BEYOND MEAT Overall Equipment Effectiveness And Continuous Improvement

HOWMET AEROSPACE

Optimizing Working Capital And Network Design

Student Team: Vedant Kanyaboiena – Master of Engineering in Automotive Engineering Jason Miller – Master of Business Administration

Project Sponsors: Barry Haun – Director, Global Supply Chain Dan Smink – Manager, Global Supply Chain

Faculty Advisors: Chris Mueller – Ross School of Business Pete Washabaugh – College of Engineering

Howmet Aerospace (Howmet) is a global leader in engineered metal products. The Howmet Wheel Systems (HWS) business unit is a market leader in every country in which it competes, and has warehousing/distribution in ten countries, with manufacturing in the U.S., Mexico, Hungary, China, and Japan. With high growth expected in the commercial transportation market in 2022, HWS is ramping up its North American supply chain.

Due to business effects caused by the COVID-19 pandemic, working capital tied up in inventory at network facilities became a primary target for reduction. Additionally, a shift towards lower-cost international manufacturing and subsequent importation was made, leading to more in-transit inventory and increased supply variability. The Tauber team was asked to reduce work-in-process (WIP), finished goods (FG), and in-transit inventory, as well as decrease supply chain costs where possible.

The Tauber team began the project by conducting extensive stakeholder interviews to understand business challenges. To optimize WIP & FG inventory, the team introduced the concept of postponement, which delays manufacturing and/or distribution differentiation of a product until a customer order has been received. This reduces variability and planning effort by pooling inventory among SKU families. To determine the reduction potential, the team created a tool that calculated the optimal inventory level according to postponement and compared it to the current state. The team also evaluated production run sizes by performing sensitivity analyses on changeover frequency. Some manufacturing lines had unused capacity; therefore, shorter run sizes with more frequent changeovers would lead to lower inventory levels and increased planning flexibility without affecting capacity.

To address in-transit inventory, the Tauber team created a scenario modeler that considered the inbound and outbound flows of the network to determine the cost- and service-optimal logistics lanes to utilize, and provided options to add, remove, or relocate network facilities. The findings of this tool were to close and co-locate the central distribution center with an existing regional distribution center (RDC) with excess capacity, expand the role of a second RDC to service the western US, and utilize additional ports to limit ground transportation of imports.

Implementing production & distribution postponement, alleviating production constraints to enable shorter production run sizes, and other proposed inventory initiatives would have a projected one-time working capital reduction of $11.0M. The optimized distribution model is projected to save $5.0M of inbound and outbound transportation costs annually.

THE MAYO CLINIC

Optimizing Inventory Management for Labs

Student Team: Andrew Johnston – Master of Business Administration Amalia Siavelis – EGL (BSE Biomedical Engineering & MSE Industrial and Operations Engineering)

Project Sponsors: Joe Dudas – Division Chair, Supply Chain Bruce Gilmore – Director, Supply Chain Management Kari Solak – Performance Consultant, Supply Chain Management

Faculty Advisors: David Chesney – College of Engineering Lisa Pawlik – Ross School of Business

The Mayo Clinic, a $14B nonprofit organization, is a leading health system in the United States that is committed to “providing the best care to every patient through integrated clinical practice, education, and research”. Mayo Clinic’s Department of Laboratory Medicine and Pathology (DLMP) performs testing services for diagnostic and therapeutic evaluations, completing 27 million tests annually for both internal patients and external customers. Tens of thousands of unique lab supplies are required to perform hundreds of distinctive medical tests and services. To source, procure, manage, and distribute inventory, DLMP partners with Mayo Clinic’s Supply Chain Management (SCM) group.

Organic growth in testing volume and COVID-19 pandemic-related supply chain disruptions put pressure on DLMP’s inventory management practices and revealed areas of opportunity. DLMP’s 125 production labs were each independently managed, which led to great variation in how inventory was handled and by whom. Limited SCM support and inadequate technology systems inhibited positive change.

