Life Or Death Logistics
Wikipedia says Newberg, Oregon’s most notable citizens include just four people—the woman who was Miss Teen USA in 1988, the illustrator who drew Captain America comic book covers, an explorer who helped settle Oregon, and Herbert Hoover, 31st president of the United States.
Wikipedia does not list Miles Lowell Edwards, the Newbergian who, in the late 1950s, developed the first artificial heart valve, a device that has helped save millions of lives around the world—and that still drives the global success of the $2 billion California company that bears his name.
Edwards Lifesciences’ line of state-of-the-art medical devices requires an equally state-of-the-art supply chain. It’s fair to say that the fast delivery of a high-quality heart valve is a part of what Edwards sells.
“A patient goes to see a doctor and, in some cases, the next day that patient is on the operating table. You have to have the product in the surgeon’s hand when he reaches for it,” says Andy Tymkiw (pronounced “Tim-cue”), Edwards’ vice president of global operations.
At Edwards, speed is a part of the product. That’s as true in a hospital in Irvine, California, where the company maintains its campus-like global headquarters and a manufacturing plant, as in a distant Indian, European or African hospital.
For a man charged with making sure a valve manufactured in Singapore or Irvine is passed like a baton in an Olympic relay, Tymkiw seems remarkably low-key. A graduate of the New Jersey Institute of Technology, his three-decade resume includes executive-level operations roles at device makers Marquest and Mentor/Ethicon of Johnson & Johnson. Asked about the critical role of his global logistics team, he refers first to the entire company’s life-saving mission or its constant R&D. “Innovation drives sustainable growth,” he says. “That’s the strength of Edwards.”
When pressed, he acknowledges that innovation in products is as important as innovation in the firm’s complex global web of logistics providers—in sourcing the organic material that goes into a heart valve as well as in distribution of the final product, even, it seems, in site selection and human resources.
In that effort, the company has partnered with such major players as FedEx, UPS, DHL, Dutch giant Rhenus and Japan’s KWE. Through them and a host of related smaller carriers, Edwards can promise delivery of a product that must be handled in sterile, temperature-controlled environments.
The valves themselves are small, not much bigger than the cap on a bottle of water. Though the tissue is processed for longevity, it’s not immortal. “What’s most important is microbiological integrity,” says Tymkiw. “We have to control for environment, for durability during shipping,” so the company pays attention to terrain and changes in local weather conditions. The heart valves travel in jars with serious label warnings about the contents—sterility and gentle handling are everything—as well as a temperature tag-alert. A bad reading on one of those tag alerts may mean simply trashing the shipment.
Then, too, there’s the carrier’s own system. In the case of FedEx, that means SenseAware, “a device that fits inside a package or a pallet, and monitors environmental factors such as location, temperature, humidity, barometric pressure, shock and even exposure to light—which could indicate a security breach—in near real time,” says Craig Simon, president and CEO of FedEx Supply Chain. “Customers can monitor their shipments through a web interface that will let them know if their products are exposed to adverse conditions along the way.”
On the front end, Edwards is sourcing the pericardium—the protective sac surrounding the heart of a cow, tissue that’s essential to the heart valve. For years, that material was sourced in the U.S. But following the Mad Cow outbreak that began dramatically in Britain in the mid-1980s and then spread throughout most of the world by the early 2000s, the firm pivoted “out of an abundance of caution,” it said, and in response to the requests of some countries—imposing rigorous standards on U.S. suppliers while also sourcing tissue from Australia where the disease never appeared.
Whether its source is the U.S. or Australia, that material is flown overnight for processing in the company’s manufacturing facility in Irvine, California. (The company also has manufacturing facilities in Utah, Puerto Rico, Singapore, Switzerland and Dominican Republic.) There, the material is trimmed into what they call leaflets, bathed in a proprietary chemical bath that stops organic activity, and moved quickly into production.
HOME IS WHERE THE HEART VALVES ARE
Located minutes from Orange County’s John Wayne Airport, in a brightly lit space the size of three or four NBA basketball courts, hundreds of Edwards workers in white smocks, gloves and blue hairnets stitch together the bovine tissue and composite metals of an Edwards heart valve. Peering through what look like microscopes powerful enough to see into the future, the workers are themselves part of the global flow of people and things: mostly women, “they’re generally from countries or cultural backgrounds where they know sewing or do some other dexterous work, mostly Asian, and some Hispanic,” says Tymkiw. And they’re very committed, he says. In a hallway leading to the clean room, scores of plaques mark employee anniversaries of up to 35 years. The average worker leaves with about 25 years at the plant.
