ML Journal August 2021

The right digital technologies, Opex, plus the right talent and fit, plus engagement, multiplies performance, says ML-Award winning Hologic Costa Rica VP, Nilo Caravaca.

“The relationship between the technology, the people, the talent, the product, and the purpose of the company, is something that you need to keep in balance all the time.”

Nilo Caravaca, Vice President Operations, Costa Rica & LATAM, Hologic

In May this year, Hologic’s Costa Rican operation won one of the Manufacturing Leadership Council’s most prestigious awards, Manufacturer of the Year in the small and medium enterprise category.

As a global medical device enterprise focused on supporting women’s health across six continents, Hologic runs 20 production sites, employing around 7,000 employees, and has revenues of $3.8 billion. The company’s Costa Rican operation is dedicated to helping to detect, diagnose, and treat illnesses and other health conditions earlier and more effectively, and has been a consistent ML Award winner over many years.

In our latest Dialogue with a manufacturing industry thought leader, Nilo Caravaca, Hologic’s Vice President Operations for Costa Rica & LATAM, talks to Manufacturing Leadership Council Executive Editor Paul Tate about the company’s award-winning projects, its drive to create more real-time information to support predictive analytics and regulatory compliance, and its formula for matching technology, with talent, and a culture of engagement to drive performance for the future.

Q: What excites you most about your role at Hologic?
A: I believe we have a really important purpose as a company: to improve and save women’s lives around the world. That’s exciting. Most of the disposables that are manufactured here in the Costa Rican facility are products that support women, helping to prevent and monitor breast cancer, to have babies, or to overcome diseases. Hologic has done more than many other companies in the world for women’s health. In fact, on October 1st every year, Hologic gets to ring the NASDAQ bell as a recognition for its efforts in supporting women’s health. Hologic is also driving the Global Women’s Health Index and the Project Health Equality initiative, and its membership in the World Economic Forum this year are further examples of the company’s growing, global leadership in women’s health.

It’s also exciting to have the opportunity to grow people, to find their strengths and try to set up winning teams. It’s a combination of finding the right product, the right technology, and the right talent, then putting that talent in the right fit, engaging them, and keeping them with you for a while so you can have the best possible performance for both the company and the person.

Q: What does winning the MLC’s Manufacturer of the Year Award mean for you and your team at Hologic?
A: Winning the Manufacturer of the Year Award in the small size, medium size company range provides real industry recognition of all the great work that the Hologic people and leadership teams have developed and accomplished over many years. It is also a tremendous opportunity to benchmark with some of the most important companies in the world. It’s not the same when you play neighborhood soccer, compared to when you go to the World Cup! Winning a match has a different flavor. We recognize that we are not finished with our transformation journey by any means, but this will give us a lot of energy to continue our path of improving ourselves and finding ways to be better.

“For us to be ready for the change that comes with Manufacturing 4.0, we also need to adjust our people. We need to adjust the way we do things. We need to adjust our talent.”

Q: How will the ML award help Hologic to pursue its digital journey in the future?
A: That’s a really good question because, like many other manufacturers, we were dragging our feet in our digital transformation journey. We were not among the first companies to start that journey, but we want to become one of the leaders. And I think the way forward has to be a balance between new technologies and people. For example, if I’m going to implement a Bot to automate a repetitive process, one that doesn’t have a lot of value added but has to happen all the time, what I want is a Bot that will actually give the individuals involved the opportunity to then free up their time to work on more value-added tasks or projects. So, the way I see it, this relationship between the technology, the people, the talent, the product, and the purpose of the company, is something that you need to keep in balance all the time. You’re not going to automate everything just because you can, or to create a system that will not be flexible because you have over-automated everything so much that sudden disruptions could crash your business. It’s about finding all those balances where you have the best of the technology, the best of the human, the best of the product, and at the end of the day in our case, the best for the patient experience.

Q: What innovative projects led to your top ML Award this year?
A: One of the projects is around supply chain. We call it, “Impacting lives Every Day”, because everything we do in our supply chain is serving a higher purpose. At the end of the day, every product we make will serve a patient who is actually waiting for it and has a condition or a medical issue that needs to be addressed. We have an opportunity to help address that need. So, everything we do with automation, everything we do setting up new systems, everything that we do implementing new digital technologies, is to help us have a more reliable supply chain, to get our products faster to the patient, to the customer, and to improve the quality of that product. So, we’re using robots to move materials, we’re using Bots to automate all kinds of processes – invoicing processes, planning processes, purchasing processes, and communication processes as well. We’re also using technology in our warehouses to keep everybody safe, which is very important to us. When you look at the statistics for manufacturing, a lot of the safety incidents are related to warehouse tasks or happen somewhere in the warehouse. Overall, these different technologies are all allowing us to have as much real-time information as possible in the supply chain. We have both insourced analytics systems and we’ve now started to create a lot of our own analytics to support that, and that’s happening very fast, so we are also using more and more real-time data to help us predict future issues or events. The supply chain is all about that today.

