Production Development: Design and Operation of Production Systems

Production Development

Monica Bellgran • Kristina Säfsten

Production Development Design and Operation of Production Systems

123

Monica Bellgran, Dr. Haldex AB Biblioteksgatan 11 SE-103 88 Stockholm Sweden [email protected]

Kristina Säfsten, Dr. Jönköping University School of Engineering SE-551 11 Jönköping Sweden [email protected]

ISBN 978-1-84882-494-2 e-ISBN 978-1-84882-495-9 DOI 10.1007/978-1-84882-495-9 Springer London Dordrecht Heidelberg New York British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Control Number: 2009939259 © Springer-Verlag London Limited 2010 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms of licences issued by the Copyright Licensing Agency. Enquiries concerning reproduction outside those terms should be sent to the publishers. The original edition of this book was published in Swedish by Studentlitteratur as Produktionsutveckling – Utveckling och drift av produktionssystem. © Studentlitteratur, Lund, 2005 The use of registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant laws and regulations and therefore free for general use. The publisher makes no representation, express or implied, with regard to the accuracy of the information contained in this book and cannot accept any legal responsibility or liability for any errors or omissions that may be made. Cover design: eStudioCalamar, Figueres/Berlin Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com)

Acknowledgements

We are grateful to the following for permission to reproduce copyright material: Fig. 1.1, line drawing in Sect. 1.2.4, line drawing in Sect. 1.3.1, Fig. 5.13, Fig. 5.14, Fig. 5.15, Fig. 8.2, Fig. 8.12, Fig. 8.18, Fig. 10.7, and Fig. 12.1 are reprinted by permission from the originator Mario Celegin; Fig. 1.2 from Crossfunctional co-operation and networking in industrial settings, Royal Institute of Technology, Stockholm, Copyright © 2002 (Gabrielsson 2002) is reprinted by permission from the originator Åsa Gabrielsson; Fig. 2.2 from Theory of Technical Systems, Springer-Verlag, Berlin, Copyright © 1988 (Hubka and Eder 1988), is reprinted by permission from Springer-Verlag GmbH, Heidelberg; Fig. 2.3 from Robotics and Computer Integrated Manufacturing Vol. 3, No. 2, Decision support in design and optimization of flexible automated manufacturing and assembly, Copyright © 1987 (Seliger et al. 1987) is reprinted by permission from Elsevier; Fig. 2.7 from Från Taylor till Toyota, Studentlitteratur, Lund, Copyright © 2000 (Sandkull and Johansson 2000) is reprinted by permission from Studentlitteratur AB; Fig. 2.8 from Performance Assessment of Assembly Systems, Royal Institute of Technology, Stockholm, Copyright © 2000 is reprinted by permission from the originator Magnus Wiktorsson (Wiktorsson 2000); Fig. 3.1 and Table 10.1 from Restoring our Competitive Edge: Competing Through Manufacturing, John Wiley & Sons, Inc. New York, Copyright © 1984 (Hayes and Wheelwright 1984) are reprinted by permission from John Wiley & Sons; Table 3.2 from Restoring Manufacturing in the Corporate Strategy, John Wiley & Sons, Inc., New York, Copyright © 1978 (Skinner 1978) is reprinted by permission from John Wiley & Sons, Inc.; Table 3.4 from Manufacturing Strategy: linking competitive priorities, decision categories and manufacturing networks, Production Economic Research in Linköping, Dissertation, Linköping, Copyright © 2002 (Rudberg 2002) is reprinted with permission from the originator Martin Rudberg; Table 3.5 from Produktionslogistik, Studentlitteratur, Lund, Copyright © 2003 (Mattsson and Jonsson 2003) is reprinted by permission from Studentlitteratur AB; Fig. 3.9 and Fig. 3.12 from Manufacturing Strategy: Text and Cases, 2nd edition, Palgrave, Hampshire, Copyright © 1985 (Hill 2000) are reprinted by permission from v

vi

Acknowledgements

Palgrave Macmillan Publishers Ltd.; Fig. 3.11 and Fig. 8.8 from Operations Management, 3rd ed. Prentice Hall, Pearson Education, Inc., Upper Saddle River, NJ., Copyright © 2001 (Slack et al. 2001), are reprinted by permission from Pearson Education, Inc.; Table 3.6 from Produktionsekomi, Studentlitteratur, Lund, Copyright © 2000 (Olhager 2000) is reprinted by permission from Studentlitteratur AB; Fig. 4.3 from Det nya bilarbetet, Konkurrensen mellan olika produktionskoncept i svensk bilindustri 1970–1990, Copyright © 1990 (Berggren 1990) is reprinted by permission from the originator Christian Berggren; Fig. 5.1 and Fig. 9.4 from Pilot Production and Manufacturing Start-up in the Automotive Industry: Principles for Improved Performance, Doctoral Thesis, Chalmers University of Technology, Gothenburg, Copyright © 1999 (Almgren 1999) are reprinted by permission from the originator Henrik Almgren; Fig. 5.2 and Fig. 5.12 from Från system till process – kriterier för processbestämning vid verksamhetsanalys, Linköping Studies in Information Science, Dissertation No. 5, Linköping, Copyright © 2001 (Lind 2001) are reprinted by permission from the originator Mikael Lind; Fig. 5.3 from Product Design: Fundamentals and Methods, John Wiley & Sons Ltd., Chichester, England, Copyright © 1995 (Roozenburg and Eekels 1995) is reprinted by permission from Wiley-Blackwell, Oxford; Fig. 5.5 from Manufacturing Systems Design and Analysis: Context and Techniques, Chapman & Hall, London Copyright © 1994 (Wu 1994) is reprinted with kind permission of Springer Science and Business Media; Fig. 5.6, Table 5.1 and Fig. 9.10 from Nyanskaffning av produktionssystem – mer än bara inköp, IVF-Rapport 99827, Göteborg, Copyright © 1999 (Johansson and Nord 1999) are reprinted by permission from the CEO Mats Lundin; Fig. 5.8 from Handbok för utformning av alternativa monteringssystem till konventionell linemontering, Chalmers University of Technology, Gothenburg, Copyright © 1981 (Engström and Karlsson 1981) is reprinted with permission from the originator Tomas Engström; Table 5.5 from Product Design and Development, 2nd ed, McGraw-Hill Higher Education, USA, Copyright © 2000 (Ulrich and Eppinger 2000) is reprinted by permission from McGraw-Hill; Fig. 5.10 from Model-based Approaches to Managing Concurrent Engineering, Journal of Engineering Design, Vol. 2, No. 4, Copyright © 1991 (Eppinger 1991) is reprinted by permission from Taylor & Francis Ltd. (http://www.informaworld.com); Fig. 5.18 and Table 5.6 from Inter-Project Learning: A Quality Perspective, Linköping Studies in Science and Technology, Thesis No. 839, Linköping, Copyright © 2000 (Antoni 2000) is reprinted by permission from the originator Marc Antoni; Fig. 5.19 from Lärande mellan projekt, In: Berggren C, Lindkvist L (eds.) Projekt, Organisation för målorientering och lärande, Copyright © 2000 Studentlitteratur, Lund, (Tell and Söderlund, 2001) is reprinted by permission from Studentlitteratur AB; Fig. 6.2 from International Journal of Production Economics, Vol. 41, pp. 335–341, Manufacturing Strategy and Capital Budgeting Process, Copyright © 1995 (Pirttilä and Sandström 1995) is reprinted by permission from Elsevier; Table 6.5 from Strategi för produktion och produktutveckling: integration och flexibilitet, Publica, Stockholm, Copyright © 1993 (Lindberg et al. 1993) is reprinted by permission from the editor Per Lindberg; Fig. 7.2, Fig. 7.3, Fig. 7.4 and Fig. 7.5 from Learning to see, Copyright

Acknowledgements

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© 1999–2008 Lean Enterprise Institute, Inc. All rights reserved, (Rother and Shook 2002) are reprinted by permission from Lean Enterprise Institute; Fig. 7.8 from Production System Evaluation: A Theoretical Analysis. Linköping Studies in Science and Technology, Thesis No. 638, Linköping university, Linköping, Copyright © 1997 (Öhrström 1997) is reprinted by permission from the originator Pernilla Öhrström; Fig. 8.4 from Industriell ekonomi, Studentlitteratur, Lund Copyright © 1997 (Aniander et al. 1997) is reprinted by permission from Studentlitteratur AB; Fig. 3.7 from Materialadministration och logistik: grunder och möjligheter, Liber Ekonomi, Malmö, Copyright © 1995 (Storhagen 1995) is reprinted by permission from Liber Ekonomi; Fig. 8.9, Fig. 8.10, Fig. 8.11, Fig. 8.13 and Fig. 9.9 from Produktionsekomi, Studentlitteratur, Lund, Copyright © 2000 (Olhager 2000) are reprinted by permission from Studentlitteratur AB; Fig. 8.14 from Integrerad organisationslära, Studentlitteratur, Lund, Copyright © 1995 (Bruzelius and Skärvad 1995) are reprinted by permission from Studentlitteratur AB; Table 8.7 from Control Engineering Practice, Vol. 7, pp. 173–182, Are operators and pilots in control of complex systems? Copyright © 1999 (Mårtensson 1999) is reprinted with permission from the originator Lena Mårtensson; Fig. 9.2 from Product Introduction within Extended Enterprises – Descriptions and Conditions. Linköping Studies in Science and Technology, Licentiate Thesis no. 978, Linköping university, Linköping, Copyright © 2005 (Johansen 2005) is reprinted with permission from the originator Kerstin Johansen; Fig. 9.5, Fig. 9.6 and Fig. 9.7 from Product Development Performance. Harvard Business School Press, Boston, Massachusetts, Copyright © 1991 (Clark and Fujimoto 1991) are reprinted by permission from Harvard Business School Publishing Corporation; Table 9.2 and Table 9.3 from Projektering och idrifttagning av nya produktionssystem – en analysmodell för utvärdering av styrkor och svagheter i det egna företaget, IVF-rapport 96040, Göteborg, Copyright © 1996 (Johansson and Rydebrink 1996) are reprinted by permission from the CEO Mats Lundin; Table 10.4, Table 10.5 and Table 11.1 from TPM-Vägen till ständiga förbättringar, Studentlitteratur, Lund, Copyright © 2000 (Ljungberg 2000) are reprinted by permission from Studentlitteratur AB; Fig. 10.4 and Fig. 10.5 from Process Efficiency and Capability Flexibility, Developing a Support Tool for Capacity Decisions in Manual Assembly Systems, Linköping Studies in Science and Technology, Dissertation No. 617, Linköping university, Linköping, Copyright © 2000 (Petersson 2000) is reprinted by permission from the originator Per Petersson; Fig. 11.1 from Quality from customer needs to customer satisfaction, Studentlitteratur, Lund (Bergman och Klefsjö 2003) is reprinted by permission from Studentlitteratur AB; Fig. 11.2 from Production Disturbance Handling in Swedish Manufacturing Industry: a Survey Study (Ylipää et al. 2004) is reprinted by permission from the originator Torbjörn Ylipää; Fig. 11.3 and Fig. 11.4 from Effektivare tillverkning! Handbok för att systematiskt arbeta bort produktionsstörningar, IVF-skrift 04805, Göteborg (TIME-handbook 2004) are reprinted by permission from the CEO Mats Lundin; Press cutting from SME Manufacturing Engineering Viewpoints section, Vol. 130, No. 2, Lean: Not Just a Better Toolbox (Flinchbaugh 2003) is reprinted by permission from the originator Jamie Flinchbaugh.

Contents

1

Production Development over Time...................................................... 1 1.1 Production Development in Focus................................................. 1 1.1.1 Time to Emphasise the Importance of Production ........... 1 1.1.2 Part of the Product Realisation Process............................ 5 1.1.3 Structured Way of Working ............................................. 6 1.1.4 Road Map of the Book ..................................................... 7 1.2 Industrial Revolutions ................................................................... 9 1.2.1 The Historical Perspective ............................................... 9 1.2.2 The First Industrial Revolution ........................................ 10 1.2.3 The Second Industrial Revolution.................................... 11 1.2.4 Black Ford Model T and Fordism.................................... 12 1.2.5 Annual Model Change and Sloanism............................... 17 1.3 Organisational Fundamentals ........................................................ 18 1.3.1 Scientific Management .................................................... 19 1.3.2 Organisational Theory of Importance for Industrial Production .................................................. 22 1.3.3 Socio-Technical Organisational Theory........................... 25 1.4 Toyota Production System............................................................. 26 1.4.1 The Founder of Toyota .................................................... 26 1.4.2 Inspiration from USA....................................................... 27 1.4.3 Towards Lean Production ................................................ 29 1.4.4 The Toyota Way .............................................................. 30 1.5 Industrialisation in Sweden ........................................................... 31 1.5.1 Development Towards Mass Production ......................... 31 1.5.2 Alternative Production Concept....................................... 32 1.6 Production Development: A Summary.......................................... 34 1.6.1 External Influences .......................................................... 34 1.6.2 Actual Options ................................................................. 35 1.6.3 Strategies and Fundamental Attitudes.............................. 36

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Contents

2

Production System .................................................................................. 2.1 A Systems Perspective................................................................... 2.1.1 Characteristics of a System .............................................. 2.1.2 Production: A Transformation System............................. 2.1.3 Classification of Systems ................................................. 2.1.4 Open System .................................................................... 2.2 What Is a Production System?....................................................... 2.2.1 Terminology..................................................................... 2.2.2 The Structure of the Production System .......................... 2.2.3 Life-Cycle Perspective.....................................................

37 37 38 39 40 42 43 43 45 46

3

From Business Plans to Production....................................................... 3.1 Strategies to Reach Targets ........................................................... 3.1.1 Manufacturing Strategy.................................................... 3.1.2 Competitive Factors ......................................................... 3.1.3 Decision Categories ......................................................... 3.1.4 Formulating and Implementing Manufacturing Strategies ................................................. 3.2 The Production System’s Contribution to Competitiveness .......... 3.3 Production System and Manufacturing Strategy in Balance ......... 3.3.1 Product Profiling.............................................................. 3.4 New Production System at Lesjöfors AB ......................................

49 49 53 54 55

4

Production System Development........................................................... 4.1 New or Changed Production Systems ........................................... 4.2 Industrial Development of Production Systems ............................ 4.2.1 Typical Development Situations ...................................... 4.2.2 Industrial Practice ............................................................ 4.2.3 Structured Ways of Working ........................................... 4.3 Evaluation: Part of Development................................................... 4.3.1 Evaluation of Existing Production Systems ..................... 4.3.2 Evaluation of System Alternatives................................... 4.3.3 Evaluation of Equipment- or System Suppliers ............... 4.3.4 Evaluation After Change.................................................. 4.3.5 Factors Affecting Evaluation of Production Systems ...... 4.4 “It Is in the Walls” ......................................................................... 4.5 Production System Designers........................................................ 4.6 New Assembly Plant in Uddevalla ................................................

77 77 82 82 83 86 88 89 91 95 96 98 100 102 105

5

Production System Development in Theory ......................................... 5.1 Fundamental Concepts and the Knowledge Area.......................... 5.1.1 Design and Development ................................................. 5.1.2 Evaluation and Follow-Up ............................................... 5.1.3 Process .............................................................................

109 109 111 112 114

63 65 67 68 71

Contents

5.2

The Development Process ............................................................. 5.2.1 Design: Problem-Solving and Decision ........................... 5.2.2 Activities in the Development Process............................. 5.2.3 Industrial versus Academic Perspectives ......................... 5.2.4 Different Approaches to the Design Process.................... The Evaluation Process ................................................................. Production Development: Part of Product Realisation .................. 5.4.1 Parallel Development Processes ...................................... 5.4.2 Design Activity Dependency ........................................... Learning and Production System Development ............................ 5.5.1 Comprehensive View and Process Perspective................ 5.5.2 Development of Production Systems as Process and Project ...................................................... 5.5.3 Learning During System Development............................

115 116 118 121 123 126 130 130 134 135 136

Planning and Preparation for Efficient Development ......................... 6.1 A Framework Supporting Development of the Production System............................................................... 6.2 Contextual Aspects........................................................................ 6.2.1 Perspectives and Attitudes ............................................... 6.2.2 Company Preconditions ................................................... 6.2.3 Investment Considerations ............................................... 6.3 Management and Control .............................................................. 6.3.1 Resource Allocation to Production Engineering and Production Development........................................... 6.3.2 Time Perspective.............................................................. 6.3.3 Work Team Composition................................................. 6.3.4 Creativity and Analytical Ability ..................................... 6.4 A Structured Way of Working.......................................................

145

5.3 5.4 5.5

6

xi

137 140

145 148 149 152 153 156 157 159 160 163 165

7

Preparatory Design of Production Systems.......................................... 7.1 Background Study ......................................................................... 7.1.1 The Importance of Solid Preparatory Work ..................... 7.1.2 Starting Point for System Design..................................... 7.1.3 Evaluation of Existing Production Systems ..................... 7.2 Pre-Study ....................................................................................... 7.2.1 Pre-Study Content: Strategic and Pushing ....................... 7.2.2 To Handle Uncertainties .................................................. 7.2.3 Strategy for Future Production Systems........................... 7.3 Resulting Requirement Specification ............................................

171 171 172 173 174 179 179 181 182 185

8

Design and Evaluation of Production Systems..................................... 8.1 Design Specification...................................................................... 8.1.1 Handling Complexity....................................................... 8.1.2 Modelling.........................................................................

191 191 192 194

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8.2

Developing Conceptual Production Systems................................. 8.2.1 Flows and Flow Principles ............................................... 8.2.2 Flowcharts........................................................................ 8.2.3 Production Planning......................................................... 8.2.4 Choice of Process and Layout.......................................... 8.2.5 Level of Technology and Automation ............................. 8.2.6 Work Organisation and Work Environment .................... Evaluation of Solution Alternatives............................................... 8.3.1 Conditions for Evaluation During the Development Process ................................................. 8.3.2 Methods for Evaluation.................................................... Detailed Design of the Chosen Alternative ................................... 8.4.1 Detailed Layout................................................................ 8.4.2 Planning the Layout ......................................................... 8.4.3 Work Studies.................................................................... 8.4.4 Detailed Design of Work and Work Place ....................... Systems Solution ...........................................................................

195 195 197 200 202 209 211 214

9

From System Solution to Production System in Operation ................ 9.1 Implement Production Systems ..................................................... 9.1.1 Terminology..................................................................... 9.1.2 Different Start-Up Situations ........................................... 9.2 Building Production Systems ........................................................ 9.3 Planning and Preparing Production Start-Up................................. 9.3.1 Start-Up Model ................................................................ 9.3.2 Organisation and Management ........................................ 9.4 Carry-Out Production Start-Up ..................................................... 9.4.1 Efficient Start-Up of Production Systems ........................ 9.4.2 Problems During Production Start-Up ............................. 9.5 Evaluate the Result ........................................................................ 9.5.1 Evaluation of Production System After Start-Up............. 9.5.2 Prerequisites for Evaluation After Start-Up ..................... 9.5.3 Analysis of the Development Process..............................

231 231 233 235 237 239 239 242 244 244 246 248 248 249 250

10

Production System Performance ........................................................... 10.1 World-Class Manufacturing .......................................................... 10.1.1 Successful Production Systems........................................ 10.2 What Should Be Measured? .......................................................... 10.2.1 Productivity and Efficiency.............................................. 10.2.2 Overall Equipment Effectiveness..................................... 10.2.3 Manual Assembly Efficiency........................................... 10.2.4 Measures Associated with Competitive Factors .............. 10.3 Measures and Methods for Follow-Up in Practice ........................

255 255 258 259 260 263 265 266 268

8.3

8.4

8.5

217 218 220 222 225 227 227 230

Contents

10.4

11

12

xiii

Continuous Follow-Up of Performance......................................... 271 10.4.1 Different Measurement Systems ...................................... 271 10.4.2 Use of Measurement Systems .......................................... 274

The Art of Avoiding Production Disturbances..................................... 11.1 Related Concepts ........................................................................... 11.1.1 Dependability................................................................... 11.1.2 Production Disturbances .................................................. 11.2 Production Efficiency .................................................................... 11.2.1 Reduced Disturbances Increases Production Efficiency ...................................................... 11.3 Comparison Between Improvement Models ................................. 11.4 To Handle Uncertainty .................................................................. 11.5 Eliminating Disturbances During Development............................ 11.5.1 Approach.......................................................................... 11.5.2 Competence Development and Knowledge Transfer....... 11.5.3 Strategic Concerns ........................................................... 11.5.4 Development Process....................................................... 11.5.5 Participants....................................................................... 11.5.6 Means of Assistance......................................................... 11.5.7 Cooperation with Suppliers.............................................. 11.5.8 Systematic Way of Working: Basis for Robust Production Systems .............................. Production Development in the Future................................................. 12.1 Trends and Visions ........................................................................ 12.1.1 Assembly: The Mirror of Change .................................... 12.1.2 Trends Within Two Sectors ............................................. 12.2 What is Required from Future Production Systems?..................... 12.2.1 Key Areas and Success Factors........................................ 12.2.2 Lean Production as an Objective...................................... 12.2.3 Right Automation............................................................. 12.3 Future Production from an International Perspective .................... 12.3.1 Production in Europe ....................................................... 12.3.2 Production in USA ........................................................... 12.3.3 China: The Factory of the World?.................................... 12.4 Make or Buy? ................................................................................ 12.4.1 Basis of Decisions and Carrying Through ....................... 12.4.2 Consequences of Outsourcing and Relocation................. 12.5 Production in Focus....................................................................... 12.5.1 Snap Shots........................................................................ 12.6 Go for Survival: Create Competitive Advantages .........................

277 277 277 280 282 283 285 287 288 289 290 292 295 298 299 300 301 303 303 303 305 307 307 308 310 311 311 313 314 315 317 319 320 320 321

References......................................................................................................... 325 Index ................................................................................................................. 335

Chapter 1

Production Development over Time

Abstract In today’s competitive situation, it is necessary to understand how production systems should be designed and put into operation in order to support competitive industrial production. Our aim is to increase knowledge of production development and thereby contribute to the ability of Sweden and other Western countries to compete internationally with its production capacity. First we describe the driving forces behind this book. Furthermore, production development in general is discussed, and how the area relates to the overall product realisation process. A large part of the Chapter is devoted to the historical perspective. Here, the development of production systems over time is presented. The different production systems of Ford and Toyota are particularly focused upon as are a number of aspects influencing production system development.

1.1 Production Development in Focus There are a vast number of books concerning production available in the market. Is that not enough? The reply to that question is both yes and no! There are many good books that treat production questions from different perspectives. Several of these books inspired us in our work, which also is made clear from the references we use. However, we think that it is necessary to highlight the production questions again and to present it from a different perspective. In order to give you the reader a better understanding of this book’s content and message we will initially describe the main driving forces behind the writing of this book.

1.1.1 Time to Emphasise the Importance of Production “Production development” is a comprehensive concept. It is about the creation of effective production processes and about the development of production ability. M. Bellgran, K. Säftsen, Production Development, © Springer 2010

1

2

1 Production Development over Time

Fig. 1.1 The largest potential to achieve successful production systems is during the development phase. Management and control of existing systems provides less potential. (Illustration: Mario Celegin)

Production development refers to production systems in operation, where the question is how to improve already existing systems, and to the development of new production systems: “As industrial competition increases it becomes more apparent that improved levels of output, efficiency, and quality can only be achieved by designing better production systems rather than by merely exercising greater control over existing ones.” (Bennett 1986, p. 2)

The largest potential to achieve “successful” production systems is during the development of new systems and therefore we consider that this area deserves extra attention (Fig. 1.1). In this book, production development refers to development and operation of production systems. The focus is mainly on questions related to development of new production systems or major changes to existing ones. Of course several of the issues are equally relevant in connection with minor changes as well. During development a holistic perspective is important, involving technology as well as humans. To use the term production development instead of the more traditional term production engineering is a way of emphasising the need for a long-term perspective on production system development. Therefore, one of the issues raised in the book is the resources devoted to production engineering in general and to production development specifically. With global competition in mind, the focus on the area of production is a more important issue than ever for every manufacturing company in Sweden and the rest of the Western world. We consider that production development is a natural part of the product realisation process. Here product realisation refers to the process from product planning to completed product. Too often product realisation is considered to be on

1.1 Production Development in Focus

3

equality with product development while production is mentioned incidentally as something that merely has to be handled and certainly not as a competitive means. Furthermore, we consider that the work with development of production systems needs improvement. One way to do this is through tools and methods supporting a structured way of working during system development. In most companies product development is a subject that must be continuously improved particularly in relation to way of working, organisation, and tools and methods used. Large resources are put into the refinement of the product-development process. It can easily be concluded that equal concentration on the area of production development implies a large potential for improvement. Production in this book refers to the process of producing products and services with support from different production factors such as labour, machinery, and raw material. The focus is on industrial production which implies emphasis on production within the manufacturing industry. A lot of the literature within the area focuses on the automotive industry. In this book we take a broader perspective and also include other lines of business within the manufacturing industry. The conditions for industrial production continuously change. Being an actor on a global market provides several opportunities while at the same time the prerequisites change and the requirements increase. The customers expect more than low prices; high-quality products should be delivered on time at the right price. Today it is not enough to develop one successful product. In a world where the demand for new products seems to be endless a long-term ability to develop new products is required. Furthermore, knowledge concerning realisation of these products in the best way is required. Industrial production has lately received a great amount of media attention. Unfortunately most of the attention has been associated with outsourcing issues, the transfer of production to low-wage countries such as China, Poland, or Malaysia. The trend of moving production abroad continues, but has lately been more and more questioned. A growing insight into the significance of production for the individual company and for the country in general moves these questions higher up the agenda. It is not necessarily an advantage to outsource production to suppliers. This insight has arisen during a period of increased outsourcing closer and closer to companies’ core activities and thereby core competences. The question that has been posed is what will happen when parts of the core competence are missing. If we do not have the ability to produce products, how long will it be before we also lose our ability to develop competitive products? The connection between product development, industrialisation, and production are strong, but if one link is weakened there is a risk that all links are negatively affected. Already today we can see that several of the countries, designated as low-wage countries, can be characterised as huge factories without competence for development within product- and production development. On the contrary, in China alone 1 million engineers graduate annually (SvD 040220), which is of advantage to Chinese industry and improves their competitiveness both within production and product development. Therefore, it is necessary that we immediately abandon prejudices, if any, concerning the unique ability of Sweden, and other Western

4

1 Production Development over Time

countries, to develop products compared to the ability level among the low-wage countries. To believe that for example Sweden only should develop products whereas production is carried out in low-wage countries may be shown to be a devastating assumption in the near future. One of the main causes of the problem described above is that companies and nations do not necessarily share the same interests (Sigurdson 2004). Many companies regard more or less the whole world as a potential factory. Companies’ aims are maximising profits which can be achieved with production located at different places. It is necessary that the prerequisites for national production and the ability to produce are good enough so that Sweden, and other Western countries, are attractive alternatives. Otherwise the risk is that we end up with “bazaar-economies” meaning that we only sell things developed and produced elsewhere (IVA 2004). In 2004 the project Production for competitiveness1 was initiated in Sweden. The objective was that Sweden should become world-leading as a producing country: “The growth and welfare of Sweden are today directly dependent on industrial success. The purpose of the project is to highlight the importance of and improve the prerequisites of internationally competitive production. The vision is to increase the Swedish ability to compete through focus on production.” (www.iva.se/produktion, translated from Swedish)

This national gathering/venture, where the majority of organisations interested in production participated, indicated the importance of production for individual companies, line of businesses, and for Sweden in general. The manufacturing industry in Sweden represents half of the Swedish export and employs a large number of people, and contributes to even more indirect openings via suppliers, the official sector, and the service sector. If the outsourcing of industrial production abroad continues the scenario is even worse than it was decades ago when the textile and clothing industry and the shipbuilding industry moved out of Sweden. Similar activities have also been performed in for example the UK, and USA (Manufacturing 2020 Foresight 2000; Gregory et al. 2003; US Department of Commerce 2004) By giving resources and priority to production development, concentrating on development of supportive tools and methods, developing knowledge within production and strengthening the competence, both in industry and academia, production will continue to be a key factor for Swedish (and other similar nations) industry. And that was the starting point for this book on production development.

1

Organisations such as the Royal Swedish Academy of Engineering Sciences, The Association of Swedish Engineering Industries (Teknikföretagen), Metall, VINNOVA, Swedish Foundation for Strategic Research, Knowledge Foundation (KK-Stiftelsen), and Samhall supported the project. Many representatives of industry participated in the project, and also representatives from universities.

1.1 Production Development in Focus

5

1.1.2 Part of the Product Realisation Process Product realisation concerns development and production of products, attractive to the customers. Product realisation comprise all activities necessary to develop solutions satisfying an identified customer need, and all those activities required to realise these solutions in terms of physical products with associated services (Säfsten and Johansson 2005). Sometimes product realisation is used synonymously with product development. Product realisation is here considered to be a broader concept where product development and production development are integrated processes dependent on each other for the achievement of efficient development and realisation, see Fig. 1.2. Functions such as production engineering, quality, engineering material, process development, and IT support are required to support the product realisation process (Gabrielsson 2002). Product realisation is part of the innovation process, which in turn is part of the product life-cycle, see Fig. 1.3. The innovation process comprises all activities necessary to make a new product available for use in the market, from basic and applied research and development to product planning and design, process planning and production, to distribution and sales, and use and service (Roozenburg and Eekels 1995). The innovation process is part of the product life-cycle, involving end-of-life treatment of wornout products. The activities shown in Fig. 1.3 are illustrated as a sequential flow. However, in order to achieve efficient product realisation, it is essential to emphasise the necessity for integrated development of product and production process which also is stressed in Chap. 5. The process of developing production systems has not been, and is not, focused in the same way as the process of developing products, neither in academia nor in industry. Even if it is well known that financial and personnel resources in the early stages of development yield good return on investment in terms of less dis-

PRODUCT REALISATION PROCESS INPUT

Product development Production development

Identification and formulation of customer needs

OUTPUT Realisation of customer needs

Support functions

Customer

Other supportive functions

Consultants

Supplier Feedback

Fig. 1.2 The product realisation process (modified from Gabrielsson 2002)

6

1 Production Development over Time Product realisation

Product development

Goals and strategies

Research and development

Product planning

Production development

Design

Process planning

Production assembly

Distribution sales

Use

Re-use

Innovation Product life cycle

Fig. 1.3 The product realisation process: part of the innovation process and the product lifecycle (Säfsten and Johansson 2005)

turbances and better final performance, the incentives are still not strong enough to motivate increased costs for development of production systems. A lack of interest in development of production systems, compared to the attention paid to development of products, can partly be explained by the limited pressure from external customers and the limited interest in business-to-business products.

