Spotlight! 2004: An Event to Remember

Following a series of lively corporate receptions on Thursday evening, the Spotlight! 2004 event took off with a start early on Friday, September 24 at the Sheraton Four Points in Ann Arbor, MI. Sixteen teams of diligent students put their best feet forward to showcase their summer projects and to compete for a total of $24,500 in scholarship awards.

Each team presented its project results to an audience of corporate representatives, students, alumni and faculty. Judges from the manufacturing industry evaluated the projects on the basis of scope, implementation, impact, overall presentation skills and other criteria to determine the winners.

TMI congratulates all of the student teams and sponsors for their support and participation in the 2004 summer projects and the Spotlight! event. We look forward to working with you on summer 2005 Team Projects.

Click here to view the Spotlight! 2004 Project Book (PDF)

Spotlight! 2004 Winners

First Place: Pfizer, Inc. - David Portner and Nari TenKley gave the winning presentation of their 14-week summer project titled "20% Global Capacity Improvement Saves $50 Million." Each team member was awarded a $4,500 scholarship.

Second Place: Alcoa, Inc. - Jason Clark, Raul Quevedo and Mohan Radhakrishnan came in second place for their project titled "Improved Delivery Performance through Product Leveling." Each team member was awarded a $3,500 scholarship.

Third Place: McKinsey & Company - Jacky Sung and Pinar Yaprak took third place with their project titled "An Operational Transformation in the Healthcare Industry." Each team member received a $2,500 scholarship award.

Below are the project descriptions of the winning teams. For a complete list of all sixteen participating companies and project descriptions, please click on the link above for the Project Book.

Pfizer, Inc.

"20% Global Capacity Improvement Saves $50 Million"



Student Team
David Portner - Dual MBA/MEM (Master of Engineering in Manufacturing)
Nari TenKley - EGL (BSE-IOE/MSE-IOE)

Project Champion
Michael V. Ganey - VP, Worldwide Pharmaceutical Sciences, Global Supply Chain

Project Supervisor
Edward Kobelski - Vice President, Groton Supply Chain
Brian Swierenga - Associate Director, Global Supply Chain

Faculty Advisors
Izak Duenyas - Business School
Tassos Perakis - College of Engineering

The Pfizer TMI team increased the worldwide manufacturing capacity of Pfizers kilo labs by more than 20% without the need for any significant capital expenditures. This increase in capacity has saved Pfizer the need to construct an additional kilo lab manufacturing facility, which would have cost approximately $50 MM.

The kilo lab facilities produce the first bulk quantity of a prospective drug for toxicology testing and Phase I clinical trials in humans. Since the kilo lab is the first bulk manufacturer of a prospective drug and the first bulk production drives the future development timeline, the kilo labs speed and efficiency is a critical factor for the remainder of the 10-15 year timeline before a drug hits the consumer market. Within the kilo lab, there is also the significant challenge of merging research with manufacturing, as each production request is often a new compound, never seen before in any of the manufacturing facilities. This job-shop type of manufacturing environment proved to be challenging in terms of data collection, lean improvements and organizational design.

The TMI team offered a fresh perspective on the manufacturing process, which is anything but traditional. The process is inherently risky, as the scale-up in production volume can introduce complications that cannot be foreseen in laboratory investigations. Each new substance uses unique raw materials and procedures, making the variability with respect to processing time very large.

The team also examined the objective of increasing global kilo lab capacity by 20% from several different perspectives including: facilities and equipment, strategic manufacturing and development, production planning and scheduling, organizational design, lean principles, and continuous improvement. The teams recommendations were global in nature, for application in Groton, CT and Sandwich, UK, and will serve as the template for organizational design in the Ann Arbor, MI facility currently under construction. Overall, the team showed Pfizer how to incorporate traditional manufacturing disciplines in a non-traditional production environment.

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Alcoa, Inc.

