two locations for clients.
The second, more challenging solution opens up broader prospects: investing in the production of high-requirement products, such as components essential for specialized, high-tech equipment, and whose production requires complex and highly vertical skills and knowledge. An example is the RTU (ready to use) components, which can be directly integrated into pharmaceutical or medical device production lines because their manufacturing and packaging techniques comply with the highest standards of quality and safety. These are high-value products that, understandably, also require substantial investments. At the time our consultancy was requested, RTU production at one of the plants accounted for 10% of total production and was expected to increase to 80% to allow the facility to achieve a financial balance justifying its operations.
The challenge was thus not only to find an RTU product to produce in high volumes but in a sustainable manner, without pushing the plant into economic distress, within a span of 2 or 3 years.
Transforming Production to Avoid Outsourcing
The chosen RTU component, set to become the core business of the plant, was a closure element for medical vials made of rubber and aluminum.
A wise choice, as its production is not feasible for all facilities.
The process of creating the rubber part presents many complexities because it comes into direct contact with the drug. The packaging itself requires many steps and high expertise: since it needs to be used directly on the vial filling line during sealing, it must have multiple levels of packaging, the last of which must be absolutely sterile. This implies processing in cleanrooms, production areas regulated by strict qualitative but especially hygienic controls, with contamination prevention procedures pushed to the highest levels. Moreover, any deviation from the planned process (such as faults or quality anomalies) must be avoided to prevent the entry of unplanned personnel into the cleanrooms and risk contamination.
After the choice of the component, the second step was to ensure having all the necessary credentials to quickly and safely enter such a specialized market, which required the approval from the U.S. Food and Drug Administration (FDA). Therefore, it was crucial to equip the facility with a top-quality system that would not overly impact its economics. To ensure compliance with the stringent FDA requirements and to achieve the needed productivity and reliability improvements, we relied on the method developed by the Japan Institute of Plant Maintenance. We worked intensively to obtain the TPM (Total Productive Maintenance) certification, an approach designed to maximize the productive capacity of plants while maintaining the right balance between maintenance costs and overall plant efficiency.
Optimization Strategies: TPM in the Manufacturing Process
High skills make a difference if they are widespread at all levels.
First step.
Our starting point was to define the necessary skills system within the plant at every level: working to high standards requires high competencies not just from the management but across all process actors.
Second step.
Another crucial step was investing in the right machinery.
Selecting the best tools—both effective and efficient—for the intended production and facility type is not trivial because it significantly impacts the ability to meet customer demands and thus the return on investments.
Small groups were trained by sector, then knowledge, processes, and skills were gradually disseminated to all collaborators and employees, aiming to build a complete staff capable of optimizing production to the fullest.
Third step.
Having laid the foundations, it was time to implement the TPM method across its 8 pillars, sector by sector:
- Focused Improvement
- Autonomous Maintenance
- Planned Maintenance
- Quality Maintenance
- Training and Education
- Administration Office
- Early Equipment Management
- Safety and Environment
Progress was checked step-by-step against corresponding KPIs to identify which areas needed corrective actions and where to intervene.
Practical Implications of Total Productive Maintenance on the Facility
The reasoned application of the 8 pillars has very practical repercussions throughout the facility, impacting not just the production department.
For instance, making individual technical employees who operate the machines more autonomous and aware not only enables optimal use but also helps them understand whether the machines are functioning properly and why. This significantly reduces the breakdown rate and machine downtime.
The ability to pinpoint problems is crucial before even addressing problem-solving skills: knowing the potential causes of malfunctions, understanding what anomalies can occur, and preventing them eliminates many maintenance costs upfront.
In optimized quality management, we have made efforts to understand and link equipment operation characteristics with their impact on product quality standards. We also went beyond the verification of non-conformities, comparing those reported by customers with those detected inside the plant, during the entire production process and we did this not only for what obviously differs from the expected quality standard but also by studying any comments, clarifications or complaints received by customer care.
We realized that there were defects or discrepancies that the company was keen to intercept but that were irrelevant to customers. On the contrary, there were others that were significantly noted by customers where the control and filter of the company was ineffective, because it was carried out too far within the overall production process.
Both scenarios cause significant losses: on one hand, resources were being allocated to unrecognized values, and on the other, worse, important non-conformities were not being intercepted. The practical implications on conversion costs are evident.
Classification of defect and applying Pareto principles priorities identified.
We have brought client needs and requests to the precise place where quality is generated, not leaving this requirement to the end of the process, far from where quality is indeed created.
The application of Total Productive Maintenance (TPM) was extended throughout the facility, not just to the RTU line, enabling comprehensive and broad improvements.
Innovate to Remain Competitive
It has been a very intense three years, but full of satisfaction as the facility that began producing RTU vial sealing components was accredited by the FDA and obtained TPM certification, overcoming the two highest market entry barriers while staying within the planned budget.
The facility remains open and productive, successfully carving out and defending a particular market niche (they produce 22% of these RTUs globally).
It’s also interesting to analyze some results related to individual TPM pillars:
- Monthly machine breakdown decreased from 1.93 to 0.61
- Conversion costs reduced from 100% to 91% (Supply Chain A) and from 100% to 82% (Supply Chain B)
- Machine efficiency improved by + 4.6%
- Accident reduction -71 %
Gradually shifting production to emerging markets can, in the long term, lead to a depletion of skills, which are instead acquired over time by the new markets. Focusing on excellence and high specialization to carve out a market share allows, on the contrary, to remain competitive and solid.
Virginio Peluzzi – Partner ŌdeXa
