Manufacturers move from Lean to agile manufacturing to adapt to dynamic global markets

Lean manufacturing is a term applied to companies that are very good at managing what is in their control, and finding ways to continuously improve areas within their shop management that prove to be inefficient. But manufacturers that have worked for years to get Lean and become Leaner may be wondering, "What's next?"

Agility is the ability to thrive and prosper in an environment of constant and unpredictable change. Agile manufacturing deals with the things that are not readily controlled. This relatively new concept is seen as the next step after Lean in the evolution of production methodologies, but many have not yet begun to implement these new tactics. In fact, a recent study found that while 40 percent of respondents are engaged in Lean manufacturing, less than four percent pursued agile manufacturing.

The basic concept of agile manufacturing is developing what could best be called a nimble mindset when it comes to understanding market environments. In short, rapid changes in the market environment are not something to be feared, but should be seen as opportunities to beat the competition to the punch. Rapid changes in the market call for rapid responses. This notion of changeability is at the heart of new movements in manufacturing based on production agility.

AGILE MANUFACTURING IN THE JOB SHOP
Agile manufacturing represents a complete shift in the mindset of production industries in the 21st century; one in which there is both a greater relationship between technology and worker skills, and greater customer access to, and demands upon, the core competencies of their manufacturers/vendors.

By its denoted value, agile manufacturing implies a sense of flexibility. In today's dynamic global marketplace, where the business variables are often unknown and changing, it is incumbent on the manufacturer to be able to respond to evolving demands at a pace that, in the past, would simply be considered unrealistic. However, the modern job shop has itself evolved to this point of accommodating increasingly shortened lead times and 90-degree engineering changes. Paperless routers facilitate computerized linkages from sales order generation to the tracking of shipments. Shop floor wireless systems account for inventory levels, automated purchasing and materials movement. Engineering schemata (particularly changes in design and construction) can be relayed directly to machine operators via graphical user interfaces as they are generated.

In other words, technology and technique have evolved in manufacturing so much so that agility could very well be considered state of the art. Agility is a result of streamlining to sharpen processes on the shop floor to hasten order fulfillment and, in doing so, maximize capacity for increased productivity.

THE ROLE OF ERP
Technology is an enabling factor in agile manufacturing. Identifying the right technology that helps the whole shop share a common database of parts and products, and production capacities and trouble spots within the supply chain, is key. Responding deftly to customer demands, materials shortages or other contingencies is crucial, considering that small initial problems are typically amplified down the line.

A first step toward becoming an agile manufacturer is developing the means by which business intelligence of the marketplace is made meaningful, and production is wholly synthesized through integration. ERP software brings all areas of the manufacturing operation into a single, real-time database where the actions of one department never happen in isolation; where all aspects of the operation are capable of responding quickly to customer demands. Particularly suited for agile manufacturing, ERP software provides the basis for rapid communications and the exchange of data, as well as the means by which responsive actions can be made quickly to ensure competitive advantage.

The manufacturer that has made the effort to instill agility through ERP has the competitive advantage when it comes to quickly transforming knowledge into new products and services for its customers.

AGILE MANUFACTURING IN THE REAL WORLD
While agile manufacturing is still a novel concept and has not yet been fully implemented across the broader spectrum of manufacturing, some early adopters are already seeing the benefits.

Humanetics, a precision metal works company based in Dallas, Tex., is an example of the sort of agile thinking taking place in manufacturing today. Not only is its workforce occupationally dimensional, the production model is one that takes advantage of the unique strengths of each of the company's four facilities. With the acquisition of a plant in Wuxi, China, Humanetics is able to produce products for the Asian market using local labour and resource efficiencies. However, Humanetics has also found that it can create a hybrid manufacturing model by combining Chinese overhead efficiencies (initial labour and materials) in alliance with American quality standards (for finishing) to provide low-cost, high-quality finished goods for a global marketplace.

To maintain real-time connectivity between a large database of shop information, Humanetics implemented a robust ERP software system that provides the company with the capability to navigate production schedules, inventory management and cost accounting for the information flowing from all four of its geographically dispersed plants. As orders are taken, processes are planned accordingly to ensure that throughput is efficient, international movement of parts is smooth, quality is maintained and delivery is on time. Ultimately, it is its agile ERP software system that provides a sense of total flexibility to what Humanetics does as a multi-location manufacturer.

AGILE MANUFACTURING TOMORROW
In a global economy, windows of opportunity open quickly and can close just as fast. The more agile the manufacturer, the greater the rewards to be gained from being the first responder to customer needs. Expanding the customer-base through emerging and diverse markets necessitates the quick reflexes that result from the consistent improvement of business intelligence.

Innovation in the market provides the greatest growth opportunities for companies who are quickest because of their concerted efforts to be agile.

Dusty Alexander is the president of Global Shop Solutions, an ERP software provider based in The Woodlands, Tex.

Historically, the majority of a manufacturer's costs have been labour. When Henry Ford introduced the moving assembly line in 1913, labour accounted for an estimated 80 per cent of total costs. One of Ford's key beliefs was that labour costs could be greatly reduced by eliminating unnecessary steps from the manufacturing process.

Ultimately, machinery accomplished what Ford and many others set out to do: streamline the production of goods and improve efficiencies on the shop floor. Machines could complete the same tasks as humans on an assembly line, but at a much quicker pace and at significantly lower costs. As a result, production and assembly processes required fewer workers and labour costs dropped considerably.

