DePuy and place orders for raw components,

DePuy Synthes and
Flextronics did a workshop with key stakeholders of the process to have a
better understanding of the physical flow of the products. From DePuy Synthes,
we gather information from the buyer who places orders to Flextronics, from the
planner who is responsible of sending net requirements for a long-term
visibility and handling short and long-term risks, and from a person in the
warehouse that works directly with Flextronics cases. From Flextronics, we
gather information from the key account manager of this portfolio, from the
customer service representative who receives the order for finished goods and
place orders for raw components, and from the process engineer who knows the
production line.

The critical path starts
with the order creation process of finished goods. The system calculates net
requirements based on forecast, stock on hand, safety stock, lead time and lot
size. The buyer converts a purchasing requisition into a purchasing order (PO)
covering the lead time of 4 months. As Graph 4 shows, the total lead time of the process
is 7 calendar days, but the real processing time is 1 day.

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The second sub process is
on supplier side, as shown in Figure 5. The process at Flextronics starts when the buyer sends
a PO. The PO is processed in the production planning and control department,
where they register the order and place orders to raw materials suppliers.
Currently, they manage 52 suppliers for the medical device business and just
one of them is engaged through a Vendor Management Inventory method1,
involving only the high runners’ raw components. The lead time of the sub
suppliers varies from 30 days to 90 days; which represents the greatest
proportion of the current end-to-end lead time.

Once the goods arrive to
Flextronics facilities, they pass through customs clearance, quality and
quantity inspection, and storage. The manufacturing process starts by picking
the goods from the storage located next to the production line. The production
batch size is 10, but it can be lower for low-runner finished goods, which
demand does not exceed 10. The production line has 3 main steps: etching,
wobbling and assembly. Not all products need all three steps. Etching refers to
print the logo of the company and the design of instruments and/or implants
that need to be placed inside each medical case.  This process requires a person with high
attention to details as the painting is manual. New people for this position
need to be trained for about 2 months before starting to work. Wobbling process
is made by a machine, in which the metal cylindrical parts of the case are
joint to the tray, thus forming the inside structure of the case. Finally, in
the assembly line the inner structure is assembled with the walls of the case
and other components, depending on the product. Despite the efforts of
Flextronics to measure the cycle time of each of the finished goods, currently
they cannot provide an exact figure of the manufacturing time of each product.
The manufacturing process takes in general from half a day up to 3 days,
depending on the complexity of the procedure. After production, the goods pass
through quality checks, where workers do 100% of visual inspection. Then, goods
are packed, loaded into bulk boxes and finally shipped to DePuy Synthes
distribution center. Transportation takes from 3 to 6 days.

Finally, the third sub
process is the reception and shipments of finished goods through DePuy Synthes
primary hub. As shown in Figure
6, the process starts with verification and scan of goods and takes 7
hours to complete. However, as this is not the only supplier neither the only
shipment to verify and scan, the goods can stay there for 2 days in order to
complete this step. Once the products are on the system, they pass to quality
check. The goods stay in this process for one day but it takes 2 hours to
complete the check for a shipment. Then, the products are transferred from one
site of the primary hub to another site of the same facility, which represents
another day inside the hub, but the process itself takes 2 hours. Finally, the
goods stay in the second facility for about 2 days, depending on the urgency of
an order and are allocated and shipped to customers in one hour.

1 Vendor
Management Inventory (VMI) is a method in which a material supplier holds and
manages materials of their customers.