Agile Manufacturing: Redesigning The Factory and Organization with Fast, Flexible Cells
Chuck Manufacturer $16mm Sales Revenue
A key division of a $3 billion machine tool manufacturer sought to improve its chuck manufacturing operations. Division managers implemented a plan based on a focused factory concept. As part of the plan, the factory was rearranged into focused groups. The organization was restructured similarly to support manufacturing operations. However, the division continued to lose sales, and profitability was marginal. The challenge was to devise a strategy that would free capacity from the existing facility, and reduce costs. An analysis revealed that a new strategy based on fast cycles would yield substantial benefits for the location.
The chuck manufacturing operation was evaluated for alternative manufacturing strategies directly addressing fast customer response, productivity, and reorganization. The concentration of effort was in factory organization, information flow and management structure.
A team was organized with people who know the product, processes, and business: sales, manufacturing, maintenance, process engineering, and production control. A rationalization of products and processes quickly revealed that material flows were long and complex, in spite of the new factory arrangement. Production was hindered by old equipment and inadequate tooling. Value-added time was minimal at 1 per cent for all products.
Information delays and queues caused excessive technical inventory and long lead times. Administrative value-add time averaged less than 10 per cent. For instance, the quotation cycle was 21 days, with actual hands-on time being less than 2 days. Similar delays were found in order entry, design, manufacturing engineering, material planning and scheduling. The total time accumulated was 18 weeks throughput for an order.
A scan of the organization revealed redundant management positions. The organization was top heavy, yet ineffective. Further analysis revealed product cost reduction targets as being outsourced labor, setups, cycle times, overhead, scrap, and rework.
A strategy of fast cycle times was adopted to achieve the objectives. This required changes in operating philosophies:
- Cellularization
- Make-to-order
- Synchronous scheduling
- Quick changeover
- Preventive maintenance
- In-process inspection
- Control of tools and fixtures
- Improved fixtures
- Increased CAD applications, and
- Family of parts NC programming
Product flow was improved by rearranging the factory using family of parts technology. Information systems were streamlined to reduce throughput time in the office. The organization was streamlined to support a fast cycle factory.
The annual return to one-time investment was 54 per cent. Estimated cost reduction was 30 per cent from:
- Improved productivity
- Family of parts manufacturing
- Increased throughput
- Reduced inventory
- Systems integration
- Increased volumes
- Decreased labor requirements
- Improved equipment utilization
Reductions in throughput time were: