Kaizen Team Charter Event Focus: Slide Handler Assembly Process (APLD) Slide Handler System Integration (BD) Event Date: 23-25 January 2007 Dates at Area: 23-25 Jan at APLD (Issaquah) & BD (Redmond), division Primary Objectives: 1. Develop the Current State Value Stream Map for Slide Handler Assembly and System Integration (as pertaining to Slide Handler). 2. Create a Future State Value Stream Map (targeted at a 3-6 month timeframe) which incorporates the eight characteristics of Lean value streams. 3. Complete an implementation plan which lays out timeframes for completing transition to Lean future state.

Process/Area Info: Identify and implement throughput and quality improvements in both Slide Handler Assembly Process (APLD) and Slide Handler System Integration (BD). Current Situation: Applied Precision provides the integrated Slide Handler system for the FocalPoint instrument produced by BD Diagnostics, TriPath, in Redmond, WA. In an effort to reduce costs, improve quality, and increase value, a kaizen event is being chartered for APLD production and BD integration processes. Re-engineering of the motion system remains a go-forward opportunity for much more significant cost reduction. Although that reengineering will be out of scope for this event, BD acknowledges the opportunity. Takt Time: 2.6 Days

Kaizen Team Charter Slide Handler (Raw Material) through Focal Point (Final Assembly and Test) Joint Exercise with Applied Precision and Beckon Dickinson January 24th, 2007

Sponsors: Chris Lord & Rick Loya, API Rick Carr, BD Leaders: Process Leaders: Edward LaPoint, Mfg Supervisor (APLD) Brian Todd, Mfg Supervisor (APLD) Team Rosters: Applied Precision Team: Rick Loya, Sales & Product Mgr. Steve Quarre, Lead Mech. Eng. Ann Weber-Riley, Mfg. Eng. BD/TriPath Team: Rick Carr (BD) Thom Cafasso, (BD) Facilitator: Dave Anderson (BD)

Kaizen and Value Stream Mapping Definitions Kaizen – means “continuous improvement” in Japanese. Kaizen is founded on the principles of doing things better and working toward (and achieving) increasingly higher standards.    

Is an intensive, rapid improvement model Is Composed of a cross-functional team The Team meets full time 3 – 5 days The Goal is process Improvement within a specific, limited area

Value Stream Map (VSM) – is a Lean Manufacturing tool that illustrates the material flow, information flow, and manufacturing & processing data. A VSM is used to identify process improvement opportunities and reduce waste. Waste – is anything other than the minimum amount of equipment, materials, parts, space, and workers time which are absolutely essential to add value to the product. 8 Wastes of Operations (8W) that the Value Stream Map aims to identify and reduce or eliminate: W1 - Overproduction W2 - Inventory W3 - Waiting W4 - Transportation (Material Movement) W5 - Motion (People Movement) W6 - Over Process (useless steps in a process) W7 - Defects W8 - Under Utilizing Employees Skill-sets

Value Stream Mapping Definitions Process Time (PT) is the time during which a unit is acted upon to bring it closer to an output. Delay or Wait Time is the time during which a unit of work is spent waiting to take the next action. Cycle Time (CT) is the elapsed time from the beginning of a process to the completion of that process for the production of a single unit. CT is measured, not calculated and may be longer or shorter than Takt Time. If the CT for every operation in a complete process can be reduced to equal Takt Time, products can be made in single piece flow. Cycle time includes process time, and delay time. (Note: Cycle Time is not the same as Lead Time). Single Piece Flow is where products move through various operations in design, order-taking, and production, one piece at a time and without interruptions, backflows, or scrap. Lead Time (LT) is the time from the moment the supplier receives an order to the moment it ships it in the absence of finished goods or intermediate (Work In Progress) inventory--it is the time it takes to actually manufacture the order without any inventory other than raw materials or supply parts Takt Time is the rate or time that a completed product is finished. If you have a Takt Time of two minutes that means every two minutes a complete product, assembly or machine is produced off the line. Every two hours, two days or two weeks, whatever your sell rate is your Takt Time. Producing to Takt Time with optimal staffing is where you want to be. Where you have the right amount of people to produce your product within your established Takt Time. The Operators cycle times are loaded to Takt Time (Line Balance). Takt Time = Available Process Time (for a period of time) Customer Requirements for that period of time

Production Control Electrical Parts

Mechanical Parts

Ball Screws

Table Slides

BD Master Production Schedule

MRP

BD

1 Pc MO’s

NanoMover Assy.

Kanban

1 x Month

1 x Week

2 x Month

Implement Pitch at Final Test

Single Point Weekly Scheduling

2 x Month

Establish Supermarket vs. Lead Time

1 x Week

Reduce Final Test Time

Reduce Burn-In at Top Assembly

Train Shipping to Pack Units

Max = 12 Z Stage Build Z Stage Burn-in Flipper Motor FIFO

X – Stage Y – Stage X & Y Link X & Y Stage

Max = 4 1

Top Assembly Top Burn-In

Frame Assy. Turret Assy.