The Tauber project team leveraged a framework of people, process, and technology to identify inventory management improvements that would net financial and operational gains. To this end, they interviewed 150 lab staff, conducted lean rapid plant assessments on 40 labs, and held benchmarking conversations with 15 industry partners to create a current state gap analysis. Next, they conducted a proof-of-concept implementation within three DLMP labs to measure the impact of their recommended changes and evaluate their ability to scale solutions. Finally, the Tauber team refined their analysis and delivered final recommendations and a phased rollout roadmap.

The Tauber team identified the potential for significant revenue gains through lab capacity advancements and cost savings through the application of lean principles. Over three years, they projected that Mayo Clinic can net $112M. To unlock this value, the Tauber team recommended that Mayo Clinic form SCM teams for supply logistics and complex order management and transfer inventory responsibilities from laboratory staff to these new, improvement-focused groups. As a result, it is estimated that 83K labor hours per year would be returned to DLMP lab activities. Additionally, the Tauber team built the business case for improved data analytics and project management capabilities in order to transform DLMP’s inventory management from a business challenge to a strategic advantage.

C.S. MOTT CHILDREN’S HOSPITAL

Augmented Reality in Pediatric Minimally Invasive Surgery

Student Team: Fernando Espino Casas – Master of Business Administration Matthew Shannon – EGL (BSE Computer Engineering & MSE Electrical & Computer Engineering)

Project Sponsors: Dr. David Chesney – Professor, Computer Science & Engineering Dr. Ronald Hirschl – Pediatric Surgeon Dr. Marcus Jarboe – Pediatric Surgeon

Faculty Advisors: Amy Cohn – College of Engineering Stephen Leider – Ross School of Business

C.S. Mott Children’s Hospital at Michigan Medicine is nationally recognized as one of the leading pediatric health care centers in the United States. Established in 1903, Mott provides comprehensive primary and specialty healthcare for children, including numerous surgical procedures.

Minimally invasive surgical (MIS) operations, performed at Mott Children’s Hospital and other hospitals nationwide, involve the use of expensive, ergonomically unfavorable booms and monitors that are not under the surgeons’ direct control because the surgeon is sterile. This current setup inhibits the visibility of real-time video from surgical cameras (surgeons and equipment on the other side of the OR table impede visibility) and requires others in the room to adjust monitors, resulting not just in surgeon frustration, but in ergonomic concerns that feed into longterm chronic disability and impact the ability to optimally perform MIS procedures. In addition, by having to be sterile, the surgeon is isolated from what would otherwise be easy access to other crucial information such as imaging, vital signs, procedural videos, and the medical literature. The impact cascades outside the operating room as well, with case delays resulting in suboptimal use of OR time and inefficient cost-management of the OR.

To address these issues, the Tauber team worked to fully integrate the newest HoloLens 2 augmented reality (AR) headset for use in operating rooms at Mott. First, the team conducted secondary research to familiarize itself with both the clinical environment and the capabilities of the HoloLens 2. The team proceeded to map key datastreams that exist in the OR and analyze what critical steps were required to integrate them into the headset, while simultaneously conducting surgeon interviews to identify factors that would impact their adoption of the technology. Based on this work, the Tauber team provided detailed recommendations to integrate real-time video from the surgical camera, patient vitals, and images into the HoloLens 2; in addition, the team provided a comprehensive business case, outlining the key benefits of integrating AR technology at Mott and other hospitals. Finally, to ensure a smooth transfer and roadmap for surgeon adoption of the technology, the Tauber team developed a surgeon acceptance and implementation plan.

After finalizing and successfully integrating the HoloLens 2 into each operating room, Mott can expect qualitative and quantitative benefits. With greater agency, surgeons will minimize delays from frustrating processes, improving short-term case completion and long-term operative careers. Moreover, administratively, Mott can expect to save 2,500 annual overtime hours and cut at least an estimated $500,000 in annual OR operating expenses, with the possibility to extend elsewhere in other Michigan Medicine operating rooms.