Week #1

Mass Production Philosophy 1. Very little Capital expenditure resulted in massive increase in productivity and reduction in labour - It was the philosophy or approach, not the technology advancements that drove increases in productivity 2. Ford created manufacturing economies of scale the more cars that were made, the more the cost per vehicle fell Week #2 Manufacturing Paradigms 1. Craft Production 2. Mass Production 3. Lean Manufacturing 4. Automated Manufacturing 5. Agile Manufacturing Mass Production Characteristics Division of Labour: 1. Previously fitters were skilled craftsmen 2. Now worker undertook one task put two bolts on. - Narrowly skilled / unskilled 3. In addition to the low paid assemblers, there were specialists for inspection, tool repair, maintenance etc 4. At the end of the production line the cars would often not work, so there were skilled rework men much like early fitters in craft production era. New breed of Industrial Engineer: 1. Designed production machinery 2. Identified production faults and re-designed components 3. Specialists in certain aspects of the car - As time passed on, in the 1960s and 70s, these engineers became too specialist, often having a very narrow expertise of the car. - Examples of such specialism would include door locking mechanism on the Ford Falcon. Tools: 1. Fords engineers developed dedicated machines able to machine components very quickly. 2. These were automated or semi-automated processes. 3. The skills of the old craft production machinists were now embodied in the machine. 4. This meant unskilled workers could now be used to load parts into the machine performing complex tasks. Organization: 1. Henry Ford demanded ever increasing closer tolerances on components and tighter delivery schedules 2. Raw materials and component manufacture was brought inhouse 3. Ford sites included steel mills, glass plants, machining and assembly.

Manufacturing Characteristic 1. Subtractive - Material removed from a solid block until the desired shape is reached 2. Formative - Mechanical forces applied to material to form it into the desired shape (includes bending, moulding and casting) 3. Additive - Material manipulated so that successive pieces of it combine to gradually 'GROW' the part What is manufacturing? 1. The transformation of raw materials into finished products. 2. The sourcing of raw materials the distribution of finished products to the customer 3. The design of products, the processing of material, distribution and customer service following the sale. # The full cycle of activities from research, design and development, production, logistics, and service provision to end of life management

Craft Production: Early car production - summary 1. 2. 3. 4. 5. 6. Workforce highly skilled in design, machine operations, fitting. Trained apprentices, Self-employed contractors to assemblers Extremely decentralised operations. Different machine shops would supply their own designs for each component The system was co-ordinated by the entrepreneur The use of general purpose machine tools to perform operations on metal and wood 7. Very low production volume <1000 per year. 50 built to same design. None identical! Early production the problems 1. Very slow 2. Production costs were high did not drop with volume 3. Only the rich could afford cars 4. Users (or their chauffeurs) also had to be mechanics 5. Consistency and reliability did not exist 6. Inability of small workshops to develop new technologies 7. Something new was needed

Q: What were the competitive drivers for Mass Production? Lean Manufacturing Why would Mass Production not work in Japan? 1. Japan had a very small domestic market demanding a wide range of vehicles. 2. The war had ravaged Japanese economy there was no money to invest in the latest production technology. 3. In the US, employees were a variable cost, and could be shed when demand fell. 4. In Japan after the war, complex union and worker rights meant employees had jobs for life. 5. Also, there were no guest workers temporary immigrants accepting poor working conditions for high pay. Muda: 1. Muda is anything that is unnecessary, adds cost, adds time, or additional costs that the consumer is unwilling to pay for. 2. Any activity that consumes resources but creates no value. The 7 Wastes of Lean 1. Defects (quality) 2. Overproduction (making more than you need) 3. Transportation (of product to machines) 4. Waiting (for machines/people) 5. Inventory (holding stock) 6. Motion (of people looking for parts, bending down etc)) 7. Processing (excessive un-needed processing)

SMED: Single Minute Exchange of Die Principles of SMED 1. Changeover is made easy. 2. No specialist engineers required so you can let the shop floor workers do it. 3. Typical Western Management response: - Im not sure I trust the shop floor workers to do that job 4. You trust them to put parts into the machines, make the rest of your products! Why not trust them a little bit more? The Breakthrough 5. So Taiichi Ohno watched the new work process in the stamping shop 6. Instead of making 100,000 parts in the press, the press would make 100 and change over 7. As he watched, he made a very important discovery 8. Because the size of the batches going through the stamping shop was now much reduced. 9. There was less inventory Muda! 10. Faults or defects were spotted earlier Muda! 11. By doing this, Toyota were able to deliver goods quicker to the customer Batch Production 1. So in our car example, you make enough XT10 cars to cover stock for four days, as thats when you will next make them. 2. You may also add some extra units in to cover any problems that may arise in production or unexpected demand 3. So inventory is used to protect you from: - Variances in customer demand - Operational inefficiencies Inventory Reduction Problems 1. Reducing Inventory can expose problems in production 2. Once a problem is exposed, correcting that problem will improve efficiency and productivity 3. The images on the next slide illustrate how inventory shields production inefficiencies 4. The level of the water is analogous to inventory level 5. The operational inefficiencies are analogous to rocks on the river bed. 6. The speed of the flow of the river is analogous to throughput 7. By reducing the inventory (level of water) we can expose the inefficiencies (rocks) and clear them to increase the throughput (flow).