1.1.3 Structured Way of Working We have carried out a number of studies in manufacturing companies in Sweden since the beginning of 1990. The focus has been on design and evaluation of production systems, and especially assembly systems, in middle-sized and large companies. Our experiences are unambiguous: the procedure when developing production systems is not in focus, even though a positive change can be discerned lately. The development process is seldom regarded as a means to achieve the ultimate production system. Structured and systematic ways of working in production system development are missing, as a consequence of the lack of interest in the development process. There are arguments supporting as well as rejecting structured ways of working. When development of production systems is concerned high time-pressure and low priority are often used as arguments against structured ways of working. Our standpoint is rather the opposite; when a clear structure or plan is followed, less time needs to be spent on planning what to do and in what order. To know what and when to do things considerably simplifies something that is carried out under high time-pressure. Another argument is the fear of a lack of flexibility of a plan or a structured way of working. In this case the comparison with product development is interesting. It is very common today, that companies follow a structured product development process describing all activities to be carried out when developing products (Beskow 2000). A structured product development process is described as advantageous from several perspectives. Ulrich and Eppinger (2003) point out that the product development process makes the decision process explicit so every-

1.1 Production Development in Focus

7

one can understand the decision rationale. Furthermore, the structure acts as a checklist and thereby ensures that important issues are not forgotten. Another advantage is that structured methods are largely self-documenting; during the actual product development process a team creates records of for example the decision-making which thereby is made available for future reference and newcomers. There are several advantages of a changed approach towards production development, not least when it comes to the way of developing production systems. Several experiences from the closely related area of product development can be applied. Furthermore, production development should be regarded as an integrated part of the product realisation process, together with product development.

1.1.4 Road Map of the Book The book is divided into 12 chapters. The foundation for the framework and the structured way of working, presented in Chap. 6, is provided in the first five chapters, Chaps. 1–5. The content of the structured way of working with production system development is described in detail in Chaps. 6–10. Chapter 11 focuses on disturbance handling and in the concluding Chap. 12 we look ahead, towards production development in the future. The content of the book has a distinct theoretical starting-point but with clear connections to practical application. Sometimes we enter more deeply into theory. This is done in boxes called FURTHER STUDIES. Theory is translated into practical application in a number of examples in the book, and sometimes in separate so-called INDUSTRIAL EXAMPLES. Both Further Studies and Industrial Examples should be regarded as complementary to the text in each chapter; the boxes provide a possibility of increased understanding. As always it is up to the reader to turn theory into practice, based on previous knowledge and the specific situation referred to. Below the content of each chapter is described more in detail. The remaining part of Chap. 1 is devoted to production system development over time, both in terms of preferred production principles, and how work with production development traditionally has been carried out. Knowledge about the historical development and the prevailing circumstances under different time periods makes it easier to identify the decisions leading to a specific production system. This knowledge can facilitate the development of new production systems and changes to existing production systems. In a production system raw material is transformed into a product. As a starting-point in the book a holistic perspective of the production system is applied. This means that both humans and technology are included; a systems perspective is applied to the production system. In Chap. 2 the implications from the chosen perspective are discussed, and the production system is described in detail. Furthermore, the life-cycle of the production system is described. In this book mainly two phases of the life-cycle are treated, development and operation, see Fig. 1.4.

8 Fig. 1.4 Development and operation of production systems

1 Production Development over Time

PRODUCTION SYSTEM Develop system

Operate system

Development includes design and industrialisation of production systems. The subsequent operation of the production system is dealt with in terms of performance evaluation and disturbance handling. Even if the focus is on development of new systems, several issues are of course common to the task of changing an existing production system. Congruence between the company’s overall strategies and production is required if production should support the competitiveness of a company. Manufacturing strategies can be a link between the production system and business strategies, and a guiding-star for the production system designers. Chapter 3 is devoted to the content and process of manufacturing strategies. The use of manufacturing strategies during development of production systems is exemplified, theoretically as well as practically. By way of conclusion a case is presented where the manufacturing strategy was a very important starting-point when building a new industrial plant. Chapter 4 provides experiences from production development in industry, mainly based on a number of studies carried out of different change situations in manufacturing industries. The reasons behind the changes are described, as are the actual changes. The described studies involve in total about 30 manufacturing companies in different lines of business, all the way from white goods to furniture. The size of the companies varies, from less than a hundred employees to thousands. The practical perspective provided in Chap. 4 is contrasted with a theoretical perspective on the development process in Chap. 5. Systematic and structured ways of working with product development are shortly described with the purpose to gain experience from a more mature area. Furthermore, Chap. 5 elaborates on long-term development ability. To achieve this, learning is necessary and different prerequisites for learning in the context of production system development are discussed. Practice and theory from Chaps. 4 and 5 provide the foundation for Chap. 6 where a framework and a structured way of working with development of production systems are presented, especially focused on design and industrialisation. The content of the structured way of working is subsequently detailed in Chaps. 6–9. Preparatory and specifying design activities are described in Chaps. 7 and 8. The industrialisation of the resulting production system design is described in Chap. 9. When a new, or changed, production system, finally is in operation the question is how good it is. Chapter 10 deals with performance measurement in production systems. Different measures are discussed, as are different practical methods for measuring performance. When a production system operates and produces products different disturbances can be a problem. Chapter 11 deals with disturbance handling and especially elimination of potential disturbances during the development phase.

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The book is concluded with issues concerning production development in the future, what is the prevailing practice, and what trends within production development can come to the fore. One of the posed questions concerns the existing, and the required, prerequisites for Sweden and similar nations to be competitive manufacturing countries in the future.

1.2 Industrial Revolutions 1.2.1 The Historical Perspective During industrial development one of the main themes has been how to achieve best performance in production. Since the industrial revolution during the 19th and 20th century a number of different production methods have dominated, during different periods. On an overall level the dominating philosophies can be grouped as craftsmanship, mass production, and lean production. These philosophies prescribe among other things the type of technology to use, work organisation, production solutions, how to handle different product variants, and quality aspects. A production system is always a result of chosen solutions. Chosen solutions are more or less based on conscious decisions. Made decisions are affected by the current historical and organisational situations. Another way to describe a situation is to use the word context, which we use from here on. Decisions made are also affected by the offered possibilities in terms of various technical, work organisational, and economical solutions. The company’s strategies are important, as are influences from history and trends in the present, when a production system is changed or developed. A classification can be made concerning how production systems of today have developed over time (Groover 2001). 1. Discoveries and inventions of material and processes to produce products; and 2. Development of systems for production, i.e. different ways of organising equipment and people in a way that production can be efficiently carried out. Material and processes to develop products have a very long history. Processes such as casting, grinding, and forging can be dated back 6000 years or more. The early production of for example weapons and implements was accomplished by craftsmanship. Domestic systems (or putting-out systems) are described where a tradesman was coordinating and buying labour from free craftsmen, working within their own premises and controlling their own tools and equipment. The first attempts towards factory systems are described from ancient Rome. The Romans had what might be called factories to produce weapons, ceramic, glass ware, and other products, even though the used procedures were based on craftsmanship (Groover 2001). It was not until the 19th century that real development towards the production systems of today started, when what we

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1 Production Development over Time

Domestic system for manufacturing

A moveable assembly line starts in Ford’s Highland Park plant

Factory system for manufacturing

1760

1830

The first industrial revolution 1. Steam engine 2. Machine tools 3. Spinning Jenny 4. Factory system

1870

1913

The second industrial revolution

The Western world realised the Japanese capabilities Time 1973

1988

The concept lean production is coined

1. Mass production 2. Assembly lines 3. Scientific management 4. Electrification of factories

Fig. 1.5 Important activities during the development of today’s production system

can call factory systems were developed, see Fig. 1.5. This development is often referred to as the industrial revolution. Since then, development leaps of comparable importance have only been taken a couple of times. Several historical events and discoveries have, however, had a significant impact on the development of today’s modern production system. Starting with the first industrial revolution in the 18th century, a tremendous technical development occurred during the 19th and 20th century. The level of mechanisation and automation in machines, equipment, and tools increased. With machines producing identical components, the prerequisites for mass production in the 20th century was created during the 19th century. This also caused incitement for further technical development, towards more and more advanced equipment. With an increased level of mechanisation and automation in the companies’ machines, costs increased. Thereby utilisation of capacity also became an important factor to work with. The consequences from that were, among other things, a need to develop new methods for planning of production, material supply, and information.

1.2.2 The First Industrial Revolution It was mainly during the period 1760–1830 important changes took place that came to affect the development of systems to produce products. Inventions such as the steam engine, the use of machine tools, and the development within the textile industry were important. This happened in parallel with the development of the so-called fabrication system where factory workers were organised based on new principles for division of labour. Thereby this period marks the transition from an economy based on agriculture, to an economy based on industrial activities (Groover 2001). Initially, several of the changes took place in the textile industry. The driving forces for these changes are to be found in the technology as well in changes of economical and social nature.

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A significant discovery was the principle of division of labour, explained in financial terms by Adam Smith (Groover 2001). Several of the major changes carried out during the 19th and 20th century were based on the principle of division of labour. In the so-called domestic system different activities in the production process were coordinated by a tradesman. The tradesman bought the raw material and delivered it to the craftsman carrying out the first operation in the production process. Thereafter this craftsman handed over the processed raw material to the next representative in the production process, and this went on until the product was completed. The completed product was handed over to the tradesman, selling it to a customer. The tradesman had none, or very little, control over the activities carried out by the craftsmen. At this point of time the boundaries between different occupational groups were clear. All activities could be carried out by a well-defined group of craftsmen, who belonged to a strong guild (Berner 1999). Craftsmen owned and sold labour, their tools, and their knowledge. Furthermore, the craftsman could organise the work by himself. It was not unusual that the craftsman also was farmer (Sundin 1991). Gradually a need to coordinate, and also to control, the various operations emerged, and entire production process became centralised and located in factory areas. The transition from the domestic system to the factory system took place without any major technological changes. It was mainly a question of where the operations were carried out and who owned the tools and controlled the activities.

1.2.3 The Second Industrial Revolution It is necessary to also mention the second industrial revolution. This time no transition from one dominating industry to another was the case, but an extension of the already initiated activities. Concurrently with an expansion in the number of produced consumer products the need for more effective fabrication systems increased. The technical background to the development of the assembly system was the introduction of standardised and interchangeable parts. While England was leading the industrial revolution, the concept of interchangeable parts was introduced in America. Most often Eli Whitney (1765–1825) is given credit for this concept. In 1797 Whitney negotiated with the American government, and received a contract for the production of 10,000 muskets. Whitney believed he could produce parts accurately enough to permit parts assembly without fitting of each weapon. In this way the time required for production could be considerable reduced. After several years of development in his factory in Connecticut he travelled to Washington to demonstrate the principle of interchangeable parts. Before government officials he laid out components for ten muskets. Thereafter he randomly picked components and assembled the ten muskets. No extra fitting or filing was required, and all of the muskets worked perfectly (Groover 2001).

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1 Production Development over Time

The principle of interchangeable parts revolutionised the methods for manufacturing and constituted a prerequisite for mass production of assembled products. Development of specialised production equipment made it possible to produce identical components for the assembly of complete muskets. Through the achievement of interchangeable parts new opportunities for production of similar products in larger volumes arose. Later on the manufacturing technique spread from the weapons industry to Singer, the company manufacturing sewing machines. Despite Singer’s prosperity, both concerning production and sales, they didn’t succeed in fully achieving mass production without the use of adjusters (Hounshell 1984). These adjusters, or filers, were actually assemblers who used the file to fit parts together (Sandkull and Johansson 2000). Later Ford succeeded in achieving mass production of cars without the use of filers. Ford’s production system from the early 20th century is often associated with the introduction of the assembly line in the manufacturing industry. The first moveable assembly line in Ford’s Highland Park factory was put into operation in 1913, but the technology had been developed long before that within the meatpacking industry (Hounshell 1984). These, at that time, very modern production lines could be traced back to Chicago, Illinois, and Cincinnati, Ohio, already in the 1830s. The development within the meat-packing industry was observed by the industrialist Ford who brought the principles to his production plant in Michigan (Groover 2001).

1.2.4 Black Ford Model T and Fordism The most well-known production system is, without doubt, the production system where Henry Ford started his mass production of cars at the beginning of the 20th century (the following description is mainly based on Hounshell 1984; Andersson et al. 1992; Lacey 1989). The historian Siegried Giedion is mentioned as the historian that perhaps better than others succeeded in placing both the person Ford and the company Ford into an adequate technological development context. From the perspective of Giedion, Ford was active at the end of a long historical process, after the development of interchangeable parts and the ideas about continuous flow, effective movement, and disassembly. However, the importance of the changes carried out in Ford’s factory during 1913 and 1914 and its dispersion to the rest of the Western world should not be underestimated. The effect from the dispersion dealt with two areas; the actual procedure of mass producing the Model T, and the rapid technology diffusion concerning how it was produced. This came to deeply affect production during the entire 20th century. The concept Fordism, coined to identify Ford’s production system and its associated personnel politics, in several ways changed the world.

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Henry Ford (1863–1947) established the Ford Motor Company in 1903, which was his third attempt to manufacture cars. It was clear to Ford, with experience from manufacturing and selling a number of mid-price cars, that the most urgent need in America at that point in time was a low-price car, built from the best material with a modern engine – “a car for the broad masse of people”. The Model T became the car combining these requirements (see Fig. 1.6). The production of the Model T started in 1908 and continued until 1927. In total 15 million cars and trucks were manufactured. With financial stability and no prejudices regarding how to produce cars, Henry Ford allowed extensive experimentation in the factory. Ford had employed 10–20 young and talented mechanics that not yet had developed established ways of doing things. Encouraged by Ford this group carried out experiments in production, tested ideas, and developed new ways of measuring, design of fixtures, tools manufacturing, industrial layout, quality control, and material handling. If the factory would have been rooted within a production tradition, Ford might not have succeeded with what he had intended to achieve. Instead Ford’s production engineers picked the best parts from several different production traditions, and overcame their limitations by adding their own technical solutions. FURTHER STUDIES: HENRY FORD (1863–1947) Henry Ford was born 1863 in Michigan, USA. At this point of time Ford’s family, who emigrated from Ireland 30 years earlier, were one of the more important families in the neighbourhood of Dearborn. Already as a little boy Henry Ford showed an unusual mechanical sleight of hand and several stories described how he invented various gadgets, repaired clocks, manufactured his own tools, investigated machines, and in other ways demonstrated his skills. When he was 16 years old Henry started to work as an apprentice in a machine workshop in Detroit. When he was 19 he went back to work on his father’s farm. Here he learned how a steam engine works and he travelled between the farmers with a moveable steam engine. Between the age of 20 and 30, Henry Ford worked as a strolling mechanic, studied machine drawing, bookkeeping, and business activity, ran his own farm and at the same time started a partnership firm focusing on wood. He had a reputation for being a good problem solver, and he successfully managed problems where others had failed, and was contracted to execute various tasks and to carry out repairs. This was how he came into contact with the internalcombustion engine, Otto, and immediately saw a possibility to create a self-sustaining vehicle. Having a fixed purpose he started to work as a mechanical engineer to learn more about, among other things, electricity. Already in 1891 cars were manufactured on a commercial basis in for example France. The words automobile, chauffeur, and garage show that France had an early lead within the automotive industry. In 1895 Ford had started to build something that looked like a car, based on what others had done before. His car strategy involved easiness, rapidity, reliability – and a low price. The first car was ready in 1896 (Quadricycle). It looked like two bicycles placed beside each other with the machinery between them, hidden in a wooden case where you could sit. Already in 1898 the next car was ready. One year later Henry Ford became technical manager in the recently formed company Detroit Automobile Company. In 1903 Ford started his own company: Ford Motor Company which went bankrupt, partly due to the major difference between mass production and prototype production. During the beginning of the 20th century there were hundreds of car manufacturers producing a few vehicles for a small

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and exclusive market. The major challenge was to freeze the design and mass produce details to be able to complete a larger number of cars. In 1908 the Model T was launched. The Model T was successfully produced for a period of 20 years. The concept was a front-assembled water-cooled internal-combustion engine and rear-wheel drive. The separate techniques were not new, but to put them together in this way was new. In 1910 Ford had 10% of the total market and continued to work with improved production engineering, standardisation, specialisation, division of labour, and flow-oriented production layout with the purpose of massproducing cars. The history of the professional and the private Henry Ford is extensive, but it provides a picture of a true entrepreneur who had a fixed purpose and with enormous strength created a real car dynasty. Source: Lacey (1989)

In 1904, Ford Motor Company built a factory on Piquette Avenue in Detroit. At this point in time the company purchased most of the required components. Therefore, the factory was designed for car assembly rather than for parts manufacturing in large series. Approximately 15 assembly groups worked at different work stations to assemble complete cars. By the end of 1905 Ford Manufacturing Company was formed, in cooperation with James Couzens, among other things to get better control over Ford Motor Company and to be able to manufacture components for the most recently introduced car model, the model N. Instead of doing that in the existing factory, a factory on Bellevue Avenue in Detroit was rented and equipped. When purchasing machine tools, Henry Ford came across a tools salesman named Walter E. Flanders. Flanders was considered to be a technical genius, with a great deal of experience from several other large companies. Flanders assisted in developing the approach for engine manufacturing at the Ford Bellevue factory, and also suggested to Ford he employ the young Max F. Wollering to be responsible for the factory. Wollering proved to be the most competent manufacturing mechanic so far employed by Ford, and only a couple of months later, by the end of 1906, Ford had persuaded Wollering to take the position of overall production manager for both of Ford’s companies. Wollering was conversant with the idea of using interchangeable parts, the manufacture of exactly equal components. Ford adopted the concept of interchangeable parts and translated it into engines, wheels, axles, etc. It was used for marketing even before it was realised within the factory. After that, Flanders and Wollering were given unrestricted authority by Ford to fulfil what he had promised. Wollering set his mechanics the task of designing and building fixtures, jigs, and other equipment required for the manufacturing of all components at the Bellevue factory. The Department Heads of the different manufacturing units were supervised in how to think. Flanders on his side made changes in the production layout. The functional layout of the organisation of the machines was replaced by a sequential order, i.e. a flow-oriented production layout. Flanders and Wollering also showed the production mechanics that by using special machines, productivity improvements could be made. Other changes introduced were guidelines implying long-term material purchasing and requirements on the suppliers stock-keeping. Flanders decided that

1.2 Industrial Revolutions

15

only ten days stock should be available in the factories. Flanders increased awareness of the car manufacturing business as a fusion of three branches of art; to purchase material, to produce, and to sell. This awareness enabled the company to successfully mass produce cars. Both Flanders and Wollering left their positions within the company after a couple of years. They had probably been employed long enough to introduce a new way of thinking among the young production engineers at Ford, but not long enough to indoctrinate them with the best way”. Ford’s engineers probably completed and surpassed the fundamental principles taught by Flanders. Henry Ford succeeded in attracting well-educated engineers, who enjoyed working, to the company. These engineers constituted the core of Ford’s successful production group. Peter E. Martin and Charles Sorensen were two of them. Martin later became managing director for Ford Motor Company and Sorensen was behind Ford’s production facilities in Europe. Gradually also other talented engineers were tempted to work at Ford’s company. They played an important role in the development of mass production of the Model T in the newly built factory in Highland Park, which formally started on New Year’s Day 1910. It is interesting to note how important each individual and their specific competence were for production development at Ford. Recruiting the right people at the right time, together with synergy effects and the new thinking resulting from their cooperation were important prerequisites for the direction the production took at Ford. However, the production volume did not increase as fast as expected in 1909– 1910 (the volume was 10–20,000 cars per year). In 1911 the volume increased to 53,000 cars per year, and in 1913 yet another large volume increase occurred to 189,000 cars. This figure was doubled two years later, and the year thereafter, 1916, the annual production volumes were a gigantic 585,000 cars. During this time the price went down from $850 to $360 per car. One of the architects behind the plant in Highland Park was Albert Kahn. Principally, the structure was a four-storied building and a one-storied building, serving as a machine workshop. To allow daylight into the factories, both houses had enormous windows, both on the walls and in the ceiling. Therefore the factory was called the Crystal Palace factory, named after the World Exhibition Crystal Palace in 1853 in New York. The first assembly line was installed in the factory in April 1913. Besides the assembly lines, Ford’s production system also contained gigantic conveyors. Here raw material, semi-manufactured articles, and completed products were transported, and at the same time the conveyors served as a storage space and thereby more floor surface was available. The several kilometre-long conveyors connected the railway, parts manufacturing shops, and the assembly shops with each other. Conveyors and assembly lines set the expected work pace and indirectly managed the initiation of the single operations. The need for personnel, raw material, and components were established with good precision months in advance when the production quantities were decided (Andersson et al. 1992).

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1 Production Development over Time

Table 1.1 Henry Ford’s elements of mass production Element

Description

Power

Power was generated in local power plants, and distributed throughout the factory by electric motors, driving units of line shafting and belting.

Accuracy

Every critical part of the Model T was manufactured in standard fixtures and tested by standard gauges during and after the operation sequence. The engine was not started until the car was ready to leave the factory, and no road-tests were carried out. Ford’s leading production engineers maintained that if parts were made correctly and assembled correctly, the final product would be correct. Quality was in other words at the forefront in Ford’s manufacturing plant almost a century ago.

Economy

Machine tools were closed group. The economy of space prevented work from accumulating in the aisles and a smooth flow of work was achieved.

System

System thinking was shown in various ways. For example, by how material was purchased, distributed, and how the final stock was handled, but also by how the machine tools were placed according to the direction of the flow.

Continuity

A system for work-scheduling was developed, providing knowledge about possible and average output from the machine tools. This made it possible to follow-up production in the different departments. Through such systematisation it was possible to maintain continuity in the input and output of materials at a calculated rate.

Speed

The principle of speed was apparent everywhere in the factory. Not at least in the tool department, providing the fundaments for the interchangeable part – and thereby the entire production process. Accuracy was highly prioritised in the list of fixture and machine tool design requirements. Fixtures and gauges were designed in a way to allow use by unskilled machine tenders.

Ford’s own development of special machinery and the purchased mechanical equipment involved a rapid increase of the production capacity of components with high precision. Since only one car model was produced in the factory, special- or single-purpose tools were used to a large extent. Ford and his production engineers were continually interested in experimentation and testing of new production methods. Mechanical equipment and production processes were constantly evaluated and changed. Installation of the assembly line and use of the line principle also in areas other than assembly was the final piece of the jig-saw making mass production possible. The line principle provided a way to speed up slow-working workers and slow down the fast ones. The assembly line provided regularity in the factory, which was significant in several ways. The way Ford’s engineers had concentrated on power, accuracy, economy, system, continuity, and speed, Henry Ford’s elements of mass production, impressed the entire world2, see Table 1.1. The very picture provided describes a large and competent manufacturing company with a well trimmed and effective production system, controlling more 2

As described by Fred Colvin in a number of articles in the American Machinist 1913 (Hounshell 1984).

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17

or less the entire value chain, from raw material production to final assembly. Innovations and new thinking, and above all the continuous work with production development, entailed a continuous improvement of processes and methods, resulting in major improvements in productivity in the factory. Ford had achieved an economical revolution. He showed that maximal profit could be achieved with maximised production volume and at the same time minimised costs. However, the revolution was short-lived. Ford’s production system was adapted for the large volume product – the Model T. With the prevailing situation during the first 25 years of the 20th century in America as a starting point, Ford had developed a very successful concept making it possible for millions of Americans to get their first car at a low cost, with all that this implies in terms of increased freedom. During the mid 1920s, when the market eventually became weaker and the customers started to request new, varying car models with improved performance, comfort, and speed, Ford lacked readiness to handle this. General Motors annually developed new models during the 1920s, but it was not until the 1930s that it was possible to talk about annual models from Ford. In 1926 the crisis became acute at Ford, and they were forced to close down factories due to the significantly decreased demand for the Model T and instead concentrated on Model A, a model that was intended to better fit the demand. However, this concept was not possible to develop technically to the same extent. As one example, the competitors had developed a new technique for sheet metal pressing, making it possible to design new bodies for their cars. Therefore, Ford no longer had the same performance advantage as previously with the robust and reliable Model T, which was superior to the competitor’s vehicles. A new way of consuming products, where new items were abandoned for even newer ones, had evolved. This new era required flexible mass production, which created entirely new rules for the car manufacturers3.

1.2.5 Annual Model Change and Sloanism The subsequent text about Ford and General Motors is mainly based on Hounshell (1984). With flexibility as a new criterion for mass production entirely new prerequisites for production development arose. The years between 1925 and 1932 can be characterised as a time of transfer between mass production of similar products to a strategy involving annual model change. General Motor’s Chevrolet challenged Ford within the low-price segment. Engineering changes were carried out annually. In 1929 a major changeover from four- to a six-cylinder engine was carried out, which increased the yearly volume to 1.5 million cars from 280,000 cars in 1924. The changeover to the new six-cylinder engine only took three 3 Mass production of cars had to, according to Alfred P Sloan Jr., by necessity apply the same principles as the dressmakers in Paris (Hounshell 1984).

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weeks which was an impressive record. Preparations for the changeover were ongoing for a couple of years, with a final phase including a pilot plant for producing the engine. Two-hundred engines had already been produced before the equipment moved and this was doubled in the new production system. This is to be compared with Ford where, under chaotic circumstances, the replacement of the Model T with the Model A caused a six-month shutdown. Ford’s changeover not only involved a change in technical solution, but also a mental changeover. The employees were used to the Model T after nearly 20 years of production of that single car model. A key person responsible for the success at General Motors was William Knudsen. William Knudsen later became managing director for the entire General Motors in 1937. He also had a critical role in the increased knowledge and know-how concerning mass production that the employees at General Motors adopted. Knudsen was recruited from Ford where he had an important role during the development of the production organisation. Relevant to note is that, despite apprehensions by many, Knudsen did not bring any experts in mass production from Ford to General Motors. Instead of building an imitation of Ford in General Motors, Knudsen chooses to build an organisation that was able to adapt to changes and expansion. He also abandoned special purpose machine tools in favour of standard equipment, placed in sequential lines. This provided adaptability to changes, totally different from the abilities in Ford’s inflexible production system. General Motors also had local and independent management in the different factories for manufacturing and assembly around the USA. The development within General Motors created a principle of flexible mass production. Product and production development were mainly controlled by market demands, unlike the development at Ford controlled by production technology. These new market requirements where similar to those of today, whereas the market situation prevailing for Ford was totally different. Strategies and principles controlling Ford’s production system – possibly influenced by Scientific Management – are still of great importance for industrial production since the assembly line and the division of labour became generally accepted concepts. There is an obvious division of labour between workers and management in Ford’s factory. Still Hounshell (1984) questions whether Scientific Management (Taylorism) actually contributed to the development of the new assembly system in Highland Park. Hounshell (1984) refers to Henry Ford who considered that the Ford Motor Company had neither relied on Taylorism nor any other system. The company should have been Taylorised even without the principles advocated by Taylor.

1.3 Organisational Fundamentals When more and more work was carried out in factories, arranged in factory systems, the requirements on work organisation increased. This need didn’t exist

1.3 Organisational Fundamentals

19

during the pre-industrial period since the tradesmen in the early domestic systems who bought labour were only interested in quality and delivery, not in how the work was carried out (Andersson et al. 1992). During industrialisation, one of the questions occupying both practitioners as well as researchers was how to organise the work to facilitate as good results as possible. Scientific Management (Taylor), the administrative school (Fayol), the bureaucratic school (Weber), and the Human Relations Movement (Mayo) usually count as being parts of classical organisational theory. Common for these schools are that they developed during the early phases of the industrialisation which is at the end of the 19th and the beginning of the 20th century (Bruzelius and Skärvad 1995). Below the fundamental principles of these schools are presented.

1.3.1 Scientific Management An idea that has, and has had, a major impact on industrial development is Scientific Management. The person associated with this idea is mainly Fredrick Winslow Taylor. The fundamentals and the principles of Scientific Management are presented in the publication The Principles of Scientific Management (Taylor 1911). The description below is mainly based on this publication. A fundamental principle of Scientific Management is maximum prosperity for the employer and for each employee. Long-term prosperity for the employer cannot exist if not accompanied by prosperity for the employee. The employer wants low labour costs and the employee high wages, and Taylor claimed that this was possible to achieve through scientific management. To make this possible the productivity needed to be maximal. However, it was here the problems began, as Taylor had noted that maximal efforts at work were not desirable among the workers. The ambition was rather to go to work and do as little as possible, a phenomenon that Taylor called soldiering. The task was to handle the soldiering and find a way to strengthen the relation between the employer and the employees so both parts could do their best to achieve the common prosperity advocated by Taylor. Taylor himself summarises his theory with the words: “it is no single element, but rather this whole combination, that constitutes Scientific Management”. The parts he referred to were: • • • • •

science, not rule of thumb; harmony, not discord; cooperation, not individualism; maximum output, in place of restricted output; and the development of each man to his greatest efficiency and prosperity.

