Editor's Note: This is the final installment of IndustryWeek's three-part series: Factories of the Future. Part One dealt with strategic design. Part Two covered integrated product development. Like never before, technological innovation is rapidly changing the sense of the possible on the plant floor. Instead of limiting business options, manufacturing technology now challenges executives to define precisely where they want to go. The manufacturing step is being transformed from a hurdle to overcome to a strategic advantage to be exploited. Flexible process equipment now emerging provides the competitive opportunity to seize business opportunities as they arise -- including changing product strategies at the last minute or satisfying customers even if it means lot sizes of one. To argue that a plant already has excess capacity misses the point of today's technology and doesn't address the real opportunity -- exploiting new levels of productivity, efficiency and accuracy, says Charles Carter, vice president of technology, AMT -- The Association for Manufacturing Technology, McLean, Va. The issue is not about replacing the old but creating the new. For example: Are you prepared for machine tools so productive that you might be able to reduce floor-space requirements by half or more? Brian Papke, president of machine-tool manufacturer Mazak Corp., Florence, Ky., says, "It's not uncommon for us to replace 16 machines with three or four." Are you leveraging the strategic potential of multi-tasking equipment? "One of the primary advantages of these hybrid machines is the ability to dramatically reduce work-in-process" -- a major concern in machining large or complex pieces, says Chris Stine, vice president, United Grinding Technologies, Miamisburg, Ohio. Are you still focused on in-line processes using dedicated tooling? Technology leaders among the automakers are abandoning that approach for the flexibility of modular cells, says Gary Kyne, director of marketing, Comau Pico, Southfield, Mich., a subsidiary of Comau SpA, Torino, Italy. "That enables production processes to quickly adapt to the need for more frequent model changes. Adding process flexibility can also be an 'insurance policy' if one product configuration doesn't sell." And are you up to date on how technology simplifies -- and solves -- traditional preventive and predictive maintenance issues? To maximize these long-term benefits from manufacturing technology, users may need to reconsider how they work with equipment builders. Don't start by specifying, "I want a machine to perform this process." Instead begin with, "Here is the part I want to make." To capture the best of manufacturing technology, think goals, not means. Comau Pico's Kyne says 70% of his customers seek supplier help with process optimization. (The company is a global supplier of equipment and services to the automotive industry.) Kyne says the leaders collaborate to obtain the true test of technology -- improved quality and a lower piece cost. But he cautions that higher piece costs also can be justifiable if there is a long-term benefit. All this is not to say that simply investing in new technology will solve all problems. Far from it. For example, consider all those software applications that promise to convert plant-floor data into useful business intelligence. They do deliver and in doing so pose a different kind of challenge. An example is Procter & Gamble Co.'s implementation of a plant-wide historian (iHistorian from Intellution Inc., Foxborough, Mass.). The software solution gathers manufacturing data from literally thousands of points throughout a production facility, acting as both a permanent repository and as a hub for software applications that can interpret it, giving it meaning and value. But managements also have to deliver when armed with those systems. With business intelligence at managements' fingertips, "not knowing" is no longer an acceptable excuse. Another challenge is maintaining the efficiency, productivity and flexibility of new plant-floor equipment. This mandates that maintenance be managed as a strategic issue, asserts San Diego-based Jan Brons, president of global operations, SKF Reliability Systems. A bearing technology leader since 1907, the company now also focuses on asset-management services. The point, says Brons, is that maintenance, managed properly, is really a profit center. "If one new machine tool offers the productivity of 16 old models, maintenance had better be a priority," says Brons. Operator training also needs attention, cautions Bob Sloan, vice president of sales and marketing, Ex-Cell-O Machine Tool Inc., Sterling Heights, Mich. "Companies have been known to buy the latest, most productive equipment, only to discover that the workforce had not been trained to deliver the technology's potential." He describes an incident involving an equipment investment by a major automotive company. "They bought a whole transmission line with the latest in control technology. It was during the 1990s when PLCs and PCs were converging. The equipment came into the plant, and nobody in the plant even knew how to turn it on. And they had no idea on how to service the stuff. They went through a major training program, but it was too late. It was after the fact. They launched during the training and had disastrous results." New production technology especially challenges business strategies based on traditional process presumptions, says George Seaberg, chairman and CEO of sub-contract manufacturer Seaberg Industries Inc., Rock Island, Ill. "To compete, senior managements must now integrate two factors -- how they empower their employees and how they leverage new technology." Seaberg observes that, "What makes that integration tricky is that sometimes one factor can compensate for the other. In an orientation class that I teach for my new employees, I always refer to an award that Toyota won in the mid-90s for having the best automobile assembly plant in Japan. It was later disclosed that the average age of their machines was 20 years!" 