NEW CONTRACT MANUFACTURING FACILITY

R E G I N A L D W I L L I A M S A N D R E W H A R R E L L P O L LY P I T C O C K

HippoTronic Medical Devices

Description of Project

Our company has outgrown its current facility

locate a site, lease up to 15,000 square feet of space, staff it

obtain the appropriate certification and qualification to begin manufacturing a new sterile electro-surgical medical device product line under contract with a large OEM, Big Med, Inc .

Objective

HippoTronic must relocate to a larger/modern facility, relocate equipment and restructure the company’s current staff to retain highly skilled employees.

Obtain certifications and manufacturing requirements necessary to be a qualified medical device contract manufacturer.

Assumptions

The product line and volume demand is already defined & guaranteed by the OEM customer.

Upper Management gives full backing & capital is readily available.

Devices being manufactured are already 510(k) cleared (FDA approval not a concern for properties of device or processes of manufacture)

No barriers to negotiating lease requirements; site selection is based solely on property characteristics not funding.

Primary Stakeholders

Internal Stakeholders Board Executives Management Human Resources Operations Leadership Engineering Employees

Investors Big Med, Inc. Patients Surgeon

Project Milestones

Preliminary Project Milestones:1. Site Selection/New Facility/Existing Site

Shutdown

2. Employee Re-Organization

3. Facility Ramp-Up

Communication Plan

Audience Vehicle of Comm.

Frequency Medium Source

Project Sponsor

Status Report

Weekly Written Report

Site Manager

Board Milestone Report

Monthly/per request

Presentation Project Team

Employees Change Plan At Outset Verbal HR Manager

Project Team

Progress Report

Task-based timeline

Electronic/ Verbal/Report/Receipt

Contractors

OEM/Customer

Progress Report

Weekly Written Report

Project Team

WBS Breakdown Highlights

Secure lease for 15,000 sq ftApproval for Construction, Installation,

Moving RFP’sStart Construction/Installation ProcessPurchase order for new EquipmentReduction in Force/Decide ongoing labor

needsPrepare Severance PackagesConduct Post Termination ActivitiesPerform Equipment/Process Validation

DELIVERABLES AT A GLANCE

Site Selection/New Facility/Existing Site

Scheduled Site Visits - Hickory Hill , Old Lamar, Directors Row Time: 2 weeks

Lease Negotiations – Negotiated discounted lease Time: 1 week Minor Improvements/Clean-up - Contract services to

build out 2,000 sq Ft “Clean Room” to install the new phone system/fiber optics Time: 2 weeks/3 days

Final Approvals - Walk thru with contractors to review clean room construction and the installation of the new phone system and fiber optics - Time: 5 days

Old facility shut down - Clean-up, secure premises, and turn keys over to the property management company - Time: 1 day

DELIVERABLES AT A GLANCE

Employee Re-organization

Change Communication Plan - Communicated all changes to through the change communication plan - Time: 1 week

Reduction in Force Plan (RIF) - Prepared a (RIF) plan to identify the 25 technicians who were no longer needed after the transition to the new facility - Time: 1 day

Ongoing Labor Needs - Determined what the new facility labor needs would be based on new requirements - Time: 6 days

Prepare Severance Packages - HR prepared severance packages for the 25 individuals identified in the RIF analysis – Time: 2 days

Post Termination Activities - Activities included recouping any company files, equipment or keys from the terminated employees

Time: 1 day

DELIVERABLES AT A GLANCE

Manufacturing Ramp-up

Equipment/Process Validation - Qualified per contract - Time: 1 week

Class 10,000 Cleanroom certification - Class 10,000 certification was required to manufacture devices - Time: 3 weeks

Total Quality Management - Performed routine maintenance and capability assessments - Time: 2 weeks

Manufacturing Workflow Structure - Created the physical map for the production environment – Time: 1 week

De-cost Manual Assembly Operations - Applied cost and price data to the workflow structure to produce a finished product - Time: 3 days

Validate Quality & Capability Maintenance - Framework for adding and changing process for post manufacturing process - Time: 1 week

Begin Production - Assessed the capability, procurement, and staffing requirements to launch production per contract - Time: 1 week

PROJECT COSTS

Site Selection - $15,391Furnishings/Equipment - $47,000Construction/Installation Services - $100,000

Moving Services - $15,000Employee Re-org (severance packages) -

$85,000Manufacturing Ramp-up - $50,300General Budget Line Items - $4,750

PROJECT RISKS

Site Selection

Ineffective site selection analysisNot adequately defining the costs of the

relocation (cost over-runs) Stalled lease negotiationsConstruction and Installation delaysDelays in the delivery of new

equipment/furnishings

PROJECT RISKS

Employee Re-Organization

Conflicts in move-over scheduleEEOC charge for wrongful termination Possible early loss of employees before date

of reduction of workforce Employee morale may cause loss in

productivity or production errors Unhappy employees may look for fraudulent

Workers comp claims

PROJECT RISKS

Manufacturing Ramp-up

Equipment qualification failures Material/process supplier changesFailure to obtain Class 100,000 Cleanroom

CertificationContamination exclusions/undiscovered issues

with facilityBig Med, Inc breaks contract/goes bankruptDe-costing reveals bad ROIRetention of skilled technical personnel in

relocation

PROJECT RISKS

THE RESULTS

Outcomes

New LocationHighly Qualified StaffCutting Edge TechnologyNew Market ShareSatisfied Customer

On Time and on Budget!!!

OUR NEW SITE!!!

NEW SITE!!!

NEW SITE!!!

Images courtesy of Loopnet.com & Google Maps

Gantt Chart

Task Schedule

257 Days66 Tasks13,536 Work Hours

Critical Path Activities

Resource Smoothing

Staged CrossoverChange Communication PlanValidation Master Plan

Reduction of Project Duration