Efficient Factory

Jim Pinto recently commented on his “Pinto’s Points” Blog on future trends in manufacturing:

http://jimpinto.com/enews/25aug2009.html

Quoting from Jim’s August 25^th Newsletter;

We must recognize that major parts of the economy – government, banking, insurance, health care, consumer services – use physical wealth, but do not create it. Financial services now comprise 45% of earnings of companies on the S&P 500 index, up from 10% just a quarter-century earlier.

Manufacturing is a primary wealth-producing sector and historically is responsible for this country’s relatively high standard of living compared to other countries. Manufacturing has now declined to about 11% of America’s GNP. The continued decline is ominous.

The Society of Manufacturing Engineers (SME) has an initiative that identifies emerging technologies that are making a positive impact on manufacturing. SME’s Manufacturing Enterprise Council collaboratively selected five “innovations that could change the way you manufacture”:

• Direct Digital Manufacturing (DDM): Use of additive fabrication processes; manufacturing components layer by layer, direct from 3D digital data, without machining, molding or casting.
• Ultra capacitors: Electrochemical capacitors that have an unusually high energy density and provide significantly more storage power, with unparalleled life span.
• Self-Assembling Nanotechnology: Manufacturing at the microscopic level.
• Intelligent Device Integration (IDI): Monitoring, managing and servicing of intelligent devices over the Internet.
• Integrated 3D Simulation and Modeling: Desktop supercomputers will revolutionize simulation and modeling, acting through microscope, telescope and time-machine operations to manage, view and tool a complete manufacturing system.

Perhaps a fortuitous result of the current recessionary environment is that the manufacturing decline is being recognized and addressed in new and innovative ways.

End Quote

Here is a link to an ealier discussion on the subject from American Machinist Magazine:

http://www.americanmachinist.com/304/News/Article/False/79569/

The major innovation we are concerned with at EfficientFactory is Intelligent Device Integration. This single innovation is not limited to manufacturing but will open up a wide range of applications. As devices have more intelligence built into them and get smarter, applications will be built to link all of these things together. The factory floor is a very confusing place, where disparate communications standards and protocols exist that don’t talk to one another.

This is the essence of distributed computing. Today the processing power is behind your screen in the box under the desk or on your lap. Soon the processing power will be all around you, fed through wires and waves – in the cloud.

Jim Pinto’s thoughts are covered in a monthly column in Automation World

http://www.automationworld.com/columns-5818

We should be getting to a major milestone soon. He 787 will be airborne for the first time very soon. It’s coming up

The 787 as seen on 070807

 on two years since Sunday, July 8^th, 2007 or 7-8-7; the date that the new 787 Dreamliner rolled out in Everett Washington to much fanfare and a slick video production. Uunfortunately the cabin was bare inside. I just happened to see it first hand months later in November, on a plant tour of the Everet Faciltiy. Airplane number 1 was dusty and dirty and in various states of unassembly.

It’s true they missed initial launch date by a long shot but in their defense, Boeing had two important innovations to roll out. First, the product; this is the largest production composite structure ever made. The carbon fiber fuselage and wings makes the entire aircraft much lighter and 20% more fuel-efficient. It was a big task from an engineering and production standpoint. They are clearly charting new ground.

The second major innovation is the method of manufacture. Boeing decided to create an extended supply chain for finished major components of the airplane. It outsourced the manufacture of these components bringing them together in Everett Washington. Boeing is now primarily the designer and assembler of the finished product, leaving the parts manufacturing and subassemblies to others for the first time in aviation history.

Many issues with the manufacturing strategy cropped up over the last couple of years. Yes, there was a machinists stike early on but production delays were largely attributed to confusion and miscommunication from the supply chain. Information about the parts and information about the process did not always correlate. The status of readiness of parts wasn’t available or was often in the wrong format. The expense incurred of solving the problems is immense. Just consider the costs of lost revenue of waiting for two years for the most popular airplane in history. The presales figures have been very impressive having orders for over 850 new 787 jetliners.

