October 2018 | Seabrook Technology Group

Monthly: October 2018

Building the Case for Paperless Manufacturing: Improved Production Performance

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Throughout this blog series, we have addressed the benefits of paperless manufacturing by highlighting the cost effectiveness of the following:

  • Eliminating the cost of paper
  • More accurate order processing
  • Reducing Non-Conformances

Today’s final feature addresses the fourth benefit of implementing a paperless manufacturing execution system:  Improved Production Performance

Medical device manufacturing is faced with many complexities. Product lifecycles are becoming shorter, and if a company hopes to maintain a competitive edge in the industry, it must evolve the manufacturing processes quickly. As products become more complex, regulatory pressures also increase.  Due to this increased regulatory pressure, each manufacturing process change is likely to 1 – increase the number of steps involved and 2 – require that more product (and process) information be collected during those steps. Strong companies realize that automating the manufacturing process leads to more efficient production.  If a company utilizes a product lifecycle management system (PLM), the design and the development of the product change as well.  Ideally, the result is a more efficient manufacturing process.

Herein lies the advantage of utilizing a paperless manufacturing system.  Companies that use MES learn more about the production process because MES allows for the user to more actively view the activity occurring on the production floor. Utilizing this new knowledge, the user can determine what new capabilities can be added to MES to improve production performance – providing tighter control and visibility.

When working to increase production performance, it is important to look at the process for handling product change-over during production.  Analyzing how a company prioritizes orders is vital to success.   As a company transitions from an ERP System to MES, intelligent dispatching optimizes and enforces order processing. As new products are introduced, MES allows the company to build on existing workflows to establish new manufacturing processes. These copied workflows may include items such as required training, required components and equipment use; and because of MES enforcement, production rework is greatly reduced.  MES utilization allows for immediate examination of the manufacturing process, and identifies specification and component errors. 

At Seabrook, one common mistake seen with manufacturers is the lack of inclusion of the purely paper-based operations in their cycle times. Remember, medical device manufacturers produce the product as well as the Device History Record (DHR).   Seabook has assisted companies as they assess the requirements for MES, and we walk through the vendor selection process with them. As an example, we are currently working with a client using a paper-driven manufacturing process that implements a two-week DHR review process that begins once their product is ready to ship.  For two weeks, the product unnecessarily sits on the floor waiting to be shipped. With the implementation of MES, this company can eliminate this two-week waiting period, and their plan is to evolve their process and review by inspection instead.  Because of MES, they will no longer have product shipment lag time, which will increase distribution speed significantly.

The tables below represent the many benefits experienced by two actual Seabrook customers who converted to MES.  DHR time was reduced significantly, leading to a reduction in inspector headcount.   NCR disposition also significantly dropped, meaning less material is wasted in the manufacturing process.  Paper-based solutions require a significant amount of manual review, which leads to longer decision-making time and more time between production and distribution of the product.  Tear-backs (when a product passes through packaging but must be torn open for inspection) were also significantly reduced.  Although not as expensive as a product recall or field action, a tear-back is an indicator of how far a product can pass through the manufacturing process before a problem is discovered.

Consider this as well:  to discover the values in the Pre-MES column, someone had to manually gather the data.  Following MES implementation, someone merely needs to run a report.

As seen in these tables, significant savings occurred through the DHR inspection process, labor cost, training cost,paper-related cost and more.  The second client (table 2) realized a cost savings of over a half a million dollars in one year, which resulted in a complete MES return on investment in less than two years.  This is consistent with a study lead by Gartner, which found that return on investment from MES implementation varies from 6 to 24 months – with an average ROI of 12 months.

As seen by each blog in this series, there are numerous financial and organizational benefits that are experienced as companies transition to paperless MES.   At Seabrook, we believe that MES and cloud-based MES are vital to the success of manufacturers.  We have recently been recognized by CIO Review as a Top Ten Manufacturing Technology Solution Provider.  Our team of experts seek to come alongside manufacturers to provide the best solutions in the industry, and we would be honored to serve those looking to make this transition.  Simply contact us via this web page or contact us directly:  Tel: +353 21 4800 840 or [email protected]

Building the Case for Paperless Manufacturing: Reducing Non-Conformance Costs

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In our previous blog, we continued to address benefits of paperless manufacturing by highlighting the cost effectiveness of increased accuracy in order processing. Today’s feature addresses the third benefit of implementing a paperless manufacturing execution system:  Reduction of Non-Conformance Costs.