"Improved Delivery Performance through Product Leveling"



Student Team
Jason Clark - Dual MBA/MSE-IOE
Ral Quevedo - EGP (Master of Engineering in Manufacturing)
Mohan Radhakrishnan - EGP (MSE Industrial & Operations Engineering)

Project Liaison/Host
Dave Hoffman - Alcoa Business System Manager

Project Champion
Roy Dirkmaat - Director of Operations

Project Supervisors
Leslie Shuman - Alcoa Business System Director

Project Coordinator
Steve Bright - Alcoa Business System Specialist

Faculty Advisors
Eric Svaan - Business School
William W. Schultz - College of Engineering

Alcoa Mill Products-Lancaster operates in the competitive $90 billion U.S. aluminum alloy market, a very demanding customer service industry. In order to maintain and improve their current market position Alcoa-Lancaster is working to manage the variability of their 22,000 unique products, customer demand, scheduling, and inventory systems.

Alcoa uses "on-time" delivery as its key performance metric, which is a significant contributor to a healthy relationship with its customers. An in-depth analysis of the production system and its various support organizations indicated that the primary delivery issue was not manufacturing or capacity based, but rather was a result of significant demand and schedule variation. The team hypothesized that the primary cause was attributed to Alcoas current booking and scheduling system. The system provides no leveling of production requirements, forcing significant fluctuation in machine utilization. In addition, the system is based on a push philosophy, resulting in departments blindly producing to a task based priority requirement regardless of capacity or customer need.

In order to approve the hypothesis the team ran three shop floor tests. These tests focused on three primary principles: 1) generate level demand to the primary process centers, 2) create shop floor visibility of demand and production, and 3) ensure that a clear production signal is generated from customer to supplier. This new pull based philosophy resulted in the discovery of conflicting performance metrics as well as substantial early production at the expense of on-time requirements, and backlog. Immediate action was taken to remedy the problems and a continuous improvement process was implemented to ensure sustainable change.

These actions resulted in two important improvements in the performance of Alcoas current production system:

Material on-time to packing increased approximately 20%
By the fifth week of implementation, the promise performance to the customer had increased
   approximately 3-5%.

Since the implementation was initiated while the team was in place, there is a high confidence level that the implementation will yield the following returns:

Sustainable on-time delivery of material to customers of 90% or higher by year-end.
An estimated net decrease in inventory of approximately 12%. This net decrease by volume is  
   comprised of a 27% decrease in work-in-process inventory, a 21% decrease in finished goods  
   inventory, and a 5% increase in raw material stores.
The expected return on the implementation of the pull strategy is approximately $30 million
   over a 3 to 5 year period and a month-to-month improvement value of $1 million over the same
   period of time.
The estimated return on capital after preliminary implementation is expected to increase from
   approximately 10% to approximately 18% over a 3 to 5 year period.

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McKinsey & Company

"An Operational Transformation in the Healthcare Industry"



Student Team
Li-Yuan (Jacky) Sung - MBA/MC
Pinar Yaprak - EGL (BSE-IOE/MSE-IOE)

Project Liaisons
Daniel Woolson

Project Supervisors
Mike Nolte
Ed Stout
Kenji Asakura

Faculty Advisors
Ted OLeary - Business School
Wei Lu - College of Engineering

McKinseys client is one of the largest healthcare providers in the U.S., owning nearly 100 acute care hospitals. In recent years, the client has faced increasing challenges to maintain high quality and profitability. As a result, McKinsey & Company was invited to help perform a quality transformation enabling the client to provide better customer service and decrease its costs.

The TMI team joined McKinsey in helping the operational transformation, primarily using lean manufacturing principles. Although lean production is a well-developed concept in the manufacturing industry, it is very applicable and yet relatively new to the healthcare industry.
In order to build the clients transformation capabilities, the TMI team designed lean operations training modules to deliver essential skills to regional and hospital leaders, allowing quick implementation of the transformation program at each hospital. Additionally, the team designed a pharmacy module that describes target areas for improvement. The team also developed an excel-based tool used to effectively monitor the progress of the improvements on a daily basis.

In addition to developing promotion and control mechanisms at the corporate level, the TMI team also helped lead implementation in the hospitals. The team assessed the current performance through benchmarking metrics, discovered areas requiring improvement, and launched many targeted initiatives. Specifically, the team reduced patient waiting time in the radiology department, improved first case start delays in the operating room, decreased turnover time in the operating rooms, and significantly improved the lead time between a patient discharge and the time the room is ready for the next patient.

These initiatives significantly increased patient throughput, improved operational effectiveness, and enhanced patient satisfaction. By involving both planning and implementation stages at the corporate and hospital levels, the TMI team not only created tangible impact on the hospitals, but also built a foundation for sustainable long-term improvement.

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