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FURTHER STUDIES: FREDERICK WINSLOW TAYLOR (1856–1915) Taylor grew up in a respected and wealthy lawyer’s home. It is described that he already as a youngster was obsessed by calculations and measurements in order to find better ways of doing things. Fredrick Winslow Taylor left his law studies at Harvard and started to work as an apprentice in a mechanical workshop and at the same time he studied engineering. At the age of 25 he received his engineering degree from Stevens Institute of Technology in New Jersey. In 1878 he started to work for Midvale Steel Company, owned by friends of his father, and managed by his brother-in-law. Soon he got a position as a group leader. A lot of the texts that are written about Taylor bear witness to a man with high ambitions to find the best, and most effective, solutions to various problems. The way he used to find the solutions was mainly through assiduous experimentation. He carried out more than 40,000 experiments to determine the optimal cutting data, which contributed to the development of the theory of chip formation. As a side effect of these experiments he also discovered the superior cutting properties of high-speed steel. He showed both in practice and in theory how cutting volume and tool deterioration varied with for example cutting speed, tool material, and machining material. As a result from these findings it was possible to increase the machining quantities five times per time unit. This work was distinguished all over the world and Taylor received a golden medal at the World Exhibition in Paris in 1900. However, there was some resistance among practitioners to use his results, many preferred to use their own methods, based on experience. As a consequence progress within the companies stagnated. Taylor continued his work concentrating on questions concerning work organisation. This is also the work that he is most well known for in the general public. Taylor discovered early that the workers were soldiering; they didn’t perform as well as they could. The culture among the workers was not to work as hard as possible, since hard work was not considered to pay off. Norms were established on the shop-floor, indicating how much to achieve in a day. When Taylor became group leader he had enough knowledge by himself to determine both how the work should be carried out, and how much time it should take. With stubbornness similar to when he carried out his experiments with cutting data he continued his work on determining how different tasks should be carried out in the most effective way. Taylor is the man who gave time and motion studies a face; he has been called the father of work studies. Taylor maintained that the workers needed motivation to carry out their tasks. One way to achieve this was to let the wages reflect their performance. It was also through compensation he was able to involve the workers in his studies. Taylor was however exposed to sharp criticism. He was called before the Senate since his methods was considered to violate human rights. However, the advantages were obvious and little sympathy was given to the potential disadvantages of the system. Sources: Sundin (1991); Andersson et al. (1992); Taylor (1911)

In Midvale Steel Company a lot of work was governed by piecework. In practice this often implied, here as in several other places, that the work accomplished was determined by the workers who had agreed on how much to produce a day, normally about 1/3 of what was possible. Quite soon after Taylor became responsible for one of the lathes it was clear that his work performance was higher than the others working with the lathes. Therefore, he was soon appointed group leader, which according to himself did not make him very popular in the workshop (Taylor 1911). Especially not since he made it clear that his ambition was to make sure that as much as possible was produced.

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One important step towards a good relation between the employer and the employees was an agreement concerning what a decent day’s work included. Taylor received permission from Mr. Sellers, managing director of Midvale Steel Company, to carry out scientific studies to establish how much time actually was required to carry out various tasks. A group of men who were considered to be physically powerful and good steady workers were selected for this purpose. During the experiments their wages were doubled, and at the same time they were told that if they were suspected of soldiering they would be discharged. Taylor wanted to determine what fraction of a horse-power a man was able to exert. The studies did not result in any law of value. No connection was found between the energy which a man had exerted during his work and how tiring the work was. In some kinds of jobs a man was tired out when doing maybe one-eighth of a horsepower, and in other jobs he was not tired to any greater extent by doing half a horse-power of work. Later the problem was handed over to a mathematician who soon determined the law governing the tiring effect of heavy work. By choosing the appropriate load, work could be carried out all day long. This was illustrated when handling of pig-iron was to be made more efficient and Scientific Management was introduced at Bethlehem Steel Company. With support from his calculations Taylor found that it was possible to handle 47 tons of pig-iron a day, instead of the 12½ tons handled before the handling was rendered more effective. The first thing that was done was to select the best man for the task. Among the 75 pigiron handlers, a man called Schmidt was selected. Schmidt was requested to do exactly as he was told, that is to carry and rest when he was told to. By the end of the day, at 4.30 pm, he had handled 47½ tons of pig-iron, which was his task. This amount was assumed to be appropriate, since Schmidt maintained this speed and load for the coming three years that Taylor was still at Bethlehem Steel. Gradually also other pig-iron handlers were trained to use this speed and load. In a similar way the work with shovelling was also made more effective. Through experiments, the appropriate load was determined to approximately 10 kilos (21.5 pounds). By selecting first-class men and observing when they shovelled, shovels appropriate for different material and loads were produced. Small shovels were needed to shovel iron ore, and large shovels for ash. At Bethlehem Steel Company eight to ten different shovels had to be available, with different sizes for different tasks. According to Taylor (1911) similar work was carried out by Frank B. Gilbreth. With support from time-studies he determined how bricklayers should work. According to his studies the number of motions made by the bricklayers could be reduced from 18 to 5. This could be done through elimination of unnecessary movements, installation of an adjustable scaffold, and by using the right way of working. Among others Mr. and Mrs. Gilbreth continued to work with Taylor’s ideas even after his death. The work with Scientific Management was also kept alive through the rationalisation movement (Bruzelius and Skärvad 1995).

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Later the principles were criticised from different directions, among other things for the inhuman perspective. Hounshell (1984) criticised Scientific Management for the risk of ending up with suboptimisation4. The reason, according to Hounshell (1984), is the actual starting point that there is one best way of carrying out a certain operation, instead of investigating alternative, and maybe more effective, ways of carrying out that operation. In the example above, the handling of pig-iron could have been mechanised instead of making the manual handling more effective. This was also one of the main differences between Fordism and Taylorism according to Hounshell (1984). When production systems were made more effective under the supervision of Henry Ford they dealt with elimination of work tasks through mechanisation and thereby changing the role for the operators. Time- and motionstudies were used in Ford’s production system, but here the starting point was to plan the work for the machines since they determined the speed.

1.3.2 Organisational Theory of Importance for Industrial Production Taylorism can be classified as a normative organisational theory; the main idea is that there is one best way of organising industrial production and administration. Henri Fayol (1841–1925) is considered to be the foremost representative for this normative organisation theory (Helgesson and Johansson 1990). Fayol considered that the actions required to run an industrial company can be divided into six groups or functions: technical, commercial, financial, security, accounting, and administration. Further he said that the technical function often had a dominating position concealing other functions, at least equally important for a company’s progress and success. Therefore, Fayol treated the first five functions relatively briefly and concentrated on the administrative function. This was divided into five elements: planning, organisation, commanding, coordinating, and controlling, which in turn was divided into a further more detailed level. Fayol argued that a staff organisation should be a complement to the functional organisation, which was in line with his ideas about a united command and the number of subordinates for each manager (control range). Furthermore, he formulated a number of rules for a good manager (a good command) (Helgesson and Johansson 1990). Line and staff organisation is considered to satisfy Fayol’s requirements on unit command, where the line managers have the right to give orders, and the staff is an investigating and consultative organ without the right to give orders (Andersson et al. 1992). The German sociologist Max Weber (1864–1920) was a spokesman for bureaucracy (the bureaucratic school/theory), a complement to the classical organisational theory. Weber said that the industrial development made companies 4 Suboptimisation means that you try to reach the best possible result within parts of an entire business (Svenska Akademins Ordlista 1995).

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more and more complex. Therefore, he considered that a hierarchical organisation with strict division of responsibility, formalised rules, and formal authority, was required. The conclusion was that it is an exercise of power, and the only possible authority is the bureaucratic where the exercise of power agrees with accepted rules. Other authorities were the traditional authority concerning old habits and the charismatic authority based on the personality of the person exercising the power (Andersson et al. 1992). Industrial production at the beginning of the 20th century was mainly organised according to the same principles that Ford used, which were in line with Taylor’s normative principles known as Scientific Management. The normative organisational theory with Taylor and Fayol at its head declared how to organise a company. The well-known Hawthorne Experiments were carried out at the beginning of the development of the Human Relation Movements during the early 1930s, with Elton Mayo as a key figure. FURTHER STUDIES: THE HAWTHORNE STUDIES The Hawthorne experiments were conducted in the factories of the Western Electric Company in the USA between the years 1927 and 1932, during a transfer period towards more flexible mass production. A group of researchers, working within the so-called human factor tradition were assigned to study the company and their growing problem with working conditions. In the well-known experiments, with the purpose to investigate among other things the effect of various levels of lighting on work performance, gave the result that the productivity increased no matter what level of lighting was used. The work performance improved, both in the test group and in the control groups, even though no changes at all were made in the lighting for the control groups. The Harvard professor Elton Mayo was associated with the project and contributed to the development of the Human Relation Movement as one result of the studies. The experiments showed that it was not possible to find any trivial causal relations between working conditions, well being, and performance. Furthermore, it was discovered that work is a group activity with specific habits, and the employer bears a relation to the entire group, not to the single individual. The human need for acknowledgement and confidence, and the feeling of being connected to a group was considered as more important for work performance than the material conditions on the work place. The results from the studies gave rise to what today is referred to as the Hawthorne effect, meaning that effects can appear due to reasons you did not think of. It was not the actual conditions that gave rise to the improved productivity in the Hawthorne studies, but the fact that both the test group and the control group were noticed leading to increased satisfaction in the groups. Sources: Sandkull and Johansson (2000); Helgesson and Johansson (1990); Andersson et al., (1992)

The Human Relation Movement brought the normative organisation theory yet another step forward, according to Helgesson and Johansson (1990). Here, the importance of the group for the individual at the work place and the individual need for acknowledgement were put into focus. The Human Relation Movement meant that the ambition to increase productivity presupposed that human

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feelings, attitudes, and reactions, were considered. The approach advocated by the movement has proven to be useful for handling humans within given organisational structures, and among other things resulted in instruments for that (Andersson et al. 1992). The Movement primarily is about organisational configuration. Helgesson and Johansson (1990) state that there was a particularly good breeding ground for these new thoughts in Sweden since there was an old industrial tradition in line with the Movement’s ideal. The Human Relation Movement to a high degree stimulated the development of personnel administrative and industrial psychological questions. Within companies, personnel departments were formed, with the mission to secure the well-being of employees. There are yet other organisational theories that have exerted influence on industrial organisation (Gorpe 1984). During the 1950s Frederick Herzberg identified, based on humans as individuals in work, two groups of factors: • hygiene factors: must be in place, otherwise people become dissatisfied; and • motivation factors: helps to increase satisfaction and affects motivation. Douglas McGregor’s way of considering people at work was described in two theories: • humans are by nature lazy and not interested in work (theory-X), and • to work is a human activity (theory-Y). Theory-X was considered to be the starting point for the majority of the industrial work places, not least because they were designed according to the principles prescribed by Scientific Management (Gorpe 1984). Psychologist Abraham H. Maslow’s well-known model for hierarchy of needs, comprising five levels, is sometimes used to illustrate the human needs related to work, and to understand the mechanism behind changed needs (Gorpe 1984). Maslow placed the needs in a five level hierarchy: • • • • •

physiological needs; safety needs; love and belongingness needs; self-esteem needs; and the need for self-actualisation.

Maslow’s theories have a strong foothold in organisational theory, but were not primarily developed bearing the working life in mind. Despite the fact that the theory is very well known, the scientific support is quite weak. The reason is that theories of this type are difficult to test (Abrahamsson and Aarum Andersen 2000). Finally, Herbert A. Simon can be mentioned, who introduced rational decision making (the decision school) into organisational theory. The starting point for this school is that decision making is the core of all administration, and the school developed to be a leading one during the 1960s (Bruzelius and Skärvad 1995). The decision school developed in parallel with the socio-technical school during the 1950s and 1960s.

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1.3.3 Socio-Technical Organisational Theory The socio-technical organisational theory was developed at Tavistock Institute of Human Relations in London during the 1950s. It was based on studies of the English coal industry and an Indian textile company. Fred Emery and Eric Trist are mentioned as important for the development of the socio-technical theory (Sandkull and Johansson 2000). The fundamental idea was that the workers psychological needs in a work situation had to be considered from a holistic perspective. The socio-technical organisational theory, the socio-technique, has had a great impact on industrial activities, not least in Sweden. The strong focus on the technical parts of production systems after the war conveyed an organisational problem for several companies (Abrahamsson and Aarum Andersen 2000). Research focusing on these problems resulted in new ways of organising production. The socio-technical organisational theory focused on the group level, with emphasis on the social rather than the technical system. The fundamental question is how to find a suitable adaptation between the social and the technical system in working life. The aim is to find an organisational form adapted to new technology and at the same time satisfying the psychological needs of the workers in a better way (Abrahamsson and Aarum Andersen 2000). The socio-technique can be seen as a reaction against for example Taylor’s ideas about division of labour and Ford’s assembly line. The socio-technical school was inspired by the Human Relation Movement, and had great influence on the area of work organisation, not least during the 1960s and 1970s. The socio-technical perspective on work organisation mainly implies that a work group cannot be regarded as either a technical or a social system. The work group has to be regarded as a comprehensive socio-technical system. When designing work organisation it is therefore essential to consider technical requirements, restrictions, prerequisites, and possibilities, and social and psychological requirements, needs, and conditions (Bruzelius and Skärvad 1995). The socio-technique was practically applied by organisation into production work groups. The group-based work organisation developed further towards an increased decentralisation, reduced division of labour, and reduced dependence on the need for a predetermined work rate. Through parallel flows and a number of buffers, the work situation became less controlled for the operators. Work rotation, work enlargement, and work enrichment described with other terms how the work content was broadened. The concept of autonomous groups also developed as a result of the industrial direction introduced by the sociotechnique. The term, autonomous groups, later became relatively controversial and in several companies other terms, such as objective governed groups or similar were used instead. The socio-technical perspective constituted the principal starting point for the design of Volvo’s assembly shops in Kalmar, and later on in Uddevalla. Since the car industry always has been associated with assembly lines this rendered large international attention (Bruzelius and Skärvad 1995).

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1.4 Toyota Production System If Ford’s production system involved a paradigm shift at the beginning of the 20th century, Toyota’s production system represented the next paradigm shift during the second half of the century. The section below aims at describing the different parts constituting Toyota’s production system. The description is mainly based on Liker (2004), Shingo (1994), Ohno (1988), Womack et al. (1990), and Womack and Jones (1996).

1.4.1 The Founder of Toyota The success story of Toyota starts, in the same way as for Ford, with a technical and innovative engineer, Sakichi Toyoda. By the end of the 19th century Toyoda started to invent equipment to facilitate his mothers, grandmothers, and other women’s hard work with spinning and weaving. He invented a manual loom, which he further developed to power-looms. This was done during the period when inventors had to do everything by themselves and therefore Toyoda also had to solve the problem of power supply by himself. Later he invented an automatic loom and in 1926 he founded the company Toyoda Automatic Loom Works, which is the parent-company of the Toyota Group and still a central player in Toyota’s conglomerate. Among Toyoda’s inventions there was a particular mechanism for automatic stoppage if a broken thread was detected. This was called Jidoka (autonomation, mechanisms for detection of production abnormalities) and became one of the pillars of the Toyota Production System. Another important contribution was his approach that work should be based on continuous improvements. Toyoda was strongly inspired by a book5 written by Samuel Smiles. The book focused on, via descriptions of industrial success stories and different inventors, problem solving, how to develop oneself, how to achieve success through hard work and discipline, and how to attract attention. It was largely concerned with fundamental values and came to play an important role in the development of the Toyota Production System. In 1929 Toyoda sent his son Kiichiro to England to negotiate patent rights for spin- and weaving equipment. Sakichi Toyoda wanted to give his son an opportunity to contribute to the world in the same way as Toyoda himself had done. However, not by continuing to work with yesterday’s technology but with what Sakichi understood should be the technology of tomorrow. Encouraged by his father, Kiichiro started Toyota Motor Corporation in 1930. Kiichiro studied for an engineering degree and started to build his company based on his father’s philosophy and management strategies, but with the addition of his own ideas. One of these 5

The book was published in 1856 and is still available, also translated into Swedish, e.g. Smiles, S. (1998) Människans egen kraft: rätta vägen till rikedom och framgång, City University Press, Stockholm. Subject field is character building (formation of character).

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ideas was Just-in-time (JIT), inspired by the American supermarket system where products were replaced on the shelves as soon as a customer bought them. Just-in-time, or the pulling principle, is about not producing any part until there is a need, that is when produced parts are consumed. As an illustrating metaphor the procedure of filling up the car can be used. A car has a signal indicating when it starts to run out of petrol, and when this signal activates you go to a petrol station and fill up. To fill up before that, when the tank is still full or half full, is a waste of resources comparable with producing products when the product is not needed. Just-in-time is a principle that makes it possible, through the use of various techniques and tools, to produce and deliver products in small quantities and with short lead time to satisfy the customers’ specific need. The Second World War and the following huge inflation left Toyota facing bankruptcy in 1948. To avoid this, voluntarily wage reductions were made. Kiirchi Toyoda had a policy of not firing personnel and therefore 1,600 employees were asked to voluntarily leave – which rendered strong intense protests. Despite the fact that there were several external reasons for the failure at Toyota, Kiirchi Toyoda himself took responsibility and resigned. This was a huge personal sacrifice, but it contributed to a turn-over of opinion and it also came to have considerable influence on the company. To set a good example or as they said, get your hands dirty, to adapt an innovative spirit, and to understand the value of the company’s contribution to society, were fundamental values for Toyota at this point of time and still are.

1.4.2 Inspiration from USA Eiji Toyoda, who also was a mechanical engineer, continued to work in the spirit of his cousin and eventually became managing director. After a 12-week long study tour among American factories, Eiji Toyoda gave his factory manager, Taiichi Ohno, a commission to improve Toyota’s production system until it reached the same productivity as Ford’s. This was a tough mission with respect to the different states and starting points for the companies at this point in time. The financial situation at Toyota was bad, the Japanese maker was small, and the customers demanded various types of products. With these prerequisites it was more or less impossible to apply Ford’s principles of mass production and economies of scale. However, the study tour in the USA had not impressed Eiji Toyoda. What he saw was that the production systems in American car factories more or less were the same as they were during the 1930s. Toyoda observed high inventory levels and lots of products waiting for the next operation. This was a consequence from large overproduction and an uneven flow. It could take weeks to discover defect products, since these were hidden in the production system due to the large series produced. In Toyota it was not possible to waste resources. There were no large areas available for inventories and workshops, and furthermore there was no demand for large volumes of a single type of car in Japan.

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One principle that was considered as worth adapting from Ford’s production system was the continuous flow made possible through the assembly line (conveyor belt). On the basis of continuous flow, Toyota created a one-piece flow with a unique flexibility in order to satisfy the customers’ demand. By touring the factories, Taiichi Ohno applied and further developed all the different principles and philosophies practised by Toyota over the years. The result was a tremendously successful production system; the Toyota Production System. FURTHER STUDIES: TAIICHI OHNO (1912–1990) As a factory manager at Toyota, in the late 1940s, Taiichi Ohno received the commission to achieve a company that could compete with Ford’s car production, but based on the philosophy and company culture prevailing at Toyota. Ohno became a key figure in the development of the Toyota Production System, and worked for efficient production until his death. Ohno himself described the Toyota Production System in a book published in 1988 (Ohno 1988). A well-known story is when Taiichi Ohno in 1984 visited a Japanese company. After a rapid walk through the factory he asked the group manager to fetch the local manager. When the local manager turned up Ohno asked if he was responsible for the factory, which was confirmed. “The operation here is a shame. You are completely incompetent”. Straight off he asked the group manager to fire the local manager. However, the group manager stated that the local manager was neither more nor less responsible for the company’s condition then the rest of the employees in the group. The factory was managed in the same way as it always had been. The group manager suggested that Ohno, as an alternative to firing all employees, would become their sensei and tell them how to do things (a sensei is a senior teacher or mentor, working in practice with problems in production). As a result from this study tour, the 72year-old Ohno resigned from Toyota and started as a sensei (he was still chairman of the board within two Toyota companies). A long and successful cooperation between Ohno, the group manager, and the local manager thereby started. One of Ohno’s favourite sayings was that “common sense is always wrong”. He thought that his mission in life was to question common sense. Among other things he tried to find a way to change the opinion that production in batches is more efficient than production piece-by-piece. Naturally, his opinion was not completely uncontroversial, and together with his temper this caused some collisions with his colleagues and workers. Yet it is necessary to add that through this perspective a very successful manufacturing company was achieved. Source: Womack and Jones (1996)

Toyota also adapted quality thinking from the American pioneer within quality engineering, Edwards Deming (other key figures within the quality area who became important for the Toyota Production System were for example Joseph Juran and Kaoru Ishikawa). The approach that the company should not only meet the customers’ needs, but also surpass their expectations, was among others adopted. Customers in this context included also the internal customers, i.e. subsequent processes in the value chain. Deming encouraged the Japanese to adopt a more systematic approach towards problem solving. Later this approach became known as the Deming-cycle or the plan-do-check-act-cycle (PDCA-cycle) which is a pillar of continuous improvement (kaizen). Toyota created a new paradigm for production. During the 1960s Toyota extended their production system to also include key suppliers, which made the

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entire supply chain practising the same principles. Toyota Production System became known for the surrounding world in connection with the oil crisis in 1973, which forced Western manufacturers to reconsider their production systems.

1.4.3 Towards Lean Production The origin of lean production can be found within Toyota’s Production System. The term lean production was coined in 1988 by Krafcik (Krafcik 1988). It became known world-wide through a study of car producers around the world, carried out in the late 1980s. The results from this study were presented in the book The Machine that Changed the World written by Womack, Jones and Roos (1990). Womack and Jones later further developed the description of the ideas behind lean production in the book Lean Thinking (Womack and Jones 1996) where experiences from approximately 50 companies practising lean production are described. These two books were important for the spread of Toyota’s Production System. Lean production, or recourse efficient/economising production, is according to APICS6, a philosophy emphasising the ambition to eliminate everything that does not add value to the value chain. Lean production applies and develops the pioneering ideas from Toyota’s Production System about reduction of waste and added value. Waste (muda in Japanese) in production is according to Ohno (1988) overproduction, waiting, transportation, over processing, inventory, motion, and defects. Everything that does not contribute to a products refinement and increase its value is waste and should be eliminated. Liker (2004) adds another dimension of waste – unused creativity among the employees. Lean production requires groups of versatile staff at all levels in an organisation. Therefore, the task is to question the appropriateness of the applied activities through value analysis and other methods (Shingo 1994). It’s about elimination of transports through a better layout and rationalisation of the remaining transports. It is also about achieving one piece flow through production levelling, synchronisation, and improved layouts which reduce the waste through overproduction. Achieving short throughput time and set-up time also reduces various types of waste (Shingo 1994). The application of lean production in the Western world has in several cases involved an isolated usage of one or several techniques from Toyota’s Production System without an understanding of the totality. This has not always been as successful as expected. The plants started in the Western world by Japanese car manufacturers during the 1980s however showed that it was possible to achieve lean production also outside the cultural institutions of Japan (Womack and Jones 1996). These plants, also called Greenfield plants, have been established with entirely new conditions, new employees, new tools, etc. It is also possible to point at adaptations of Toyota’s Production System to specific companies. For example, both Scania and General Motors have developed their own variants, Scania’s Pro6

American Production and Inventory Control Society

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duction System (SPS) (Scania 2004) and General Motor’s production system (GPS) (Ny Teknik Wednesday 2 June, 2004).

1.4.4 The Toyota Way Toyota’s Production System should be kept separate from the way of thinking, the Toyota way (Liker 2004). The reason is that both the production system and the way of thinking need to be emphasised. Toyota’s Production System can be regarded as the most systematic and most complete example of what to achieve with Toyotas way of thinking. The Toyota way is not a tool box but rather a sophisticated system for production where all parts contribute to the totality (Liker 2004). The Toyota way is summarised in 14 principles by Liker (2004). Liker (2004) identified 14 principles, organised in four basic categories: Philosophy, Process, People and partners, and Problem solving, illustrated in a “4P model” formed as a pyramid. Philosophy is the base which the other three categories with their comprising principles rest upon. Problem solving represents the top of the pyramid, involving continuous improvement and learning. In brief, the four categories and the 14 principles comprise the message depicted in Table 1.2. The summation above provides a picture of the values that constitute the foundation of Toyota’s Production System and how the principles and the philosophy are applied in practical industrial reality. The principles together create a totality which has made Toyota an enormously successful and profitable company. INDUSTRIAL EXAMPLE: TOYOTA, A PROFITABLE COMPANY “With a profit of 1.16 billion yen, 1.16 thousand milliards, Toyota has accounted for the largest profit in the history of Japan. This corresponds to twice the profit in GM and Ford together … Among the reasons usually mentioned to explain their good profitability is their flexible production system and demand large enough to avoid large discounts as used by some of their competitors. Toyota’s value on the stock market is higher than General Motors, Ford and Daimler Chrysler together”. Source: Ny Teknik, Wednesday 12 May, 2004

Today, Toyota’s production system and lean production are often considered as synonymous with world-class production. Within the automotive industry there is a general agreement that some variant of lean production is the right way to go when it comes to the company’s overall manufacturing strategy (Mercer 1998). This is also evident in the large amount of new books describing this. From being described as “lean and mean” during the 1990s, it seems like the ideas have been accepted on a large scale. Applications have often been made in terms of using different principles or methods, rather than radical or thorough changes based on something like the Toyota way. However, the interest in the Toyota way, the fundamental principles of Toyota’s Production System, has gradually increased.

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Table 1.2 Philosophy, Process, People and partners, and Problem solving according to the Toyota Way of thinking Category

Content of Toyota way principles

Philosophy

Base management decisions on a long-term philosophy

Process

Create continuous process flow, pull-system, level out workload, build culture for quality right the first time, base kaizen and employee empowerment on standardised tasks, use visual control, use only reliable and thoroughly tested technology

People and partners

Grow leaders, develop exceptional people and teams, respect network of partners and suppliers by challenging them

Problem solving

Go and see for yourself, make decisions slowly but implement rapidly, become a learning organisation

1.5 Industrialisation in Sweden In 1807 the first steam engine for industrial use was introduced in Sweden at Bergsunds Mekaniska Verkstad (Bergsunds Engineering Workshop). During the 1830s and 1840s a number of manufacturing industries were started in Sweden by immigrating Englishmen and Scotsmen which contributed to the important technology transfer from England. Technology transfer and transfer of ideas on how to organise and manage production have always exerted great influence on Swedish manufacturing industry (Lindberg et al. 1993).

1.5.1 Development Towards Mass Production After the early introduction of the ideas advocated by Taylor it took quite a long time before Scientific Management was applied at any larger scale in Swedish industry. Within all business in Sweden the number of employees increased during the 1940s. Production in Sweden was not directly affected by the Second World War and there was a great demand for industrial goods after the war. However, the development of new modern German industry after the Second World War gave Swedish manufacturing industry serious competition. This caused a strong pressure for rationalisation within the companies (Sandkull and Johansson 2000), and the 1950s and 1960s were the days of glory for rationalisation activities. Work studies played a central role, especially in the manufacturing industry. The Human Relation Movement did not result in any practical consequence until the 1940s and 1950s in Sweden, when personnel departments were established in the companies. By their introduction a more human perspective was developed, compared to the technical and production-oriented management resulting from the adoption of Taylorism (Sandkull and Johansson 2000). Further on, it is observed that with new staff policy and growth of personal administrative and industry

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psychological questions, new issues were brought up on the agenda. Several of the lines of thoughts raised by the Human Relation Movement are considered to have been institutionalised within the personnel departments in our companies. Rather likely this development also constituted a prerequisite for the impact from the socio-technical school in the 1960s in Sweden, and came to influence the creation of production organisations based on teams. The prerequisites for mass production were not present in Sweden before the Second World War. It was not until after the war that the industries started to seriously adopt Taylor’s ideas about work studies and rationalisation, and for several manufacturing companies the assembly line became an ideal. Many attended education in production engineering with a focus on work studies during the 1950s and 1960s, with a peak in 1967 with 29,000 participants (Sandkull and Johansson 2000). The interest in production engineering and the significance of production in Sweden were obvious during this period. Work studies and other methods made it possible to rationalise production, which resulted in less complex production systems and reduced the need for production skill. The rationalisation movement resulted in, among other things, the various measurement systems that were introduced. Methods-Time-Measurement (MTM) was introduced at a large scale and the number of white collars working with work studies, methods engineering, and production planning grew quickly (Sandkull and Johansson 2000). As one consequence, among others, the skill associated with rationalisation and development towards mass production was transferred from manufacturing to functions such as maintenance, repair, and tool manufacturing. Thereby, the manufacturing departments lost many competent and skilled people. For mass production within technically oriented production systems personnel with limited skill were recruited instead. With an increased division of labour the need for staff functions arose, carrying out some of the work tasks previously handled by the skilled manufacturing personnel. The amount of indirect work thereby increased significantly and more and more people came to work with tasks outside of actual production.

1.5.2 Alternative Production Concept In parallel with the development in Japan, which among other things resulted in the Toyota Production System, development of a Swedish production concept was ongoing, with influences from the Human Relations Movement and the sociotechnical theory. In Volvo’s car plants, in Kalmar and Uddevalla, a new work organisational concept was created with longer cycle times and increased work content. Volvo’s Kalmar plant was the first assembly shop not using the traditional assembly line. Instead the cars were built in a serial flow with small buffers between each team (Ellegård et al. 1992). The plant in Kalmar was described as a new way of thinking concerning assembly. The concept was further developed in the Uddevalla plant, where Volvo moved even further away from the assembly line. The first assembly plant in

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Uddevalla opened in May 1988 and the last in October the same year. Here, an entirely new production concept for car assembly was created, based on stationary assembly with teams qualified to build a complete car. The new production concept, sometimes called reflective production, was among other things characterised by the following principles (Ellegård et al. 1992): • overall learning of natural totalities in work; • parallel organic flows which makes building of entire products possible in selfgoverning teams; • the technical system is adapted to the human; • work content defines time required, knowledge defines work content; • division of labour is designed within the team; • long cycles are made possible; • changes are natural parts of the work; and • planning with long time-horizon. Reflective production is considered to have several similarities with lean production, but the production concepts are differentiated from each other on a couple of critical points. One difference is the use of assembly lines and the other is the extensive division of labour in lean production (Ellegård et al. 1992). The counterpart to Volvo’s Uddevalla plant was available in Saab’s Malmö plant, even if Saab did not develop a new production concept. Saab’s Malmö plant was for different reasons closed down at the beginning of the 1990s, shortly after start-up. During the same period also Volvo’s Uddevalla plant was closed down due to the company’s production capacity in proportion to the reduced market demand (Sandkull and Johansson 2000). The plant in Uddevalla was reopened in 1996 as a joint venture between Volvo and Tom Walkinshaw Racing (Engström et al.1998). The prerequisites constituting the industrial reality in Sweden in the 1980s were crucial. In order to understand the evolvement of reflective production the context is essential. During the 1980s there was an increasing lack of labour within Swedish manufacturing companies and the requirements on the places of work, the work environment, and the work tasks thereby increased. It was necessary with industrial new thinking to attract labour for production. Efforts to create what they called “the good work” were made. You can only speculate on whether the Swedish production concept, reflective production, actually was better than the traditional assembly line or not. Reflective production systems were not operated long enough to be stable. Ideas involving such radical changes of production require a comprehensive view to make sure that all parts are synchronised. For a new production concept to concur with existing ones it is also required that the management is enthusiastic and that the people realising the changes are active. The attitudes among the involved people towards the development work as well as the production system in itself are crucial for the outcome. During the deep recession in the 1990s the situation changed. Required capacity decreased, the need for recruiting reduced, and unemployment became reality. In

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other words, the climate changed for innovations and development of existing and new production systems in Sweden. Furthermore, the climate was characterised by tough requirements on profitability. Specialised flexibility was predicted to replace the production systems inspired by Ford, but that has not happened (Sandkull and Johansson 2000). Instead production systems have been modified to facilitate higher flexibility. Companies in Sweden have got on fairly well when it comes to allowing employees to take more responsibility for parts of the production.

