Design Excellence - Cardinal Health and their Mission to make Healthcare Safer and More Productive

Design Excellence

Georgette BelairVice President, Design ExcellenceClinical Technologies and Services

October 2008

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We make healthcare safer and more productive.

Who are we?

Our mission

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What we want to become

To be the premier, global healthcare companyas recognized by current and potential customers, employees and shareholders.

Our vision

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Our customers

Cardinal Health helps hospitals improve operating results by managing their supply chains efficiently.

We provide the pharmaceuticals, medical products, and nuclear diagnostic products necessary to deliver high-quality care in any setting.

Cardinal Health helps pharmacies improve logistics, financial operations, quality control, product selection and customer service.

We offer solutions for clinical, reference and research laboratories which improve economics, standardization, labor utilization and patient outcomes

Hospitals Alternate care

providersPharmacies Laboratories

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Quick facts about Cardinal Health

• 90% of U.S. hospitals use Cardinal Health products or services

• More than 50,000 deliveries are made each day to 40,000 customer sites

• One-third of U.S. prescriptions, medical/surgical and lab products flow through our logistics system

• 14 million nuclear pharmaceutical prescriptions dispensed each year

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Design ExcellenceBuilding a World-Class Product Development Process in

Today’s Environment

FACTS:

• The pressures in today’s environment drive us to think of nothing LESS THAN EXCELLENCE!

• We have to be AS FAST as we can be if we want to be the market leader!

• We can NOT AFFORD to trade off either!

Why am I here?

Source: C. Buck, GE, 2007

U.S. industryBest-in-Class

Anesthesia-relatedfatality rate

Airline baggage handling

Breast cancerscreening (65-69)

Adverse drug events

Hospital-acquired infections

1

10

100

1,000

10,000

100,000

1,000,000

Defects

permillion

levels1 2 3 4 5 6

Overall healthcarein U.S. (RAND)

Healthcare errors and inefficiencies

Increased visibility into the magnitude of medical errors and inefficiencies plaguing the system has occurred over the past 8 years

However, history suggests these errors can be prevented

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Session Topics

• Marrying DFSS with Innovation

• Share the Key Improvements Design Excellence brings to the Product Development Process

• Sample tools teams can use from the DFSS toolbox

• Share Examples of where Design Excellence helped Product Development teams and their partners achieve

• Ways to Measure Success along the way when you deploy DFSS

• Examples of Savings you could expect when you implement DFSS

What is Design Excellence?

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A Systematic approach to New Product Development, that drives Customer Value, Product Quality, Manufacturability, and Serviceability into every product we make

A comprehensive understanding of our Global Customers’ spoken and unspoken needs

Predictive Engineering and Modeling to drive faster design iterations

Consistent transfer of Design Intent and stable manufacturing processes

What is Design Excellence?

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Method Utilized for . . .

Lean Thinking

• Inventory Reduction • Cycle Time Reduction • Removing non-value-added steps• Removing Waste

Design Excellence

• New Products, Processes and Services• Designing new systems when Incremental Improvement Cannot Close the Gap•Using DFSS tools, including strong VOC rigor to design for differentiation

Six Sigma (DMAIC)

• Improving Existing Products/Processes and Services• Root Causes, •Eliminating Defects

Six Sigma Methods

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DEx is essentialto meet true

quality goals

DEx is essentialto meet true

quality goals

Process Improvementswith Design Excellence (DEx )

Time

DEx Benefit

Z ()

6

4

2

0

Process Improvements Only (Process Entitlement)

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3

1

DEx Moves Us Beyond Improving Existing Designs and ProcessesDEx Moves Us Beyond Improving Existing Designs and Processes

Moving Beyond Process Entitlement

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Reactive Design Quality

Transition to ...

Predictive Design Quality

Moving from Reactive to Predictive

FROM:

– Evolving Requirements

– Design Rework and Tweaking

– Build and Test iterations

– Measurement

– “Test in” Quality

TO:

– CTQ Flow down from Customer Expectations

– Control Critical Design Parameters

– Modeling and Simulation with Design and Process Capability Flow-up

– Statistical Quality Prediction

– “Design in” Quality

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Design Excellence and Innovation

Phase 0 Phase 1 Phase 2 Phase 4Phase 3 Phase 5 Phase 6Concept

GenerationDEFINE DESIGN LAUNCHMEASURE ANALYZE VERIFY/VALIDATE

Idea Management

InnovationDeciding what offerings to pursue

ExecutionEmploying Design Excellence Principles

Innovation

• Finding new Technology

• Finding new Areas for us to build on

• Creating new Markets

Design Excellence

• Bringing those innovations to reality

• Designing for Manufacturability, Cost, Reliability, Serviceability

• Driving Customer Priorities and Speed-to-market

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Design Excellence principles

1. Uncompromising priority for unparalleled Quality, Usability, Reliability, Manufacturability, Serviceability...

2. A comprehensive understanding of our Global Customers’ spoken and unspoken needs

3. Using Operational Excellence, establish Lean, Flexible processes that optimize our precious resources and that foster rational decision making rather than replacing it.

