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Consumer Case Study

Edwards Life Sciences, Inc.

Edwards Life Sciences, Inc. is a manufacturer of heart valve devices and therapy that treats cardiovascular diseases. Instruments such as heart valves and stints are used as metal supports into a blood vessel to hold the heart open after balloon angioplasty. This publicly traded corporation was established in 2001 as a spin-off of the Baxter Corporation in order to focus on heart valve and stint products geared towards the medical industry. Medical instruments and devices are sold in a worldwide market targeted at hospitals, health centers, rehabilitative facilities and doctors. Edwards has manufacturing facilities in Irvine, CA, Utah, the Dominican Republic and Europe. Edwards employs 1000 employees at the Irvine facility. Annual sales are estimated at $860 million in 2003.

“CMTC continues to exceed expectations. Our
project ROI was terrific. It exceeded 200%.”

Becky Mollohan
Mfg. Mgr. Edwards Life Sciences, Inc.

Issue/Needs
The goal of Edward’s senior management was to markedly reduce their manufacturing cost by introducing Lean Manufacturing processes to all levels of their organization. Edward’s management believed that by using Lean processes, “waste” elimination and streamline processes would result in cost-savings and greater efficiency. They chose CMTC to train their management team and manufacturing personnel will spend attention to designated employees known as “Lean Champions” who would be responsible for the implementation of these processes.

Implementation Highlights
The project started March 2002 and consisted of 2 modules 1) the training of 300 employees in Lean concepts and training of selected personnel (Lean Champions) in the implementation of Lean practices, and 2) the guiding of the Lean Champions through specific Lean procedures to facilitate the required production improvements. One module of the training involved a Lean 101 Overview which consisted of the basic Lean principles, terminology and approach. The second module for the Lean Champions’ training involved both the Lean 101 Overview and detailed implementation training. The goals of the training were to 1) establish a Lean vocabulary consistent throughout the organization, 2) identify ways to reduce cycle times, 3) reduce work in progress and 4) reduce cost. Training was conducted during the last 9 months of 2002 and Lean Implementation teams for Champions was conducted for selected product lines during the 1st quarter of 2003. The project ended April 2003.

Improvement Description
By implementing the Lean technique, or “Smart Factory” (Edwards’ internal lean term), there has been significantly reduced work in process and cycle time in each of two subassembly areas – ring and HVT (Heart Valve Tissue). The manufacturing cost savings will be enhanced in 2004 and 2005 as the new procedures are implemented throughout their facilities. Results have also established continuity and consistency of the Lean vocabulary throughout the organization and new methods to reduce cycle time.

Financial and Investment Impact
The Lean initiative, led by CMTC, has shown positive results. The changes in manufacturing processes that have been implemented as a result of these projects have reduced Edwards costs by $160,000 in 2003. It is anticipated that the savings in 2004 will be $250,000. The investment thus far has been approximately $100,000 in direct costs. Subsequent year savings will not require additional expenditure.