1.6 Production Development: A Summary To summarise Chap. 1, it can be concluded that there are several factors affecting the production system, see Fig. 1.6. These factors can be summarised in three different categories: • external influences; • strategies and fundamental attitudes among the individuals involved in the development of production systems; and • actual options during development of the production system. Management strategies

Technology Work environment and organisation

Actual options

Planning and control

PRODUCTION SYSTEM

Strategies and fundamental attitudes

Company culture

External influences

History

Trends

Globalisation

Production philosophies

Company structures

Fig. 1.6 Factors affecting the development of production systems (based on Bellgran 1998)

1.6.1 External Influences The external influences affecting the production system design are among other things history, trends, globalisation, and company structures. Production development history, nationally as well as internationally, has an important role. Previous achievements and successful production systems can be models for production systems to be, if gained experiences and knowledge is made available to others. A short historical description was given concerning production development in general and production systems in particular in Chap. 1. The ideas advocated by Taylor and Ford had a very dominant influence on subsequent production systems, all

1.6 Production Development: A Summary

35

around the world. The extent different production concepts are spread around the world depends among other things on the openness of the creators. It also depends on to what extent the different ideas have been studied by researchers and others. As one example Ford can be mentioned. As a consequence of his openness concerning the production system, his production technology spread quickly within the American manufacturing industry (Hounshell 1984). Ford’s ideas were spread by, for example, articles in different journals. Later, production concepts such as the Toyota Production System and lean production are other examples of ideas which strongly affected the development of new systems. Actually, it is even relevant to talk about a paradigm shift concerning the attitude towards production and its possibilities of being a decisive, competitive means for a manufacturing company. With Sweden as an example, it is also possible to give national examples of important factors affecting the development of production systems. One such factor is the socio-technical idea which above all affected the design of assembly systems, away from the traditional assembly lines to solutions implying increased work content for the assemblers. Different trends are reflected in the production systems developed, as in the current forms of industrial collaboration. However, the importance of the experiences and the history within a company should by no means be underestimated when the influence on new systems is concerned. Globalisation is a strong force affecting the design of today’s production systems. A consequence of the ever-increasing competition facing the manufacturing companies in terms of new global actors, new and more specific customer needs, short lead-times, and low production costs, is increased specialisation and in several cases outsourcing of noncore activities. The rise of new company structures implies that we can observe an increased change concerning the companies’ owner conditions, for example local ownership decreases for several production units. The number of international owners has also increased for Swedish companies; dramatically from 1990 onwards. Ownership affects the geographical location of development units for production engineering and production development, and also other research and development units. Location of research and development units belongs to the external influences. This affects existing and new production systems, since physical proximity to research and development provides good opportunities for testing new technology on site.

1.6.2 Actual Options When developing production systems the available and actual options concerning technology, planning and control, and work environment and organisation are decisive for the chosen solutions. The chosen solution is often a mixture of existing solutions and solutions developed specifically for the new production system. Planning and control is concerned with methods and tools, materials control and materials handling, and various options concerning plant layout. Existing technology, machines and equipment, availability and level of automation, are other

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decisive factors. Unfortunately, it is too easy to forget the actual options concerning work environment and organisation. This area is for some reasons easy to neglect when developing production systems, even if examples of the opposite also can be given. Work environment and organisation have also been driving new ideas within the production area.

1.6.3 Strategies and Fundamental Attitudes Strategies and fundamental attitudes among involved people are decisive for the development of production systems and the final result. Strategies in a company concern the business strategy and its translation into manufacturing strategy. Strategies provide boundaries for a new production system. The applied production philosophy is partly a consequence of the chosen manufacturing strategy. Company culture concerns visible as well as invisible knowledge and experiences from the company’s own activities, and often constitutes a not deliberate control of the way of working and the choice of solutions for the new production system. Finally, people are the corner stone of the company with all its functions, not least because of the production system and its development. The fundamental attitudes among people are reflected in behaviour and decisions at all levels and in all situations. How external influences and actual options are considered when developing production systems depends on the fundamental attitudes among those involved. The development of production systems during the 20th century until today consists of a combination of different solutions and alternatives. Development is guided by the available and actual options and general opinions at the time for development. Today, the accumulated options, especially at a detailed level, are enormous compared to the situation almost a hundred years ago when Ford developed his assembly line. The possibility to find the right solution for every specific situation is therefore larger, and simultaneously the complexity increases. The requirements on the basis for decisions are high, as are the requirements on a wellplanned development process, in order to make use of the existing possibilities of achieving efficient production systems.

Chapter 2

Production System

Abstract This chapter aims at answering the question of what a production system actually is, what the characteristics of a system are, and why a systems perspective is useful when dealing with development and operation of production systems. Furthermore, different ways of classifying production systems are presented based on characteristics given by the systems perspective. The terminology related to production systems is presented, and different hierarchical levels and parts of the production system are described. As a conclusion the relevance of a life-cycle perspective on production systems is elaborated upon.

2.1 A Systems Perspective During the 1990s it was generally observed that a holistic perspective on production systems was required (e.g. Rampersad 1994; Wu 1994; Bellgran 1998). Today, the need for a holistic perspective, or to regard the production system in totality, is generally accepted. A holistic perspective on production systems implies that systems should be designed with the technical and physical parts, the humans in the system, and the way to organise the work, taken into consideration (Bennett 1986). One way to facilitate the use of a holistic perspective is to apply a systems perspective, based on system theory, to production systems. The importance of totality is emphasised when a system theoretical perspective is applied to the production system. With support from a system theoretical perspective all parts are taken into consideration and the interplay between the different parts of the production system is emphasised. A system theoretical perspective is also called a systems perspective (Lind 2001). A similar term is systems thinking, referring to how we regard the world around us, if we use the system concept to understand the complexity of reality (Checkland 1998). The notion system has become more and more common to describe activities and phenomena in different situations (Lind 2001). Therefore, the notion system M. Bellgran, K. Säftsen, Production Development, © Springer 2010

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often appears in combination with other words, as in our case production system, manufacturing system, and assembly system. Systems exist everywhere and despite differences all systems share some common fundamental structures. As a consequence the system theoretical perspective has developed as a way of explaining systems in a scientific way (Wu 1994): “… manufacturing industries are now leaving one technological age which is characterised by machines, and are in transition to the age of systems.” (Wu 1994, p. 27)

One explanation of the statement above is that a systems perspective is useful for increasing the understanding of a complex production system. To successfully develop and operate production systems good understanding of the components of a production system and how these components interact is essential.

2.1.1 Characteristics of a System Systems theory is based on the relations and interplay between different components in a system. The fundamentals of general system theory can be found in biology where von Bertalanffy had already described the meaning of a system in 1920 (von Bertalanffy 1972). However, the system concept is, according to von Bertalanffy (1972), as old as western philosophy; Aristotle said that the totality is more than the sum of the parts. A fundamental starting point of systems theory is the idea of synergy; meaning that totality is different from and hopefully larger than the separate parts, which can be exemplified as (Checkland 1998): “The taste of water, for example, is the quality of the substance water, not of hydrogen and oxygen which is combined to achieve water.” (Checkland 1998, p. 3)

A system is an organised collection of personnel, machines, and methods required to accomplish a set of specific actions (CIRP 1990). Churchman (1968) includes the accomplishment of a set of goals in his definition, as does Wu (1994). A system can thereby be defined as a collection of different components, such as for example people and machines, which are interrelated in an organised way and work together towards a purposeful goal. The system boundaries can be drawn at different levels, and everything outside the system boundaries can be considered the external environment (Wu 1994). A characteristic of a systems environment is that the environment influences the goals for a system but the system cannot influence the environment (Churchman 1968). On the basis of how the environment affects the system, the environment can be divided into different parts. The active (close) environment directly affects the system, whereas the passive (remote) environment has little or no effect on the system (Hubka and Eder 1988). Within system theory emphasis is placed on what are inside the systems boundaries.

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Commonly a system is divided into subsystems, which provides a general view of a complex system. With a systems perspective the relations between the different subsystems are emphasised, and also between different hierarchical levels (Lind 2001).

2.1.2 Production: A Transformation System The function of a production system can be described as a transformation of input to output, see Fig. 2.1. This description is according to the black-box principle (Wu 1994). The transformation constitutes a black box which we cannot see the contents of. The transformation can for example consist of machining or assembly. The major elements of a transformation system are a process, an operand and the operators (Hubka and Eder 1988), see Fig. 2.2. The arrangements and relationships of the elements form the structure of the system. A transformation system usually has a defined goal; to perform a transformation on an applied operand, from an existing state to a desired state. Driving and guiding the process is the task for the operators, consisting of the human system, the technical system and the active environment. The function describes the purpose of a system, what it does or is intended to do. With the terminology from systems theory we can refer to the technical system and the human system as the executing system, and the information system and the management and goal system as the active environment. The relation between these subsystems together contributes to the transformation of input to output. One example of a transformation system is a production system. Fig. 2.1 Transformation of input to output

Input

TRANSFORMATION

Executing system Active environment

Human system

Technical system

Information system

Transformation process

M - Material E - Energy I - Information

Management and goal system Feedback

M,E,I

Operand in initial state

Passive environment

Operand in desired state

Transformation system

Fig. 2.2 A simplified model of the transformation system (Hubka and Eder 1988)

Output

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The transformation can be regarded as a change process. To meet the requirements of the change, the operand gets added values. These values can be different qualities which makes the operand fulfil the requirements after the transformation. For example, there is a demand for pressed sheet instead of raw steel. In this case the steel (the operand) should be given these qualities, the added values, through the transformation process. The transformation affects the operand through changing its structure, location (for example through transportation) or time dimension (for example through stock-keeping). The structure of the system is described by the different elements, which are parts of the system, and the relations between these elements. The function describes the purpose of a system, what it does or is intended to do (Hubka and Eder 1988). When the transformation system is a production system the function is for example to transform raw material into components or complete products. Transformation of raw material into components or products can be achieved in five fundamentally different ways (Mattsson and Jonsson 2003), see Table 2.1. The transformations described above can also be combined. A production system often uses several different value-adding processes to transform raw material into the demanded form and if necessary complete products. The result (output) from a production system can therefore be input to another production system. As one example, in the USA about 20% of the steel production and about 60% of the rubber production went straight into the automotive industry during the 1990s (Wu 1994). Table 2.1 Five fundamentally different transformations Transformation

Description

Separating

Essentially one item that is the source of several items from the production system, e.g. production of petrol and paraffin oil from crude oil.

Putting together

Several items as input and one item as output, e.g. production of machines.

Detaching

Change of form of an item through removal of material, e.g. production from shaft turning.

Forming

Change of form of an item through reshape, e.g. rolling of ingot into steel profiles.

Quality adaptation Change of qualities of an item without changing its form, e.g. surface treatment.

2.1.3 Classification of Systems Depending on the purpose of a description of a system, different classifications can be used. Here we present some classifications relevant for a production system. Systems can be described from functional, structural, and hierarchical perspectives (Seliger et al. 1987), see Fig. 2.3.

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The functional perspective (Fig. 2.3a) describes the system as a black box transforming input to output. The structural perspective (Fig. 2.3b) is a way of describing the system in terms of its different elements and the relations between these elements. The system can also be regarded from a hierarchical perspective (Fig. 2.3c) which implies that one system can be a sub system within a larger system. With the hierarchical perspective the relation or position of a system is described in relation to other systems, as for example sub systems or super systems. Other examples of classifications relevant to the production system are (Wu 1994): • physical and conceptual systems; • continuous and discrete systems; and • stochastic and deterministic systems. Systems can be divided into real systems or models of systems (Arbnor and Bjerke 1994), which can also be referred to as physical and conceptual systems (Wu 1994). Physical systems consist of real objects such as machines and equipment whereas conceptual systems can consist of diagrams, charts, verbal descriptions, etc. The production system can be both physical and conceptual, depending on which phase of the system’s life-cycle is considered. A conceptual system can be found during the production system design phase and a physical system after the implementation phase. Continuous and discrete systems belong to a category of dynamic systems, which are defined based on how the system variables change over time. System input status system output

(a)

element relations system

(b) super system

system subsystem

(c)

Fig. 2.3 System from a functional perspective (a), a structural perspective (b), and a hierarchical perspective (c) (Seliger et al. 1987)

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variables in a continuous system change continuously over time, whereas system variables in discrete systems change step-by-step. How variables change over time is for example of interest when simulating production systems. In a discrete system separate activities can be discerned, which for example is in congruence with the flow of material in production systems (Wu 1994). Going through further classifications, relevant for production systems, systems can either be deterministic or stochastic (Wu 1994). Deterministic systems have a cause-and-effect relationship between input and output, for a given input the system always responds with the same output. Stochastic systems are characterised by random properties; the input, process and output can only be statistically analysed (Wu 1994). However, the possibility to discuss deterministic and stochastic systems depends on whether the system can be classified as open or closed.

2.1.4 Open System An open system depends, unlike a closed system, on its environment. In an open system, the relation to the system’s environment is studied, which is not the case in a closed system. A production system is an open system that depends on and is affected by its environment. Open systems maintain a dynamic relation with the environment, which is essential for production systems. Production systems have to be adaptable to changes in the environment and the competitive market. An open system is among other things characterised by the following attributes (O´Sullivan 1994): • an open system is goal seeking and hierarchical where different subsystems have various degrees of importance in the goal fulfilment; • an open system is an inseparable entity, it is holistic; and • open systems are characterised by equifinality; goals can be reached in a number of different ways. Equifinality needs explanation. It was mentioned above that in closed, deterministic systems it was possible to predict the output based on the given input. Cause-and-effect relationships prevail in closed systems, which is not the case in Multifinality

Equifinality Productivity

Automation Improved work environment indicator

effect

Way of working Design approach

When evaluation is carried out

Owners influence indicator

effect

Fig. 2.4 Different types of finality relations: multifinality and equifinality

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open systems. In open systems there are several factors that might affect the output. To describe this, the term finality can be used (Arbnor and Bjerke 1997). Another term for finality is indicator-effect relations, see the example in Fig. 2.4. One indicator can give several effects (multifinality), and several indicators can reach one and the same effect (equifinality). The development of the theory of open systems has, among other things, contributed to the development of the socio-technical school. However, the inputoutput nature of the traditional system theory cannot fully describe the sociotechnical parts (Hubka and Eder 1988; Karlsson 1979). The system theory treating human beings in an organisation as components does not suit the socio-technical system, according to Karlsson (1979). Two different tracks have developed within systems theory; a classical system theory and a so-called soft system theory. The latter is closer to the socio-technical school, and thereby provides better possibilities to describe socio-technical systems (Checkland 1998).

2.2 What Is a Production System? The previous chapter was devoted to definitions and descriptions of systems in general. Since the focus in this book is on production systems it is appropriate to also explain the meaning of production. Moreover, a more thorough analysis and description of production systems is needed, which is provided here through descriptions of the components of the production system, its relations and hierarchical nature. The process of creating goods and/or services through a combination of material, work, and capital is called production. Production can be anything from production of consumer goods, service production in a consultancy company, music or energy production. There is a clear connection between production of goods and services. Consumption constitutes the superior driving force for all production. Produced goods must in some way be distributed for consumption. Production of goods is therefore often of no interest, if not combined with production of services, as for example within the area of logistics (Mattsson and Jonsson 2003). However, the specific type of production referred to in this book is industrial production. Our limitation is production of goods, where the transformation of raw material into products is carried out in a production system.

2.2.1 Terminology Production system is often used as synonymous with manufacturing system and assembly system. Other notions used to describe different types and sizes of production systems are line, factory, plant and workshop. The differences in notions

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indicates that there actually are differences in what parts or to what extent a production system is referred to, but also that there are differences in how the different notions should be defined. The first issue to analyse is whether any of the systems is superior to the other, to look at the systems from a hierarchical perspective. To elucidate how the different notions are used throughout this book a brief survey is required. In the further studies we start with the notions manufacturing and production. FURTHER STUDIES: MANUFACTURING VERSUS PRODUCTION The English notion manufacturing stems from the Latin manu factum, made by hand, and is explained as the making of articles or material by physical labour or mechanical power. The notion production stems from the Latin pro ducere, lead forward, and produce is explained as to bring into existence. CIRP1, which is an international research association within production engineering, gives the following definitions of manufacturing and production: Manufacturing is: “… a series of interrelated activities and operations involving the design, materials selection, planning, production, quality assurance, management and marketing of the products of the manufacturing industries”. Manufacturing production, which most often is shortened to production: “… the act or process (or the connected series of acts or processes) of actually physically making a product from its material constituents, as distinct from designing the product, planning and controlling its production, assuring its quality”. As we can see manufacturing can be regarded as superior production (based on the definition of manufacturing production). In other words, according to the above given definitions manufacturing could be regarded as all activities within a company from design, material supply, planning and production, to quality assurance, distribution, management and marketing. In this case, production embraces the actual production process, the physical making of a product. Sources: Hounshell (1984); CIRP (1990)

We consider the notion manufacturing as superior production. By way of introduction it was mentioned that production is the process of creating goods and/or services and we gave music and energy production as examples. This is also reflected in the definition provided by CIRP: “… the result or output of industrial work in different fields of activity, e.g. agriculture production, oil production, energy production, manufacturing production.” (CIRP 1990, p. 736)

In that sense production, as a line of business or branch of industry, is superior manufacturing. The observant reader might have noticed that the definition of manufacturing system, concerning the content, is similar to the definition of product realisation introduced in Chap. 1. A distinction that can be made is that product realisation refers to the process describing the design and realisation of a product, whereas manufacturing system refers to the actual system where the product is designed and 1

CIRP = International Institution for Production Engineering Research, see http://www.cirp.net/

2.2 What Is a Production System?

45 Manufacturing system Parts production system Production system Assembly system

Fig. 2.5 A hierarchical perspective on production system

realised. Thus, the difference is between process and system. The product realisation refers to the process, whereas manufacturing system refers to the system. By way of introduction it was also mentioned that the chosen terminology also depends on what part of the production system is concerned. The next issue to elaborate is accordingly the different subsystems possible within a production system. A production system can for example embrace both the parts production and assembly, which means that the production system is superior to these subsystems. A hierarchical perspective of a production system is illustrated in Fig. 2.5. The notion line is often used to denominate an assembly system. A workshop can refer to a subsystem of the manufacturing system, as for example the parts production system, or to a whole plant. Plant is often used synonymously with manufacturing system. Production engineering and production development are two additional concepts which need clarification. Production engineering is here concerned with different manufacturing processes and rationalisation of existing production (Andersson et al. 1992). Production development concerns development and operation of production systems with a more long-term perspective. The discussion concerning definitions might appear to be unnecessarily complicated, but aims at illustrating the need for a common terminology. No matter what definition you decide to use, most important is that the chosen definition is jointly defined among those working together within or around the production system.

2.2.2 The Structure of the Production System A production system comprises a number of elements between which there are reciprocal relations. Commonly mentioned elements are premises, humans, machines, and equipment (Löfgren 1983). Software and procedures might be added to the listed system elements according to Chapanis (1996). A structural perspective of the production system can be used to describe the different system elements and their relations, see Fig. 2.6. Yet another dimension can be added to the description of a production system, the decision-making process. The decision-making process for a production system adds capital management (owners), business management and production management to the description of a production system (Sandkull and Johansson 2000), see Fig. 2.7.

46 Conveyor

2 Production System Humans Robot relations Production system

Computers

Fig. 2.6 Example of elements in a production system (a structural perspective)

Fig. 2.7 Model of a production system including the decision-making process (Sandkull and Johansson 2000)

Capital management

Business management

Production management

Equipment

Material

Products

Labour

At the same time as each system component is an important resource, they are also potential sources of variation and disturbances which might be difficult to predict.

2.2.3 Life-Cycle Perspective The main activities within a production system are often described based on the products life-cycle (Technical Foresight 2003): • the market activity places demands on the product delivered from the production system. It provides boundaries for how the system should perform when it comes to quality and productivity, and also provides prerequisites in terms of time for development, product qualities and cost; • the engineering activity controls the product development, which is a prerequisite for the production system; • the production activity creates the product in the production system;

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• the distribution activity makes sure that the product is delivered under the right conditions to the customer; • the service activity aims at removing and preventing defects which might appear in the product; and • the recycling activity aims at saving resources and handles worn-out material. The production system can also be regarded from its own life-cycle, from initial planning of the system design to phase-out. Increased environmental requirements, both from consumers and from legislation, place higher demands on re-use, not only of the produced products, but also of the production system. Therefore, it is relevant to plan for several product generations as well as system generations when designing production systems. The altered environmental requirements have contributed to a shift from a sequential to a parallel nature of the production system life-cycle, see Fig. 2.8. New production systems are designed and realised in parallel with old systems still in operation, which provides good opportunities to make use of previous experiences. The nature of the production system varies during the different lifecycle phases, as do the requirements placed on the abilities of the system. Therefore, it is essential to be aware of the production systems current position in the life-cycle to know what requirements are reasonable. Questions concerning manufacturing efficiency are also of interest when the life-cycle of a production system is considered. Manufacturing efficiency is commonly measured during the operation phase. If manufacturing efficiency is measured already from the start of the planning and design phase there would be obvious incentives to improve efficiency also during the initial development phases. All of a sudden it would be very attractive to improve the design process and to plan for efficient realisation and start-up. With this approach, manufacturing efficiency measured during the whole life-cycle of a production system, all phases could contribute to the achievement of total efficiency.

Operation, refinement

Operation

Planning

Start-up Realisation Design

Termination Re-use

Fig. 2.8 The life-cycle of a production system (Wiktorsson 2000)

Chapter 3

From Business Plans to Production

Abstract This chapter deals with the important linkage between business ideas and production. Emphasis is on the role of the production system and its contribution to company outcome. Manufacturing strategies are presented as a means to communicate the linkage between business plans and production. Process and content of manufacturing strategies are described, as well as how successful implementation can contribute to company competitiveness. Tools are presented as a means to investigate congruence between production system and the overarching manufacturing strategies. Finally, a success story of how a company developed a new production system based on a well-formulated manufacturing strategy is described.

3.1 Strategies to Reach Targets The main objective of most companies is of course to make money. Profitability is also a prerequisite for long lasting business. Thus, for a manufacturing company, it is about making products that attract potential customers, which consequently are possible to sell at a suitable price and give a certain profit. The interest in production and its influence on companies’ financial outcomes has been significant during the last century. Toyota in Japan is a company emphasising the importance of production. The company has, especially for the past 20 years, been a leading actor with its sustainable work for efficient leadership in production (see e.g. Womack et al. 1990; Monden 1998). It is, however, not easy for production to maintain its position in manufacturing companies. Production has, for a long period of time, been considered as a function that only has to do as it is told by the company. One question is how this can be, even though manufacturing companies often have between 60 and 70% of its capital tied up in production-related investments (Hill 2000). In many countries top management often lack experience and knowledge in

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production. As a contrast, Hill (2000) points out that in order to manage a company in Japan a prerequisite is to have good experience in production. A consequence of lack of production experience is that the management does not recognise production’s strategic potential. Production operations are on the contrary focused on short-term productivity and efficiency targets, thus leading to a reactive position in the company. The role of production managers has in many cases been focused on meeting short-term targets which leads to good competence in short-term activities such as planning, maintaining efficiency, and human resource issues. Ever since the beginning of the 1990s, company demands have changed considerably having consequences also on production. Manufacturing today involves handling great complexity caused by the high degree of customised products. Products are manufactured in many variants, in varying volumes, product lifecycles are shortened, and at the same time both national and international competition is increasing. It is not enough just to control and adjust the production system. According to Hill (2000), there is a need for production managers with broad experience involving business knowledge as well as the ability to communicate production’s role in the company. It is necessary to show the consequences of different management decisions on production in order to select the best choice and to make well-founded decisions. It is necessary to consider production from a strategic and long-term perspective. The awareness among executives about production’s strategic force has also increased during the past decade. The production manager of Scania stated in 2004 that “Production is our core competence” and the final assembly line in Södertälje was described as the heart of Scania (Hultén 2004). Production and strategy has, however, traditionally been considered as incompatible. From a historic point of view, production has been regarded as a shortterm perspective, whilst strategy on the contrary is associated with a long-term perspective. Strategy is a plan that describes the path to follow in a certain situation, or is a pattern of decisions that together leads the activities in a specific direction. Hayes and Wheelwright (1984) point out that the following characteristics are valid in business situations1: • time perspective is often long, both in terms of time for carrying through decisions as well as the time before we can see the results of the realisation; • effect, when it can be observed, is significant; • a concentrated effort is often needed in order to carry out the chosen activities; • most strategies demand a series of supportive decisions over time, which follows a consistent pattern; and • a strategy must be convincing so that all levels of an organisation act in a supportive manner to the strategy.

1

The word strategy was already used in 450 B.C. and embraced abilities such as administration, leadership, and power. The word emanates from the Greek word stratego which alludes to the role a general plays as a leader (Quinn et al. 1988).

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In order to turn a business idea into a product offer, a strategy for the activities is needed. Strategies exist at different levels of a company. Corporate strategy is the top level, business strategies follow, and at the functional level there are, for example, market and manufacturing strategies, see Fig. 3.1. Corporate strategy is described by Miltenburg (1995) as a long-term, general description that involves target, product/market, and how competitive advantages will be achieved. The business strategy must also clearly describe within which business areas the company aims to act. The next subordinate level is the business strategy, which is more short-term as well as more detailed than the corporate strategy. The functional strategies are to be found at the lowest level. Each function should formulate a strategy describing how they will contribute to the company’s overall targets. The functional level includes, for example, market strategy, manufacturing strategy, as well as research and development strategy. Miltenburg (1995) points out that the functional strategies need to support each other. The importance of congruence between market and manufacturing strategies is emphasised by, for example, Hill (2000). Manufacturing strategy is in focus during development and operation of the production system, even though other functional strategies are of great importance as well. The concept of manufacturing strategy was first used during the 1940s at Harvard Business School (Bennett and Forrester 1993). The great academic breakthrough for manufacturing strategies came in 1969, when Skinner (1969) described manufacturing as the missing link in corporate strategy. The essence of the article was that manufacturing often represents a considerable investment and should thereby be proven to contribute to company targets. Consequently, a linkage between the company’s overall strategies and the foundation for making production decisions is needed. Skinner is considered one of the pioneers within the area of manufacturing strategy. Other important work has been performed by, for example, Robert Hayes and Steven Wheelwright (see e.g. their work from 1979 and 1984), and Terry Hill (see Hill 2000). Corporate strategy

Business strategy A

Market strategy

Business strategy B

Manufacturing strategy

Business strategy C

R & D strategy

Fig. 3.1 Hierarchical levels of strategies (Hayes and Wheelwright 1984)

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3 From Business Plans to Production

FURTHER STUDIES: PIONEERS IN MANUFACTURING STRATEGY Wickham Skinner is one of the leading pioneers behind the work to bring production to corporate strategy level. Skinner’s article from 1969 is probably the most cited article on manufacturing strategies. According to Skinner, manufacturing strategies are about clarifying that production can contribute to company competitiveness. Thus, production is not a millstone around the company’s neck. It is necessary that top management make decisions that are reflected in production thus creating production that acts in a supportive manner to reaching the targets. Other prominent researchers are Robert Hayes and Steven Wheelwright, who in 1979 published an article of great importance in the field. They raise the question how the capabilities of production systems are in congruence with products and volumes, the so-called productprocess matrix. The book from 1984 is also very important. The fourth pioneer is Terry Hill. Hill’s framework for formulation of manufacturing strategies is very important, as well as his distinction between order-winners and orderqualifiers. What is common for these pioneering works, and in a sense perhaps the most remarkable, is that in spite of the fact that Skinner’s article was published more than 35 years ago and Hayes and Wheelwright began their work more than 25 years ago, their contributions are still as valid. Sources: Skinner (1969); Hayes and Wheelwright (1979, 1984); Hill (2000)

It can be noted that ever since the beginning of the 20th century, countries such as Japan, Germany, and Italy have drawn competitive advantages from their production. The main reason is that they began by integrating the production perspective with overall corporate strategies, in accordance with Skinner’s ideas (Hill 2000). These ideas have gradually spread to a wide range of companies. Studies indicate that above all, major companies are aware of production’s role and thus of formulating manufacturing strategies (Winroth 2004). It should, however, be noted that the importance of communicating and expressing strategies reduces if the company is small and the managing director and production manager is the same person. Thus, a non-articulated strategy may still have an impact in smaller companies. Production may contribute to the long-term strength of a company in two ways: resource-based and market-based (Gagnon 1999). The latter means that the very production itself provides competitive advantages to the company. It may, for example, concern a unique process technology that no competitors have competence in. The market-based approach is the most common, where production provides competitive advantages through its way of supporting company operations. This support must be stronger than the support competitors receive from their own production functions. For a long period, it was sufficient for production to respond reactively to external demands. It is, however, a long-term effort to identify and strengthen the production capabilities that actually provide competitive advantages. Thus, the production manager’s role is extremely important from a manufacturing strategy perspective. By formulating and implementing manufacturing strategy, it is possible to communicate the importance of a long-term perspective on production and at the same time to strengthen production’s role in the company.