How do we look for waste Use Value Stream Mapping 1. A value Stream Map is a map of the production environment 2. It aims to distinguish between value-adding and non-valueadding activities. 3. It uses a broad range of information (compared with process maps) 4. It is a high level (510 activities) map 5. It has a wide scope, frequently spanning the whole supply chain. 6. It can be used to identify where to focus future improvement activities. Techniques to reduce waste Cell Manufacturing: 1. Traditionally, machine shops had all the drills together, all the grinding wheels together, all the assembly areas together etc. 2. Cellular manufacturing brings all the equipment required to produce the product into one area or cell 3. Manufacturing cells are often in a U shape Advantages of Cellular Manufacturing: 1. Reduced floor space for cell - This in turn allows for room for further production capacity without significant capital investment i.e. new factory 2. Improvements in efficiency 3. Reductions in lead time - Not carrying Work in Process all around the factory 4. Greater control of inventory - Process area is smaller workers can see inventory - Less risk of damage as goods arent left around waiting to be processed 5. Improved quality - Product is now responsibility of cell workers greater ownership.

Problems with Ohnos plan (have one stamping machine for many parts, and changeover the dies more regularly) In Detroit, Stamping presses were set up and left for months, or years. Because: 1. 2. 3. 4. Dies weigh several tons. Absolute precision alignment of the dies was required. If misaligned the press would crease the stampings Or worse, under the immense pressure the sheet metal could actually melt in the die Specialist engineers had to change Dies 5. Dies would sometimes take a whole working day or longer to change. 6. This meant waiting on the production line and that is Muda

Advantages of Cellular Manufacturing (cont): 6. Reductions in batch size: - Only one part going through cell at a time - No half finished products waiting to be moved on to next batch 7. U shape facilitates communication between workers in the cell 8. Workers in cell work as a team 9. Cross-trained to work on all equipment in cell. This enables: - Fewer workers in cell - Workers able to help each other - Workers able to cover for absences - Fix problems together Andon - Visual Management board 1. Lets workers know: - Target production - Current Status - Totals - Scrap rate - Absences 2. Makes workers feel informed 3. Used to stop production Jidoka - Automation with a human touch 1. If problem occurs in production. Jidoka prevents defective processes or product from being sent further along production 2. When a machine breaks down: - Detect the abnormality. - Stop (Toyota every cell on production line has a stop lever) - Fix or correct the immediate condition. - Investigate the root cause and install a countermeasure. 3. Focus attention on understanding the problem The 5 Whys: 1. Ask Why five times to get to the root of the problem: (ex) Why holes drill not following spec Because Drill wear out. Why drill wear out - Checked with the supplier the right drills, but theyre using a new supplier. WHY new supplier? Cheaper. 2. WHY is the new supplier cheaper? Theyre using a different coating process Why is the different coating process affecting the drills Not sintering for long enough

Push vs. Pull Production 1. Push Production Traditional push system Production is based on a combination of: - Forecasts from sales dept - Actual customer orders Forecasting: Inventories are produced with the expectation that customers will order and purchase in the coming days/weeks It is up to you (the producer) to anticipate how much you think will be required and when it will be required If the expected sales dont arise you offer incentives, reduce price, two for one, Your purchasing of raw materials also works to the forecasting schedule: Buy more because of the time it takes for them to arrive (dont want to be caught short) Discounts from supplier for buying more Can only buy in batches of (say) 1000 Buy a few extra just in case some are faulty All of a sudden, youre overflowing with material youre begging production to take them off your hands 2. Pull Production You wait for an order and then you start making the products This is possible because you have reduced you batch size as small as possible You get to work on topping up the stocks. With Pull Production, you are more in tune with customer demand patterns The customer is Pulling the product from the factory Kanban Signboard / Billboard 1. Kanban is a signal to produce or start the operation 2. Kanban comes in many different forms: - Card - Signal / light - Empty shelf space 3. Kanban works all the way through the company and further up the Supply chain to the raw material suppliers

