A Lean Decision

MARKET SIGNS

Faster, better, thinner, cheaper. Faster, better, thinner, cheaper. Faster, better, thinner, cheaper. This mantra can be heard around the world as Adult Incontinence (AI) manufactures adapt to an evolving underpad market, one of the key products within the AI market. Underpads are flat absorbent pads used to protect bed linen and chairs. They are made of absorbent material with a fluid-proof backing and may be disposable or reusable. In response to the market, manufactures are rolling out updates and modifications to high speed lines to make products as thin and efficient as ever. At the same time, there are added value trends to consider such as higher absorbency levels (achieved by replacing existing tissue material with a higher absorbent fluff pulp), faster fluid acquisition, as well as efforts to decrease the amount of fluff pulp used to cut costs and create thinner products. Attends Healthcare Products is a great example of a manufacturing company that is following these trends by introducing a new high speed underpad line to effectively compete in the AI market and capture a larger market share.

THE ISSUE

Today, Attends manufactures two types of underpads, layered and fluff, together both make up close to 30% of their business. However, Attends still remains uncompetitive in the Underpad market with only 15% of the market share. Attends was set on finding the key reasons behind the problems and what kind of decisions would need to be made to fix them. After some extensive research and analysis, Attends found that the key reasons behind their lack of market competitiveness and position was the inefficiencies in several supply chain areas. Specifically, in the use of too many materials, too much material, the high costs of raw material and the inability to utilize package (cube) size. Attends would soon uncover three major problems that were a direct result of their supply chain problems, and required their immediate attention. First, Attends realized that their existing manufacturing platforms put them at a disadvantage to competition that supplied smaller more cost effective supply chain solutions to the market place. Second, the current supply of wading tissue used in layered underpad products was becoming increasingly expensive and the supply was unreliable. Lastly, the sales price that could be extracted from the market on the current underpad lineup produced less than optimal returns at current manufacturing costs, making it difficult to win new business. Attends knew major changes in their current supply chain had to be made, deciding on what changes and how they would be made was their next biggest challenge.

THE SOLUTION

Attends researched many alternatives to the problems they faced. Outsourcing from China was an alternative however, it would limit savings on specific underpad products (light weight 5 count) and Attends was just beginning to develop China supply options. A second alternative was to upgrade the existing equipment across five operating platforms. This was not capital efficient and limited savings. The final alternative and ultimately the final choice that Attends decided on was to request funds for the design, equipment purchase, and installation of a high speed underpad converter and pack system. This decision was based on the cost improvements in three major categories: materials, labor, and freight. More specifically, the key benefits in these areas included: The ability to produce products five times faster with less operators, produce low basis weight (thin) fluff products, removing the dependency on their tissue provider by eliminating the use of tissue, and the ability to reclaim fluff in heavier