DM MEDICAL CORPORATION: CASE STUDY ON LEAN MANUFACTURING

DM Medical Corporation is a large manufacturing facility which produces electro-mechanical medical devices.

The plant was vertically integrated, producing their own circuit board assemblies, cable assemblies, and the

box-build final assembly and test. The process was driven by an electronic resource planning (ERP)system with

multi-level bills of material, pick lists, lot sizes, and stock room transactions. Costs were too high, lead times

were too long, and they had too much money tied up in inventory.

Inventory reduction goals were set by the management team and pushed down through the organization. The

initial efforts focused on the ERP process. Bills of material were challenged and compressed. Lead times and

lot sizes were cut. Several efforts were made in various production departments. This eliminated many non-

value-adding reporting steps and stock room transactions. Shifts were balanced to allow product to continue

to flow across the entire process, and not just the "bottleneck" operations. Sequential inspection was initiated,

followed by failsafe steps. As a result, in less than six (6) months:

Inventory was reduced by P1.7 million

Lead times were cut from eight (8) weeks to five (5) days

First pass failures were cut by 60%

On-Time Delivery went from near zero to 100%

Simplification and streamlining resulted in the freeing up of resources (people, equipment, and space) for

other growth opportunities.

Answer the following questions: (5 items x 5 points)

1. Did DM Medical Corporation shift from traditional manufacturing to lean manufacturing? Justify your

answer by giving at least one (1) indicator.

2. What are the problems that DM Medical Corporation faced?

3. Cite at least five (5) initiatives the company made to address those problems.

4. Give at least one (1) lean manufacturing principle that was applied by the company.

5. Assuming that you are the operations manager of the company, what other initiatives can yourecommend that will support at least one (1) lean manufacturing principle?