The readiness of the supply chain and syndicate that Boeing set up are what many consider the root of the delay. If information was in the same format and standards were applied, much of the confusion could have been avoided. It’s clear that the information about the process and product were indistinguishable to Boeings problems.

The learning curve may be long, but Boeing is coming to the end of it, successfully.

Here are some promotional videos and multimedia about the 787 from www.newairplane.com

ERP (Enterprise Resource Planning) systems are expensive to build, implement, and maintain. A  new study commissioned by CFO Research Services focuses on the maintenance cost of ERP. Maintenance contracts rule of thumb often run from 10% to 20 % of the purchase price of equipment or software, so doing your due diligence right is imperative from the start. There are plenty of gotcha’s after the fact.

The full study is available here

There is always going to be a need for an information system to drive data and information to the factory floor but my personal feeling is that there needs to be a balance in information flow; not just driven from the top down, but the bottom up. The bottom up approach has more power as a pull system. A system has to be focused around the point where the money is made. It’s about throughput. Money is not made in the Accounting department, they are the scorekeepers who tell you if you are making money. A Plant Manager I knew used to say “if the machines are running – we’re making money”

ERP Systems are descendents of accounting systems that have been adapted to the factory floor. Think of the “square peg in a round hole” analogy. It’s been adapted by the need to report financials at month end.

The natural workflow is from the product. The product is most important to the customer, they could give hoot about your process. Where’s My Product? When is it going to be here? What does my product cost? I want my product to have this feature.

These ERP systems are huge behemoths that are adapted to an existing production process.

Much of the ongoing maintenance cost that you’ll incur is in direct proportion to the amount of customization you have done to fit that square peg into the round hole. When the peg doesn’t quite fit there is customization or exception management – that ultimately leads to bloat-ware.

A newer field of study is providing a different way to look at the problem. Complexity Science is an emerging field of study that has promise in factory floor systems. If you’ve read my blog before you‘ll see I’ve written about Richard Morley and his application of Chaos Theory applied to the production process – with some very interesting business results – and fewer lines of code. Now doesn’t that sound like lower maintenance costs?

Traditional Accounting methods are for tracking activity that is relevant to the process of making or servicing something. Accounting rules are standard for all businesses, which is good. It allows you to compare results between disparate companies that have no common characteristics other than to make a profit.

There is however something that is lost through standardization. It has made the things measured easy to measure but might not illuminate waste. Over time businesses have become quite good at measuring things like material, labor, energy, and other inputs to production. The aspects of production that are often difficult to measure are becoming the keys to profitability. The standards cover the majority of scenarios but there may be times when something that should be measured is unique to your firm. There is more often a loss of granularity. Combining costs through standard proactice can let occurrences of wastes slip through unnoticed. 

These are often not the inputs to production, but are the chronic wastes in any process. LEAN initiatives drive the waste out.

There are eight areas where waste is classified. You can read about that that in another post here.

The problem is that firms don’t measure and monitor these wastes. Accounting is widely practiced but LEAN measurement is not. Unfortunately, many firms don’t have clue as to how these wastes can affect the bottom line. Consider the chart below.

Scenario 1 – All is well; we’ll use this as a baseline.

Scenario 2 – Some production costs can be reclassified as waste. The result is the same profit but the firm has a better understanding of what constitutes the costs. It begins with using the right metrics.

Scenario 3 – When revenues go down fixed costs remain… fixed. Variable cost shrinks in relation to lower output. But waste remains the same. Now that wastes are tracked with proper metrics, the firm can act to reduce them

Scenario 4 – Waste has decreased now they the firm has measured it and acted on it. The decreased cost of waste is now the increase in profit.

I will admit this is a simplistic example but the take-away is;

Waste is a cost of production. If you eliminate waste your eliminate cost. That cost savings goes right to the bottom line.

By relating waste to cost of production through proper metrics profit increases and can be sustained as long as the metrics are built into the system. If you don’t measure it; you can’t manage it, and if you don’t build a system around it; you won’t sustain it.

Your accounting department can be a good place to start, but sometimes you have to dig deeper in places like the factory floor to get the detail you need.

