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Can You Make"Any Part, Any Minute?"

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Thursday, May 15, 2014

Certain pieces of metalforming and fabricating equipment define manufacturing flexibility better than others —waterjet cutting (depicted on this issue’s cover) comes to mind, for its ability to cut most any combination of material type and thickness. So does the ever-improving technology of automated material handling, enabling fabricators to confidently run lights out—thus satisfying the “any minute” part of this column’s title.

The phrase “any part, any minute” comes from an article that appeared recently in MetalForming magazine. The article’s author, Salvagnini executive Ricky Hanson, coined the phrase when describing the concept of manufacturing flexibility: a company’s ability to adapt rapidly and cost effectively to evolving market needs.

Seeking flexibility by investing in technology is one thing; measuring your company’s flexibility and tracking progress is another thing altogether. Discussing metrics with metalforming and fabricating company executives, the hit list includes customer reject rates, on-time delivery, overall equipment effectiveness, WIP, revenue per employee and, of course, EBITDA. But there’s rarely if ever any mention of measures related to innovation and flexibility.

LNS Research and MESA (Manufacturing Enterprise Solutions Association) International recently combined forces to craft their biennial Metrics that Matter research survey. To specifically gauge manufacturing flexibility and innovation, their researchers suggest tracking two key metrics:

• Rate of new product introduction—how quickly a company can introduce a new product to the market, including time for design, development and manufacturing ramp-up; and

• Engineering-change-order (ECO) cycle time—the time it takes to implement design changes, from documentation to production.

Moving new products from concept and design through engineering and on to production requires design, manufacturing and sales to work in unison—no more silos. Easier said than done, of course, and that’s where management plays a vital role by opening the doors to collaboration and sequential development.

The LNS Research/MESA survey (view results at the LNS Research website, using the link tinyurl.com/nl5tv6f) finds that on average, manufacturers realized (from 2012 to 2013) a 7.8-percent improvement in the innovation-related metrics noted above. How is your company doing?

When looking to slash ECO cycle time, consider that long ECO lead times typically result from an overly complex approval process. Poking around the internet, I found a research paper (old, but still very relevant) on managing the ECO process. Authors Christian Terwiesch (from Graduate School of International Relations and Pacific Studies) and Christoph Loch (from the French company INSEAD) make numerous recommendations on how to streamline the ECO process, based on their observations at a European automobile manufacturer. The first step in the approval process, they note, and one that holds the key to simplification, should be evaluating the cost-benefit of each ECO. Many ECOs may appear beneficial at first glance, but in the end the resulting benefits may not justify the negative impacts of the change—production delays and added costs, for example.

Terwiesch and Loch also note that when ECOs occur late in the game, they can become profit stealers. Leading-edge manufacturers, then, must develop systems to detect the need for changes early in the development process, minimizing their overall impact on the project timeline, and the related costs.

Lastly, addressing the many unnecessary steps that can plague efforts for speedy ECO handling, here’s a great tip from the research paper:

“Handoffs can be eliminated by organizational changes rather than technology. Allowing an engineer to handle an ECO all the through without having to ask for intermediate check-offs from management requires not technology, but training of the engineer (in terms of quality, process knowledge and communication) and a willingness of management to delegate and check final results rather than process details.”