'Best Plant' To 'Next Plant' If a Toyota plant in Japan can win a best automobile assembly plant award with 20-year-old production equipment by managing employee skill properly, what happens if the latest process technology is brought into play? Howard Miller, plant manager of International Truck and Engine Corp.'s Indianapolis engine plant is going to find out. Miller is no stranger to optimizing the people processes. In October 1998 when IndustryWeek featured his facility as one of the 10 Best Plants in North America, the last sentence of the feature story concluded, "He knows that the success he enjoys ultimately comes from his most important asset, his people." Now he is integrating his people-management skills with a manufacturing technology initiative that should make his facility a winner for a factory-of-the-future awards competition. Designed to leap ahead of the competition, the goals include tighter quality control, bringing the new equipment in at 2.0 Cp process capability, and going to 82 inventory turns, says Rick Powell, manufacturing services business team leader. (Cp is a statistical value based on short-term data that represents the potential capability of a process. The 2.0 Cp goal means that 99.999999% of the time the specification is met.) Miller's 1.2 million square-foot facility is an engine plant, almost completely dedicated to producing Ford Motor Co.'s PowerStroke diesels for the popular Ford F Series pickup trucks. In updating the production technology, Miller is countering the opening assertion in IW's 1998 Best Plants story: "Don't look for the performance secret in the milling, drilling, turning, broaching, grinding, boring and honing." Miller is now enthusiastically emphasizing optimizing both technology management and people management. International's factory of the future takes as comprehensive a look at the production equipment as it does at asset-management issues -- the management of all the factors that control the productivity of the plant. A striking characteristic of International's efforts is the extent of partnering evident in making plant-floor investments. For example, in establishing stretch goals for two new 400-foot lines for machining connecting rods, International depended on co-development with the supplier, Tri-Way Manufacturing Technologies Corp., Windsor, Ontario. The project's mantra: Keep the production process at the plant five years ahead of the competition. "What made that work was the workforce stability evident at International," says Tri-Way's president Jim Campbell. "There was no personnel churn to disturb the team during the development period." To establish the process plan, the team relied on computer simulation and engineering analysis to test and refine concepts. The team's performance metrics targeted 87% system uptime -- 95% for individual machines. To assure the maximum uptime, the team specified condition-based sensors on production equipment to reduce the reliance on conventional time-based maintenance procedures, says Powell. "Our approach is to know the condition of the equipment and then make a maintenance decision. The approach substantially reduces repair-part inventories." International's new transfer lines include vibration sensors, oil pickup points for analysis, infrared thermography and noise sensors. Other important goals: reducing machine complexity and improving ergonomics and other comfort factors for operators. For example, to reduce ambient noise levels, International collaborated with sub-suppliers. In another instance, the International/Tri-Way team lowered machine work height from 42 inches to 36 inches. "We couldn't change the equipment design, so we lowered [recessed] the floor," says Powell. Rods produced on either new line pass through seven operations -- half that previously required. Design innovations include novel mill/grind technology that eliminated the need for a multi-million dollar investment for a separate bank of double-disk grinders. The trick was to combine both a milling cutter and a CBN grinding wheel, explains Campbell. "Besides cost savings, the approach also results in a simpler, more compact system." Other equipment suppliers include Unova's Lamb Technicon, Warren, Mich., and Johanne Krause, Bremen, Germany. International's emphasis on equipment maintenance issues can be seen in the control architecture for the lines. In contrast to the conventional practice of having one control console for an entire line, the International/Tri-Way team decided to duplicate control consoles at each major machine location on the line. That saves time in responding to problems. The MRO Challenge To support the continuing investment in ever-more productive and efficient equipment, International's engine plant is taking a more comprehensive grasp at maintenance -- a strategic enterprise-management approach. "The reality is, if we're down, we're not making money," explains Rick Powell, manufacturing services business team leader. "And with three shifts, there is no overtime, just another shift. Our process is designed to utilize every minute of every day, and every minute of uptime lost is lost product and profit." For a solution, International turned to Rockwell Automation for a way to improve maintenance repair and operations (MRO). By using Rockwell, International is able to focus resources more strategically. "Our core competency is making engines," asserts Powell. International's MRO program is administered under Rockwell's Automation Asset Management Portfolio (RAAMP). That program includes tracking repairable assets and product warranties and optimizing inventory levels and maintenance resources. The movement away from being merely reactive is something Powell and his team have been working on for several years. "Three years ago, we were very reactive in our maintenance practices. It was merely how quick can you get it back up and running and get some more parts out. Now we focus on integrating reliability into our equipment and on mean time between failure (MTBF) as opposed to mean time to repair (MTTR). We've sharpened our