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3.1.1 Manufacturing Strategy Today’s customers demand more than low cost. They want products at best price, with good quality, in sufficient amount, and of course on time. In order to stay competitive it is necessary to provide production systems that are capable of handling the increasing demands correctly and efficiently. The task to provide production systems that support the factors a company has selected to compete with is facilitated by means of a well-formulated and implemented manufacturing strategy: “Manufacturing strategies comprise a series of decisions concerning process and infrastructure investments, which, over time, prove the necessary support for the relevant orderwinners and qualifiers of the different market segments of a company.” (Hill 2000, p. 48)

A manufacturing strategy is a plan comprising the activities that are necessary to reach targets. It is a pattern of decisions within different areas, supporting a company’s competitive advantages. A division of manufacturing strategy into content and process is common, see Fig. 3.2. The content of manufacturing strategy is usually described in terms of competitive factors and decision categories. A company’s aims to compete in a certain market are called competitive factors. The decision categories represent the company capabilities that are used in order to reach the targets. When this is achieved, competitive advantages are reached. The content of a manufacturing strategy determines a company’s ability to qualify as a supplier on the market through developed competitive advantages, see Table 3.1. Manufacturing strategy process describes its formulation and implementation. The major part of research so far has been focused on manufacturing strategy content (Dangayach and Deshmukh 2001). In real life, it is however equally important to actually formulate and implement the manufacturing strategies. Fig. 3.2 Manufacturing strategy: content and process

Manufacturing strategy Content Competitive priorities, decision categories

Process Formulate, implement

Table 3.1 Manufacturing strategy content MANUFACTURING STRATEGY CONTENT Competitive factors

Decision categories

Cost, quality, deliverability, flexibility

Structural production process, capacity, facilities, vertical integration

Infra-structural quality, organisation, production planning and control

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3.1.2 Competitive Factors Competitive factors (see e.g. Hayes and Wheelwright 1984), as well as orderwinners (Hill 2000), are used to describe company objectives. They may also be regarded as performance measures or a description of a company’s competitive priorities. The four most important competitive factors are considered to be cost, quality, flexibility, and deliverability; these are described below: Cost: Refers to the ability to produce and deliver to low cost, i.e. to be cost efficient. Economies of scale, cost for supply, product and process design, as well as experience are some sources of cost efficiency. Quality: Refers to the ability to meet customer needs and expectations, to make products that correspond to what the customer wants. Quality is about experience (a higher value) or meeting specifications (less defects). Producing with good quality is often synonymous with the latter. Flexibility: Refers to the ability to rapidly and efficiently adapt production to necessary changes. Within production this is often linked to an ability to manage variable volumes, i.e. volume flexibility, or many variants within a certain volume, product mix flexibility. There are also a number of other types of flexibility. Deliverability: Refers to the ability to deliver and the most important issues are reliability and speed. Reliability is the ability to deliver according to plan, an ability that is of outmost importance to companies that deliver just-in-time. Short delivery lead times can be achieved either in the production system or through delivery from stock. A company’s competitive factors may develop over time, thus improving its competitiveness. The so-called sand-cone model was developed at the beginning of the 1990s based on results from European studies on company competitiveness, see Fig. 3.3. It illustrates that competitive factors are cumulative, i.e. they build on each other thus forming a cone of sand. Several studies have shown that the fundamental property is quality, followed by deliverability and cost efficiency (Ferdows and de Meyer 1990; Berggren 1993). Once these demands are met, it is possible to compete with flexibility. Different competitive factors can be classified based on their role in a competitive situation. Are the factors crucial for the company’s possibility to win the order

Flexibility Cost efficiency Deliverability Quality

Fig. 3.3 A sand-cone model

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or are they prerequisites for being a supplier? Order-qualifiers are the factors that need to be met if the company is to compete as a supplier (Hill 2000). An example of an order-qualifier could be quality or environmental management certification according to ISO-standard. The qualifiers only need to be maintained at the same level as the competitors. In order to win an order you need, however, you have to be better than the competitors when it comes to order-winners. Order-qualifiers and order-winners are equally important for a company that wants to reach and maintain a competitive market position. The manufacturing strategy framework, developed by Terry Hill (Hill 2000), built on order-winners and order-qualifiers, has had a certain impact. It is, however, not entirely uncontroversial. One question is if and how the difference between winners and qualifiers give indications on how the company should react (Spring and Boaden 1997). Is it most advantageous first to fulfil the qualifiers and after that turn to the winners? Hill (2000) describes furthermore that winners are weighed between 0 and 100 based on previous sales and production. This means that, even if a distinction is made between qualifiers and winners, the company has to prioritise between different winners. The question is can the company afford to neglect any winner at all? One aspect is that winners and qualifiers are product specific. It may be relevant to separate winners from qualifiers since this gives a support when prioritising between activities and when formulating the company’s manufacturing strategies. The manufacturing strategies should specify suitable competitive factors, as well as necessary decisions within areas that support these competitive factors.

3.1.3 Decision Categories Areas, within which a company needs to make decisions, are called decision areas or decision categories. The terminology is not consistent, neither in nomenclature nor in content. The source is what Skinner described as decision areas (Skinner 1969). Another often used designation is decision category (Hayes and Wheelwright 1984). Within the area of operations management the term strategic issue is also used (Slack et al. 2001). In this book from now on we are going to use the term decision category. Each category comprises a number of questions which the company has to deal with and make decisions about. The decisions must support the chosen competitive factors and are thus very important. An early list of decision categories was presented by Skinner (1969, 1978), comprising five different decision categories: facilities and equipment, production planning and control, labour, product design and development, and organisation and leadership, see Table 3.2. Each decision calls for taking a certain standpoint. Thus, a trade-off between different alternatives has to be made. The choice of relevant decision categories can be discussed. Several alternative combinations are available (see e.g. Wheelwright and Hayes 1985; Miltenburg 1995). Table 3.3 summarises the decision categories that are dealt with in this book together with relevant questions to decide upon.

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Table 3.2 Trade-offs in production (Skinner 1969, 1978) Decision criterion

Questions to answer

Trade-offs between …

Facilities and equipment

Vertical integration Capacity Localisation Choice of equipment

Make or buy One large or several small Close to market or material Generic or dedicated

Production planning and control

Size of stock Quality control

High or low stock capacity Reliability or low cost

Labour

Specialisation

Specialised or not

Product design and development

Number of variants Technological risk

Customised or not Leader or follower

Organisation and leadership

Organisational structure Human resources management

Functional or product oriented Large or small personnel group

Often a distinction is made between structural and infrastructural decision categories (see Table 3.1). The structural decision categories are distinguished by their long impact, their resistance to change, and that they often demand major capital investments. The infrastructural decision categories are often of a more tactical nature, they are built up by an ongoing decision-making process and they mostly need only minor investments. It may, however, be quite costly to change also the infrastructural decision categories and they may by no means be neglected. In the 1960s, when Skinner emphasised the importance of production, the primary focus was on the structural decision categories. Today, some researchers claim that the infrastructural categories are even more important (Hayes and Pisano 1996). The fundamental ideas behind lean production are given as an example that more or less lacks structural elements. Just-in-time, decentralisation of responsibility, as well as cross-functional integration entirely lack structural decisions. Structural changes are described as easier to accomplish since they only demand an investment in hardware, whilst infrastructural parts are stuck in the organisation and are consequently considerably more difficult to adjust (Hayes and Pisano 1996). From a comprehensive view it is reasonable to regard structural and infrastructural decisions as equally important. The issue is to find Table 3.3 Decision categories and example of questions that need to be answered Decision category

Questions to answer (examples)

Production process

Process type, layout, technical level

Capacity

Amount, acquisition point

Facility

Localisation, focus

Vertical integration

Direction, degree, relation

Quality

Definition, role, responsibility, control

Organisation and human resources

Structure, responsibility, competence

Production planning and control

Choice of system, capacity in stock

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the right combination of decisions. Structural changes, such as for instance decisions regarding a new factory or changes in production capacity need to be combined with infrastructural decisions on planning and organisation in order to give good return. In order to give a better understanding of the content of the different decision categories (see Table 3.2) a short description of each category will follow. Only a short introduction will be given since most categories are more thoroughly described later in the book. 3.1.3.1

Production Process (Process Type, Layout, Technical Level)

The production process handles the transformation of resources into products (Olhager 2000). Decisions regarding production process are process type, layout, and technological level. Process type concerns how processes and activities are organised, which is directly linked to production volume and number of variants. A fundamental principle for categorising production is the frequency, with which a certain product family is run in production. The categories are single unit process, intermittent process, and continuous process. Intermittent process implies that a product is run with a certain interval in production. Another division of the intermittent process can be made based on uncoupled and coupled flow of products (Hayes et al. 2004). Which process type is the most suitable for handling product volumes and number of variants is described based on the classical product-process matrix (Hayes and Wheelwright 1979; Hayes et al. 2004; Slack et al. 2001), see Fig. 3.4. The diagonal in Fig. 3.4 indicates a normal position, where there is a correspondence between production volume, number of variants, and type of process. Any deviation from the diagonal increases the risk for increased cost, either for compensation of too low flexibility or because the process does not utilise all of its costly flexibility.

low

Volume

Variants Volume

high

high

single

single

Number of variants

decoupled

decoupled coupled

coupled contin uous

continuous low Obvious congruence between process and volume/variant characteristics

Fig. 3.4 Product-process matrix showing the conformity between volume and variants of product and process type

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3 From Business Plans to Production

The next decision concerning production process is about layout, i.e. the physical arrangement of different equipment in a workshop. Aspects influencing different decisions are production volume, number of variants, and relevant competitive factors. A division can be made based on the following basic layouts: • • • •

Fixed position; Functional layout (process oriented); Batch flow (cells); and Line-based flow (product oriented).

The third decision concerns detailed layout. One question is about the existing and desirable level of technology in the production system. The word automation is often used to describe mechanical, electronic, and computer-based systems that are used for carrying out, inspection, and controlling different operations in production (Groover 2001). A rough division can be made into manual, semiautomatic, and automatic tasks, depending on the degree of human involvement. Which level of automation is the most suitable depends of course on a number of circumstances. Levels of mechanisation and automation have increased considerably and the number of human operators directly linked to production is reduced, i.e. the indirect work increases. Direct labour cost is often less than 10% of the product cost, while the indirect work constitutes a much larger share (Sandkull and Johansson 2000).

3.1.3.2

Capacity (Amount, Acquisition Time)

Capacity is the capability level a company has to carry out a certain activity during a certain period of time (Slack et al. 2001). This must, however, be related to the product demand. Capacity is often expressed in terms of volume or number. Estimation has to be based on the capacity need, and when it is needed. The following resources can be used to adjust capacity in the short or long term: • Personnel: increase/reduce number of personnel, number of shifts, adjustment of work hours; • Technology: new or developed production equipment; and • Buy/sell capacity: let somebody else produce, produce for somebody else. There are different strategies for handling fluctuations in demand (Olhager 2000; Petersson 2000; Rudberg 2002), see Fig. 3.5. If the company doesn’t have the possibility or chooses not to end up in a situation with lack of capacity, it can be positioned ahead of demand, a so-called leading strategy (lead). The opposite, to be behind demand, is called a lagging strategy (lag). A lagging strategy always gives a higher risk for lacking capacity than having over-capacity. Such a decision is based on trying to minimise the cost for over-capacity rather than the cost for not being able to meet demand. The ideal situation is of course if the real capacity is in pace with the actual demand.

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Leading strategy (lead) Keep up with demand

Lagging strategy (lag)

Time

Fig. 3.5 Capacity strategies in relation to demand

3.1.3.3

Facility/Factory (Location, Focus)

The facility (or factory) is the actual building where production will take place. One of many decisions that need to be taken is where to locate the facility/facilities. Questions to deal with are: • • • • • •

Should the factory be near the market? Should it be near raw material/suppliers? How to position the factory in relation to a logistics centre? Should there be one or more factories? Are there special competence needs? Legal issues?

Another aspect, directly linked to the production process, is the focus of the factory. Process or product focus is one way of describing the linkage between production system and product. Process focus indicates a more general plant, which can handle a variation of products, whilst a plant with product focus is dedicated to one or a few products in large volumes, often with a strong focus on low cost, see Fig. 3.6. Fig. 3.6 Process vs. product focus Process focus General purpose plant

3.1.3.4

Product focus Plant adapted to product

Vertical Integration (Direction, Degree, Relationship)

Vertical integration may also be expressed in terms of vertical positioning. Available production processes and other activities that are necessary in the product realisation process, depend on make or buy decisions. The extent of vertical integration depends for instance on whether the company can build their own distribution channels or sell through retailers or if the company should produce themselves or buy from suppliers. The direction of vertical integration can be described as downstream or upstream, or a combination, see Fig. 3.7.

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3 From Business Plans to Production

Raw material producer

Material fabricator

Component producer

Upstream

Manufacturer/ assembler

Wholesaler/ distributor

Retailers

Consumers

Downstream

Fig. 3.7 The value adding chain

Vertical integration in any direction provides a better control over the product realisation process. It also gives better access to new thinking and possibilities for technology development. Subcontractors that are integrated closely to assembly are one example of upstream integration. This is common for instance in the automotive industry. It may also provide advantages of scale since the internal demand increases which enables high volume production at low cost. Hill (2000) exemplifies with the Japanese producers of semi-conductors that provide 50% of the world market through corporate networks. Downstream integration can among other things lead to improved knowledge on the real demand structure. Another aspect to consider is the form of integration. Which relation will the company have with upstream and downstream partners? It may be in the form of ownership, partnership, or other forms of collaboration. 3.1.3.5

Quality (Definition, Role, Sharing of Responsibility, Control)

Quality is a competitive factor in terms of output property, see earlier in this chapter. However, it is also a decision category regarding the necessary decisions to make in production on how to work with quality issues. Quality regarding competitive factors calls for a definition of the actual aspects of quality, which may be based on the eight dimensions of quality suggested by Garvin (1988); performance, features, reliability, conformance, durability, serviceability, aesthetics, and perceived quality. Once the definition of the quality dimensions has been made, routines for securing these dimensions have to be established. To many companies, quality in terms of conformance to requirements is an order-qualifier. There are two overarching questions to consider related to quality in production (Hill 2000). The first question is whether there should be a reactive or proactive approach towards quality work. A reactive approach focuses on discovering faults and making sure that no faulty products reach the customer. A proactive approach is preventive. The other question is about roles and sharing of responsibility. Previous experience has shown that it often is difficult to separate responsibility from realisation, i.e. the person in charge of carrying through the task also has to be responsible for achieving the right quality (Hill 2000). Many companies today put a lot of effort into securing their processes. 3.1.3.6

Organisation and Human Resources (Structure, Sharing of Responsibility, Competence)

Decisions regarding organisation and human resources are important for a company’s ability to reach targets and achieve competitive advantages. Criteria within

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this category include questions such as structure, sharing of responsibility, competence, and award system. An organisational structure describes company structure with departments and functions. The purpose of a structure is to analyse, systematise, and allocate work tasks in a way that utilises all available resources in the best possible way for reaching targets (Bakka et al. 1993). Thus, organisational structure reflects in what way the company recognises its production and how they work with their production function. Sharing of work tasks, job sharing, can be done in several ways. Usually a distinction is made between vertical and horizontal job sharing. Vertical job sharing distinguishes between planning and problem solving tasks and executive work tasks, while horizontal job sharing aims at splitting the process into as short time units as possible (Forslin 1991). Job sharing and work organisation is often discussed, for example, related to assembly. Work organisation describes how labour and technology are organised in order to enable production. An important question is how this work can be done in the best possible way, both regarding satisfying human needs and at the same time reaching sufficient efficiency in production. Read more about work organisation in Chap. 8: “... even when technical and financial conditions are identical there are several ways of organising work, which gives different social consequences, but also different functions of the system.” (translated from Forslin 1991, p. 166)

Other important issues to deal with are competence, degree of flexibility and versatility of personnel, reward systems design, etc.

3.1.3.7

Production Planning and Control (System Choice, Stock Capacity)

Decisions regarding production planning and control are about choice of principles, both for material handling and production. When choosing materials and production planning systems the linkage to the market or what is expected of production, should be taken into consideration at different levels. Different solutions provide different ability to support the aims at different levels. The three levels; master planning, requirements planning, and detailed planning are often used (see e.g. Hill 2000). Different aspects are to be considered at these levels (Rudberg 2002), see Table 3.4. The presented attributes are examples of aspects to consider at each level. Master planning prepares and establishes plans for selling and for production operations (Mattsson and Jonsson 2003). This involves planning for coordination between planned deliveries and sufficient capacity. The customer order decoupling point (CODP) splits the flow and decides where the planning point will be. Upstream CODP production is carried out on forecast, downstream on customer order. This means that we get the following main categories of production control; Engineer To Order (ETO), Make To Order (MTO), Assembly To Order (ATO), and Make To Stock (MTS) (as described by e.g. Mattsson and Jonsson 2003; Rudberg 2002), see Fig. 3.8.

3 From Business Plans to Production Raw material

Assembly to Order Make to Order Engineer to Order

Forecast

Supply perspective

Make to Stock

Components

Semi-finished Finished products goods MTS Customer

ATO

Forecast

MTO

Forecast

Customer Customer

ETO

Customer

Demand perspective

62

Fig. 3.8 CODP divides forecast based flow and customer driven flow

Choice of CODP affects certain capabilities of the production system, see Table 3.5. Customer demands may thus be of guidance for production planning. The output from master planning is a master plan, which is input to requirements planning at the next level, see Table 3.3. The main task at this level is to see to it that material and components are available when needed (Rudberg 2002). In requirements planning a division is made between time-controlled and tactbased planning methods. If the product is not to be made with certain time regularity, each order has to be individually planned and it is relevant to talk in terms of time-controlled planning (Olhager 2000). Necessary decisions are when and where to carry out the operations as well as the order sequence when queues occur. If set-up times are short and the product has equal work content in the different production resources it is possible to use tact-based control. This means that each product is manufactured as closely as possible to the product’s cycle time (Olhager 2000). Table 3.4 A hierarchical description of a materials and production planning system (Rudberg 2002) Level

Planning horizon

Planning period

Decision criteria

Master planning

<1 year

week

Products, delivery unit Product mix Capacity planning (bottle necks) Decide delivery time Customer order de-coupling point (ETO/MTS/ATO/MTO)

Requirements planning

2–6 months

week/day

Specific units Specific resources (work cells/working groups) Split product structure (tact/time) Number of planning points

day/hour

Specific units Specific resources (work cells/working groups) Decentralised control in cells Evaluation and feed-back

Detailed planning

<1 month

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Table 3.5 CODP and possibility to fulfil different competitive factors (Matsson and Jonsson 2003) Factor

ETO

MTO

ATO

MTS

Time to customer

Long

Average

Short

Very short

Production volumes

Small

Small

Average

Large

Product variation

Very high

High

High

Low

The third level is detailed planning, see Table 3.3, which is closest to production. Order release to production, inspection of initial material, as well as sequencing of production operations are main tasks (Mattsson and Jonsson 2003). The other judgment within the decision criterion production planning and control is about stock size. To keep goods in stock always causes cost and risk. A warehouse needs building, personnel, and equipment, and there is always a risk that goods have to be discarded due to being out-of-date, incurrence etc. It can also be lost for some reason. The following questions should be asked prior to making decisions on suitable stock size (Hill 2000): • Pay-back: what extra value does the stock level provide compared to the cost for keeping it? • Alternatives: in what other ways can we achieve the same result, for example by reducing set-up times or introducing just-in-time deliveries?

3.1.4 Formulating and Implementing Manufacturing Strategies Depending on if the company has chosen market-based or resource-based competition, see earlier in this chapter, the basis for formulating manufacturing strategies is affected leading to different methods. The market-based perspective is more common which also is reflected in the amount of research done in this area. A wellknown example of the market-based perspective on manufacturing strategy is a framework by Hill (2000). The main idea of this framework is that the company’s overall objectives, market strategy, and manufacturing strategy should meet, see Fig. 3.9. Market strategy describes how products qualify and win orders on the market. Manufacturing strategy describes how the production function can fulfil the stated targets, i.e. the identified order-qualifiers and order-winners, see Fig. 3.9. Order-winners and order-qualifiers thus constitute a linkage between the overall objectives and the manufacturing strategy. The process of formulating manufacturing strategy is described in five steps (Hill 2000): 1. define the company’s overall objectives; 2. decide appropriate market strategies to meet these objectives;

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3. investigate how different products qualify in their respective markets and how they win orders over their competitors; 4. make process choices (structural decisions); and 5. provide appropriate infrastructure to support production. When adapting a resource-based perspective the starting point is the company’s ability to produce, i.e. operational resources that win orders. Thus, the focus is on development, preservation, and different ways of increasing the effects of the company’s operational resources as a competitive means (Gagnon 1999). This is a comparatively new way of considering the production system’s possibilities in the company. Consequently, we still lack well-proven methods for how to formulate manufacturing strategies based on the resource-based perspective. Gagnon (1999) describes a possible approach. The starting point is to examine the company’s abilities and competencies and to identify the most important ones. The next step is to investigate how this can be utilised in the best possible way towards the market. Finally, strategies are formulated that enable efficient utilisation of the identified strengths. It may, however, be problematic to identify and to agree upon which abilities are the most important. Miltenburg (1995) suggests a plan to follow for implementing the formulated manufacturing strategy. It focuses on a methodology for examining which abilities the production system should have in order to support the chosen competitive factors. If there is an existing production system, one task is to decide if any changes are necessary. If there is no existing production system, the task is to design a system that realises the decisions taken for each decision category. Once it has been decided what to do in production, a plan for its fulfilment should be drawn. The plan should comprise what to do, why, how, when, and by whom it should be done. Each chosen competitive factor indicates what to do and why for all decision criteria. The single activities may then be formulated as single projects which are to be fulfilled according to plan.

Corporate objectives

Growth Survival Profit Return on investment Other financial measures

Marketing strategy

How do products qualify and win orders in the marketplace?

Product markets and segments Range Variants Volumes Standardisation versus customisation Level of innovation Leader or follower

Price Quality conformance Delivery: speed, reliability Demand increase Colour range Product design Brand image Technical support After-sales support

Manufacturing strategy Process choice Choice of alternative processes Trade -offs embodied in the process choice Role of inventory in the process configuration Make or buy Capacity: size, timing, location

Infrastructure Function support Manufacturing planning and control systems Quality assurance and control Manufacturing systems engineering Clerical procedures Work structuring Organisational structure

Fig. 3.9 Order-winners and order-qualifiers are the linkage between market demands, interpreted into market strategy, and manufacturing strategy (Hill 2000)

3.2 The Production System’s Contribution to Competitiveness

65

3.2 The Production System’s Contribution to Competitiveness Competing is to fight with other actors for the first position in the market. For a manufacturing company, this means to compete for customers with other companies running overlapping or similar operations. There are different perspectives on how to reach success. A radical example is presented by Womack and Jones (1996). Their approach is to ignore competitors in favour of focusing on perfection through elimination of waste. According to Hill (2000), another perspective is about understanding the market, the company itself, and competitors. A combination is probably the most useful approach, since neither one’s own ability nor the market can be ignored by a company striving for a market-leading position. Competition can be regarded at different levels. At the top level, competition is between actors (or products) that can solve similar needs. If we, for example, are to move between two cities, car manufacturers are competing with other companies carrying out transport services, such as train, bus, and air companies. This competition is at functional level. At product level, competition is between companies offering similar products, such as cars. Finally, competition can be at brand level, such as between cars within a certain size and price category, see Fig. 3.10. Significant for today’s production systems is that technology for manufacturing products is available everywhere in the world. Access to production equipment does not come only from traditional equipment suppliers. It is becoming more and more common that companies that develop their own processes, also transfer their knowledge to others, either voluntarily through selling or involuntarily through suppliers and other companies’ benchmarking. The result is in any case that technical possibilities for producing companies converge and that conditions for production are more and more becoming the same. This is also reflected by the similarity between competitors’ products. As a consequence of the increased uniformity between competing companies competitive means are shifting from product and process technology to other factors. One example is that time to market when introducing new products has become an important competitive factor in many business areas. By introducing products faster on the market than the competitors, financial and market share advantages are reached. Transportation from point A to point B (car, train, bus….)

Private car, taxi…

Local train…

Opel, Chrysler, Volvo, etc. Fig. 3.10 Competition at several different levels

Greyhound…

Function Product Brand

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3 From Business Plans to Production

The Role of Production Production can play four active roles as a company strives to reach its objectives. The four roles describe a continuum, from internally neutral to externally supportive (Wheelwright and Hayes 1985; Slack et al. 2001), see Fig. 3.11. The first step, being internally neutral, implies that the role for production is to minimise the negative potential from production. At this step typical characteristics are that experts are hired from outside to make decisions on strategic production matters, production is reactive and wants to be ignored, and the main method for controlling the output from production is an internal, detailed supervision. In the second step, externally neutral, the role is to keep up with competitors. With this role for production the ambition is to follow branch practice, and the major competitive advantage is considered to be capital investment. Taking production one step further, approaching the third step of being internally supportive, production is considered as potentially supporting the business strategy. Here investments in production are reviewed regarding congruence with business strategy and a manufacturing strategy is formulated and followed. When the company strives to reach production initiated competitive advantages the fourth, and final step, is approached. At this step the ambition is to realise the potential within new production principles and technologies, and furthermore, production is involved in important decisions regarding market and product development (and vice versa). Wheelwright and Hayes (1985) claim that it is difficult, or even impossible, to leave out one step. Often a company remains in one step until they are forced by external influence to develop. It is not possible to proceed until the company masters the present step. The first three steps describe mainly the task of obtaining a better linkage between production and market demands. It strengthens a marketbased perspective on competition. The shift between step three and four is consid-

Provide advantages through production

Link strategy to production

Inc

s rea

ing

m fro tion u b tri con

tion duc pro

Redefine market expectations

Being best in class

Internally supportive

Keep up with competition

Follow ”best practice”

Externally neutral

Stop obstructing

Internally neutral

Correct the the organization worst grievances

Step 1

Step 2 Ability to implement

Externally supportive

Step 3 Ability to do right

Step 4 Ability to lead strategy

Fig. 3.11 Production’s role and contribution to company competitive advantages (Slack et al. 2001)

3.3 Production System and Manufacturing Strategy in Balance

67

ered to be the hardest. This shift involves a change between different perspectives on how the company shall compete, from a market-based to a resource-based perspective (Gagnon 1999). At step four production contributes most to company success (Wheelwright and Hayes 1985), see Fig. 3.11. From the market-based perspective on competition, it is hardly possible that production can constitute a competitive advantage as such, but the role is to support chosen competitive factors. With a resource-based perspective the company’s production capabilities are no longer dictated by market strategy but are to a high degree self-determined.

3.3 Production System and Manufacturing Strategy in Balance If we want production to contribute to achievement of the company’s chosen competitive priorities, production function ought to correspond to market demands or expectations. The question is if there is only one production system that is best at realising a certain manufacturing strategy. This can be discussed in terms of suitability or congruence. The starting point in much of the literature on manufacturing strategies is deterministic (the course of events is entirely determined by surrounding conditions). This means that there should be a best suited production system for realising each specific manufacturing strategy, thus fulfilling certain market demands. The question whether good correspondence between manufacturing strategy and production system affects the company’s capabilities or not has been investigated in studies at a number of companies (Draajier and Boer 1995). The result of their studies shows that even if the companies had organised their production systems quite differently, they could still satisfy similar market demands. On the other hand, companies with similar production systems could meet quite different groups of market demands. On the contrary to what the researchers expected (they had a deterministic approach when the study began), it was not possible to determine the exact design of production system entirely based on the market demands. They concluded that it was not possible to exactly and unambiguously decide how the production systems should be designed in order to act successfully in the market. In accordance with this result, Ruffini (1999) showed that different production systems can show similar abilities and performances. It can be concluded that there is free scope for how different issues are realised in a production system. There is a certain design space in production system design, also known as strategic choice. The strategic choice implies that there are certain aspects that influence production system ability, but there is still a large freedom of action for production system designers. This is in good accordance with the approach that a production system necessarily should be regarded from outside with a systems perspective and that the production system is an open system. Thus we cannot expect any causal linkages, but rather finality linkages,

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3 From Business Plans to Production

which means that there are several and equally efficient ways of reaching desired targets (Bozarth and McDermott 1998; Gresov and Drazin 1997). It is not a question of either strategic choices or determinism. Both perspectives are relevant (Ruffini et al. 1998). The issue is to understand, describe, and explain why and how cooperation between different parts affects the final production system. Bearing this in mind we can now study a tool that has its starting point in the deterministic perspective.

3.3.1 Product Profiling By means of product profiling it is possible to examine how the present or planned production system corresponds to what the market demands (Hill 2000). Using product profiling provides several advantages. It is an excellent way of investigating the congruence between how the company qualifies and wins orders in the market and the structural and infrastructural possibility to support order-qualifiers and winners. The result from a product profiling indicates if and what has to be changed. Product profiling is also a way for the company to integrate functional strategies with the overall objectives, see Fig. 3.12, which provides a better view of how the company can create relevant competitive advantages. Product profiling is a quick way to check company status. Market is rapidly changing, often considerably faster than the production systems. Thus, it is good to use a tool that is suitable at different times in order to map the match between market and production system. It is necessary now and then to investigate the

Some relevant aspects Product range

Product and markets

Typical characteristics of process choice jobbing

batch

line

wide

narrow

Customer order size

small

large

Level of schedule changes required

high

low

deliveryspeed

price

Order-winners technology

general

flexibility

high

dedicated

Process

Manufacturing

Production volume Key manufacturing task

Original position and profile Position of new products

Fig. 3.12 Product profiling (Hill 2000)

low response to specification

low high low-cost manufacturing

3.3 Production System and Manufacturing Strategy in Balance

69

match since manufacturing strategies are both time and market specific. This means that manufacturing strategies need to be updated as market and products change, if the match is to be maintained. Product profiling is a comparing technique which, apart from giving an on-the-spot account, also offers the possibility to compare today’s situation with different possible scenarios. The starting point when doing product profiling is the basic abilities of different processes and layouts. Table 3.6 shows some examples of which possibilities regarding criteria different process types and realising layouts may provide. Take the aspect product range as an example. Single piece process enables a large product range, while an intermittent process with line-based layout enables a narrower product range. Table 3.6 shows a compilation indicating capabilities of different process types regarding a selection of possible relevant aspects. Product profiling that is carried out in order to investigate the match between production and market can be carried out at production systems level as well as at corporate level. Hill (2000) describes the actual product profiling in four steps, see also Fig. 3.12. Table 3.6 Compilation of properties of different processes and layouts (Olhager 2000) Aspects to consider Single-piece process Fixed position

Intermittent process Functional layout

Batch flow

Line layout

Continuous process Continuous flow

Market/product Type of product Range Order size Introduction rate Order-winner?

special wide small high speed

special wide small high speed

standard small large low price

standard very narrow very large very low price

general high low many meet specification

general high low many sensitive to specification

dedicated low high few low cost

dedicated inflexible very high few low cost

limited according to demand high low low high low

limited low high low high low low

high high low high low high high

very high very high low high very low very high high

decentralised high

decentralised low

central high

central very high

Production Process technology Product mix flexibility Volume No. of set-ups Main task

Investment/cost Investment level Stock level Work in progress Ready stock Labour cost Material cost Overhead

Organisation Control Level on specialist support for production

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3 From Business Plans to Production

In the first step, relevant aspects for the specific situation are identified. Choose aspects to compare regarding product/market, production, investment/cost, and organisation (see examples of aspects in Table 3.6). The choice should reflect relevant strategic aspects for the actual market in question. The total number of aspects should be kept to a minimum. 1. Note down the decisions that the process choice causes for the chosen aspects. Fill out the product profile with decisions (e.g. product range wide/narrow depending on process type) for chosen aspects. 2. The purpose of product profiling is to enable a comparison. Thus, draw comparing profiles. Comparisons can for instance be made between existing and planned situation. 3. The final profile shows the degree of match between market, production, and infrastructure. The straighter the line the better the match. An example at production systems level from Hill (2000) is shown. The match between production system (i.e. manufacturing) and the product and market in question is examined; see final product profile in Fig. 3.12. The purpose is to investigate the match between market demands and production system capabilities. Black circles indicate the initial situation while white circles describe the changes over time, which in this case are mostly related to required changes of increased volume. INDUSTRIAL EXAMPLE: INPUT DATA TO PRODUCT PROFILING A company producing cartons decided to invest in part of its processes. These processes were core to a range of its products and accounted for about 30% of the sales revenue. To meet the parent group’s return on investment the company needed to increase the output of these products by about 50%. For some time the marketing strategy had been to position itself in the higher-quality end of its markets. However, to gain the higher volumes required to justify the process investment, the company had to go for business won on price. Soon the company had almost 15% of its total business with distinct low-cost needs. Analysis The investment was consistent with existing processes (according to its point on the jobbing-batch-line continuum in Fig. 3.12) and chosen to support the existing business. However, the additional price-sensitive business required different process and infrastructure support, which is indicated by the straight line and the dogleg relationship in Fig. 3.12. Source: Hill (2000)

When there is a mismatch between for instance production and market, different alternatives arise. The company can carry out adjustments until a match is achieved. Alternatively, the company can choose not to do anything at all, which also may be a strategic choice. The product profiling has however filled its purpose and highlighted the situation and possible consequences, such as extra costs, if the situation is to be corrected.

