04/25/2022

How to be flexible – and remain so

SCHULER Consulting: Manufacturing concepts put to the test

From the series "Innovative Holzbearbeitung" in the German professionell trade magazin HK Magazin 02/2022. 

By Nikolaus Rossa and Herbert Wolf

Rapid adaptability in production is regarded as an essential core competence of manufacturing companies in order to respond optimally to changing external influences. However, the pandemic in particular has shown how vulnerable many manufacturers still are in this context. Above all, firmly rooted processes and little leeway within the IT structure lead to this dilemma. But which areas of work are particularly critical in this context and what adjustments can be made to increase flexibility in spite of this?

Flexibility in manufacturing IT

If you want to achieve more flexibility in your own company and position yourself for the future as an entrepreneur, an examining look at your own manufacturing IT is a good start. Here, in addition to many important commercial processes, there are three work steps that are particularly critical. "Critical" in the sense that these work steps often already take away flexibility and often offer a lot of potential for improvement. These work steps are: 1. order entry, 2. production data generation, and 3. production control.

1. order entry:

Society is becoming more and more individualized, and accordingly, so is furniture. Richness of furniture variants leads to the fact that data models (in case of customized furniture) become more and more extensive, while their value, however, remains relatively low - compare this, for example, with the individual configuration and price of a car. When buying furniture, the customer nowadays also expects to be able to see his furniture during the sales consultation - in other words, a graphically exact preparation of the order. The difficulty at this point is to capture complex furniture efficiently and yet completely. Depending on the business model, the question arises as to whether suitable systems are in use for this step. A distinction must be made between internal and external order entry.

In the case of external order entry (e.g. in the furniture store or kitchen studio), the following questions are central:  

1. How high is the quality of the data captured at the point of sale? Are they complete, meaningful and correct? A semantic and syntactic check is necessary.
2. How high is the effort at the point-of-manufacturing to prepare the externally recorded customer orders so that they can be produced unambiguously and in the end the product is created that the customer demands?
3. Are there frequent callbacks to the point-of-sales to clarify the order? Is there a graphical import of customer orders?

Flexibility here means: managing to pull customer orders correctly, meaningfully, and completely from the many different data entry systems (furniture stores, studios, online) without manual rework if possible.

In the case of internal order entry (e.g. by interior architects, designers or in work preparation), the following questions are relevant in order to check whether the systems used offer sufficient flexibility:

1. What creative leeway does the system allow?
2. Is CAM data generated automatically?
3. How high is the maintenance effort for master data maintenance and connections to supplier platforms?
4. What know-how do my employees need?
5. How high is the effort for configuration and extension of the system?
6. Flexibility means here: Maximum freedom in the design as well as in the transfer of orders to production.

2. production data generation

The question of how production data is generated, configured and prepared for production is essential for flexible manufacturing. Production data generation takes place at the latest when the production orders are made available. This includes, for example: cutting plans for ripping, macros for edge processing as well as CNC and drilling programs. Qualitative production data is the basis for automating further processes. The configuration of this set of rules should take place within the company itself so that internal know-how can be expanded and adapted at any time. For example, if there are new processes, tools, machining aggregates or changed procedures in the value creation.

It also makes sense to configure data for the positioning and movement of automation technology such as robot grippers, gantries or sorting accumulators on the basis of internally managed rule sets. If you have this process fully under control, you hold all the cards for further automation later in the value chain.

Another challenge is the creation and maintenance of master data. In practice, this is often maintained multiple times in different systems. This leads to considerable additional work. In the worst case, this can have serious consequences, even leading to a machine crash.

Flexibility here means that production data is generated automatically as far as possible and made available at the workstations. CAD/CAM systems play a major role here, making it possible to derive the relevant production data from the order entry.

3. production control

Transparency is the first step towards flexibility. Only those who are constantly informed about the current and, at best, also the future statuses in their production can react quickly and correctly. The use of manufacturing execution systems (MES) is helpful in gaining transparency about production processes. They can combine production planning, control and organization. Automation solutions such as manufacturing execution systems, which bring vertical and horizontal processes into a flow, are associated with far-reaching investments, but bring great advantages for everyday value-adding activities.

Linked to the rough capacity planning within an ERP system, an MES can perform the precise workload planning of production. This makes it possible to plan the exact capacity of individual workstations. There are different scenarios in the planning: Which order is dispatched and when, and what effect does this have on the utilization of the workstations? Bottlenecks can be identified at an early stage. This allows the manufacturer to react and take action in good time: If a bottleneck becomes visible at a workstation, additional resources such as a "jumper" can be deployed as an extra worker or working hours can be extended. If the production flow at a workstation comes to a standstill, this determines the overall capacity of the production. If, on the other hand, the workloads of the workstations are known, then the ideal production routes for a balanced production flow can be determined on the basis of work schedules. In the event of breakdowns or changes, the system can react at short notice and suggest alternative production routes. The impact on completion dates and capacity utilization can be displayed by a scenario manager.

