Category: Medical Device Manufacturing, General Manufacturing, Case Studies, Inventory
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Medical Manufacturer is 40% More Efficient on the Shop Floor with ERP Software
IVD Research, Inc. is not your typical manufacturer; this California-based company manufactures diagnostics and turn-key laboratory solutions. These solutions are used in hospitals, laboratories, clinics, and other medical institutions around the world.
So, what does a company that manufactures a few products and makes them primarily from liquids and biological reagents need with a sophisticated ERP system? Try lack of shop floor controls, poor inventory management, difficulty in measuring costs – the same issues that manufacturers everywhere struggle with on a daily basis.
25% Reduction in Inventory
All of IVD Research’s raw materials have expiration dates, which means the company can’t just hold them in inventory until they run out. And because they’re made with biological reagents, the diagnostic kits in finished goods inventory have expiration dates as well. According to Director of Operations, Christopher Lambillotte, this presents several inventory management challenges – all of which were answered by ERP software.
“With Global Shop Solutions, we know exactly what we have in inventory and how long we can keep it there. And having visibility of the dollar amount enables us to manage inventory levels up or down as needed. We’ve reduced our raw materials inventory by 25% and our purchasing costs – in large part because we no longer order materials the day before we need them.”– Christopher Lambillotte, Director of Operations at IVD Research
Faster, More Efficient Purchasing
In addition to lowering inventory costs, Global Shop Solutions ERP software also saves IVD Research money by simplifying the purchasing process. Previously, all raw materials were manually ordered, which often led to duplicate ordering of materials already in inventory. Using the Auto Purchasing application, IVD Research can now see the history of every raw material, when it was ordered, and how much it cost.
Combined with the ability to see the entire production schedule for three months out, IVD Research can also make larger, more economic purchases of raw materials. Meanwhile, the use of automatic reorder points further simplifies the purchasing process.
Complex Traceability of All Raw Materials and Finished Goods
As a biotech company, IVD Research must have complete traceability of all raw materials and finished goods, which requires precise lot-to-lot tracking capabilities. This includes following numerous written documents when making their diagnostic kits, as required by the FDA and USDA.
“It would be nice to automate the entire traceability process in Global Shop Solutions ERP software,” says Lambillotte. “However, we’re required to keep paper documents as well, so we find it easier to do the paperwork first and then go back and do the lot tracking and issuing of materials in the system later. That’s not the way Global Shop Solutions is designed, and probably not the way most companies use it, but it works for us. The software is so flexible that it still manages to simplify the process, even with our combination of manual tracking, pre-assigned lot numbers and different levels.”
40% More Efficient on the Shop Floor
According to Lambillotte, Global Shop Solutions has produced a steady stream of improvements throughout the shop floor.
He can now issue work orders with due dates. Instead of standing around waiting for instructions, shop floor personnel look at the work orders to see what to do next. He can look in the system to see the status of every job, including where each job is in the production process and who’s working on it. He can also compare work in progress to finished goods, as well as open versus closed work orders.
“As a result, manufacturing at IVD Research is now continuous,” notes Lambillotte, “and we’ve improved shop floor efficiencies by more than 40%.”
Chief Operations Officer, Kathy Hildebrand, who works at home more than half the time, points to Global Shop Solutions’ remote capabilities as an important benefit.
“I can see everything that’s going on in the business from my home office,” she says. “I can track which bills have been paid, which customers are behind, and make sure we’re paying the right vendors at the right time. I can do the production scheduling and generate the master schedule. I can see what’s happening on the shop floor in real-time. Global Shop Solutions gives me a complete picture of the business at any point in time.”
Personalized Service and Support
As a provider of generic brand diagnostic kits, IVD Research must offer low pricing to maintain a competitive edge. With Global Shop Solutions ERP software helping to control inventory and keep costs down, Hildebrand knows the company is pricing its products correctly. And by making the data visible throughout the company, Global Shop Solutions ERP software helps everyone work together more effectively.
Download the full case study to learn more about all the ways ERP software has helped IVD Research improve their business.