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Performance in delivering parts for medical equipment is critical to customers. When sophisticated medical equipment – such as a CT scanner, X-ray machine or MRI system – is inoperative due to an unavailable part, the hospitals we support are unable to provide the best diagnosis for a patient. Further, diminished utilization of the equipment affects a hospital’s bottom line.
The metric for parts delivery of this project was defined as the time between order receipt and parts delivery. Prior to the Six Sigma project, the process averaged 12 hours. Since more than 80 percent of the time our customers request that a part be delivered in less than 24 hours, and 95 percent of the time they want a part in 40 hours or less, on the surface, our delivery cycle time appeared to be superior. But when variation was taken into account, the process was failing to meet customers’ needs – often by days. As measured at the 95th percentile (P95) level, delivery time was 102 hours. In other words, 95 percent of our deliveries were completed within 102 hours. As a secondary issue, our inventory was running too high – the result of increasing the number of replacement parts on hand in order to decrease delivery times.
This project was initiated to improve our delivery performance and at the same time to reduce our inventory. The goal we were challenged with was a top critical products P95 delivery cycle time of 40 hours. The team exceeded this goal, achieving 36 hours. Confirmation of the performance change in delivery was validated through the use of a 2-sample t-test. Additionally, we reduced back orders by 51 percent and reduced inventory by $13 million.
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