3.4 New Production System at Lesjöfors AB

71

3.4 New Production System at Lesjöfors AB We conclude Chap. 3 by giving an example of how Lesjöfors AB, a Swedish steel spring manufacturer, designed a new production system based on a welldeveloped manufacturing strategy. The starting point was that one of the company’s factories was totally destroyed in a fire in 1996. The plant had 7,000-m2 of floor area and the turnover was at that time 30 million Swedish kronor (MSEK). After the fire, the owner wanted to rebuild the plant with a maximum investment of 30 MSEK and with an annual cost for premises of maximum 1.5 MSEK. The order situation was already before the fire strained, which was to be handled together with the reconstruction. Lesjöfors AB has Swedish owners and in 2003 the company had about 400 employees in total over the nine production units. The company is one of the leading producers of steel springs in Europe. The business idea is to have a large standard range of different springs in stock which can be delivered within 24 hours after order. The company has three main business areas focusing on flat strip components, coil springs, and wired products. The company also produces after sales products for cars and other vehicles. Keeping a full line of products in stock is financially justifiable since set-up costs are high. Product development drives the product range, which means that the present range is decided through product development. Some products are, however, still customised. In 2003 the company had a turnover of slightly more than 570 MSEK. The annual growth has during the past 10 years been about 15%. Combination of successful industrial engineering and business development is the reason for the rapid growth. Product development in house and good control over production processes, where tool manufacturing and methods planning are two important parts, are considered to be the main success factors. Competitive advantages are short development time, flexibility, and reliable delivery. The following company description is, by approval of Lesjöfors AB, mainly collected from the company’s own material. Some analyses and judgments were made in connection with the planning and development work of the plant and its production system. Some of the investigated areas were: • • • • •

customer segment, order-qualifiers, and order-winners; technical resources and their main characteristics; product position/profile; production flow analysis; and the decision-making process.

Through the vision of world-class spring manufacturing, a division into customer segments (business categories) was made, see Table 3.7. The company also made an identification of order-qualifiers and winners, as well as an estimation of their respective importance and linkage to focus, see Table 3.8.

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3 From Business Plans to Production

Table 3.7 Customer segments for Lesjöfors AB Customer segment

Business category

CODP

Free after sales for automotive spare parts, chassis springs

Own selection with direct delivery from stock to distributors

at the service stock

Automotive

Customer design, agreements, and delivery schedules

at the service stock

Power distribution system

Customer design, agreements, and delivery schedules

at the service stock

Construction industry

Customer design, agreements, and delivery schedules

at first operation

Traditional engineering industry

Customer design, order on demand

at first operation

Table 3.8 Identification of order-qualifiers and winners, and the linkage between criteria and focus of Lesjöfors AB Order qualifiers

%

Criterion

Focus

100 Deliverability

Production system

100 Deliverability

Production system

100 Active selling 66

Order winners

Quality certification

Quality management system/training

66

Technical customer support

33

Standard selection

33

Range development

33

Wide range

29

Volume flexibility

29

Nice plant

29

Material knowledge

12

Spring development

12

Design flexibility

8

Design

%

Criterion

Focus

66

Price

Material cost, production system

43

Short delivery times

Production system

42

Tidiness

39

Fast administration

39

Prompt answer

34

Brand

Production system

3.4 New Production System at Lesjöfors AB

73

Table 3.9 Order-qualifiers and order-winners based on product family chassis chassis chassis industry industry industry industry industry Competitive compeABB standard sport cabin gate vibr spec priorities tition switch Delivery Q Q Q Q Q Q Q Q precision Deliverability Q Q Q Q Q Q Q Q Short lead W W W Q W W time Price W W W W W W Q Product range Q Q Aesthetics W W Q Q Q W Q Q Fast handling W W W Q Q W Prompt W W W Q Q Q Q W notification Active selling Q Q Q Q Q Q Q Q Technical Q Q W Q Q Q Q W customer support Design W Q Spring W Q Q development Standard Q Q selection Design W Q Q W flexibility Volume Q Q Q Q flexibility Brand W W W Q Q Q Q Quality Q Q Q Q Q Q certificate Nice premises Q Q Q Material Q Q Q W competence Surface W treatment knowledge Selection Q Q development TURNOVER 28 5 1 12 8 9 4 5 SHARE (%)

An identification of order-qualifiers and order-winners was also carried out based on product family, see Table 3.9. Other manufacturing strategy analyses were made. Value-adding positions of the product range were analysed. Possibility and relevance of changing vertical

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3 From Business Plans to Production p

PRODUCT POSITIONING/PROFILE Product life cycle stage Process Life cycle stage

II. III. IV. I. Low volume Low volume High volume High volume Standard not standard many few large commodity single

I. Functional layout

Flexibility HoS ABB

In s du

II. Batch flow

Chassis

try

Cabin

III. Line flow layout IV. Continuous process

Price Small product changes

New products continuously

Fig. 3.13 Product positioning at Lesjöfors AB

integration was investigated. The need for technical resources of specific processes/operations was analysed. Finally, an analysis of product positioning was performed by means of a product-process matrix, see Fig. 3.13. A product profiling was also performed where relevant aspects of the product were matched against suitable production arrangement. The alternatives, functional layout, batch flow, and line were examined. The aspects that were used in the product profiling are illustrated in Table 3.10. In this profile, demands from the different product families are shown. Finally, a production flow analysis was carried out on different product families that could be produced in the production system. An analysis was performed where the decision categories, organisation/personnel, control system, premises, Table 3.10 Basis for product profiling performed at Lesjöfors AB Relevant aspects for product

Products and markets

Production

Typical characteristics for process choice

Product type

Functional Special

Batch flow

Line Standard

Range

Wide

Order volume

Small

High

Typical order winner

Flexibility

Price

Narrow

Process technology

General

Process flexibility

High

Dedicated Low

Batch size

Small

Large

Set-ups: number

Many

Few

Set-up cost

Low

Production’s task

Time and quality

High Low cost

3.4 New Production System at Lesjöfors AB

75

Management Flow 2, 3, 4, lab, service, etc.

Flow 4

Flow 2 Flow 1

Flow 3

Departure

Fig. 3.14 Layout illustrating chosen production system at Lesjöfors AB

production capacity, and machinery/processes were matched against competitive priorities such as deliverability, reliability, active selling, quality certification, technical customer support, standard product selection, range development, wide range, and volume flexibility. An investigation of the different demands for reaching the level of world-class was also carried out (for 17 different factors such as product, automation, lead-time, maintenance) and compared with three development levels: traditional, present, and world-class. In that way the company could get a picture of what was necessary for them to reach the level of world-class. The final suggestion for the production system at Lesjöfors AB is illustrated in Fig. 3.14. Other results showed for instance a strong improvement in deliverability and reliability in the new plant compared with the old one. Also lead time was improved, from 4–5 weeks in the old plant to about 10 days in the new plant. Furthermore, productivity more than tripled, capacity doubled, and the production area was reduced by half.

Chapter 4

Production System Development

Abstract The content of this chapter is based on a number of studies carried out in manufacturing companies during the late 1990s. During these studies the focus was on assembly systems; however the results are applicable to the superior production system as well. The chapter provides ideas on production system development in practice. By way of introduction a basis for production system development is described – causes and contexts for development. After that the actual activities during development and the effects on the studied companies after they developed the production systems are described. An important part of system development is evaluation of existing and conceptual production systems. How the companies evaluated production systems is therefore also presented. Thereafter, how company culture plays an important role during production system development is described. A description of production system development carried out in Uddevalla, when Volvo restructured its assembly plants, concludes the chapter.

4.1 New or Changed Production Systems There are several reasons for a manufacturing company to change or develop new production systems. In this chapter we will take a closer look at some of the reasons mentioned by the studied companies. Before we proceed, details of the studies referred to need to be discussed. The content in Chap. 4 is mainly based on two major studies. One study involved ten, and the other 15, manufacturing companies in Sweden. The studies were carried out in the mid and late 1990s (Bellgran and Öhrström 1995; Bellgran 1998; Säfsten and Aresu 2000; Säfsten 2002), and focused on change/development of assembly systems. In addition, six more detailed studies were carried out, focusing on questions related to the assembly system design process. These case studies provided deeper knowledge of the design process as such and the influence from contextual aspects on the design process, among other things. Moreover, three case studies focusing on evaluation of assembly M. Bellgran, K. Säftsen, Production Development, © Springer 2010

77

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4 Production System Development

systems are referred to in this chapter. The assembly systems within the studied manufacturing companies often represented a large part of the manufacturing activities. Conclusions drawn concerning assembly systems are considered valid for production systems in general. All the participating companies were manufacturing companies. Most of the companies manufactured middle-sized and relatively complex products, which implied a certain degree of complexity in the assembly system. In the study involving ten companies the most complex products, for example trucks from the automotive industry, were excluded. The reason was that the assembly system design processes in these companies were considerably more extensive than for other products, and therefore the preconditions differed too much from the other companies (Bellgran and Öhrström 1995; Bellgran 1998). These system design processes are however delineated based on other research results. All studies referred to focused on activities carried out related to a change or development of assembly systems within manufacturing companies. Therefore, another criterion for the manufacturing companies participating in the studies was that they had carried out some kind of change, large or small, of the assembly system during the last few years. Several of the participating companies were part of larger groups, and both smaller and larger companies participated. The number of employees varied between circa. 100 to slightly more than 2,000 and, consequently, the turnover also varied substantially between the manufacturing companies. Most of the companies were geographically located in the southern part of Sweden. This chapter begins with some examples on why the studied companies initiated change activities and ends with a discussion concerning differences between various reasons for changes and the actual degree of change. Why Change a Production System? The main reason identified as to why a new assembly system was developed in the ten-company study was the introduction of new products or product families which, for various reasons, it was not possible to assemble in the existing systems (Bellgran and Öhrström 1995; Bellgran 1998). Some of the companies saw at the same time a possibility to improve the working environment, automate, or improve the order within the flow, even if the product triggered the change. In some companies reasons other than new products triggered the system changes, for example a need for an improved working environment or for increased capacity. Similar results were found in the more recent 15-company study (Säfsten and Aresu 2000; Säfsten 2002). The most commonly mentioned reason for changes in the assembly system was the introduction of a new or a changed product or product family (mentioned by seven out of 15 companies). However, the reasons for introduction of new products and product families varied. The background could for example be new environmental legislation, altered market requirements, or technology development. A new product may also result in demands for various

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79

changes. In one company the introduction of a new product initiated a review of the existing production system. INDUSTRIAL EXAMPLE: NEW PRODUCT REQUIRING NEW ASSEMBLY SYSTEM The latest assembly system change in Company F was due to the replacement of an old product family. The difference between the old and the new product family was fairly large, among other things the number of common parts had increased. One important requirement was to utilise possible advantages from coordination between parts. The most common reasons as to why the company changed its assembly system were said to be quality assurance and the possibility to be more cost effective. In Company L a new product in combination with high requirements on efficiency were mentioned as the main reason for the latest change in the assembly system. In this case it would have been possible to assemble the new product model in some of the existing assembly systems, but due to the keen competition on price it was still motivated to develop a new system. The product cost was considerably reduced with the new system, and the investment was described as profitable. In Company J the most recent change of the assembly system was carried out when a new product generation was introduced. The change mainly involved a replacement of the existing equipment for transportation. In other words, the new product generation implied a reason to revise the existing assembly system. When the study was carried out, discussions were ongoing in the company concerning quite extensive changes of the assembly system caused by a need for doubled capacity, and one of the ideas was centralisation of all assembly within the company. Source: Säfsten and Aresu (2000)

In the 15-company study other reasons to change the assembly system were also mentioned. In some of the companies activities in improvement groups resulted in potential areas for improvement. INDUSTRIAL EXAMPLE: IDENTIFIED POTENTIAL FOR IMPROVEMENT Company E and Company I pointed out that several changes were initiated by the operators. The main reasons for the most recent system change in Company E were said to be quality, ergonomics, and a need for more flexible capacity. About half of the investments within the company could be referred to as replacements, the rest was technology development. In Company I the reason for the most recent change was that the packing was not considered good enough. The product design obstructed smooth packing. Minor changes in the product design were required together with a change in the assembly system. The most recent change in Company K was part of continuous improvement within the production system. The change was initiated from the system, even if the driving cause was found in the company’s overall production system policy. The accomplished changes involved improvement of the flow and orderliness. In Company N the reasons mentioned for the latest change were requirements on cleanness and an improved flow. Here the changes involved rearrangement and centralisation of assembly to separate clean rooms. Source: Säfsten and Aresu (2000)

Even if none of the companies explicitly mentioned that a change was carried out as a result of an evaluation of the assembly system, the results from more or less informal and unsystematic evaluations of existing assembly systems were still taken into consideration.

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In another example the assembly system had to move as a consequence of rearrangements in the rest of the plant. Initially, the idea was just to move the entire assembly system without changes. However, the activities coincided with an alteration of production manager and a discussion was initiated whether it was possible to achieve “a better assembly system”. In that way a review of the existing assembly system was initiated. Things found relevant to change involved the material and quality handling. The descriptions above illustrate various types of changes. There are two distinct variables: degree of change and reason for change. With the properties of an existing production as starting point, the extent of change in terms of minor or major changes could be described. It is, for example, relevant to distinguish improvement of existing production systems from development of entirely new systems, the latter a far less frequent activity than the former. A minor change might, for example, involve replacement of a few tools or work stations, whereas a major change can involve an entirely new production system. New production systems do not necessarily imply extensive changes, it can be similar to the existing system but it can also be built according to entirely new production principles. To make a distinction between various degree, or order, of change Porras and Robertsson (1992) use the concepts of first-order and second-order changes. A first-order change is described as involving alterations of the system without any shift in either fundamental assumptions about key cause and effect relationships or the basic paradigms controlling system performance. Developing an assembly system similar to the previous system is one example of a first-order change in a production system context. A second-order change is radical and multi-level, and involves a paradigmatic shift. An example of a second-order change would be the transition from manual to automatic production. Order of change, or degree of change, is often reflected in the chosen way of working when the change is carried out. Major changes are commonly carried out as projects. When a new product is to be introduced, production system changes can be carried out as part of the product development project, whereas industrialisation might be carried out in a parallel or subsequent project. Minor changes are commonly carried out as part of everyday work. As one example, experiences from the 15-company study can be mentioned; here minor changes were often carried out as part of the work with continuous improvement (Säfsten and Aresu 2000). Various reasons for assembly system changes, the way of working during the change, and its result are presented in Table 4.1. Reasons for change can be found within the production system as well as outside, as exemplified above. Using terminology from organisational theory, the different types of reasons can be referred to as planned and un-planned changes (Porras and Robertsson 1992). A planned change originates from within an organisation, with the purpose to improve performance. An un-planned change originates from outside the organisation and implies an adaptation to raised requirements. Similar terminology, also used in organisational theory, is internal and external change impulses or change initiative (Bakka et al. 1993). Since production systems similarly to organisations can be regarded as open systems it is not farfetched to

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81

Table 4.1 Reasons for change, way of working and result of assembly system changes (Säfsten 2002) Reason for the latest change

Way of working

Result

Rationalisation, strategic decision to automate assembly

Project

New assembly system

Problem with quality and ergonomics identified in existing system

Part of everyday work

New assembly system

Problem when packing products

Part of everyday work

Improvements of existing system

New product in combination with increased requirements on efficiency

Part of product development project

New assembly system

New product

Part of product development project

New assembly system

borrow these concepts to categorise the changes we have seen within production systems. When the reason for change originates outside the production system, the change is considered to be externally initiated. And similarly, when the reason for change originates from within the production system it is internally initiated. Externally initiated changes in the production system are for example introduction of a new product or increased demand requiring more production capacity. The relation between investment and potential revenues is often obvious. When changes were initiated externally in the above-mentioned study (15-company study) the initiative to invest in new assembly systems often came from the industrial management. In one company where the investment was internally initiated (due to ergonomic requirements) the initiative came from a group composed of the production manager, production engineers, and the shop manager. Ergonomics and work environment are typical sources of internally initiated changes within production systems. External reasons are often more explicitly driving or dominating, sometimes in combination with internal reasons. Internal reasons more often cause changes of an existing production system rather than development of entirely new systems, as is the case when external reasons drives a change. This can be illustrated as in Fig. 4.1 where various degrees of change are related to internal and external reasons, and associated types of change are given. When classifying a change in a production system the starting point is the properties of the system before the change compared to the properties after the change. This means that the same change, for example introduction of robots in assembly, can imply a minor change in a production system already used to robots, whereas it means a major change in a production system without any previous experiences of automatic assembly. Accordingly, degree of change describes the extent of a change in relation to the company’s existing production system before change. Summing up, it can be established that among the studied companies’ production system changes were most often carried out due to changes in the product assortment in terms of new or changed products, demand for increased capacity,

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4 Production System Development Reason to change

Degree of change

Internally initiated

Externally initiated

Minor

Improvement

Development

Major

Transformation

Revolution

Fig. 4.1 Reason to change and degree of change together describe different change situations

replacement investments, or to introduce changes in the work organisation. Aspects such as resource allocation, project organisation, and prioritisation vary with the reason for the change and the investments in the production system.

4.2 Industrial Development of Production Systems In practice, how do companies proceed when new production systems are to be developed? In this chapter the development procedure within a number of manufacturing companies is described. The procedure varies between the companies due to various circumstances (contextual aspects). Nevertheless, there are several similarities worth noting and further analysing.

4.2.1 Typical Development Situations In Bley et al. (1996) industrial examples illustrate three different procedures/situations facing companies when developing production systems (assembly systems): 1. Solution to the problem could be found in a catalogue from a system supplier. The task for the production engineer was to choose an appropriate solution. 2. A manual work station was to be designed and guidelines about ergonomic aspects could be found in standards. Different systems solutions solving the problem were proposed/offered. A work station could be created by using system modules. The task remaining for the production engineer was mainly concerned with task accomplishment rather than problem solving. 3. Pre-assembly, final assembly, and function test organisation was to be proposed. Various forms and resources were available to solve the task and the goals were unclear. To be able to find a solution a project team was required working with a dynamic development process. The preconditions for various development situations vary. Solving a task with unclear goals and several possible solutions is more demanding and time consuming than choosing a complete solution from a catalogue, although this can be complicated enough.

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4.2.2 Industrial Practice The practice among some manufacturing companies in Sweden when developing production systems, and especially assembly systems, is narrated below. The industrial examples illustrate specific assembly system design projects. A general starting point for many companies when discussing different solutions was the layout. A quite common procedure was to develop a number of alternative conceptual solutions, and to quickly choose one of these concepts to be developed in detail. The choice was often made based on discussions within the project team to determine the best conceptual solution. If requirement specifications were available, comparisons with these were made to determine which conceptual solutions best fulfilled the requirements. Evaluations of conceptual solutions were often made intuitively or by discussion with others. INDUSTRIAL EXAMPLE: LAYOUT AS A STARTING POINT WHEN DEVELOPING ASSEMBLY SYSTEMS Company 1 based their task to design the assembly system on the layout, i.e. a drawing of the plant. A layout describing an idea of a solution was made and thereafter various aspects were discussed based on this layout. Different details were developed, and based on various issues changes were made. No initial investigations were made, the development work started almost immediately with a number of layout suggestions from which the subsequent work then continued. Company 2 initiated their work by making time and activity schedules. The explanation for this was that they already were familiar with the product. This fact also made it possible to neglect some activities. Brainstorming preceded the outline of a layout. Different layouts were outlined, and gradually improved upon based on feedback from, among others, the assembly personnel. Company 2 worked out the concept, partly based on the existing system (and partly in cooperation with a consultant). Yet the final result was comparatively different from the existing assembly system. In principle Company 3 copied the layout from the existing assembly system and reused quite a lot of the equipment. The layout was used to test the design and determine the amount of floor space. Initially the layout planning focused on finding enough free space for the assembly system. Suggestions on layouts were also made by the system supplier. The purchased equipment was finalised, installed and test-run by the company’s own technicians. Thereafter, work stations were tested and gradually adjusted. In Company 4 the layout was the starting point for the investment request. The assembly system development was part of a larger project. A timetable was made, and based on this various development activities were planned. One year after the management’s approval of project start the detailed work with the assembly system was initiated. Layout planning was a starting point for the development of various system solutions. After discussions, they agreed on a system alternative presented for the project management. The alternative, which was regarded as advantageous from an operator perspective was, however, not accepted by the management and the project team had to restart the activities based on suggestions from the management (which were considered as more efficient). Some tools required for the initial system solution were, however, already ordered. Despite the delay, the assembly system was implemented according to the timetable. Company 5 developed several different subsystems, in slightly different ways. The project team distributed the area of the premises, and then detailed solutions for the different subpro-

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jects developed. For one of the subprojects, the designated area was too small. The design process varied due to, among other things, different project leaders and project teams, but also due to different preconditions. The result was various solutions for the different subprojects. Source: Bellgran and Öhrström (1995)

Results from the ten-company study (Bellgran and Öhrström 1995) showed, among other things, that only a few companies formulated a thorough requirement specification before initiating assembly system development. INDUSTRIAL EXAMPLE: REQUIREMENTS AS A STARTING POINT WHEN DEVELOPING ASSEMBLY SYSTEMS In Company 6 the assembly system was gradually built up in different units, among other things governed by increased production volumes. The work with the layout started at a relatively early stage and involved quite a lot of employees. The project team suggested a layout that was gradually improved and finalised. An extensive requirement specification was prepared for purchasing equipment. In Company 7 the requirement specification constituted an important condition for the system design. A number of criteria or requirements were identified, which the existing assembly system did not meet. The principles for the new assembly system solution were established at an early stage. The system’s performance and the forecasted production volume were well known. The capacity planning therefore became an issue. The layout planning started at quite an early stage and was focused on utilising the available space in the best way. Different solutions were tested, often through experimenting and prototypes. The production system in Company 8 involved both machining and assembly. The requirement specification was of great importance for the design process. The management clarified their visions, their ideas of the assembly systems abilities, production volume, etc. On a detailed level other types of factors needed consideration, such as for example flow, quality requirements, tied-up capital. The project team then investigated the possibilities to meet the objectives. The vision constituted the basis for the conceptual development. Then, work followed with adapting the concept to available resources, for example the premises were determined before the project was started. In a later stage of the project, when they begun sketching on the layout, also suppliers were involved. Company 9 developed a production system with assembly and machining integrated. Machining was regarded as considerably more complicated than assembly. Production system design was based on a requirement specification mainly involving requirements on the product. The production volume was decisive for the assembly systems design. Outgoing from the production volume, capacity, assembly time, requirements on equipment, etc. was calculated. Assembly system development was not dominated by layout planning. A general view regarding the design process was: ‘if you think right from the beginning, maybe you have been involved too long”. Source: Bellgran and Öhrström (1995)

A reason mentioned as to why the studied companies did not start with a requirement specification was that most of the developed assembly systems were manual; requirement specifications were regarded as more important when purchasing expensive and advanced production equipment. When developing manual assembly systems, requirement specifications were seldom compiled on the same level of detail as when developing automatic systems; possibly because manual assembly systems were often developed by the company themselves.

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INDUSTRIAL EXAMPLE: DEVELOPMENT AS A TAKE-OVER Company 10 differed quite a lot from the other nine companies; their new assembly system was a take-over of an already existing system. The company reused as much as possible of the existing equipment. The assembly system was chosen based on the preconditions, especially concerning material contents and volumes. The division into suboperations was important for the design of the system, both to fit the assembly system and to make it reasonable to build. Initially, the technical system was built and then the organisational part was considered. The initial solution developed through discussions in the project team, and thereafter it circulated for comments within the company. Source: Bellgran and Öhrström (1995)

No systematic and documented evaluations, based on any type of methodology, were carried out in any of the companies participating in the ten-company study. The assembly system alternatives were not of the character that they were simulated with any simulation tool; on the other hand most of the companies used the layout and paper models, representing machines and stock etc., to test various solutions. The studies referred to confirm the well-known fact that the two most important factors for a production system are the product with its design, and the estimated production volume. These factors influenced several of the decisions taken by the production engineers during system development. It could be noted that one system alternative was quite often chosen early in the development process. Companies had a tendency to present a single “best” solution very early on in the development process, which partly can be explained by the routines for investment requests requiring descriptions of the planned production system. The studies also indicated certain aspects that influenced the system development work within the companies. One of these aspects was the management of the system development process; the assignment of project leaders and system engineers, and the overall resources allocated to the project. The composition of the project team is often decisive for the result of a project, irrespective of type of project, and this was the case here also. It was also interesting to note the great influence on the development work, and thereby the final assembly system, from diffuse and sometimes abstract aspects. The final result was not only affected by tangible technical and economical aspects, but also how the system was developed and who was working with the development of the system. An unexpected complexity of the task was evident, not only due to the huge amount of possible alternatives to choose between, but also because of the actual development process. Several of the research studies carried out were retrospective studies, meaning that a phenomenon or a situation is studied afterwards instead of in real-time. This means that the result depends on the memory among the respondents (interviewees), and the human memory tends to be selective, both consciously and unconsciously. Sometimes the respondents had difficulties in recalling how the production system was developed, which partly could be explained by the time elapsed between the actual development and the interviews. However, it was clear that the way of working with system development was not in focus. The development

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process was not regarded as a way, a means, to achieve the best possible production system as a result, i.e. the goal. There was a lack of structure and systematics (e.g. methods or other means) as a consequence of the low attention paid to the way of working. It was concluded that there was no clear structure facilitating the task for system engineers when developing production systems.

4.2.3 Structured Ways of Working A design process can be structured to various degrees, either from the very beginning or along the way. Yet it is not unusual that activities during the design process are carried out in a slightly ad hoc manner. The degree of structure depends largely on the awareness of the complexity of problems facing the system engineers. The ten-company study provided examples of different ways of working based on various degrees of structure (Bellgran and Öhrström 1995). INDUSTRIAL EXAMPLE: STRUCTURED OR UNSTRUCTURED WAY OF WORKING The studied companies described their way of working during development of their latest assembly system as follows: (1) “Not structured, the last assembly system was put together in a rather unstructured way”. (2) “No, there have not been any particular guidelines”. (3) “No structured way of working, we do not work as systematically with records as maybe State-owned companies or those with State-owned customers. We are not that bureaucratic. It is difficult to describe how we are working, although there are probably some systematic methods involved. It is not very formalised. A drawback is that there is no documentation of the activities which means that it is not possible to look back at mistakes with support from documents. It is not certain that the result would improve from keeping more records, on the other hand the requirements for this have increased today”. (4) “No, we didn’t have that process described yet, we didn´t have such a clear process. Processes weren’t topical then. We had two milestones. It is possible to follow some kind of sequential procedure but it didn´t exist at that time”. (5) “No, in total the project work was partly regulated in terms of a formal project”. (6) “It was largely done by one man”. Source: Bellgran and Öhrström (1995)

Several aspects influence the possibility of following a predetermined and structured way of working when developing production systems. Time and priority are two aspects, difficulty to obtain relevant information is sometimes mentioned, as is the lack of available methods. A structure makes it possible to focus on the essential issue of creating good system solutions, instead of spending time on bothering about the way of working. The risk of obtaining a method that exerts too much control is relatively small. One company created a structure adapted to their situation (see the Industrial Example below) partly based on the method presented in Bellgran/Lundström

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(1993) and updated in Bellgran (1998). The project leader had an important role during the development and application of the company-adapted method in this specific company. INDUSTRIAL EXAMPLE: STRUCTURED SYSTEM DEVELOPMENT 1. PLANNING AND DETAILED INFORMATION 1.1 Analysis of existing assembly system: Interviews with production personnel and production managers, work in the assembly system, work instructions, handbooks, plant layouts, etc. 1.2 Sales forecast: Synthesis of data from planning department, market and sales department, and historical data 1.3 Benchmarking: Literature reviews (e.g. of Volvo’s plant in Uddevalla), seminars, study tours, experiences from system development in other companies 1.4 Requirements on the assembly system: The result from the requirement specification was summarised in a goal document. The technical requirement specification and the product design constituted the rest of the basic data. Overall goals for the assembly system were formulated. 1.5 Analysis of new product: Continuous reviewing of the product design 2. DEVELOP ASSEMBLY SYSTEM CONCEPTS 2.1 Functional structure 2.2 Idea generation 2.3 Choose assembly principles 2.4 Conceptual ideas 2.5 Assembly structure Comments to 2.1–2.5: The basic concept for the assembly system was developed together with the production manager and the production engineering manager. As a complement to the previous study of the assembly system a pre-study regarding the present quality level was carried out as a subproject. Several exercises concerning the assembly systems structural design based on an A-model structure were carried out together with the area responsible. Reconstruction was carried out together with the real-estate manager and production engineering manager. 2.6 Preliminary layout 2.7 Work organisation 2.8 Evaluation: Technical and economical 2.9 Choose assembly system concept 3. DETAILED DESIGN OF ASSEMBLY SYSTEM 3.1 Improve the layout 3.2 Detailed design of the different parts of the assembly system 3.3 Design fixtures 3.4 Design test stations and program 3.5 Purchase components for the assembly system 4. REALISATION OF THE ASSEMBLY SYSTEM 4.1 Tools 4.2 Prepare the production area 4.3 Manufacture fixtures 4.4 Build the assembly system 4.5 Assembly test 4.6 Documentation Sources: Bellgran (1997; 1998)

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The assembly system developed in the example described above was mainly manual and based on an existing system concept. Much of the design activities could thereby concentrate on the detailed specification of the system. Great importance was, for example, attached to the design of the work places and the test operations. In view of the fact that the system concept more or less was inherited, the conceptual life of the existing assembly system (involving both technology and work organisation) was at least two system generations.