There are two types of Kanban cards: 1. a conveyance card (C-Kanban) 2. a production card (P-Kanban) How Kanban Operates: 1. When a worker at downstream Work Center #2 needs a container of parts, she does the following: 2. She takes the C-Kanban from the container she just emptied 3. She finds a full container of the needed part in storage 4. She places the C-Kanban in the full container and removes the P-Kanban from the full container and places it on a post at Work Center #1 5. She takes the full container of parts with its C-Kanban back to Work Center #2

Kanban Problems: 1. The Kanban process means that, if there are no orders, therell be workers sitting around, doing nothing! 2. Heres an idea, get the workers to tidy up around their cell By doing 5s. The 5S 1. SEIRI (Tidiness) - Identify tools needed at workstation and remove everything else 2. SEITON (Set in Order) - Neatly arrange and identify the tools 3. SEISO (Cleanliness) - Clean up. Get rid of dirt and messiness 4. SEIKETSU (Standardise) - Perform the 3 previous steps regularly and frequently to maintain order and avoid complacency. 5. SHITSUKE (Discipline) - Turn Seiri, Seiton, Seiso, and Seiketsu into habits

Week #6 Agile Manufacturing 1. Agility is the ability to grow and succeed in an environment of constant and unpredictable change. 2. The reasons of this trend change are: - The strength of global competition is increasing; - Mass markets are fragmenting to niche markets; - Customers expect low volume, high quality, customised products at low cost. - Product lifecycles are decreasing

3. Origin of Agile Manufacturing: - First introduced by the Iacocca Institute report 21st Century Manufacturing Enterprise Strategy - They saidInstead of just chasing after the Japanese by copying their techniques in a prescriptive fashion, - or implementing our own prescriptions such as CIM, - We should be trying to achieve a competitive lead by doing something that our competitors are not doing. 4. Agile Manufacturing Objective: The objective of agile manufacturing is to enable manufacturing enterprises to be competitive by dynamically reconfiguring: - Software (EDI supply chain software), - Process Equipment, and - People and Organization structures.

5. The move from Lean to Agile: - While it is suggested that organisations should be achieving a competitive advantage from Lean, it is worth noting that Lean is a base platform from which to launch an agile manufacturing strategy. - That is, the manufacturing organisation should be working with low inventories, fast setup times, able to perform short timescale mixed model scheduling etc. 6. Characteristic of Agile Manufacturing: Greater product customization Rapid introduction of new or modified products Advanced inter-enterprise networking technology Upgradable products Increased emphasis on knowledgeable, highly trained workers Interactive customer relationship Dynamic reconfiguration of production processes Greater use of flexible production technologies Rapid prototyping An open systems information environment Innovative and flexible management structures Product pricing based on value to the customer Commitment to the flexible operations and product designs 7. Agility Manufacturing Companies: - Customer-integrated process for designing, manufacturing, marketing, and supporting all products and services. - Decision making at functional knowledge points - not in centralized management silos - Stable unit costs, no matter what the volume - Flexible Manufacturing-ability to increase or decrease production volumes at will. Easy access to integrated data whether it is customerdriven, supplier-driven, or product and process-driven Modular production facilities that can be organized into ever changing manufacturing nodes. Data that is rapidly changed into information that is used to expand knowledge. Mass customized product verses mass produced product.

8. (4) Core Agile Concept: a) A strategy to become an Agile Manufacturing enterprise. b) A strategy to exploit agility to achieve competitive advantage. c) Integration of organization, people and technology into a coordinated interdependent system to provide competitive advantage. d) An interdisciplinary design methodology to achieve the integration of Organization, people and technology. A) Organisational Agility: - The latest idea in Agile Manufacturing is the development of Virtual Enterprises - Agility is built around a number of separate companies - Each has a core skill or competency which they bring to a joint venturing operation - The Joint operation is based on using each partners facilities and resources. - These joint ventures are called virtual enterprises or adaptive value networks because they do not own significant capital resources of their own. - This will help them to be agile, as they can be formed and changed or dissolved very rapidly.