They stay for a variety of reasons, often because they’ve been thoroughly vetted in the application and early training phases. Tymkiw says just 6 percent of applicants are accepted for training on a kind of provisional status. Some 60 percent of those trainees survive boot camp, and move through up to six months of additional training, learning to meticulously sew bovine (cow) tissue to delicate-looking metal frames. The result is something that resembles an extraordinarily detailed crown for a very diminutive king.
With that kind of investment in people, it’s “extremely important for us to sustain a culture that retains employees,” says Tymkiw.
And they do retain them—through salaries and benefits that make it possible for manufacturing workers to live in staggeringly expensive Southern California, Singapore and Switzerland, but also through unique softer programs. One such program unites grateful heart-valve recipients with the people who hand-built the valve prosthesis that keeps them alive. It’s not surprising that the company’s best source of new job applicants is current clean-room staff.
Nor are those workers stuck in a silo, relegated only to a single piece of the product-development process. It’s common, Tymkiw says, for a clean-room employee to participate in product design at the ground level, making certain that the final product is not only medically effective, in other words, but that it can be mass produced.
COMING TO LIFE
Like many American success stories, Edwards Lifesciences was born in a workshop, this one behind the Portland home in which Edwards lived with his wife, beginning in 1947. He was by then a retired engineer with industrial patents in which you can track the evolution of his interest in the technology that would one day replace rundown human heart valves. In the 1930s, he designed a water pump so powerful it flayed the bark off trees in Northwest sawmills. In 1940, with German and Japanese militaries on the move, Edwards struck again, designing for Boeing’s B-17 a fuel pump that worked as well at high as low altitudes.
Even retired, Edwards tinkered in his workshop, hoping now to solve a problem that bedeviled him: his own hinky heart valves, damaged like so many others’ by a bout of childhood rheumatic fever. His goal: the manufacture of a completely mechanical heart.
In a meeting of almost mythic quality, Edwards in 1958 showed up uninvited at the office of a much younger man, the improbably named University of Oregon heart surgeon Albert Starr. Edwards was looking for a business partner.
Starr was himself a product of the global economy—his parents came from Eastern Europe and England—and driven by remarkable ambition. He entered Columbia University as a 16 year old and graduated as a surgeon just six years later, in time to enter the Korean War as a U.S. Army combat surgeon. “My greatest fear was anonymity,” he once told a reporter. “I wanted not only to accomplish something important but also to have the world recognize me for my accomplishments.”
Starr was instantly engaged, but persuaded Edwards to focus smaller—not on the construction of an entire mechanical human heart but the relatively simpler valve that controls the flow of blood into and out of the heart. People were dying because of dilapidated heart valves, and they could be saved now, Starr told Edwards. Two weeks later, the story goes, Edwards returned to Starr with a prototype. In September 1960, just two years after their first meeting, the pair had their first—the world’s first—successful mechanical valve replacement surgery. Writing in The Oregonian in 2010 on the occasion of the 45th anniversary of that event, reporter Joe Rojas-Burke said patient “Philip Admunson, a 52-year-old truck dispatcher from Spokane, lived for 15 years with his valve and died after falling from a ladder at home.”
DON’T SKIP A BEAT
Tymkiw says again and again, if in slightly different ways, “the product must be there” when the patient needs it. “The product must be available at all times,” he says. “There can’t be any backorders.” Any breakdown in the supply chain can mean delays for a patient headed for surgery. The heart valves have a shelf life of up to five years, but they’re typically used within 12 months of entering the supply chain.
But for businesspeople accustomed to thinking of the supply chain only as vulnerability—like a single phone line into a cabin in the woods in a horror movie—Edwards’ approach is illuminating. Edwards’ multi-centered manufacturing—in Singapore and Switzerland; in Irvine and Draper, Utah; in Puerto Rico and the Dominican Republic—is built as much on cost and service considerations (wages and taxes, shipping time to regional markets, and local government regulation) as bet-hedging against regional business interruptions. The unlikely reappearance of Mad Cow in one place would leave untouched Edwards’ sources in another; a disaster—a weather event, earthquake, major regulatory change, war or civil unrest—that hits one part of the company’s supply chain isn’t likely to bring down the entire enterprise.
Edwards’ Swiss unit is critical to new-product rollout—for reasons that may surprise Americans who look skeptically at European regulation. That’s because the EU’s standard for new medical products is more consumer-friendly than the American standard. European regulators measure the safety of medical devices, and allow practicing physicians to determine clinical efficacy. The U.S. Food and Drug Administration (FDA) measures both safety and effectiveness—a much tougher standard. Edwards points to its long slog through the first U.S. clinical trials of the Edwards transcatheter aortic heart valve, the device that allows for a less-invasive implant of the company’s heart-valves in patients. The EU approved the first Edwards transcatheter aortic valve in 2007; FDA approval came four years later.