To clarify, a manufacturing non-conformance is an unexpected event that occurs in the manufacturing process that deviates from a set standard or requirement.  Several unexpected events can occur that will dramatically impact non-conformance costs.  These include:

  • FDA Audit Failures.  Failing an FDA audit can have tremendous cost.  According to FDAZilla.com, the expenses associated with a failed audit can include reputation damage, competition response, consulting, training (or re-training), and obvious loss of business.  Immediate cost can easily begin in the hundreds of thousands and escalate quickly into the millions (A Bad 483 Could Cost a Company Millions, Tony Chen, blogfdazilla.com, 2018).
  • Product Recalls.  Recalls can be extremely damaging for both cost and company reputation.  In addition to the initial cost of product recall – including creating a crisis team, product removal, cause investigation and public relations management (Lockton.com/whitepapers The True Cost of Product Recall, 2015) – there is a much greater cost associated with reputation damage and the recovery process. 
  • Product Replacement.  Non-conformance that leads to actual product replacement can devastate the production budget.  Material and labor costs alone can easily reach into the hundreds of thousands – not counting the wasted marketing and promotion dollars associated with product replacement.   
  • Customer Dissatisfaction.  We live in the age of the empowered consumer.  Because of social media and ease of communication, one dissatisfied customer can impact an entire company in a moment’s notice.  More importantly, an unhappy customer is a vocal – and influential – customer, as unhappy customers are three times more likely to tell friends and colleagues about a negative customer experience.  Additionally, it costs seven times more to acquire a new customer as it does to retain a current one (www.inc.com/graham-winfrey/the-cost-of-unhappy-customers.html).   Any glitch in customer satisfaction that is caused by manufacturing non-conformance is bound to have a tremendous impact on the bottom line.
  • Company Stock Value.   Non-conformance can damage a company’s image, impacting return on assets and yield.  Importantly, company stock value is difficult to recover.  The go-to metric for nearly all investors when it comes to valuing a stock is the P/E ratio. Standing for price-to-earnings, this formula is calculated by dividing the stock price by the earnings per share (EPS).  A disgruntled investor is unlikely to return if the company stock P/E ratio continues to suffer. 

Two Examples:  In 2006, Boston Scientific received a corporate warning letter from the FDA.  As a result, 100,000 stents were recalled, and  – pending FDA approvals –  their production was delayed.  Throughout the next four years, Boston Scientific worked diligently to correct issues – but over these four years, they lost sales for existing products, had to delay a key product launch, and lost over five billion dollars in market capitalization. 

Similarly, in 2013, after an extensive FDA inspection, Edwards Lifesciences was forced to halt multiple product launches.  After just two years of work to remediate the FDA inspected issues, these nonconformance costs reached nearly twenty million dollars and the stock price had dropped by thirty-two percent.

How can MES help reduce non-conformance costs?

Paperless manufacturing through MES can reduce these costs by:

Enforcing Specification.  Building a case for paperless manufacturing must begin by identifying the company specifics that MES can improve.  One of the easiest areas to identify are missed specifications (specifications out of tolerance).  Missed specifications can be identified by examination of paper records.  Were there products in the paper records that continued through the manufacturing process with missing specification information?  Questions that should be asked include “how many products went to rework or scrap,” and “how many products were shipped?”

Automating NCR Tracking and Resolution.  MES can completely automate the NCR tracking process. Any product currently involved in an NCR will be unable to move through the manufacturing process. This ensures that the NCR remediation process is followed and that the product does not get shipped. Therefore, because the NCR-related product cannot move through the manufacturing process and the MES captures NCR-related activity, the remediation becomes immediately visible, encouraging a swifter resolution.

Providing Complete DHR & Audit Information.  When order processing is halted on a manufacturing floor where MES is enforcing the operation, various company departments become aware of the situation quickly and efficiently.  In the previous Boston Scientific example, the remediation process took four years. When utilizing MES however, detailed production issue records and customer complaint records are enforced and created in real time.  The advantage is obvious, as there is no wait time for completed paperwork (allowing research to being immediately) and the completed DHR can be quickly retrieved during the auditing process. 

