HippoTronic Medical Devices

1. HippoTronic Medical Devices New Contract Manufacturing Facility Reginald Williams Andrew Harrell Polly Pitcock

2. 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 .

3. 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.

4. 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.

5. Primary Stakeholders • Internal Stakeholders • Board • Executives • Management • Human Resources • Operations Leadership • Engineering • Employees • Investors • Big Med, Inc. • Patients • Surgeon

6. Project Milestones • Preliminary Project Milestones: • Site Selection/New Facility/Existing Site Shutdown • Employee Re-Organization 3. Facility Ramp-Up

7. Communication Plan

9. WBS Breakdown Highlights • Secure lease for 15,000 sq ft • Approval for Construction, Installation, Moving RFP’s • Start Construction/Installation Process • Purchase order for new Equipment • Reduction in Force/Decide ongoing labor needs • Prepare Severance Packages • Conduct Post Termination Activities • Perform Equipment/Process Validation

10. 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

11. 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

12. 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

13. PROJECT COSTS • Site Selection - $15,391 • Furnishings/Equipment - $47,000 • Construction/Installation Services - $100,000 • Moving Services - $15,000 • Employee Re-org (severance packages) - $85,000 • Manufacturing Ramp-up - $50,300 • General Budget Line Items - $4,750

14. PROJECT RISKS Site Selection • Ineffective site selection analysis • Not adequately defining the costs of the relocation (cost over-runs) • Stalled lease negotiations • Construction and Installation delays • Delays in the delivery of new equipment/furnishings

15. PROJECT RISKS Employee Re-Organization • Conflicts in move-over schedule • EEOC 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

16. PROJECT RISKS Manufacturing Ramp-up • Equipment qualification failures • Material/process supplier changes • Failure to obtain Class 100,000 Cleanroom Certification • Contamination exclusions/undiscovered issues with facility • Big Med, Inc breaks contract/goes bankrupt • De-costing reveals bad ROI • Retention of skilled technical personnel in relocation

17. PROJECT RISKS

18. OUR NEW SITE!!!

19. NEW SITE!!!

20. NEW SITE!!! Images courtesy of Loopnet.com & Google Maps

33. Gantt Chart

34. Task Schedule • 257 Days • 66 Tasks • 13,536 Work Hours

35. Critical Path Activities

36. Resource Smoothing • Staged Crossover • Change Communication Plan • Validation Master Plan

37. Reduction of Project Duration

38. THE RESULTS Outcomes • New Location • Highly Qualified Staff • Cutting Edge Technology • New Market Share • Satisfied Customer On Time and on Budget!!!

39. THE END