4. A relentless understanding of Development Risk in every project and aggressive efforts to minimize development risk as early as possible.

5. Predictive Engineering and Modeling to drive faster design iterations, built with Multi-Generations in mind

6. Consistent transfer of Design Intent and stable manufacturing processes

Focus on the Customer, Quality and Design Intent TransferFocus on the Customer, Quality and Design Intent Transfer

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The culture to sustain Design Excellence

1. Issues are Freely Brought Forward and Feedback is welcome.

2. Transparency in the design process and an openness and willingness to rigorous, data driven Review of all of our designs and methods.

3. An understanding and appreciation of our Design Processes by all involved in our product development efforts.

4. Inclusive, cross-functional Teamwork is the method with which we will develop and commercialize products.

5. Empowered, Self-Directed Teams that hold themselves accountable to achieve great performance, continuously Measuring their ongoing results.

6. And an energized culture that encourages Innovation, provides Professional Opportunities for our employees, & Recognizes and Celebrates achievement.

The “How Can I Help?” CultureThe “How Can I Help?” Culture

What will it get you?

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What will Design Excellence get you?

Examples of where Design Excellence helped Product Development teams and their partners achieve

• Faster launches

• Better ramp-up in manufacturing

• Fewer defects in manufacturing and in the field

• Higher customer satisfaction, Sooner!

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What will Design Excellence get you?

What you can do What you will get

• Understand your customer

• Evaluate for best concept

• Identify clear requirements

• Design for Mfg/Ass’y

• Design for Serviceability

• Common Tools and processes

Differentiated products

Best solution for customer

Save time re-designing

Fewer quality problems in field or on plant floor

Less cost for Service Group

Less training, quicker transition to functioning teams!

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How will you measure success?

What you will get How will you measure

Reduction in re-design

Best solution for customer

Fewer quality problems in field or on plant floor

Less cost for Service Group

Quicker transition to functioning teams!

Design Burn Rate, speed-to-launch

Cust Sat. Score, Sales targets

Scrap Rates, First Pass Yields, Stabilization Time

Service Costs, MTBF

Voice of Employee, speed-to-launch

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Better Understanding of True Customer Needs

Measureable, Testable Needs

Better Analysis of Concepts, Risks, and

Capabilities

Fewer Surprises at launchHigher Customer SatisfactionHigher Quality and Reliability

Phase 0 Define Measure DesignAnalyzeVerify & Validate

Launch

Where will we see improvements?

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Include A COMMON VOCABULARY and best practices like:

Voice of the Customer rigor and translation to solid requirements

Scorecards to communicate progress

Cascade tools to keep requirements/specs connected

Design for “X” tools (“X” = Manufacturability, Assembly, Serviceability...)

Sample DFSS Tools

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DFSS Tools

SCORECARD EXAMPLE

Performance Level Requirement CTQ Owner

Lower Limit Nominal

Upper Limit

Target Cpk Mean

Std. Dev. Cpk Mean

Std. Dev. Cpk Mean

Std. Dev. Cpk

Measurement System Analysis

Target Value Design Prediction Design Verification Process Validation Data

VOC

Scorecard

•Strong Requirements Development

•Confirmation of Key Differentiators (Mello, Hepner-Brodie)

•QFD-traceability of Requirements and Measurements

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DFSS Tools, cont’d

Design for X

Concept Development

•Assembly, Manufacturability (Boothroyd Dewhurst)

•Reliability (FTA, Modeling)

•TRIZ, creative concept development tools

•Pugh Matrix, objective concept selection

How can you make it last?

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Making it Last:

Sustainable Improvement

Process/ Tools

Performance

People

Leadership

Communication

Training

Single Process to follow

Common Tools across CTS

Metrics Accountability

Mgmt Commitment Infrastructure

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Making it Last:

Sustainable Improvement

People

Communication

Training

Communicate Roll-out

Communicate small successes

Establish ownership

Train in context of full process

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Making it Last:

Sustainable Improvement

Performance

Metrics Accountability

TRACK progress

Hold EVERY team accountable

Point out the successes

Look into the failures

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Making it Last:

Sustainable Improvement

Process/ Tools

Single Process to follow

Common Tools across the business

Make it SIMPLE!

Hold EVERY team accountable

Put a PROCESS in place

THEN give them tools

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Making it Last:

Sustainable Improvement

Leadership

Mgmt Commitment Infrastructure

Walk the walk!!

Need to align LEADERSHIP first

Structure needs to be in place to support it

Leaders must be accountable to drive the right behavior

Questions?