Effectiveness always trumps efficiency: flexible manufacturing on-demand

Genius ERP: ready out-of-the-box for custom manufacturing.

Back in the day: common sense was…

With all the buzzwords such as Kaizen, Lean and Six Sigma, it seems manufacturers may have forgotten to listen to the customer and market. Surprisingly, but in full compliance of these dogmas, manufacturers created surplus products that rusted in dealer parking lots.

Many changes and dogma management projects were successfully implemented, but often without any noticeable, significant, or directly linked positive changes to the bottom line. Many dogma-embracing manufacturers continued with loss after loss.

When customers demanded change, companies kept producing more of the same: globally outsourced, high-volume assembled products. They did not understand that how affordable something is to make is not as important as how customized and at what speed the customer wants to buy it.

They called this “efficiency.”

Moreover, some blamed their losses on the production floor workers, labor unions and minimum wage laws. Nonsense! In fact, it could be argued that mismanagement has been responsible for creating working environments that have eliminated thinking, discouraged pride and limited improvement and customization opportunities, thereby annihilating creativity.

After wrongfully assuming that being price competitive should be the main driver for outsourcing globally, companies were left with large stockpiles of inventory and late delivery. It was seemingly logical for locally based midsized manufacturing companies to invest in building manufacturing plants in low wage (affordable) markets outside North America to maintain price-driven market share.

Rules were created, such as: the first 100 parts are engineered-to-order locally; the next 1,000 parts are made-to-stock “south of the border;” the next 10,000 parts are made-to-stock in country B; and the next 100,000 made-to-stock on country C, etc…

It all sounded so great, but one look at increased inventories told us the opposite was true. Work-in-process and work-in-transit escalated: 100, 1,000, 10,000 and 100,000?…

What about agility, demand planning, storage, damaged items, and fully depreciated surplus at the end of a product’s lifecycle?

 

Present day: common sense is…

For midsized manufacturing companies, responding rapidly to market demands has become essential. Meaning, as customers demand increased customization, manufacturing complexities also increase while lead-time and order size requirements decrease. This results in increasing operating costs, while revenue remains the same and/or declines.

The logical way to deal with this increased complexity and decreased revenue is to develop manufacturing processes that allow for more flexibility, require less inventory, and line up with customer demand and with customized order capabilities.

Flexible manufacturing in the bigger scope will add job opportunities, decrease revenue losses, and satisfy the customer’s “specific” needs. It also demands knowledge at the shop floor level, high levels of creativity, clever planning, and a dedicated, well-connected, and communicating team to accomplish it.

Flexible manufacturing is sustainable when tier-1, -2 and -3 suppliers are within close proximity of one another and within a few miles of the assembly point.

 

3D printing and vision-guided robotics…

In its infancy, 3D printing and vision guided robotic applications were limited by premature technology, creating unpredictability and varying results. As a result, the potential of what this technology could do was slowed by negative views and theories that this would create high levels of unpredictability.

Today this is no longer true. Bin picking, indexing, machining, drilling, packaging, etc., have all been simplified by operating software that is easily modified and adjusted for multiple products traveling through the same line.

These technologies should grow rapidly for the following reasons:

  1. Currently expensive indexing conveyor systems, ranging from $10,000 to $80,000, are specifically engineered and manufactured to handle one specific part.
  2. Most tools to perform processes and modifications to the part being conveyed are manufactured to the thousandth of an inch to perform one single task for one specific part. Think of it this way: a new press with every new stamping die.
  3. Making changes to product assembly routing and line setup are virtually impossible as each addition or modification requires a new indexing conveyor and in most instances new tools performing the same function.

When 3D printed and vision guided robotics are fully utilized, the (indexing) conveyor system no longer needs modification for each product or product change. Rather, it will in most instances be able to convey several or many modified versions of a part.

In many setups, it is possible to have one robot hold the product while the other robot changes and operates different tools to perform many custom tasks in custom and random sequence.

This may not mean that every single task can be performed by 3D printing and vision guided robotics overnight – there may still be processes that require specific and precision-indexed handling. Perhaps 90% of the currently precision-indexed automated tasks could be performed with 3D printing and vision guided robotics within the next 5 to 10 years.

In addition to this, the 3D printing of production and prototype parts, though in an infant stage of commercialization, will only increase demand for rapid product changes.

 

Manufacture-to-order (MTO), not make-to-stock (MTS)…

Assuming there’s reliable communication between actual sales and production planning (not forecast, but actual demand), each part could be justified as a profitable venture in itself.

This allows highly customized items to become profitable revenue streams themselves for midsized manufacturers, but will also demand that manufacturers be more creative, flexible, highly educated, and have a better understanding of their respectively broadening engineering, science and markets.

Mass customized orders require a larger sales and marketing staff, engineering team, IT department and mid-level management staff. Creative teams with motivational and challenging leaders must thrive on developing new ways to meet their customers’ demand at lightening turnaround and delivery speeds. Inventories and work-in-process and work-in-transport will decrease and most parts will be pre-sold and allocated to the end user by the client.

 

Dealing with complex agility and execution…

Today’s short product lifecycles require agile development, rapid time-to-market and, most importantly, flexible manufacturing execution. This requires design and engineering to be synchronized with production and supply chain limitations. Or, even more important, for continual rapid changes to limitations which are no longer there (however poorly defined).

Many midsized industries have leveraged the opportunities of 3D CAD, automated CAD2BOM, Progressive BOM Release, WYBIWYG (“What you BOM is what you get”), etc…

It will be interesting to see how large enterprises deal with these new market conditions, especially those that were leveraging non-invoiced-capital from public popularity investment towards mass (not mass customization) efficiency.

 

The bottom line…

Flexibility, throughput, order-to-cash, mass customization and creativity could very well replace "undefined change” and stockpiles of inventoried “efficiency.”

 

"Effectiveness eats efficiency for breakfast!"

Peter Mol

Peter has extensive experience working with mid- and c-level management teams, helping them to increase their throughput and level of performance. He has consulted with plants in a variety of manufacturing industries, including automotive, fabrication, food, plastics, stamping, aluminum and steel.

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