Super Value CT Scan Power Distribution Unit
(SVCT 8 / Wipro GE Healthcare)
Production partner qualification and manufacturing execution for the Super Value CT PDU (SVCT 8) — helping Wipro GE Healthcare capture 80% market share in India.
Background
M/s GE Healthcare was facing a major challenge from M/s Siemens Healtheneers, M/s Cannon Medical Systems, M/s Phillips Brilliance in the CT Scan machine retail business. This was further aggravated by M/s Fujifilm Healthcare/Hitachi Healthcare, United Imaging Healthcare and M/s Neusoft Medical Systems joining the competition.
Internal brainstorming at GE HQs to increase sales revealed that the emerging market was in India where the requirement of CT scan machines was growing exponentially due to government impetus to reach its large rural areas to provide at least minimal health care to its poorest citizens. GE being the front runner in CT Scan machines was providing the state of the art high end machines which were consequently the costliest. They realized that in order to address the bulk emerging market in India they would be required to develop a minimalist CT Scan machine at very competitive price. This resulted in an exercise to reduce the cost of each sub-system/LRU of the CT Scan machine to its lowest cost without compromising on its basic functions. Wipro GE Healthcare was given the task of designing the Power distribution Unit for this machine which called Super Value CT PDU model name SVCT 8. They were also tasked to identify a supplier who could productionize it at bare minimum cost.
My Association
- I was the Senior Vice President (Engg & Operations) of the company chosen by Wipro GE Healthcare to carry out production of SVCT 8. I was solely responsible for the task. I was given a free hand to get the work done as to be a production partner to GE was considered a premier branding.
Challenges
10 Real-World Obstacles EncounteredCompany selected as production partner was not from a medical manufacturing background.
GE Healthcare process of getting approved as a production partner was not understood in entirety.
The time frame given by GE Healthcare for getting our facility approved and to commence production was 12 months which included prototyping and pilot.
The supply chain for the PDU was to be established from scratch as it was a new vertical for the company.
Test set ups with complementary hardware, software, tooling etc were to be established.
The manufacturer for the mechanicals was to be approved by GE separately but to be identified by us.
Manpower had to be trained and certified as per GE Healthcare standards.
Documentation was to be carried out as per GE Healthcare standards and formats.
Production facility layout as per manufacturing process flow including shop floor, testing bay, Quality check, store and inventory control, work instructions, finished goods area, packaging were to be brought up for Approval by GE Healthcare.
Pricing was to conform to GE Healthcare target.
Remedies
9 Strategic InterventionsOur company had a Defense manufacturing arm. Defense standards are similar to medical standards in production and certain process certifications like IPC standards are common. The workmanship standards are similar. We did not hire from scratch but pulled out experienced technicians, junior engineers and supervisors from our Defense manufacturing division along with quality and documentation personnel. This gave us a ready start to the activity.
While the design was being finalized by Wipro GE Healthcare we sent our material management team to GE facility to get an insight into their supply chain management.
We associated our technicians and engineers with the Wipro GE Healthcare team during prototyping stage at their facility.
We made our production floor manager to visit GE production site to understand their work flow.
We adopted the same ERP as Wipro GE Healthcare to have uniformity of process.
Once the BOM was frozen by the GE team of designers our material management team sat down with GE procurement team to optimize the same. We worked out a hybrid arrangement between GE and ourselves where we would procure from suppliers which gave us the best prices and then ask them to deliver at our location to get the best CBOM.
Due to our extensive exposure in the Defense manufacturing we could offer substitutes which were less expensive than the components being used by GE which in turn helped to reduce our CBOM and ultimately meet GE target pricing.
We procured twice the quantity of material than the order value so that we did not have issues of material shortage, material rejection, material delay, material lost in transit as we had a 100% back up. We also kept a buffer stock of 10% machines of our six monthly supply to cater for emergent requirements or unforeseen delays.
Over a period of 6 months we built up a SVCT 8 specific workforce and repatriated back the manpower we had initially borrowed from the Defense manufacturing arm.
Lessons Learned
Learn from the best. We learned from GE Healthcare.
While starting a new venture spend on process, quality of equipment and tools, skilled and experienced manpower.
The power of correct and complete documentation leads to extensive risk mitigation.
At all levels of management concentrate on back up and reserves.
Senior leadership should look at long term view of profitability as premium branding will open new avenues for business growth.
Conclusion
The SVCT 8 initiative of was a total success with Wipro GE Healthcare garnering 80% of the market share and giving even Tier III competitors a stiff challenge in pricing itself.
Col Sanjay Chandra (Retd)
Former Sr Vice President
XYZ Company
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