focus on reliability-centered maintenance." International's new maintenance philosophy is that a problem isn't fixed until the root-cause has been identified and corrected. Assisting with that is Dennis Linehan, the Rockwell onsite asset-management professional. The system is highly integrated into International's processes. When suppliers talk to Linehan, it is as if they are talking to International's purchasing department directly. Before RAAMP, International's third-party part repairs were averaging 58 days. With RAAMP and Rockwell's parts repair and remanufacturing capabilities, the average is down nearly 50%. If it is a Rockwell in-house repair, the turnaround time is averaging three days. By reengineering its part-management processes and partnering with Rockwell to manage more than 28,000 spare parts, International had substantial savings in the first year of the program and realized 157% ROI after less than three years of the RAAMP initiative. Cutting-Edge Display If the interests of machine tool buyers went no deeper than the interests of most automobile buyers, Mazak's Papke might find it difficult to rationalize transforming the company's production facilities into a constantly evolving Cyber Factory of the future. But Papke knows that customer success -- and his own -- depend on how users integrate machine tools with information technology. Two years ago Teruyuki Yamazaki, chairman and CEO of Yamazaki Mazak Corp., the parent company, described the convergence of machining and IT: "In the digital world, machine tools are only a form of computer terminal, albeit one capable of cutting and forming metal. How systems are linked to pass on information at increasing speeds will be critical." Papke's Cyber Factory project in Florence, Ky., takes its inspiration from the first Cyber Factory the parent company opened in 1998 at its Oguch, Japan, headquarters. The factory both produces Mazak products and displays the latest technologies available in Mazak production equipment. Current updates totaling $20 million at the Kentucky plant hint at what to expect when substituting new machine tools for yesterday's solutions. "Replacing Mazak with Mazak equipment is about the toughest justification [situation] you can get," Papke quips. For example, six machining centers were replaced with one 52-pallet Mazak Palletech Cell with three Mazak FH-6800 horizontal machining centers for the production of small to medium-sized prismatic parts. The new cell will run "lights out," or unmanned. Also, four Mazak FH-8800 horizontal machining centers have been installed in a 144-pallet flexible manufacturing system (FMS) to replace an eight-machine FMS. The new system will produce up to three-foot cube parts such as headstocks, turrets, table housings, tool changer details and tailstocks. Six new multitasking machines, Mazak's Integrex Series, are also being installed. Mazak says their implementation will provide the ability to produce finished parts from raw materials in a single setup. Benefits include doubled productivity and shorter overall lead times. Papke says his multitasking machines represent an evolution of the machining center with the turning machine. "It often looks like a turning machine in that it can turn, but it also provides all the performance of a machining center. So now you're combining the turning operations together with the machining center operations and sometimes even doing another peripheral-type operation [such as] a small hobbing operation [or] even grinding. Think of a lean manufacturing cell, all combined into one [machine]." He says the result is a greatly increased throughput of those operations. "This [multi-tasking] is the fastest growing sector of the machine tool industry." At Mazak, he traces the idea back to 1983, "when we first started putting some milling on turning machines. Today it has evolved to the point where you can load a solid block of metal and produce a fully machined engine block -- all on one machine with just one setup." All production machines in Mazak's Cyber Factory are wirelessly networked to facilitate Intranet links to engineering, sales, production, and administration departments. Make It Simple Let's assume that your factory of the future is so successful at satisfying customers that you're faced with the need to invest in more plant and equipment. Are you sure that's the most cost-effective solution? What if the products were easier to make and faster to assemble? Even though a plant and its equipment concepts conform to the highest standards of efficiency and throughput, consider that product development still holds a critical key to what happens in the manufacturing step. Optimizing that development/manufacturing relationship has special strategic corporate significance for corporations that want to build close to global markets, says Bradley Keup, senior technical strategist, strategic fulfillment and cost engineering, Dell Computer Corp. "By optimizing the relationship, it's possible to establish worldwide manufacturing despite regional cost differentials. Our goal is to reduce the capital expenditure needed to design and build products. We want to increase the throughput possible with the existing capital infrastructure." Dell's savings are substantial. In fact, redesigning one product line and introducing the Optiframe S, L, M, and MT chassis for personal computers saved Dell an estimated $32 million in reduced direct labor to date. The company saved millions more by increasing throughput and thus postponing facility relocations that otherwise would have been required to boost manufacturing capability. The Round Rock, Texas-based Dell drives its Design for Excellence initiative with software from Boothroyd Dewhurst Inc., Wakefield, R.I. The analytical solutions include Design for Assembly and Design for Service.
Factories Of The Future -- Plant-Floor Strategy
The most crucial investment for the factory of the future will be made not in hardware or software, but in understanding how manufacturing technology provides new options to power business success.