Real-time Event Troubleshooting.  MES utilization allows for immediate analysis and remediation of any unplanned production event.  As an example, a Seabrook consultant worked on a MES that was closely integrated with automated systems. During production, there were multiple cases in which the incorrect label was applied to a unit. The entire labelling process was automated based upon product information. The MES created and maintained event logs at the millisecond level so that the team was able to analyze these logs and assist the engineers to correct the flawed logic in the PLC that controlled that section of the line. This swift analysis and correction would not have been possible had the system not utilized MES. 

Enforcing Up-to-Date Training.  Operations with expired training may not directly generate a NCR,  however, quality issues could occur as expired training can lead to operator error.

Enforcing Up-to-Date Preventative Maintenance.  Similar to operator error, production issues could occur if equipment maintenance and calibration schedules are not followed. The NCR is a workflow that will require routing signatures, resolution documentation, and closure. With MES, the product and NCR workflow cannot be shipped until that NCR is closed.

Stay tuned for the next post where we will finish this Blog Series highlighting the benefits of paperless manufacturing.  Coming soon!

Building the Case for Paperless Manufacturing: More Accurate Order Processing

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In our previous blog, we began to address the benefits of paperless manufacturing by highlighting the cost efficiency of eliminating paper. Today’s feature addresses the second benefit of implementing a paperless manufacturing execution system:  more accurate order processing

Increased accuracy is the goal when processing manufacturing orders, as increasing the accuracy of processing these orders greatly improves supply chain management.   

How does accuracy increase when utilizing paperless manufacturing execution systems?  Simply stated, paperless MES allows for

  • automatic transmission of data,
  • enforcement of data capture, and
  • increased visibility throughout the manufacturing process. 

Each benefit is expounded upon below.

AUTOMATIC DATA TRANSMISSION.  With MES, the transmission of order information is automatically sent from the ERP system to the factory floor.  This process eliminates potential human errors created by the mishandling of paper spreadsheets.  When utilizing MES, once the order is complete the MES sends key order information directly to the ERP system, and material is consumed.

ENFORCED DATA CAPTURE.  When MES is utilized, data capture is enforced in real time, efficiently sending timely information directly to your ERP system.  The efficiency of this process reduces material cost by creating less rework, less material inspection failure, and less product rejection.   

INCREASED PROCESS VISIBILITY.  Paper-based tracking solutions have limited visibility and can delay response time to production issues.  Paperless MES is a more mature implementation that includes production displays throughout your facility. With MES, line managers have dashboard applications that show them production information in real time, allowing for more accurate and more reliable tracking solutions. These dashboards allow the manufacturing team to respond more quickly to production issues.


Through the prevention of Material Expiration Enforcement, Roche Diagnostics prevented scrapping a $250k lot on day 2 following ‘go-live’ on eDHR technology.  This occurred simply because MES would not allow an operator to use expired material on a product.

As an additional example, Seabrook worked with an organization that averaged 30 NCR’s per month on 1 production line. After MES, they only had 3 NCR’s for the entire year!

Stay tuned for our next edition on the benefits of paperless manufacturing, as we discuss the cost of non-conformance issues.

Seabrook Recognized as Top 10 Manufacturing Technology Solution Provider by CIO Review

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CIO Review Magazine has recognized Seabrook Technology Group as a Top 10 Technology Solution Provider for their 2018 Special Edition of Manufacturing Technology 2018.  

Since 1989, Seabrook has been an industry leader in manufacturing technology.  This CIO Review honor – specifically to recognize Seabrook’s movement of Manufacturing Execution Systems to the cloud – will be featured in the magazine’s 2018 Special Edition as seen at this link.

“To be recognized by CIO Review is an honor,” said Seabrook Global COO John Dzelme.  “To be considered a Top 10 Technology Solution Provider is affirmation of the hard work that we do at Seabrook to serve the manufacturing industry,” explained Dzelme. 

CIO Review, a technology magazine, has been at the forefront of guiding organizations through the continuously disruptive landscape and providing enterprise solutions to redefine the business goals of enterprises tomorrow.  Thank you to CIO Review and the staff for this prestigious honor.