Final Assembly Final Test

QA

Packing/Shipping

FIFO

FIFO

FIFO

FIFO

FIFO

Max = 1

Max = 1

Max = 1

Max = 1

Max = 1

1

1

1

1

1

1

1 – 2 Months

A

CT =

CT =

CT =

CT =

CT =

CT =

CT =

PT =

PT =

PT =

PT =

PT =

PT = 15 min

PT = 30 min

UT = 99%

UT = 99%

UT = 99%

UT = 99%

UT = 99%

UT = 99%

UT = 99%

CO = NA

CO = NA

CO = NA

CO = NA

CO = NA

CO = NA

CO =

20 - 40 Days

4.4 Days

26 – 34 Hrs

2.2 Days

5.5 Hrs

Future State Page 1 Slide Handler (Raw Material) through Focal Point (Final Assembly and Test) Joint Exercise with Applied Precision and Beckon Dickinson January 24th, 2007

2.2 Days

29 Hrs

2.2 Days

3.3 Hrs

2.2 Days

5 Hrs

2.2 Days 0.3 Hrs

LT = ???? (Full) LT = ???? (Steady State) PT = ????

0.5 Hrs

Master Production Schedule

S&OP

Focal Point Customers 10 FP x Month

Applied Precision

New FP = 9 Refurb. FP = 1

WO

FP Production

Establish Flexible Supermarket

Single Point Scheduling would be at the Chassis part of the Focal Point Build

1 x week

Shrink System Qualification FIFO

Establish Slide Handler Supermarket

Uncrating

QA

Mechanical Integration

Optical Integration

FIFO

FIFO

Max = 1

FIFO

Max = 1

1

1

CT= 30 min

CT=15 min

PT=

PT=

UT= 100%

UT= 100%

C/O = NA

C/O = NA

1 New = 2 -4 Refurb = 1 - 4

Workstation Setup

System Qualification FIFO

Max = 1

Country Kit and Labeling

Safety Test Final Ops FIFO

Max = 1

1

Combine Safety Test & Final Ops

Max = 2

Final QC FIFO

FIFO

Max = 1

1

1

1

Max = 1 1

1

CT= 12 Hrs

CT= 6 Hrs

CT= 8 Hrs

CT= 34 Hrs

CT= 6 Hrs

PT=

PT=

PT=

PT=

UT= 100%

UT= 100%

UT= 100%

C/O = NA

C/O =NA

C/O = NA

Shipping

1

CT= 1 Hr

CT= 1 Hr

CT= 2 Hrs

PT=

PT=

PT=

PT=

UT= 100%

UT= 100%

UT= 100%

UT= 100%

UT= 100%

C/O = NA

C/O = NA

C/O = NA

C/O = NA

C/O = NA

3-5

A 6.6-13.2 D 3.3-6.6 D

2.2 D 0.5 Hrs

0.3 Hrs

2.2 D 12 Hrs

Future State Page 2 Slide Handler (Raw Material) through Focal Point (Final Assembly and Test) Joint Exercise with Applied Precision and Beckon Dickinson January 24th, 2007

2.2 D 6 Hrs

2.2 D 8 Hrs

6.6 – 11.0 D

4.4 D 34 Hrs

6 Hrs

2.2 D 1 Hr

2.2 D 1 Hr

2Hrs

LT = 84 – 117.2 Days (Full) LT = 54.8 – 73 Days (Steady State) PT = 147.4 – 161.4 Hrs

Implementation Plan Objective

Goal

Who

When

Establish Flexible supermarket

3-5 FP in BD F.G.I.

BD/Rick Carr Dave Anderson

3Q’07

Combine safety test & final ops

0 WIP

BD/Rick Carr

1Q’07

Shrink sys qualification FIFO

Reduce to 2X

BD/Rick Carr

3Q’07

Establish SH Supermarket

2-4x New 1-2X Rfrb

BD/Cafasso/Carr APLD/Loya

April ’07

Establish RM super market

1-2 month for Long L.T.

APLD/Brian Todd

April’07

Train shipping to pack

Training record established

APLD/Ann Weber-Riley

1Q’07

Reduce final test

Reduce to 2 hr/50% Time study=2hr

APLD/Ann Weber-Riley BD/Rick Carr

3Q’07

Establish test DS pitch

Visual Indicator

APLD/Brian Todd/ Ann Weber Riley

1Q’07

Reduce top plate burn-in

TBD

APLD/Ann Weber-Riley

TBD

Establish One piece manufacturing orders

ECN Implemented

APLD/Brian Todd/ Ann Weber-Riley

1Q’07

Establish Kanban

Parts bins located in S.H. Cell

APLD/Brian Todd/ Ann Weber-Riley

2Q’07

Implementation Plan Slide Handler (Raw Material) through Focal Point (Final Assembly and Test) Joint Exercise with Applied Precision and Beckon Dickinson January 24th, 2007