On Management

Dec. 21, 2004
Can you guarantee 'no surprises'?

Some years back, I visited a customer who had a sign -- "No surprises" -- prominently displayed on his office wall. I still remember the lecture I received about how important it was that we deliver on a timely basis. These days, supply chains are being linked ever more tightly. There is precious little slack in the chain and even less margin for error. The auto industry, exemplified by Toyota, is an impressive example of how rapidly material can (and must) be delivered -- and in the exact sequence needed to match planned production. When I think about the challenges this must pose, I wonder why more people -- especially automakers and their suppliers -- don't use every tool at their disposal to eliminate unpleasant surprises. One of the nastiest surprises in a manufacturing plant is the unexpected breakdown of a key piece of equipment. Yet many manufacturers still use the "night watchman" system for monitoring the condition of equipment. I use the night watchman term to describe the manual, roving data collection approach. When the old night watchman made his rounds, he inserted his key into the monitoring box to assure management that he had been there at the appointed time. But there was no assurance that he even looked around while there -- just that he had been there. After all, the only tools that management gave him were the key, a flashlight, and maybe a two-way radio. Sometimes this kind of data collection is worse than useless. It can be downright dangerous. Roving data collection for predictive maintenance on critical machines was a pretty good approach a few years ago -- and it still is, in the right applications with the right equipment. But too often the data collected are not indicative of the machine's actual operating condition, because the collecting is done the easiest (and cheapest) way possible -- with the machine shut down. It ignores the fact that the real stresses on the equipment are generated when the tools are running. So why don't manufacturers use continuous-monitoring systems more widely? The only excuse I hear is cost, but I don't buy that. A single serious breakdown costs far more in lost production and disruptive effects than the capital cost of continuous-monitoring equipment. The second breakdown prevented pays for the installation cost. Perhaps managers cite the cost obstacle because no one really does a good job of calculating the downstream costs of these production surprises. Continuous monitoring is essential in hospital intensive-care units. Now this type of monitoring is possible in critical factory work centers. A few years ago, the cost of such equipment was high. But that is changing rapidly. For example, a small group of people at a Knoxville start-up company called MachineXpert is driving down the cost of continuous-monitoring equipment without sacrificing critical functionality. Continued advances in technology make it possible for pioneers like MachineXpert to make the phrase "No surprises" a reality at lower cost than ever before. Accelerometers that cost $300 two years ago are cheaper today by more than half. Monitoring costs of $1,000 per channel are now below $200 per channel and dropping. At these price levels, the roving data collector -- who is usually the first person pulled off his rounds when extra manpower is needed in a maintenance crisis -- will become more and more like the night watchman of old: a disappearing breed replaced by newer and better technology. MachineXpert CEO Cecil Presnell predicts: "Someday, machine builders will simply choose to build continuous monitoring into their machines." Until then, his firm plans to offer an affordable alternative. Boundaryless companies hooked together in seamless, tightly integrated supply chains are the way of the future. The concept works superbly at improving productivity, reducing inventory, upgrading customer service, and reducing costs until -- surprise! -- something breaks down unexpectedly. I'd prefer no surprises like that. Then maybe the only surprises would be big new orders from satisfied customers. John Mariotti, a former manufacturing CEO, is president of The Enterprise Group, a consulting business. He lives in Knoxville. His e-mail address is [email protected].

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