4.3 Evaluation: Part of Development Evaluation constitutes an important part of the work in production system development. Studies carried out among manufacturing companies shows that evaluation is an often neglected activity. Evaluation is often considered as important, but only a few take the time to carry out an evaluation. Lack of time is often given as the reason for not evaluating; not knowing how to do it is another reason, or a combination of both. This is in sharp contrast to several other areas, such as education, politics, etc. where evaluations are carried out to a considerable extent. There are several points within production system development that evaluation is required. In the preparatory development work it is essential to evaluate the existing production system to derive advantages from previous experience before designing the new system. When developing several alternative system solutions it is essential to compare the alternatives against each other and against various criteria. In that way a good foundation is achieved to decide on the best production system alternative to continue working with. There is yet another phase where evaluations are essential and that is after a change or when the production system is in operation, see Fig. 4.2. After a change, a momentary evaluation (at a certain point) of the final result is appropriate, as is continuous follow-up of the production system performance (see Chap. 10 for further elaboration). When change activities or development

Fig. 4.2 Production system life-cycle phases where evaluations are of interest (Säfsten 2002)

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work is concluded it is also relevant to evaluate the actual way of working resulting in the final system. Here, however, the emphasis has been on evaluation of the result from the change or development work, in other words the production system itself. We will now take a closer look at how the studied companies worked with evaluation during the different development phases.

4.3.1 Evaluation of Existing Production Systems The most common description given of evaluations made of existing production systems, carried out before a change, is that the evaluations were unsystematic and unstructured. Nevertheless some types of evaluations are generally carried out as a basis for the systems to be. The type of evaluation to be carried out is of course variable. Evaluations of existing assembly systems carried out in the studied companies were mainly of an intuitive character, based on observations of the systems in everyday work. Related to this it is relevant to note that all of the studied companies had existing systems, and none of the studied companies started from scratch with system development. Evaluation of existing production systems is carried out on a physical system. Knowledge and experience of the system and its performance is available. Data concerning the production systems performance might be available, or possible to acquire, as is practical experience from the systems. Below, some industrial examples of evaluations carried out of existing assembly systems in connection to changes are described. INDUSTRIAL EXAMPLE: EVALUATION OF EXISTING SYSTEM BEFORE CHANGE Company M invested in a new assembly system for the introduction of a new product. The company tried to identify advantages in the existing assembly system, and what qualities were expected from the new system. The evaluation was not carried out in a particularly structured or neat way. The team was composed of those responsible for the assembly plant, an experienced assembly methods engineer, hand-picked operators, and the safety representative. The principles for selection of operators were, among other things, long experience within the company and leadership abilities. The idea was that these operators later on should work with the new assembly system. Within the team the qualities of the existing systems were discussed as well as the expectations on the new assembly system. The evaluation of the existing assembly system gradually changed focus and became more of an evaluation of various system alternatives. Source: Säfsten and Aresu (2000)

Several companies describe a similar course of events as the company above. A common procedure is discussions and identification of advantages and disadvantages. A number of persons are gathered and together they try to identify potential areas of improvement in the existing production system, and ideas for new systems. The described work is of quite informal character, and brainstorming is often one part of it.

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One company described the work as an indirect evaluation of the existing system since they made good use of previous experience by gathering involved people. One company described the process as seminars where requirements, advantages, and disadvantages of different system alternatives were discussed. Thus, in most cases the evaluations concerned both existing and conceptual solutions. Previous experience of how things were done earlier was often important, as illustrated by the following statement: “You look back a lot when you do something new.”

With lively and continuous cooperation within groups, short communication paths are achieved, which besides facilitating evaluation also provides advantages for the operation of the system. There were also examples of companies that already from the beginning had ideas about the new assembly system. This naturally influenced the approach of the evaluations. INDUSTRIAL EXAMPLE: EVALUTION BASED ON GUIDELINES FOR ASSEMBLY SYSTEMS The last time Company K changed its assembly system a project team was formed to develop alternative solutions. The project team was composed of two operators, one service technician, one production engineer, and two persons from process engineering. The reasons mentioned as to why they changed the assembly system were requirements for structured flows and orderliness. In this company there were explicit guidelines for the entire group of companies prescribing how to design assembly systems. These guidelines contained, among other things, requirements on ergonomic installations, a minimum of stock, reduced flows, optimised process and quality. At this point of time an assembly system design according to these guidelines existed. Several experiences from the existing system could be transferred to the new assembly system. They knew what was good and what was not – and hence what should be improved upon or changed. Source: Säfsten and Aresu (2000)

In some companies a specific method or procedure was used to investigate the expected impact of various failures. When this method, failure mode and effects analysis (FMEA), is applied to the manufacturing process it is sometimes called process-FMEA. The studies show that the companies used process-FMEA during several phases of a system development project. Apart from that, time studies were also carried out on existing assembly systems before change. The purpose of the time studies was to determine the time required to complete various moments. The result was the basis for the allocation of working operations between different assembly stations. Evaluation in terms of analysis of the amount of value-adding activities in existing assembly systems also occurred (a type of value flow analysis). Examples of questions posed when existing assembly systems were evaluated were: • How good is the existing system? • What can be improved and what is good enough? • What are the advantages and disadvantages of the existing system?

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• What is done by other companies? How do others do this? • What are our expectations of the new/changed system (compared to the existing system)? The amount of previous experience that is useful and valuable when developing assembly systems depends on several aspects. The reason for the change and what to change has influence. If directives are given, prescribing how to design the new system, the result from an evaluation of the existing assembly system is probably less valuable than if several possible solutions are to be compared with each other. Another aspect influencing the value of evaluating the existing assembly system is how good the system actually is. There is an evident risk of being uncritical when bringing previous solutions into new systems. If the existing production system is not suitable for its tasks it is essential that the deficiencies are elucidated. There is the risk that bad solutions become rooted in a company if evaluations are not carried out to reveal the bad solutions. Despite the lack of structured evaluations it was still obvious that the studied companies started from, and derived advantage from, the existing assembly systems. Sometimes also the existing concept was copied into the new system. Some considered the experience from specific pieces of equipment (e.g. fixtures) was valuable, and sometimes even old equipment from the existing system was used in the new assembly system. Naturally, evaluations can be carried out continuously in a more intuitive way. This is the way deficiencies in old production systems are identified, deficiencies eventually leading to internally initiated changes of the production system. Deficiencies can be at a detailed level concerning for example machinery with faulty equipment and tools, or at a system level where the overall principles are questioned. Results from evaluations of existing production systems indicate good and bad qualities of the system, with the purpose of guiding improvements and changes, both in the existing and future systems. For example, the result can be gathered and used during the specification stage of a subsequent system development process. Before a change, evaluation of the existing production system is carried out once, thus it is not an iterative process. In several of the studied companies the evaluation of the existing system gradually evolved into the design of new/ changed system alternatives. Besides the specific result from an evaluation, another outcome was increased knowledge for all involved concerning the system qualities and capabilities.

4.3.2 Evaluation of System Alternatives During design of different system alternatives several requirements and restrictions need to be considered. At the same time there are numerous possible solutions to consider. A complex design process with several alternative system solutions provides arguments to carry out thorough evaluations. In several situations, when no

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specific evaluation was carried out of the existing assembly system, the existing system was still part of the evaluation of system alternatives for a reference system. INDUSTRIAL EXAMPLE: ONE EVALUATION EXAMPLE Company B described that they initially identified advantages and disadvantages with the various suggested system solutions. At the time of the study the company was in the middle of a change, involving a comparison between the existing assembly system and a new system solution. The new suggested assembly system solution was based on an evaluation of a number of different concepts. The production engineers had developed a number of different alternatives (among other things based on ideas from a couple of industrial visits). Production management and the rest of the production engineers looked at the suggested solutions. One alternative was selected and the production engineers refined this solution before the assembly operators were invited to give their opinion on the suggested system alternative. The evaluation mainly had the character of a discussion and no documentation was available. Source: Säfsten and Aresu (2000)

In another company a discussion was held in connection with the introduction of a new product, concerning whether it would be appropriate to change the assembly system design or not. One idea was to replace some of the parallel assembly stations with an assembly line. At this point in time, during the early 1990s, this was not possible due to the massive resistance towards assembly lines. The change carried out was an update of the internal transportation system. The subsequent large change in the company was concerned with a changeover from parallel assembly to assembly line; however, this time it was based on explicit directives from the company management. When the preconditions to realise this directive were discussed an evaluation, or comparison, was carried out between the present parallel assembly stations and the possible future assembly line. A number of advantages and disadvantages of a line-based layout were identified, see Table 4.2 for details. The most important qualities of the line-based layout were the pulse in the system, visibility, and the possibility to keep the product in the right sequence throughout the assembly system. Table 4.2 Advantages and disadvantages of a line-based layout Advantages of a line-based layout

Disadvantages of a line-based layout

Better and simpler control of process and organisation

Reduced possibilities for the assemblers to control their work

Visual

Reduced variant flexibility

Space efficiency

Reduced volume flexibility

Problems become visible, provides a driving force for improvement

Increased requirement when introducing new products

More rapid learning

Reduced work content

Improved quality

More sensitive to disturbance

Improved possibilities for good ergonomics

Balance losses

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When comparing different alternatives, as in the example above, the existing production system was compared with an alternative system solution. The alternative system solutions can be developed within the company, but it could also be based on well-known concepts used by for example competitors. In the following section an extensive evaluation, carried out in a manufacturing company when a new assembly system was developed in the late 1990s, is described. An Industrial Evaluation Model One of the studied companies put quite a lot of effort into the evaluation of various assembly system concepts when they last changed systems. Seven different assembly system alternatives were developed, and compared with each other. As one part of a product development project comprising a new product family, a separate work team was dedicated to a subproject involving the design of a suitable assembly system. The design activities were carried out by a team of six to seven persons consisting of the plant manager, production development manager and additional personnel from production development, production engineering management, and personnel from the quality department and from the planning department. As part of the design activities an evaluation model was developed, involving several steps for evaluation of different conceptual assembly systems. The subproject manager worked full-time and the other participants worked part time on the subproject, in parallel with their ordinary responsibilities. On the basis of the known criteria of the new product family the subproject leader designed seven different conceptual assembly system solutions. These suggested solutions were discussed in the subproject team. The first step of the evaluation involved a comparison of the seven assembly system concepts regarding 19 different key factors, see Table 4.3. A common evaluation of important factors was done, and quality, work environment, and material handling were some of the prioritised factors. The risk of assembly errors, due to high flexibility, was also a prioritised factor during the initial evaluation. The second step involved individual evaluations by all members of the subproject team. Each assembly system concept was given a value from 1 to 7, where 1 represented most suitable and 7 least suitable, for each key factor to describe how good they perceived the concept to be regarding that specific key factor. The gradation was summarised in a matrix composed of the 19 key factors and the seven conceptual assembly system solutions, see Table 4.3. The score for each key factor was added up for the seven system concepts and thereby it was possible to compare the concepts with each factor. The third step was to summarise how many times each concept had been most suitable (1) and least suitable (7). This most/least suitable grading was weighted with the previous scores and the seven concepts were placed in order of precedence. Here three of the concepts stood out as equivalent. For each of these three concepts a comprehensive evaluation was done where positive and negative factors

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Concept 7

Concept 6

Concept 5

Concept 4

Concept 3

Concept 2

Concept 1

Table 4.3 Step 2 of the evaluation of different concepts

Environment Material deadlock Material flow Part mix-up Correct order realisation Space efficiency Human resource development Investment level Stock keeping Planning Assembly to customer order Delivery capacity Capacity flexibility Product balancing Group organisation adjustment Staffing Indirect time Cycle time Quality Summary/concept

were listed. As a fourth, and final step, of the evaluation a number of factors were investigated in more detail. Focus was on the factors perceived as most positive or negative during the initial step of the evaluation. For each key factor a comparison was done with possible goals, a specification of what was positive and negative, and the preconditions for improving the concept – if required, see Table 4.4. The most important part during this step of the evaluation was to identify the preconditions, or measures required, to improve the concept. At this stage one of the concepts did not fulfil the requirements concerning cost, space, and time for material access. There was then two possible assembly system concepts left. One of the concepts was very similar to the existing assembly system with separate lines for each product, and the other concept had common subassembly and flexiTable 4.4 Example of the detailed evaluation Factor Space efficiency

Goal

Positive

Negative Low due to a minimum of part coordination

Preconditions or measure to improve the concept

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ble final assembly lines. One of the features of the new product family was a considerably increased number of common parts, compared to the existing product. It was considered as important to make use of the potential coordination possibilities in the assembly system, and therefore this concept was chosen.

4.3.3 Evaluation of Equipment- or System Suppliers In several of the studied companies the evaluation of different system alternatives ended up being an evaluation of various system suppliers. One company stated that they had good knowledge of the available alternatives on the market, and they had also been able to find an alternative fulfilling their requirements on capacity and cost suitable for the change in question. The decision to select a particular alternative was not the price offered by the supplier – the chosen alternative was the most expensive – but a judgement of the supplier’s competence. The rejected supplier was considered not to be able to provide sufficient service, mainly for geographical reasons. Furthermore, no assembly line was available in Sweden to bench-mark, which was the case for the chosen supplier. Another company had invested in a turnkey assembly system. As a first step the existing assembly system was evaluated. After that the new system was planned, based among other things on company internal reports describing advantages and disadvantages with for example various tempo time and assembly layouts. Besides these reports also other ways of collecting data were used, as were influences from among others the Swedish Assembly Forum1. The entire group also visited four companies to, as they said: “open ourselves up to new thinking and new influences, to see how others do it even if the products differed ….”

On the basis of this, the requirements for the new assembly system were listed. Four different system suppliers were contacted and asked to present system solutions/estimates. The evaluation of these solutions is described as quite unsystematic. The evaluation included used technology, flexibility for future extension, sound level, cleanness, impression of service and maintenance, ergonomics and price. During this phase other companies were visited where system solutions from the involved system suppliers were operating. This was described as an important part of the evaluation and quite decisive for the final selection of system. During the visits they tried to form an opinion about accessibility and reliability of the studied systems. The final selection involved two system suppliers, with relatively similar conceptual solutions. Conclusive for the final decision was partly a judgement of the supplier as such, partly whether they could demonstrate a working 1

Svenskt Monteringsforum (Swedish Assembly Forum) is a network for people interested in assembly-related questions, members are both from industry and from academia, www.monteringsforum.se.

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solution. The system supplier finally chosen was known to be good as a supplier. The supplier evaluation in itself was described as based to quite an extent on feeling, i.e. based to a greater extent on how they saw the supplier then on real data. INDUSTRIAL EXAMPLE: EVALUATION OF CONCEPTUAL SOLUTIONS WITH FOCUS ON SYSTEM SUPPLIER Company D installed an entirely new assembly line. The chosen solution was a turnkey installation from a system supplier. The choice of assembly system concept was mainly a matter of choosing the system supplier, i.e. the system supplier was chosen before the system concept. One of the reasons was that the chosen supplier was considered to be a world-class supplier of assembly systems. At this point of time this was an important argument for Company D, since they only had limited experience of automated assembly systems which was the case here. Another advantage with the chosen supplier was that they controlled the entire system delivered. Several other system suppliers combined parts from various subcontractors. To have control over the entire system was believed to be equivalent to having knowledge of all included parts, which was considered advantageous. Furthermore, the risk of discussions concerning responsibility was reduced with only one supplier involved. When choosing between suppliers Company D valued close cooperation. Source: Säfsten and Aresu (2000)

When system suppliers were involved, the choice between various system concepts largely became a question of choosing system supplier. Not least when the system was a turnkey solution. The assembly system provided by the, from the manufacturing companies perspective, best system supplier was chosen. Best system supplier refers to aspects such as service, continuity, and good reputation. The supplier’s process knowledge was also important, such as for example assembly. One approach when choosing the equipment or system supplier was based on requested offers/estimates from various companies, another approach was that the supplier was chosen first and thereafter discussions about a suitable concept were initiated.

4.3.4 Evaluation After Change When a system solution is chosen and the change is completed, i.e. the new production system is implemented, yet another opportunity for evaluation occurs. At this stage there are different evaluation approaches to choose between, among other things depending on what the system is compared with. Relevant comparison can, for example, be made with internal or other existing production systems, the new system as expected, or the requirement specification. How the point of reference is chosen depends on the company, and what the purpose of the evaluation is. In the ten-company study no thorough, systematic evaluations had been done of the new assembly systems to determine weaknesses and strengths of the systems (Bellgran and Öhrström 1995). It was rather the general experience from assembly and the daily work with the assembly system that provided information about how

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the new system worked. Above all the daily contact with production engineers and operators were important sources of information. Not all of the companies formulated requirement specifications before the studied changes. Evaluation after a change can consequently be a question of quite informal thinking as to whether the expectations on the system were reached or not. For companies with documented requirement specifications the possibilities to carry out structured evaluations against the stated goals were easier. Evaluation after a change can be done in different ways. Companies investing in turn-key assembly systems, delivered from system suppliers, often mentioned the final acceptance test as an important evaluation. This was often carried out at the suppliers’ facilities, after delivery acceptance, and performance (in terms of expected capacity) and quality were measured. In connection with delivery acceptance and final acceptance test, sometimes a comparison was made with the requirement specification that was the basis for the system. The final result was not compared to the requirement specification in all companies; in some cases they just established the outcome of the change or the new system. One company expressed: “… we measured delivery reliability continuously – and efficiency, quality, is measured both before and after and that is some kind of evaluation.”

The statement above indicates that the work with evaluation and continuous follow-up goes together in different ways. This was also emphasised by a company in the study, answering the question on how they evaluated an implemented assembly system in the following way: “We measure our entire production on a large amount of parameters, so you can say that evaluation gets very easy. We measure technical disturbances, efficiency, economics in total, and we measure quality, so it is very easy.”

Before start of production one company worked with a principle they called ready work factor, meaning that they already from the beginning, with support of a starting curve and a start plan, knew how many units they should produce per day. Other quantitative measures used to follow-up implemented assembly systems are (Bellgran and Öhrström 1995): • • • • • • • • • •

Assembly time; Cost; Capacity; Availability; Failure quote; Capability; Productivity; Efficiency; Locking up of money; and Manning factor.

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INDUSTRIAL EXAMPLE: ASSEMBLY SYSTEM FOLLOW-UP BY OPERATORS In one company a survey was carried out among the operators working in the new assembly system. They were asked to answer questions concerning their opinion of the new system, and how they liked working with it. The new assembly system was also compared to the previous system. The survey was carried out when the assembly system was in full operation, a couple of years after start of production. The survey indicated that most of the operators were pleased with the new system, although a few preferred the old way of working. This resulted in a parallel line, designed according to the old principles. In that way the operators that preferred the old principles had the opportunity to continue working like that in the parallel line. Source: Bellgran and Öhrström (1995)

According to the industrial studies evaluation after a change was not always carried out. In some cases, when the change was associated with the introduction of new products, it was perceived that they didn’t have the time. Highest priority was naturally to ramp up the product to planned volume (production ramp-up) and that was seldom without problems. As a consequence, evaluation and follow-up had to wait. One thing that was a little surprising during the studies was that even though the companies said that they had formulated requirements specifications before the change, they didn’t always check against the requirement specifications whether the changed or new system fulfilled the requirements. A requirement specification, based on solid preparatory work is an excellent tool to use, both for purchasing and during evaluation.

4.3.5 Factors Affecting Evaluation of Production Systems In the ten-company study, time pressure and lack of relevant measures were assigned as the reasons why evaluations were not carried out in a predetermined and structured way (Bellgran and Öhrström 1995). Likewise the difficulty to structure for example the more qualitative information about the system was mentioned as an obstacle. Furthermore, the difficulty of bringing qualitative and quantitative measures together in a meaningful way was given as a reason why evaluations did not take place. In the 15-company study several different reasons were given why evaluations were not carried out, in spite of the fact that many of the respondents were well aware of the potential advantages and profits (Säfsten and Aresu 2000). One of the reasons mentioned was the prevailing company culture. Another explanation given was that only one person worked with production engineering on an overall level, and they didn’t have time to follow-up everything that they wanted: “We are a small organisation, and a lot of things are thereby based on common sense rather than working things through as you would like.”

One company that not had evaluated the implemented assembly system considered the high market requirements as the reason; they had to produce to satisfy the

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market. There was no time to via evaluations be effective enough in production. Similar situations were described in several companies. There were also companies who tried to evaluate the assembly systems, but didn’t know how to do this. What we can see from the brief examples above is that assigned factors affecting if and how production systems are evaluated originate from both the context, i.e. the company, and the production system itself, and from the change or development process the evaluation is part of. Some of the identified factors are gathered and presented in Table 4.5. First, the factors mainly associated with the change or development process itself are considered, see Table 4.5. When the design of a new production system is determined already from the beginning, evaluation of various conceptual solutions is not very interesting. This also influences the actual development process, which is further elaborated on in Sect. 5.2.4. The need for evaluation varies, among other things depending on the reasons behind a change. One reason affecting the need for evaluation is the company’s knowledge about its own production system. If a company continuously follows-up the system performance, quite good knowledge is gained about the qualities of the system. In such a situation the need for evaluation of the production system before a change is less. The way of working also effects evaluation. If change or development of a production system was carried out as a project, it was more likely that evaluations were carried out. Working in a project also provided possibilities for different evaluators. For example, when change or development was carried out as a project, the hand-over to the production organisation could make a natural incentive to carry out an evaluation, with someone from the production organisation responsible. The other group of factors affecting if and how evaluations are carried out are categorised as production system and company-related factors in Table 4.5. Perspective and attitudes among the involved personnel highly affects if and how evaluations are carried out. If evaluation is considered to be tedious and not worthwhile when new projects are in preparation, it is easy for evaluation to be disregarded. During our studies we could see that the level of complexity in the production system affected whether evaluations were carried out; low complexity was associated with very limited, if any, efforts concerning evaluation. However, high complexity was not necessarily associated with ambitious evaluations. Com-

Table 4.5 Factors affecting evaluation (Säfsten 2002) Change or development process related factors

Production system and company related factors

• The value of previous experiences depends on how the solution is chosen • Chosen change or development process approach • Reason to change • Form of working

• Perspective and attitude among those working with system development • Complexity • Size of company • Investment level • Knowledge of existing system/alternatives • Company culture

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plexity is often related to the investment level, another factor affecting evaluation. Similarly as for complexity, high investment levels do not necessarily correspond to extensive evaluations. Although low investment levels were sometimes given as a reason not to evaluate. Another factor affecting evaluation is the size of the company. Larger companies more often carried out systematic evaluations, but not all large companies evaluated their assembly systems. If the company for example continuously worked with follow-up, the need for evaluation before a change was less. To conclude, company culture seems to be very important, mainly in terms of whether evaluations are carried out or not. Preferred ways of producing and preferred ways of working affects whether and how evaluations are carried out, as well as the perceived value of evaluations. Company culture is extremely important for the development work in general, and therefore the subsequent section is devoted to the role of company culture in production system development.

4.4 “It Is in the Walls” The importance of company culture for how a production system is developed should not be underestimated. As we saw above, company culture is stated as a reason for not evaluating the production system. The term company culture is here defined from a practical perspective, based on empirical results rather than from a theoretical point of view (Bellgran 1998). We can characterise company culture as the traditions, experiences and knowledge gained of methods, products, processes, and more or less successful change and development projects over time among the company’s personnel. In a similar way Sandkull and Johansson (2000) describe the concept of company culture, also based on the company’s history: “A company’s history can be compared to a sedimentation process, where old ideas and values gradually sink to the bottom leaving space for new ones. To various extents there are still rules, procedures, and structures from previous years in the company. The ideas that once formed the activities have left traces, which will remain for a long time. They can be built into the layout of the plant, the location of the machines, and the organisational routines.” (Sandkull and Johansson 2000, p. 10)

To what extent the system designers know and adapt to the company culture therefore affects how production systems are developed. The industrial studies (Bellgran and Öhrström 1995) showed that system designers often associated company culture with: • change readiness at the company; • existing traditions and perspective; and • way of working.

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INDUSTRIAL EXAMPLE: IS IT “IN THE WALLS”? Some answers to the question on how system designers considered company culture affected the design of their latest assembly system are given below (the answers are gathered from interviews, but not always verbatim): – The project was initiated by a team, considering the old system passé and that we had to think forward. There were some real enthusiasts working with this. – The company culture is not exactly a drawback; we try to work according to modern principles. – Company culture is very important. We saw the old system, especially concerning work organisation and work tasks. The new system was partly a reaction against the existing system. – I think the company culture is of great importance. Traditions have importance for what you do now. To know how things were done before. We try to think differently, but sometimes you feel that you can’t do things in another way than like this. If something is successful you try to refine that every time. Till next time, you try to correct mistakes made. – The company runs with a philosophy. Things should be done at full speed; even when design, change, or phase-out of a production system is the task. – Company culture has a large influence. For example, if you are interested in automation or if you are stuck with your old methods. Some personnel can be against new solutions thereby splitting the personnel into two camps. The company has, for example, been quite good at requirement specifications. – The older you get, the more difficult it is to change yourself, unfortunately. Maybe you don’t like things that you don’t understand. Often, if you have done things in a certain way for a long time, it is easy to follow a familiar way and not look curiously into the unknown, which might be better. – I think that we change ourselves very often. Company spirit; we are not particularly bureaucratic, maybe we do not work very systematically in terms of documentation. It is not very formalised; it is attached to the walls. The line of business develops; we are used to rapid changes. Company culture means that you do things as you always have done. It is difficult to evaluate yourself, but I think that all the new people bring pretty good ideas. Within a year things have changed here. – The company culture means quite a lot. Assembly has been governed by custom and tradition for at least a decade. It has governed our way of thinking. Traditions are of great importance. We have started to rethink now. Source: Bellgran and Öhrström (1995)

Both strengths and weaknesses within the company and its culture should be identified, and utilised, to develop production systems in an effective way. Experience and tradition from previous production system development projects within the company influence future projects to quite an extent – both in a positive and a negative way. For example, if the development process seldom has been carefully planned, effort is required to motivate such a procedure in new development projects. On the other hand, previous experience is advantageous in new projects, since it provides awareness as to what type of problems may occur and what the consequences might be. Not only experience of how previous systems were developed is relevant (concerning the way of working, use of tools, etc.) but also experience from the actual production system is naturally important as has been previously mentioned.

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Company culture could be regarded as a carrier of the tacit knowledge gathered within a company, characterising the activities in different ways. By thinking about things that are specific, it is easier to make use of the positive parts of company culture, and at the same time learn how to handle the negative parts. This is highly valid for the chosen perspective on production system development, and for applied ways of working and methods used.

4.5 Production System Designers Behind every successful change, there are one or more key persons or enthusiasts (Dahlqvist and Severinsson 1991). And inversely, one reason for the failure of projects in general, is the lack of passionate champions. When developing a production system the preconditions for success are even higher if the champion and the project leader are one and the same person. This is even more obvious if the project also implies that the way of working and used methods are to be changed. In general, the project leader has a large impact on the character and management of a development project, which activities are emphasised, what the fundamental perspectives are, etc. The knowledge area treating project management is extensive, and there is a wide selection of literature available. Here, we place the focus on the role as a system architect or designer. A general description of the role of production developer involves tasks concerned with development and changes in production. We choose to use the terms system designer or system engineer to focus on the aspects of production development associated with the actual design of a production system. The selection of system designers for the latest assembly system designs in the companies involved in the ten-company study is presented in Table 4.6 (Bellgran and Öhrström 1995; Bellgran 1998). Most commonly, personnel from the production function, above all from production engineering, are responsible for and work with change and development related to production and production systems. A typical project group working with design of an assembly system was composed of between two and four employees from production engineering according to the ten-company study (Bellgran 1995; 1998). This was confirmed in a survey involving subcontractors in the automotive industry; here ten out of 15 companies stated that their assembly systems were designed by production engineers (Bellgran 1998). Production engineers also participated in the design work in the other companies, but in those cases in work groups together with representatives from other functions. Specialists and competence from other departments were used in the project groups when necessary. External personnel seldom or never participated during an entire system design project. In some cases no project group or project leader were formally appointed to design the production system, the task was part of the everyday work. This was most common in smaller projects, with a low level of auto-

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Table 4.6 Internal and external system designers in the ten-company study Company

Internal system designer

External system designer

1

One production engineer and one quality engineer No external personnel designed the system, and the production engineering involved. manager was involved. Engineering, purchasing, and operators participated when required.

2

Mainly the production engineering manager, proNo external personnel duction engineers, and the plant manager particiinvolved. pated. Operators and the union were involved. Engineering, purchasing, marketing, tooling participated when required.

3

The plant manager, a production engineer, and a foreman designed the assembly system. Other functions participated when required.

External designers, e.g. equipment suppliers participated.

4

The production manager was the project leader. Two persons and a foreman worked with layouts and production preparatory work.

No external personnel involved.

5

A production representative in the product development project managed the system design team with a production leader and a production engineer. A production assistant, purchasing, and operators were involved in production issues. Tooling participated when needed.

No external personnel involved.

