Press Releases
Few Use Metrics, Plant IT Systems to Support Growth Opportunity
Cummaquid, MA and Charlotte, NC (October 31, 2006) -
Medical device manufacturers are not measuring and improving all of the critical aspects of operational and financial performance that might enable them to reach their full growth potential, according to a study published today by independent industry analyst firm Industry Directions Inc. and sponsored by Camstar. The study “Visibility and Control Minimize Risk: MES for Growing Medical Devices Companies” also revealed that the majority of medical devices manufacturers’ metrics processes are too slow to foster continuous improvement.
Only about one-third of the medical devices companies surveyed use Manufacturing Execution Systems (MES), even though the complexity, compliance needs for track & trace and growth potential would make those systems a logical choice. All of those using MES have gained market share while only one-third of others have.
Industry Directions lead research analyst Julie Fraser says, “Medical devices manufacturers have an opportunity to grow at a nearly unlimited rate, but most are stymied by a lack of speedy, accurate information from their production processes. As a result, the market cap for these companies does not look nearly as healthy as their profit margins suggest they should. Increased investment in plant software systems will be a cornerstone of medical devices companies’ ability to measure and improve performance as well as grow.”
The specific metrics that most medical devices companies do not use today but that might help them improve in areas critical to growth include overall equipment effectiveness (OEE), upside production flexibility, total and work-in-process (WIP) inventory, productivity and cash-to-cash cycle times. Few manufacturing applications are widely used – only spreadsheets, document management and ERP are used by over half of these companies. None of those systems can support rapid access to metrics, which correlates to strong performance improvement.
A much greater portion of the medical devices companies in this study that use MES improved on key business and financial metrics. Over 70% more of those using MES improved on economic value-added, cash-to-cash cycle times, EBITDA (earnings before interest, taxes, depreciation and amortization), and productivity as measured in value-added per employee or revenue per square foot. More of those using MES made improvements across a range of operations measures as well, from quality metrics such as yield, process capability and scrap to equipment utilization and overall equipment effectiveness (OEE). Four times as many of those using MES were able to reduce overtime, and twice the proportion improved OEE compared to medical devices companies not using MES.
Fraser will be presenting some of these research results at the InSide Manufacturing Performance Plant Tour and Workshop at ZOLL Medical Corp. in Chelmsford, MA on November 2. The complete research report “Visibility and Control Minimize Risk: MES for Growing Medical Devices Companies” is available from both Industry Directions and Camstar.
About Camstar Systems, Inc.
Camstar is a leading provider of enterprise manufacturing execution and quality systems. Camstar’s InSite application manages, monitors, and synchronizes manufacturing activities across globally distributed plants, and integrates them in real-time with core business processes. Rapid to implement, it provides the manufacturing control needed to help eliminate scrap, rework, paperwork errors and redundant checks. As a result, manufacturers improve yields and product quality, shorten lead times and reach volumes quickly, respond to changing demand, and reduce the cost of compliance. More than 100 leading companies, including Johnson & Johnson, Roche, Tyco, CIBA Vision, ZOLL, Zeiss, BIOTRONIK, Kinetic Concepts, IBM, Kodak, AMD, Philips and Hitachi rely on Camstar as a trusted software partner.
For more information, please visit www.camstar.com
About Industry Directions
Industry Directions is an industry analyst firm that conducts research on the business processes and enabling technologies used in manufacturing value networks in specific vertical industries. These industries include every type of manufacturing, from pure process industries such as oil and gas to batch process such as food and pharmaceuticals to discrete such as automotive, electronics and aerospace, to mixed mode industries such as consumer durables. Areas of focus include supply chain, business-to-business, production, lean & other improvement initiatives, enterprise management, product lifecycle management and performance management. To learn more, visit:
www.industrydirections.com.
Media Contact:
Industry Directions
Julie Fraser
(508) 362-3480
jfraser@industrydirections.com
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