Q: Hologic’s second winning project focused on talent management. What was the motivation behind that?
A: We have developed a whole new set of talent management processes that allow us to attract and incorporate the best talent in the market, to involve and inspire them, and to give them the opportunity to perform at the highest level.

“It’s more and more important that every product and every material we use, as far as possible, has potential to be either reused or recycled.”

 

For us to be ready for the change that comes with Manufacturing 4.0, we also need to adjust our people. We need to adjust the way we do things. We need to adjust our talent. For example, there are new job positions that were not there with us five years ago. If somebody would have told me 10 years ago that I would be looking for data scientists today, for us to predict data and have these massive databases that we have created and converted into functional information today, I would have said “No. That’s somebody else’s job.”

But now in manufacturing, we’re looking for new kinds of talent, people with a different kind of profile, and we are also looking at how we can improve the people that are already within the organization by providing the training, the tools, and the things that we need to match their strengths to new tasks so we can convert most of our talent to be able to benefit from new digital technologies.

Q: Is that having a broader cultural impact on the way the company operates?
A: Yes. We’ve needed to change our culture to close a technology gap. Like many companies, you have early adopters who feel very comfortable with new technology and don’t feel threatened by a Bot, or a robot, or anything digital. Then you have people on the other side of the curve who feel a little threatened by technology because they don’t really know how to embrace it. They recognize that the future is going in that direction, but it can be a little scary when they don’t have that opportunity to engage with it. So, we’re making every effort to close that digital gap. That has been a major change. And we like to feel we are developing new approaches and processes here that can be shared and supported with the rest of the Hologic network.

Q: What’s your most important digital transformation initiative today?
A: Right now, one of the key things we are doing is transforming all the flow of information we need to support the variety of regulations for a global medical device company. It’s a heavily regulated industry with a lot of compliance requirements, and with many different regulations in different regions, sometimes with several agencies in each country. We need to have a high level of specificity for each one of those countries’ market requirements, so we are transforming that process into a digital system where we can provide real-time information to the rest of the world, and coordinate that with real-time information for our production lines.

Q: Which digital technologies have made the most impact in the company so far, or is it a combination?
A: I think it’s the combination that impacts us most. For example, we started by putting all of our efforts on analytics, trying to get the most out of our databases because the information was sitting out there, it was doing nothing for us for the future, so we wanted to take more advantage of that. But then we figured that there’s more to M4.0 than analytics, so we started automating our internal processes with what I call Bots to improve our operations and add more value. And we wanted to make the technology more engaging for our people in this transformation, so one fun fact is that all of our bots are named after local Costa Rican female leaders that have done something special for sustainability, or women’s health, and so on. One is Anna Rosse. She was somebody in Costa Rica that changed the awareness of breast cancer. And because of everything she did, we were able to reduce breast cancer deaths. We were able to improve the way we treat women in a lot of ways. So, we named that Bot Anna Rosse. Then we named another Bot Christiana Figueres, the Costa Rican diplomat, because she’s been a beacon of sustainability around the world. She’s been out there in the UN and many other places finding opportunities and creating awareness around the world to invest more in sustainability.

Q: So, as you pursue this interesting new approach, what challenges still keep you awake at night?
A: The first challenge is that Costa Rica has a very active labor market in medical devices, so there is a lot of opportunity for people to find open positions. The second winning project I mentioned earlier addresses that challenge of how to create an engaging environment for people where they want to stay and grow. For me, the biggest accomplishment is to develop the best ideas that can support that engagement approach because you know it will make a big difference to our future.

The second challenge nowadays is that we’re having all kinds of supply issues because of everything that’s happening with COVID and the global economy. We’re having issues with several commodities, facing problems with lead times and freight lines around the world. It may be the first time we are seeing something like this where all of these variables are coming together at the same time. To me, it’s an interesting environment right now where you have to understand how you can best manage those resources and how you make sure you get the best out of them so the patient can have their treatment on time.

Q: What other impact has COVID had on your operations?
A: It’s been a very difficult time, of course. But perhaps on balance, I think it’s been mostly positive for us. It gave us the opportunity to do better. It took us out of our comfort zone. We’ve been able to support our customers, manage inventories, and many other things while still working from home and having almost no impact. We also started cross-training everybody. So, if you were working on line one, now you know how to build product in line two and line three if there is a failure or a disruption, so we were able to move people around and reinforce where needed. And because we now have on-time analytics and real-time data management on the production floor in some of our lines, that gave us the added opportunity to predict when those things were likely to happen. The whole experience has helped to make a change for the better, to make us more accommodating, more flexible.