Faced with tighter margins and increasing competition, job shops and custom manufacturers today are embracing innovative new ways to take shop floor automation and business management to the next level. Driven by new applications and technology advancements, these solutions are enabling businesses to minimize costly manual labour practices throughout the manufacturing process to obtain a level of efficiency that their predecessors could only have imagined. In addition, these solutions allow shops to maximize other resources, including their existing investments in machines, systems and applications.

One of the new tools responsible for driving this level of efficiency on the shop floor is intelligent numerical controls (INC). Capable of running on virtually any machine - from the simplest lathe to multi-function machines running the most advanced algorithms - INCs monitor and measure the output of production data, such as job starts, machine hours and part counts, without manual intervention. These controls provide seamless integration with almost any application and peripheral, including shop management systems, while also interfacing with barcoders, feeders, robots, probes and tool setters to help streamline production.

It is critical for job shops and custom manufacturers to have access to this production data, along with employee information and other operational data, in a single system to more effectively manage production. The integration between the shop floor and back office provides a more holistic view of the organization. It enables management to better plan and schedule projects, ensuring that business is always running smoothly and that customer expectations are being met.

While computer numerical controls (CNC) have been in use for decades, intelligent numerical controls are a very recent introduction. Based on standard PC motherboard architecture, these controls truly represent the state-of-the-art in numerical control form and function.

Whereas previous controls relied on hard-wired control mechanisms, intelligent controls rely on software. The difference is significant. For example, every machine purchased with CNC controls was, in essence, obsolete the day it was installed. It could be upgraded with new controls, of course, but this was extremely expensive and time consuming. In contrast, intelligent controls are upgradeable simply by installing new software. Should additional computing horsepower ever be required, the components of the intelligent control are as easy to upgrade as the components of any personal computer.

The true value of intelligent numerical controls is apparent when they are integrated with an enterprise resource planning (ERP) system on the back end to automate the collection of production data and enable communication with business and production systems on the shop floor. Production data can come directly off machines into the ERP system, providing a level of accuracy unattainable through traditional data entry methods. Moreover, by automating this process, job shops can always have the most up-to-date data in real time, and they can also better control headcount and costs.

ERP integration with INC controls offers powerful additions to a manufacturer's competitive arsenal. Far more than simply reporting machine run times and parts produced, the integration of ERP and INC systems helps to drive all aspects of manufacturing effectiveness and efficiency.

The product of ERP/INC integration can be as basic as real-time reporting of machine data to the ERP system. However, since INC is a software-based environment, manufacturers can now achieve unprecedented synergy between not only the INC and ERP systems, but also a wide range of affiliated applications, including robotic controls, automated tool management, metrology, cooling systems, material feeders and tool setters.

Achievement of such integration typically involves the use of an application program interface (API). Well-designed intelligent numerical control software includes not only a resident API, but also a well-documented, easy-to-use .NET interface. With these components in place, integration between multiple systems is a relatively straightforward process.



One of the benefits of the integration shown in Diagram 1, is real-time data transfer from the machine to company management. Among the possible data being transferred are:
• Job setup time (accurate tracking of setup time and costs);
• Job starts and stops (machine time costs, maintenance schedules, tool changes);
• Machine operator time (accurate labour tracking, not only by work centre but by job); and
• Material usage (pulling material from inventory within the ERP system as material is depleted on the job).

Such basic integrations offer all of the advantages you would expect, including reduced human error and improved accuracy. Perhaps most important is the instant addition of the data to the manufacturer's ERP system. This empowers managerial decision making. Any purchasing manager responsible for raw materials can tell you how important that becomes during times of material shortages or price volatility.

While the basic integration of ERP and intelligent controls is powerful, imagine what you can do by taking the concept one step further. In Diagram 2, the same use of the API is applied to integrate with several other systems in the work cell. The diagram shows tool usage data flowing from the automated tool crib, through the API, into the intelligent control, and out to the ERP system. We also see that the tool usage data are being combined with tool wear data from a metrology system. The entire overall system is now working more effectively and efficiently than ever before. For example, tool wear data combine with tool availability data. The metrology system authorizes the automated tool crib to issue new tools when they are needed. Purchase orders are automatically issued, just-in-time, based on rules set up within the ERP system. Costs are tracked more accurately than ever before, and finite adjustments to the system are now possible.



In this example, we've only leveraged the intelligent control to integrate ERP with the tool crib, metrology, machine data, material usage and labour. Similar integration, based on the straightforward use of the intelligent control's API, greatly broadens the possibilities. As shown in Diagram 3, an entire manufacturing operation can now be integrated. Integrating two systems, however, can be problematic, and integrating three or more can be overwhelming. But history shows that such integration is possible. Consider, for example, the integration of your PDA with your cell phone and laptop. This was originally looked at as an impossible dream until the appropriate APIs were developed. Now, such integration is commonplace. It has changed the way we do business and the way we live.



The integration of the manufacturing environment, made possible through the use of intelligent numerical controls and ERP, holds similar promise. At the very least, it will change the way we manufacture. Given the history of manufacturing breakthroughs, it could just change our world.

Dan Deanovic is the director of development for Exact JobBOSS, a provider of job shop software.