Waste; any activity that consumes resources but creates no value for the firm or customer. Waste in manufacturing is segmented into Eight Categories. The analysis comes from the forerunner of Lean Concepts: the Toyota Production System. Let’s look at these elements as an introduction.

1 Over Production – producing ahead of what’s actually needed by the next process or customer.

 If information systems are in sync throughout the plant floor. Where One machine can “keep tabs” on another machine this type of waste can be reduced or eliminated.

2 Waiting – Operators or machines idleness due to equipment failure, resource or material scarcity. Waiting is caused by improper machine settings; too slow or too fast may lead to premature wear or breakdowns.

Redirecting Idle machines are to do other jobs if they can communicate wit them will help other parts of the process. The key is timely information gathering about the availability of other appropriate jobs and material. Adjusting machine speeds and feeds can be at different accommodates upstream or downstream changes.

3 Transport – Moving parts and products unnecessarily for example moving work in process to a warehouse or holding area when the next process could be located close by. 

If machines can communicate with material handling equipment (other machines), wasted handling time and expense is reduced. Over long distances, it is cheaper to move a computer file about a part than the part itself. It’s true as long as the receiving machine can reproduce it by understanding the same protocols or language used. Distributed manufacturing is a promising solution provided the resolution of communication hurdles.

4 Over Processing – Inefficient or unnecessary work for example for poor tool design or product design. Speed and feed losses on machines.

Plant floor information systems monitor cycle times and send alerts if machines are going awry. Overburdened machines and processes need to be monitored in real time to send the appropriate alerts to supervisory staff. Information about the local events can couple with real-time data from the process. Think of it as a “bubble up” approach to information rather than “push through” or “top down” approach common in ERP systems.

5 Inventory – Having more than the minimum stocks required to keep the process flowing smoothly.

Inventory can cut both ways optimal inventory can be a moving target in a plant. Too much is an unnecessary investment tying up cash. Too little creates waiting and contributes to other wastes. Ideally, the subsequent process pulls the requirement for the previous process. The faster rate of production and leanness of the product flow requires information to be up dated faster.

6 Motion – Unnecessary or strained movement by operators, such as looking for the right tools or materials or instructions.

Plant floor information systems can couple real time data from the process with the documented processes for operators and machines.

 7 Correction – Off line inspection, rework, and scrap.

Closed loop quality feedback systems can force temporary machine shutdowns, send email or text alerts, and ultimately reset tools to account for out of tolerance situations.

8 Non Utilized Capabilites and Talents – For both machines and people.

 Two categories here are people and machines. First, people, this is the hard one. It has a lot to do with the culture of your organization which is another topic altogether. The second is machines. An amazing amount of functionality is built into today’s labor saving factory floor machines. All this increased functionality has come from proprietary sources and the problem is that these advances don’t communicate with other sources. The factory floor is made up of “islands of information” locked inside of machines that speak different languages. If the problem of communication is solved machines could perform beyond they original capability. 

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 For each of the wastes I’ve given a potential resolution that can be achieved with better communication of information about the process and the product. The keys are; communication in the same format, and as close to real time as possible. The first step is to monitor and evaluate the situation so the right metrics. Relevant, timely, information about the process can help reduce waste as an on going process.

David Strom Posted a link to his article on real-time analytics here

http://www.cioupdate.com/features/article.php/3800861/Taking-Control-with-Real-Time-Process-Monitoring.htm

It’s also available on his blog Strominator.

Going a little further than he did, real time monitoring in a manufacturing process has two advantages.

First; knowing what’s going on. The days of business report being available the next day or the next week are going by the wayside. In order for a person to act alert monitoring using machine alerts. Assets in a factory are largely production assets. If they are not doing anything, the right thing, or the right thing properly, they aren’t productive; and not making you money.

Second; creating a closed loop feedback system. This is adaptive control. By enabling a small level of smarts in a machine, that machine can capture sensor information and adapt to what it is doing. This takes the first advantage to a new level. It automates it.

A lot of what David quotes in his article is a good example of the application of technology creating a definite business benefit