Q: How important are sustainable operations to your future as a company? How high up the priority list should that be for leadership teams in the future?
A: Sustainability is very dear to us at Hologic. I tell my team that I have a little bit of a green heart. And it’s important for us across multiple areas, from waste management to sustainable materials, energy management, social responsibility, and also making sure that we have the sustainable talent that will help us grow in the future.

For example, we use the ISO 50,001 standard because we wanted the best possible benchmark to control our energy usage. We’ve already implemented a solar panel system which has helped to reduce our carbon footprint significantly and we’re thinking of expanding that. We also have a goal to have zero waste to landfills in the near future and we’re already halfway there.

And from a social responsibility standpoint we have invested heavily in local STEM initiatives. So, we are helping kids, underprivileged kids, and teaching them what their future could be. Our engineers teach them how to build robots with Lego, our chemists show them chemical experiments, our supply chain team shows them how things are done, and the IT team shows them the future. We want them to get excited, and to get women excited in STEM careers so they have more opportunities for the future.

Q: What do you think the biggest challenges and opportunities for the manufacturing industry are over the next five years?
A: I think the world will see significant growth after the pandemic. The industry was restricted for a while, but now we want to do everything we could do before, and a little bit more. So, we need to be prepared for that growth. The problem is knowing how to prepare if you don’t know how big the growth is going to be. Do you invest in things that you may never use? I think that is going to be quite a challenge.

I also think access to key global commodities will change. There are certain commodities and components that are common to pretty much every technology and that will create a lot of challenges to teams around the world. The way we’re doing things from the global standpoint today, the commodities we use, and how we are managing things will change as everybody moves further into digital transformation. As a leader, that is something you need to understand and secure a plan for the future.

“All of our Bots are named after local Costa Rican female leaders that have done something special for women’s health or sustainability. ”

 

The technology gap will also continue to grow as we have more and more applications that are cloud-based and applications that are using more sophisticated technologies. The challenge is knowing how you keep closing that gap and how to keep everybody current? Even today, if you stop doing things and moving forward along the digital journey, within one or two years you will be pretty much obsolete. You need to keep riding at the top of the digital wave. That has an impact on talent development, too. Today we are talking about closing the digital gap or the digital bridge that some of our talented individuals have. In the future, we need to create more opportunities for converting and improving and investing to keep growing that talent for the digital world.

Q: What kinds of skills do you think the next generation of manufacturing leaders will need in that new era?
A: Most of the things that we will be using in the future will need some kind of software, and more devices will be connected, including wearable devices, so data scientists and people with some software background will be increasingly important. As leaders, we need to make sure that we have an opportunity to merge people with the right software programming skills to the right manufacturing skills as well. We’ve already started doing this at Hologic and the results have been impressive and encouraging. It makes you wonder why we didn’t think of that five or ten years ago. That’s how good those results are.

Leaders also need a clear focus on adding value to a customer. Every customer wants something special these days, so having that communication with the customer base and the flexibility from a manufacturing standpoint so you can use the technology and tools in your production lines to adjust to those customer needs. Quality has always been super important but now is even more important than ever as you respond to new demands. At the end of the day, impeccable quality is critical.

Q: Finally, if you had to focus on one thing as a watchword for the future of manufacturing, what would that be?
A: As an engineer, I think of it as a formula: Find the right talent, fit that talent in the right position, engage it, add tenure over time to allow you and the person to grow the role to drive superior performance which will benefit both the person and the company.  That would be my formula for the future.      M

FACT FILE: Hologic, Inc.
HQ: Marlborough, Mass.
Industry Sector: Medical Technologies
Revenues: $3.8 Billion (2020)
Net Income: $1.1 Billion (2020)
Employees: Nearly 7,000 Employees
Presence: Six continents
Production Sites: 20 sites worldwide
Website: Hologic.com

EXECUTIVE PROFILE: Nilo Caravaca
Title: Vice President, Operations – Costa Rica & LATAM
Nationality: Costa Rican / Spanish
Education: Bachelor’s degree, electrical and electronics engineering, Universidad de Costa Rica; Master’s degree in business administration, Fidelitas, Costa Rica
Languages: Spanish, English, German, French

Previous Roles Include:
– Senior Operations Director, Hologic
– Owner, Marco Polo Imports
– Global Unity Manager, Cooper Bussmann
– Global Quality Manager, Cooper Electronic Technologies
– GM, Cooper Electronic Technologies, Costa Rica

Other Industry Roles/Awards
– 2021 Manufacturer of the Year (Small/Medium Enterprises),
Manufacturing Leadership Council
– Gallup Exceptional Workplace Award, 2021
– Shingo Silver Award, 2019
– Essential Costa Rica – Nation Brand Company Award
– Bandera Azul Ecologica Award
– PROCOMER Top Ten Exporter of Costa Rica, 2017