(An FDA staffer not authorized to speak on the agency’s behalf told Global Trade that Edwards’ recollection of the approval process is correct. He said the FDA recognizes the problem and is working to speed approvals, but that, in the meantime, he believes “most Americans are probably happier we really take the time we need” to investigate new products. An Edwards spokesperson said the company “recognizes the FDA’s progress in this area.”)
Because of the historically huge disparity in time-to-market, Tymkiw says, California-based Edwards has operated on a “Europe-first strategy.” That means the company’s most innovative products go to Europeans first, via the company’s Swiss operation.
For the moment, like many global companies, Edwards is eyeballing escalating wages in Asia. For millennia, the region was labor-rich and jobs-poor. That’s changing in the course of a few generations.
“Singapore [where the company hosts two business units] and Hong Kong are in a race to produce billionaires, and [are] among the most expensive places in the world to do business. So companies are fleeing,” says Tymkiw. But even as Singapore’s government shuns new offers of low-wage jobs, it apparently delights in the presence of Edwards, with its offer of high-end, value-added manufacturing jobs.
Tymkiw predicts that California could see fewer Edwards manufacturing jobs for the same reason: The high cost of living drives demand for higher wages. But there will always be pilot-level manufacturing jobs at the company’s headquarters, in part because of the critical role of clean-room workers in product design, in part because the company will always want to remain decentralized, Tymkiw says.
“We don’t run into many instances where we’re caught flat-footed,” he says.
LEARNING FROM HEARTBREAK
The importance of decentralization was brought home painfully during the 1990s. In 1996, just a few weeks before Christmas, a private plane heading into the nearby Orange County airport slammed into a warehouse near one of the company’s clean rooms. The plane’s three occupants were killed. No one on the ground was hurt.
It was a Saturday, with fewer workers on site, and those 80 or so people escaped the crash and resulting fire without injury. With only modest alteration of those facts, the crash might have been a catastrophe for the company. The lesson was clear: A truly global supply chain could reduce the risks of a devastating supply chain and distribution interruption.
Wherever it manufactures or distributes, Tymkiw says, Edwards runs disaster scenarios. In California, that means earthquake studies in which Singapore becomes the hypothetical primary global manufacturer. In distribution, Tymkiw points to “multiple inventories held in multiple locations” the company can tap in the event of an impediment somewhere else.
But where else? He runs down an ominous list: Of the 177 or so countries around the world, most are challenging for one reason or another—the absence of intellectual property protections, or the problem of crime, war, rising wages, or civil unrest, for example. What remains, he figures, are about 15 truly stable countries. Even then, real stability is fleeting.
“You think you’ve got it figured out, and then things change,” Tymkiw says—Russian soldiers show up in eastern Ukraine; refugees from Syria, Iraq and Afghanistan pour into Europe; Ebola explodes in Africa.
By 2010, Edwards was perhaps better prepared than many when the volcanic eruptions of Eyjafjallajökull in Iceland sent a plume of ash into the sky over Europe. Air-traffic officials dropped the lid on flights over most of the continent for much of April and several days in May.
Edwards’ supply-chain partners—UPS and FedEx in North America, Rhenus in the Netherlands, DHL in most of Europe and elsewhere—routed inventory around the plume and onto ground delivery.
From the patients’ perspective, there was likely no hint at the logistical complexity that concluded when they awoke to their own enlivened heartbeat.
LIFE MEETS SCIENCE
There may be few greater coincidences than the fact that Diane Graf needed a heart valve.
Four years ago, Graf was diagnosed with endocarditis, an infection that destroys the heart’s valves. The coincidence: Graf was by then an eight-year veteran of Edwards Lifesciences (now an executive assistant in the company’s public affairs group).
She knew something of the process and requested—and received—her company’s heart valves by name. Her recovery from surgery was relatively fast. In six weeks, she was back at work.
“Two years later, I was invited to travel to Singapore with my husband to meet the sewing team that made one of my valves,” Graf recalls. “I was introduced to the 15 people who actually hand stitched my valve. They had never met someone whose valve they made. They wanted to hug and touch me—which was great, because I wanted to do the same. My husband and I were brought to tears and so grateful to each one of the sewers. I think it brought home to them how truly lifesaving and important their work was. This was such an emotional experience for all of us. Over lunch we talked about our families, children, and our jobs at Edwards and found we had so much in common. For me, this trip was an emotional and humbling experience that I will never forget.”