There are many question with regards to the efficacy of such agile networks: Who organises and manages these various autonomous functions to work as a cohesive whole? The Design company? The Marketers? Supply Chain Integrator? How do companies find local joint ventures to join? How do the partners communicate effectively? What other issues can you think of that might affect a agility in a virtual enterprise? B) Production Agility: - Mass Customisation - Computer Integrated Manufacturing - Rapid Manufacturing

Summary of Manufacturing Paradigms:

Mass Customization Production System: - Generally uses Postponement principle - Delay adding value until the customer orders - There are two main sub-systems to production: a) Push subsystem produces sub-assemblies or semi-finished products b) Pull subsystem is customer driven and aims to build products that match customer requirements - The two sub-systems are separated by the De-Coupling point

Management Strategies (Split into two groups) : 1) Product Level - Component commonality - Product Modularity - Platforms 2) Process Level - Component Families - Process commonality - Process Modularity - Delayed Differentiation Product Level Strategies 1. Component commonality - Aim to use as few components as possible - The result may lead to over-designed common components 2. Product Modularity - Mix and match independent and interchangeable product building blocks with standardised interfaces in order to create product variants 3. Platforms - A basic common module that is implemented in several variants of the product family. - Cost intensive and are developed to serve as main component for long period of time Process Level Strategies 1. Component Families - Grouping components into families. Based on Group Technology and cellular manufacturing 2. Process commonality - Reflects the degree to which products can be manufactured on the basis of a few number of processes. 3. Process Modularity - Dividing a large process into smaller sub-processes that can be designed and carried out independently while ensuring that the whole process fulfils its objectives 4. Delayed Differentiation - Delay the point at which product variations assume their unique identities

Mass Customization: Week #7 1.Mass Production - N. the production of large quantities of a standardized article (often using assembly line techniques) Wordnet 3.0 Princeton Uni. 2.Customize (customise) - Vb. Modify something to suit a particular task Oxford English Dictionary Is a business strategy Aimed at satisfying individual customer needs at costs that do not considerably differ from the costs of similar standard products It provides customers with a large product mix (solution space) Increasing the chance of a consumer finding the product that exactly matches their requirements

As the decoupling point moves upstream, the degree of customisation will increase As the decoupling point moves downstream, the delivery lead time will reduce What about production costs? A moderate surcharge for customised product should not exceed ~ 10-15% of standard product

Aspect of Mass Customization: - However, the design, development, production and distribution of a large product mix can adversely affect efficiency - The result can be a drastic increase in costs and reduction of profit - The costs of variety are generally referred to as complexity costs - The capability of managing variety and complexity is a necessary competence for mass customisation companies

(3) Component Evaluation of Mass customisation Production system: 1) Customisation Cost effectiveness - The ability to differentiate products without increasing production costs significantly 2) Customisation volume effectiveness - The ability to increase variety without decreasing production volume 3) Customisation responsiveness - The ability to reduce order-to-delivery time of customised products and to re-organise processes quickly according to customer requests

Two types of Delayed Differentiation: 1. Component Commonality: - Commonality in early manufacturing produces benefits of risk pooling - -Over given planning period, its more accurate to forecast demand for common component than the single demands of many different components. 2. Operations Reversal: - Redesigning the process and/or products in such a manner that the sequence of production is reversed - -Vanilla Boxes approach: pre-assemble components on a push basis, so that final product variants arent assembled from scratch when order comes. Operation Reversal Benetton: Instead of dyeing then knitting garments, Benetton restructured operations All clothes knitted in grey first Low lead time clothes dyeing sub-process was added at end Consequently, they improved responsiveness to customer preferences and improved efficiency. Computer Integrated Manufacturing (CIM) - CIM Cannot be bought and installed - It is the integration of all enterprise operations and activities around a common corporate data repository (database) - It is the use of integrated systems and data communications coupled with new managerial philosophies that improve organizational and personnel efficiency Benefits of CIM: 1. Improved customer service 2. Improved quality 3. Shorter time to market with new products 4. Shorter flow time 5. Shorter vendor lead time 6. Reduced inventory levels 7. Improved schedule performance 8. Greater flexibility and responsiveness 9. Improved competitiveness 10. Lower total cost 11. Shorter customer lead time 12. Increase in manufacturing productivity 13. Decrease in work-in process inventory

**Competitive Drivers of Agile Manufacturing: 1. differentiation strategy 2. exibility performance 3. product mix exibility 4. competitive intensity in the industry (external)

True Mass Customization: - True mass customisation is where the customer has an active role in the design of the product. - It has been suggested that there are 3 main reasons why this will not happen: - We covet what we see - We hate choice / choosing - We cant design - Designers spend months or years perfecting products (like these). **Competitive Drivers of Mass Customization: 1. Brand building 2. Increase existing sales 3. Customer integration 4. Short product development cycle 5. Resources and capabilities 6. More focus on customer 7. MC has the ability to provide superior customer value through customization on a mass scale. 8. Ability to balance between customers perception and companys ability to fulfil. 9. Deliver individualized products within an acceptable time and cost frame without burdening a customer with a price premium and long delivery times.