On the other hand, an MES system also provides important feedback from production. For example, early information about changes in delivery dates offers a great advantage in customer communication. In addition, orders can be recalculated and planned times for follow-up orders can be generated on the basis of the feedback. This transparency ensures confidence and accuracy in new planning (e.g. new types of orders, products, etc.) and reduces the risk of bad investments. This makes a company flexible.

Flexibility here means: Creating transparency in production and expanding the possibilities for proactive action, for example through the use of an MES system.

Understanding IT systems as part of the value chain

IT systems are part of the value chain, as the end product can only be created through associated data models. Rapid adaptability in terms of production cannot be viewed solely in terms of machinery or personnel. Those who design their information flow in an end-to-end manner, set up the production-relevant data in a modular fashion and clearly define interfaces have the best prerequisites for small adjustment intervals and thus increase the flexibility of their value-creating processes even before the first chip has fallen.

Ideally, the vertical processes in their triad of planning, controlling and monitoring include regular feedback loops that provide a comparison between planning and the ACTUAL state, such as a comparison between planned and recorded production times and planned and recorded material consumption. Such feedback loops increase transparency: It becomes possible to identify and eliminate weak points in planning and control processes. The feedback and comparisons also serve to ensure quality, delivery reliability and adherence to schedules, and can be a decisive criterion for rationalization measures.

In this context, not only the systems designed to ensure a continuous flow of information play an important role, but also the supply of information to the employees on the shop floor. The constant availability of all relevant information - at best at the touch of a button and in real time - such as component drawings, production routes, assembly drawings, completeness checks or solutions for service cases, leads to faster reaction times for employees. These systems help companies avoid waiting times or downtimes in production and thus make a significant contribution to value creation.

Flexible manufacturing concepts

Another key to success in the question of flexibility is the manufacturing concept. This refers to the processes of horizontal value creation from the supplier of raw materials to the delivery of the finished end product. When planning production facilities and making the specific choice of workstations, machines and systems, the question of the appropriate overall concept always arises. Depending on numerous factors such as the product, the size of the company or the production location, there are various options for designing the horizontal value-adding processes. Basically, the value-adding process can be differentiated according to the following manufacturing principles: First, make-to-stock production (production on component interim storage or finished goods storage) and second, order-related production.

Make-to-stock production is characterized by high lot sizes, low unit costs and short delivery times. The production and logistics processes in make-to-stock production have a low degree of complexity. However, product variance is limited and product flexibility, for example in the case of model changes, is restricted. In addition, high set-up times are required for specialized plants. High storage capacities are often required, which necessitate high capital investment and a large amount of floor space.

Order-related manufacturing involves batch size 1 production lines with little or no setup times. Theoretically, unlimited product variance is possible here. In contrast to make-to-stock production, the capital requirements in warehousing and buffer areas are low. However, they are more complex in the sorting process and in terms of IT process requirements.  

Order-related production is significantly more flexible than layer production. However, due to increasing customer requirements and higher product variance, small producers as well as large mass producers are faced with the problem of meeting an ever-increasing variance with the appropriate manufacturing processes. In the case of kitchen manufacturers, for example, this has led them to expand their product portfolios into other areas (home, bathroom) and the intermediate storage capacities for components have reached their limits. The reaction to this has been to produce larger proportions on an order-by-order basis. The following combinations of the make to stock and make to order manufacturing principles have emerged as possible solutions to counter this development: firstly, a production of standard parts (A and B parts) to intermediate stock with an order-related production of C parts or secondly, the production of standard parts to stock, while C parts, from A and B parts are cut back.

Conclusion

Both order-related and make-to-stock production have their raison d'être. Depending on the application, product portfolio and degree of product standardization, an individual decision must be made here. On an industrial scale (e.g. kitchens), the aforementioned mixed forms of order-based production and make-to-stock production are more likely to be used. Looking at the industry as a whole, both small and large manufacturers face the same challenge of increasing product variance and thus increasing demands on the entire value creation process. Those manufacturers who want to stand out from the crowd here offer their customers maximum product flexibility. However, not only the choice of manufacturing concept, but also the use of suitable IT systems is critical here in order to increase transparency and thus flexibility in manufacturing.

The external shock caused by the pandemic has put even more pressure on producers. Manufacturers will continue to be challenged to digitally connect vertical and horizontal processes and integrate them into the cycle of their business processes. In this context, collaboration with external partners helps to identify the need for action in one's own company and to define and implement the right measures. The view from outside provides valuable and well-founded insights for deciding where the (technological) journey of one's own company should continue to go. The following applies here: no two companies are the same. The goal of achieving more flexibility in manufacturing IT and production processes can only ever be solved individually.

About the authors:

Nikolaus Rossa has been working for SCHULER Consulting for four years. His core activity is IT consulting with a focus on MES.

Herbert Wolf has been working as a consultant at SCHULER Consulting for four years. Here he advises manufacturers from the German speaking region mainly on the topic of strategic production planning.

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