6

The production engineer was project leader for the main project. One production leader, two operators, purchasing, and one tooling engineer participated.

No external personnel involved.

7

Three production engineers, one engineer, the asOne equipment supplier sembly leader, and the department manager partici- participated. pated. The production engineering manager partially participated.

8

The production engineering manager decided what equipment to buy.

9

Four to five system designers, among those the plant External personnel were manager, participated. Other competence used when involved. needed.

10

Three subproject leaders, with one production leader External competences were each, production engineer, and foreman designed appointed to some extent. three systems. One engineer, instructor, and operator also participated. Other departments participated when required.

One involved supplier.

mation. A majority of the system designers designing the assembly systems had other tasks in parallel. Interesting to note from the ten-company study is that the cost of labour, according to the respondents, was not included in the cost estimation for system design, but was counted as use of existing personnel. Costs might possibly have been followed up by other functions within the company. According

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to the ten-company study involvement of the operators was limited and mainly involved an opportunity to give their points of view concerning system alternatives or technical solutions. One observation from all industrial studies was that union involvement in system design projects was low, at least at the concrete level where requirements for the production system were specified and different alterative solutions were designed and evaluated. One explanation might be the general reduction of union involvement during the 1990s. More likely though is that the studied projects were considered too small to require union involvement. Possibly there might have been some involvement at management level, where investment decisions were made. When the assembly system design involves a radical change, for example from manual to a highly automated system radically changing work organisation and work tasks, union involvement becomes more important. Operator involvement in assembly system design projects varies according to the studies carried out. In companies with a large share of assembly, which is a personnel intensive operation, the operators’ engagement has often involved their giving of opinions on different system solutions. Solutions are quite often presented as a layout. This places great expectation on the operators’ competence to determine possible technical, work organisational, and work environmental consequences from different solutions. It is advantageous to involve the operator during certain activities of the design process, for example during requirement specification and evaluation of requirement fulfilment (Karlsson 1990). An additional activity is evaluation of the existing production system, if any, before change or development of a new production system. There are several reasons to plan for involvement of operators during the different phases of a development project. The most important reason is quality. The possibility to accomplish better system solutions increases with input from the operators. Support of system solutions, both at the conceptual and detailed level, is another reason to involve operators. Good support increases the possibility to end up with solutions accepted among the operators in the production system, which also can facilitate smooth production start-up. Yet another reason why operators should be involved is the necessity for education and training. Many companies work close to, for example, the equipment supplier. The agreement between the manufacturing company and the equipment supplier usually involves operator training, located either at the suppliers site or at the manufacturing company when the equipment is delivered. When representatives of the operators participate during the different phases of the development project, transfer of experience and learning occurs continuously which facilitates start-up. Furthermore, it creates good prerequisites for transfer to the rest of the operators when the system is in operation. The composition of a project team for production system design is often based on the fact that it normally is the responsibility of the production engineering department. If production development and production engineering are separate functions (which is rare in smaller companies, but also in larger), the production development function may be involved as well. The required qualifications among

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the persons appointed as system designers are often determined by the technology level in the coming production system. INDUSTRIAL EXAMPLE: PROJECT ORGANISATION IN A SYSTEM DEVELOPMENT PROJECT In one company, with an applied matrix organisation, resources from the line organisation were used in the project organisation to develop the new assembly system. The areas of responsibility were slightly diffuse. The work group was above all dependent on a number of key persons taking responsibility for a large part of the development project, even if they had other parallel work tasks. Three system designers at middle management level were involved in the project and their roles and tasks depended partly on their position within the organisation, and partly on when they had possibility to participate. The situation changed when a new project leader for the overall product development project was employed, and project management became more formalised and visible. Source: Bellgran (1997)

In a tough industrial reality, exposed to competition, where finding new ways to handle the continuously changing conditions is required, also the way the production system is designed needs to be considered and evaluated. The competence required within the companies is an essential question. INDUSTRIAL EXAMPLE: THE NEED FOR ORDERING COMPETENCE The assembly system and the equipment that goes with it was previously built within the company, but for strategic reasons the goal was to reduce this part of the company’s activities and instead buy more from external suppliers. This was considered to have both certain advantages as well as disadvantages. The equipment supplier network was not developed well enough since they used to build their own equipment and the limited experience of preparing requirement specifications was a disadvantage. Source: Bellgran (1997)

This involves the question concerning how the company chooses to handle the competence required to build machines, equipment, fixtures, and tools – should it be available within the company or bought externally. If machines and equipment are bought externally from suppliers the question is whether the competence within the company to buy them is good enough. Do they have the capability to formulate requirement specifications and agreements with enough quality? Projecting or the actual design of the production system is yet another dimension the company has to consider, both in general and for each specific situation. Who are to participate in production system development projects, when and to what extent?

4.6 New Assembly Plant in Uddevalla The production concept, developed in Volvo’s assembly plants during the 1980s, came to be known as reflective production (Ellegård et al. 1992). The development took place both in Kalmar and in Uddevalla. What happened in connection

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to this is for several reasons interesting to mention. One reason is that it is one of the most well-documented assembly system design processes carried out in Sweden (see for example Berggren 1990; Ellegård et al. 1989 and 1992; Engström et al. 1998; Sandkull and Johansson 2000). The production concept also received international attention (e.g. Bennett and Forrester 1993). Researchers participated in and documented the entire process, which was ongoing for quite a while. In this chapter, the focus is not on the resulting system, see Fig. 4.3, but on the design process preceding the realised assembly system solution. According to Engström et al. (1998) the development of the assembly plant in Uddevalla challenged prevalent assumptions concerning organisational rationality. The process of designing new production systems does not always follow a rational path, as is sometimes described afterwards. Quite often logical

Fig. 4.3 Volvo’s assembly plant in Uddevalla (Berggren 1990)

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explanations are sought to a course of events that afterwards seems to have followed a deliberate plan, but actually happen by chance and various restraining decisions. Instead Engström et al. (1998) emphasised the internal logic of the design process, driving the work forward, in a direction that had not been staked out beforehand. The design process involved a sequence of alternatives where each alternative was influenced by previous decisions. Decisions made generated in turn restrictions on subsequent alternatives. At the same time the work was characterised by the project leader’s ambition to postpone the final decision about the layout in the assembly shop as long as possible. New experiences from test and training shops influenced the design process. Furthermore, some of the team members were new thinkers, advocating reflective production as an alternative to lean production. INDUSTRIAL EXAMPLE: DESIGN OF AN ASSEMBLY PLANT IN UDDEVALLA The initial proposal for the Volvo assembly plant in Uddevalla was similar to an existing plant in Kalmar. The starting point was a serial flow with a buffer stock between the work groups. The cars that were assembled were transported by AGVs (automated guided vehicles) through the entire system. During an early stage, the project group also suggested a system solution similar to the semi-parallel flow later introduced in the assembly plant of Saab Automobiles in Malmö. This was about 1985–1986 and the dominating ideas characterising system design by that time were based on the principle of collective work rather than assembly lines á la Ford with extensive job splitting. Maximum cycle time for each individual was considered to be approximately 20 minutes. A crucial constraint, introduced early in the design process, was based on a decision concerning the material supply. Because of reasons such as space restrictions and extensive material handling at all work stations in the planned parallel flow, quite early on a requirement was established for supply of material as kits by means of special material fixtures containing all required components for each product. Several product variants implied a large amount of components at the work stations, if not delivered as kits. Furthermore, the kitted material provided an opportunity to use the material as work instructions for the assembly operations. Small components were kitted in plastic bags. Another argument also supporting the chosen material supply principle, i.e. kitting, was the time usage. By using automated equipment for kitting time could be saved, both compared to a manual system and compared to storage of components at each work station. Discussions concerning material supply, and the amount of material required for each individual car, led to disassembly of a car in summer 1985. This was also the reason for building a test workshop. The work and the experiences from the test workshop and a training workshop, where assembly of cars was taught, implied an increased possible cycle time, from the previously expected 20 minutes up to 120 minutes. This substantially revised mental model of the individuals capacity meant that one operator assembled a quarter of a car instead of three operators assembling an eighth of a car. A second crucial constraint introduced during the design process was the location of the material workshop in an existing building, instead of tearing it down. This decision separated the material handling work from the assembly work, which implied a need for an AGV system (a solution inherited from the Kalmar plant, at this point of time considered to be a high-tech solution appropriate for an innovative plant). A later decision in the design process, to build two three-clover assembly buildings, constituted a third constraint. Each threeclover was divided into three assembly shops, a solution that affected the possibility to use a solution based on shorter cycle time. In the light of these layout decisions for material, assembly and test plants, the actual design of the inside of the assembly shops remained. The layouts needed adaptation to among other things production capacity and limitations in assembly time. Source: Engström et al. (1998)

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Three aspects initially restricted the design process in the Uddevalla plant (Engström et al. 1998): • type of product to produce (size, number of components, number of product variants, etc.); • expected production capacity (number of products to produce); and • budget limits. Other constraining aspects were introduced during the design process when various decisions concerning the building, layout, and equipment were made. When decisions are added to each other, constraints are created reducing the number of possible solutions, both at a conceptual level and at a more detailed level when technical and work organisational solutions are to be determined. Therefore, it is a challenge to plan the design process in such a way that no essential aspects are forgotten or neglected, due to constraints created by other decisions. Questions concerning the work organisation tend to receive lower priority during the design process, which affects the scope of decisions. As soon as layout and technology are selected, the possibility to think freely when designing the work organisation is reduced. When designing complex production systems it has also been shown to be difficult to regard work environmental aspects in a satisfactory way and especially ergonomic aspects are mentioned (Engström et al. 1998). In the work of Johansson and Sandkull (2000) the assembly plant in Kalmar is compared to the assembly plant in Uddevalla concerning the support from company management for the different solutions. The plant in Kalmar was designed by experts, on the basis of ideas from the manager, whereas the Uddevalla plant represented a solution not supported by the local experts that was only later accepted by the management. What management did was to give a number of qualified car assemblers and production engineers the possibility to, with support from researchers, by means of experiments find a solution, which at this point of time represented a new way of thinking in the automotive industry (Sandkull and Johansson 2000). By way of conclusion it may be relevant to comment that a considerable part of the research within the area of production development in Sweden is based on the national automotive industry. Volvo’s development of their different plants around the country have provided a foundation for new and interesting research results within the production area, seen from a broad perspective. Among this research concerning work environment and work organisation also counts. The important automotive industry with all its suppliers have for decades been in the front-line of production development in Sweden. They have also participated in different research projects within the production area which probably have contributed to the strong position of the automotive business. A long-term research and development strategy among companies supports industrial production development. Reflection and theory development on the one hand and practical application and development on the other hand together form an unbeatable combination for success.

Chapter 5

Production System Development in Theory

Abstract With the practical experiences from industrial development of production systems in Chap. 4 as a foundation, a theoretical exposition now follows. By way of introduction the knowledge area and the meaning of a number of relevant concepts is explained. After that the development process and thereby included activities are described. One of the core activities, evaluation, is more thoroughly described in a section on its own. Furthermore, production development is discussed from its position in the product realisation process. A long-term ability to develop production systems is essential for success and in the concluding section some approaches to achieving successful development from a long-term perspective are presented.

5.1 Fundamental Concepts and the Knowledge Area Part of the theoretical foundation for development of production systems can be found within product development. In one part of product development scientific methods are used to study design with the intention of improving understanding. This area is called science of design or design methodology (Cross 1993). Such research can be grouped into five different categories (Cross 1993): • development of design methods (creation and application of systematic methods); • management/control of the design process (models and strategies to carry out design projects); • the nature of design problems (theoretical analysis of the nature of design problems); • the nature of design activities (empirical observations of design applications); and • the philosophy of design methods (philosophical analysis and reflections concerning design activities). M. Bellgran, K. Säftsen, Production Development, © Springer 2010

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Research within the area focuses on study and analysis of design activities and of other activities carried out during a design process. The research also elucidates different ways of creating a more evident structure in design, which later can be converted into models and methods to support design projects. Development of models and methods is a common way for researchers to convert theory and knowledge into usable tools, in this case for industrial application. Design methodology, the procedures designers follow, provides knowledge about the design process (Roozenburg and Eekels 1995), and part of this knowledge is useful for designers, such as: 1. models of design and development processes; 2. methods and techniques to be used within these processes; and 3. a system of concept and corresponding terminology. The process of developing production systems can sometimes be structured as models. Fundamental understanding of the development process and its associated activities is essential for successful development of production systems. Some efforts have been made to develop methods and tools supporting, above all, production engineers. The efforts have more often been of prescriptive nature rather than as results from practical experiences concerning how the work should be carried out. The terminology within the area is still not completely stringent, which might obstruct the possibility of abstraction and creation of understanding for different concepts. Terminology is relevant both for understanding and for the possibility of development. The terminology concerning development of production systems suffers from a lack of stringency in terminology indicating that the area is still immature. Concerning design methodology, it was observed in Chap. 1 that there was greater focus on applications in product development than production development, both in research and in practice. Some reasons for the current situation concerning production development are: • the work requires descriptions such as theoretical constructions of various character; • focus on specific applications at the expense of development of general knowledge; and • focus on development of methods/tools solving subproblems. The need for theoretical constructions of various characters makes the possibility to communicate different questions within the area of product development difficult. The development process as such requires a description of the different phases. To that, the planning of the actual development work can be added as yet another area for description. The third description is concerned with the completed production system and possible existing production systems studied during development as inspiration. Previous industrial studies carried out in manufacturing companies have clearly revealed the problems associated with structuring ques-

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tions concerning the production system and its development process. The need for theoretical constructions of various characters and the lack of stringent terminology are two explanations given for the difficulties of structuring the problems. To become absorbed in terminology and definitions within an area of knowledge might possibly seem to be of advantage for a researcher but of less relevance for a practitioner. Understanding of the terminology within an area of knowledge provides prerequisites for a deeper understanding, which is of importance for everyone active within an area. A consequence of a lack of stringent terminology within an area is that the same concept might have different meaning for different users. Therefore, the subsequent pages are devoted to essential concepts in the context of production development such as design, development, evaluation, follow-up, and process.

5.1.1 Design and Development The term design is associated with both the object that is designed and the actual design work. It concerns the design of the production system, the physical and organisational solutions, in other words the actual work involved in deciding what it should look like. When designing production systems it is therefore relevant to pay attention to both design as a result (substantive), and design as an activity (verb). As was made clear in Chap. 4 design of production systems implies a change. A change might involve improvement of an existing system as well as development of an entirely new system. One way to distinguish the extent of a change is to use terminology such as modify, improve, and design. A distinction can be made between improvement and design, both in terms of the activities carried out (van Gigch 1991) and the result attained (Suh 1990). Improvement implies that the production system moves closer to standard or normal, expected conditions, whereas design is a creative process were existing solutions are questioned (van Gigch 1991). Thereby, the result attained can, according to Suh (1990), be classified as improvement of an existing system or as original design. The concept modify concerns a more detailed level and involves partial change of a structure, or function, of an object. Another term, often used in industrial contexts, is process development. Process development is often used on the same abstraction level as product development. Process development can accordingly have equality with production development. Process development can involve development of production systems both at the conceptual level and at the tangible technology level. Throughout this book tangible and practical questions concerning the area of system development have been translated into theoretical reasoning where the terminology constitutes a foundation for understanding. Terminology used to describe different activities during changes of production systems is vast and not perfectly unambiguous. The following definitions are applied in this book:

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Design of production systems involves problem definition, identification of the goals, and to put forward different alternative solutions (problem solving). After that the different suggested solutions should be evaluated, a solution should be selected and developed further to a detailed level (decision-making). The result is a description of the production system to be (system solution). Development of a production system includes besides the design of the system solution also the next stage, to implement the solution, which involves building and industrialisation of the production system. Thereby the concept development involves a larger part of the life-cycle of a production system than the conceptual design.

5.1.2 Evaluation and Follow-Up Below, evaluation in the context of production system changes is in focus. As previously mentioned changes can involve improvement of existing production systems as well as development of new systems. Evaluation during different phases of change has been studied, and constitutes the foundation for the reasoning throughout this book. During change there are some phases where evaluations are particularly interesting, that is before change, during the selection of solution, and after completed change, see Fig. 4.2 in Sect. 4.3. Evaluation as such constitutes its own area of knowledge. For several years extensive research has been carried out concerning evaluation of education, politics, and public programs, despite the fact that there is nothing like a unified evaluation theory, but rather several applications of evaluation within different areas. A classification can be made into two types of theories (Karlsson 1995): 1. theories for evaluation: models and methods supporting evaluation; and 2. theories about evaluation: the logical nature of evaluation and the role of evaluation in particular situations. Evaluation is a general activity, applicable within most areas. There are many definitions of evaluation in the literature, being more or less extensive and precise in their wording. The different definitions reflect to various degrees a multidisciplinary and multifunctional activity. FURTHER STUDIES: DEFINING EVALUATION – Evaluation is to describe and value a program (Jerkedal 1999). – Evaluation is the process of determining the merit, worth and value of something, or the product of the process (Scriven 1991). – Evaluation is a systematic and methodological judgment of a phenomenon in the light of certain criteria (Nydén 1992). – Evaluation is examination and judgment in terms of worth, quality of performance, degree of effectiveness, conditions and so on in order to determine the true characteristics and to ensure that the mission is fulfilled (Blanchard and Fabrycky 1998).

5.1 Fundamental Concepts and the Knowledge Area

Customer needs

Production system requirements

Functional requirements

113

Technical solution

Final production system

Verify Validate

Fig. 5.1 Validation and verification (Almgren 1999)

Even if the circumstances vary there are certain fundamental similarities, which also are expressed by Scriven (1967): “Evaluation is itself a methodological activity which is essentially similar whether we are trying to evaluate coffee machines or teaching machines, plans for a house or plans for a curriculum.” (Scriven 1967, p. 40)

Besides evaluation, other concepts are used with similar meaning. Concepts such as follow-up, analysis, validation and verification are used for similar activities (Scriven 1991). In everyday use several of these concepts are used synonymously even if there are certain differences in meaning between the words. As we discussed earlier evaluation aims at determining the value or the result of for example a change. The intention with follow-up is to investigate whether for example a production system operates as expected. Analysis implies that a production system is divided into its constituent parts and each part is investigated. In the case of analysis the valuating element is not necessarily involved. Concepts such as validation and verification can be used to clarify the goal with an activity, which is not necessarily carried out with the more general concept evaluation (Rasmussen et al. 1994). Validation and verification are concepts naturally used in different production contexts, see Fig. 5.1. Verification is concerned with the degree to which the result meets the requirements of the design specification, the functional requirements. The question is whether the design is right, if the chosen solution meets the design intentions. Verification is often done to make sure that the products as well as the production system fulfil the requirement specification (Almgren 1999). Verification is commonly carried out in connection with realisation and industrialisation of a production system. Validation aims at making sure that the end product, in this case the final production system, fulfils the initial customer needs. The question is whether it is the right design, whether the end product meets the customer needs (Rasmussen et al. 1994). Validation is commonly carried out when the production system is in operation and stable conditions prevail (Almgren 1999). Throughout this book the following definitions are applied: Follow-up refers to the activity of investigating that everything continues as expected in a continuous activity. Evaluation is defined as the systematic process of investigating and judging production systems in the light of certain criteria, or the result of such a process. Evaluation can be used to determine the value or the result of for example a change.

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5.1.3 Process An additional concept that frequently recurs in this book is process, for example development process and evaluation process. A process is commonly described as a number of activities to carry out in order to achieve something, a course of events resulting in something required. In a process it is furthermore required that input and output is defined. This description is attractive if you like to avoid regarding the production system as a social system. According to Ljungberg and Larsson, the problem with the description is the association with a black box producing expected output as long as it is provided with input. However, the description works as a first introduction but is considered as unsuitable to guide the development of processes. The definition suggested instead is worded as follows: “A process is a repetitive network within a certain order of linked activities using information and resources to transform ‘object in’ to ‘object out’, from identification to satisfaction of customer needs.” (Ljungberg and Larsson 2001, p. 44)

With this definition we move away from a sequential description, which also is preferable for the development process. Furthermore, it is made clear that processes are not concerned with closed systems but prerequisite for activities are information and resources. This is also in accordance with what we described in Chap. 2, i.e. production systems are here considered as open systems. It should be pointed out that the process as such is with content; it is not until it is manned and provided with resources that value can be created. To elucidate appropriate processes it is essential to look at the context which in this case is the manufacturing company. Within a manufacturing company there are several processes of different type, which for example can be divided into (Harrington 1991): • production process: associated with the product delivered to the external customer; and • business process: includes all processes supporting the production process. This view on processes can be described as in Fig. 5.2. The notion production processes might give limited associations since in daily speech, it is often used to describe activities such as turning, milling, etc. A more comprehensive notion is core process or main process (Ljungberg and Larsson 2001). A main process describes the purpose of a business and often has external customers (Bergman and Klefsjö 2002). For a manufacturing company the main process is to develop and produce products, i.e. product realisation. Business processes can be of different character and a refined division can be made into support processes and management processes. Support processes are required to keep the main business working, but cannot be described as equally critical for the businesses as the main process. Examples of support processes can be manning, creating budget, maintain equipment, etc. The distinction between

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115

Fig. 5.2 Central concepts in Harrington’s process view (Lind 2001)

main process and support process is not trivial but still important since it reflects the company’s view on its business (Larsson and Ljungberg 2001). Support processes have internal customers. Management processes are the processes required to manage and coordinate main and support processes. These processes also have internal customers. A main process, such as “to develop products”, can in turn be divided into subprocesses and activities. A subprocess can for example be “to develop a production system”. Development can consist of design, evaluation and implementation.

5.2 The Development Process The characteristics of a production system and thereby its ability to support a company’s manufacturing strategy are determined by its design. The design of a production system is not random; behind each system design there is a more or less explicit design process. “Whenever a piece of equipment or a system is being designed, the consequences are also, explicitly or implicitly, being designed. If the consequences are to be taken seriously, then the time to take account of them is at the design stage.” (Klein 1994, p. 208)

With the understanding that the organisation and dynamic of the design process affects the final result of the process, the production system, it is necessary to focus on the design activities.

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Design of a production system is a typical example of a double task, which means that planning of the design process represents one task and the actual design represents the other task (Klein 1994). One way to elucidate the double task in design of production systems is to distinguish between: • planning of the design task, and • the actual design task. Through elucidation of the double task the necessity of planning the design task is made clear. In this way prerequisites are created for a systematic way of working which often support the final result.

5.2.1 Design: Problem-Solving and Decision The design process is a form of problem-solving where the means to reach the ends are sought intentionally (Roozenburg and Eekels 1995). All forms of problem-solving follow a similar cycle of activities, see Fig. 5.3a. When design is the task the basic design cycle can be used, see Fig. 5.3b. The design cycle includes the activities carried out prior to the implementation of the designed system. To actually implement a system solution is problem-solving in itself. Development of production systems includes design as well as implementation. The different activities are not necessarily carried out sequentially, even if Fig. 5.3 might give that impression. Design is an iterative process ideally resulting in a decision concerning a production system design in accordance with formulated requirements. As we can see there are several similarities between the problem-solving cycle and the design cycle. During the design process several decisions are made, the task is to determine the value of a number of decision variables (Chryssolouris 1992). Development of production systems can be seen as a complex form of decision process (Bennett and Forrester 1993). An alternative way of describing the activities carried out during development, and at the same time catch the iterative dimension, is to start with the decisions taken. In order to focus on organisational decisions in contrast to individual decisions Mintzberg et al. (1976) suggested a model describing a decision process. The decision process model originally consisted of the three phases (identification, development and selection). The implementation phase was added when the model was applied to analysis of production system design. With this complement the model provides guidance and possible structure to the decision processes associated with the development of production systems (Bennett et al. 1990), see Fig. 5.4. The four phases in the decision process consist of seven routines: recognition (collection of impulses), diagnosis, search, design, evaluation/choice, authorisation and implementation. In Fig. 5.4 we can see two decision processes. The thin, dotted line represents a fundamental decision process where the number of impulses indicating a need for action reaches a level initiating a decision process (recognition),

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117

we select a solution and implement it. The unbroken line is one example of a decision process during development of a production system. In this situation the decision process is often iterative and several loops can be required within and between the different phases. One or several impulses indicate need for action, for example the marketing and sales department signals a need for increased capacity in the production system. When the impulses reach a threshold value in the routine recognition, resources are allocated to handle the situation. In the routine diagnosis the impulses are put into order to enable decisions on how to continue the activities. In the development phase a suggested solution is designed which is evaluated before implementation. The result from a design process is ideally a decision concerning appropriate design of the production system according to the raised requirements. Decisions taken during a design process are often more or less based on intuition, which is unavoidable since the design process otherwise would stagnate (Roozenburg and Eekels 1995). Decisions are often based on experience and common sense, or a combination thereof, together with rational arguments. It is, however, common that the rational arguments are added afterwards to support an idea (Rosell 1990). In complex decision situations, such as development of production systems, Problem-solving model for system design • Problem definition • Design value system • Synthesis of system • Analysis of system Chose best • Choose bestsystem system • Plan for implementation

(a)

The fundamental design cycle Function

Analyse

Criteria

Synthesis

Temporary design

Simulation

Expected qualities

Evaluation

Value of suggested design

Decision

Approved design

(b)

Fig. 5.3 (a) The general problem-solving model applied to system design and (b) the basic design cycle (Roozenburg and Eekels 1995)

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Identification

Development

Selection

Implementation

Search

Diagnosis

Recognition Basic decision process

Design

Authorisation

Evaluation/ choice

Implementation

Fig. 5.4 Mintzberg’s decision process model applied to the analysis of system development

a consequence from intuitive decision making might be that relevant information is not considered (Roozenburg and Eekels 1995). The different activities in the models described (design cycle and decision process model) are not carried out in isolation as it appears in Figs. 5.3 and 5.4. As one example the activities associated with the analysis of a specific situation tends to mix with the design of different system alternatives (Säfsten 2002), which is in accordance with normal human behaviour (Witte 1972). According to Witte (1972) it is not possible to collect information without at the same time formulating alternatives. When alternatives are designed it is not possible to avoid evaluation of these and therefore one is forced to make a decision. We will return to this matter later since it is decisive for design and evaluation of system alternatives. Afterwards, production system designers tend to rationalise the description of a development project. This, for example, means that the sequence of decision is reconstructed as being a simple series of activities (Bennett et al. 1990). This is one of the reasons why theoretical models and conceptual frameworks are developed in order to explain different decision processes and to illustrate system configurations. It provides a possibility for the practitioner to understand the dynamic and complexity of system design.

5.2.2 Activities in the Development Process The appearance of the development process varies. A general development process is commonly described as a flowchart or a number of boxes representing different activities. The fundamental phases of the development process for a production system are design and implementation. These phases constitute activities such as pre-study, formulation of goals, evaluation, decision and realisation. Even if the terminology is not perfectly stringent it is possible to see that the design process is structured fairly similarly in different literature. The design process includes (based on Bennett and Forrester 1993; Wu 1994; Bley et al. 1996; Blanchard and Fabrycky 1998):

5.2 The Development Process

• • • • •

119

analysis; requirement specification; design or construction of subsystem; integration of subsystem into totality; and evaluation and decision.

A general framework describing the phases in the design process is suggested by Wu (1994), see Fig. 5.5. The framework is based on the general problem-solving cycle in Fig. 5.3a. According to Wu (1994) there are two main approaches which can be taken when designing production systems. One approach starts with a set of objectives and creates a system that fits the objectives, without considering previous systems. The other approach considers the existing system, and tries to modify it to fulfil future requirements. The framework suggested by Wu (1994) is a combination of these two approaches; the current situation is considered before setting the objectives for the new system. This increases the chances of a result not necessarily requiring the old system to be replaced. Fig. 5.5 General design framework (Wu 1994)

Problem

Analysis of situation

Setting of objectives

Conceptual modelling

Evaluation of concepts

Decision

Detailed design

Evaluation of concepts Decision

Solution

Concept Pre-study Analysis of concepts

Plan Project team

Planning

Drawings Specifications Design

Delivery acceptance

Equipment

Own production

Delivery test

Achieved targets

Acceptance test

Installation

Start-up

Agreement

Acquisition

Production by supplier

Fig. 5.6 A general process for acquisition of production systems (Johansson and Nord 1999)

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Table 5.1 The acquisition process (based on Johansson and Nord 1999) PHASE

DESCRIPTION

Pre-study Analysis of concepts

Create a foundation for the company’s current and future need for production equipment. Consider product aspects, analysis of equipment, identify requirements, etc. Outline and evaluate conceptual equipment solutions. Make system specifications based on function and possibility analysis. Determine whether the acquisition project should be carried out or not.

Planning

Design of the equipment and production specifications is prepared based on the conceptual solution. Budget and time plan is established, the project is planned. Aspects such as capacity, availability, maintainability, usability, and security are specified. The flow is specified. The relation between the production process and 7M1 is analysed. Process-FMEA, quality assurance. Evaluation of specifications, evaluation of suppliers requested to bring in offers.

Design

Initially rough, thereafter detailed design of the equipment based on the specifications. Suppliers participate in the work. The installation is planned; problems are identified and taken care of. If an external supplier is used the offer is divided into a commercial, a juridical, and a technical part.

Acquisition

Evaluate suggestions from suppliers concerning objectives, requirements, cost, and delivery time. Assess the supplier concerning possibility of goal fulfilment regarding technology, quality, co-operation, etc. After negotiations and appointment of supplier a legal agreement is concluded. Carry out professional acquisition of specified equipment from chosen supplier.

Production by supplier

Production of the equipment is carried out at the supplier’s facilities, controlled by the customer.

Own production

Internal production of equipment.

Delivery test

Verification of equipment based on specification and agreements, before delivery to customer. Tests are carried out, preferable under production-like circumstances. Preparation before final acceptance and equipment hand-over at the customer site.

Installation

Co-ordination of activities, co-ordination in relation to time schedule. Carry out tests to secure functionality after transportation from supplier.

Start-up

Test of single equipment and complete system. If possible vertical start-up, which is full-speed from start of production. Ramp-up to achieve required targets concerning efficiency, quality, volume, etc. Training of operators. User-friendly documentation.

Each phase in the model depends on the outcome from the previous phase. Several of the phases are strongly connected and it is necessary to iterate back and forth between the phases (Wu 1994). In this context we should not forget the double task, and the activities associated with the planning of the design process, even if this activity is not explicit in the framework. When implementation is added to the design process we refer to the development process. 1 7M involves the production parameters man, machine, method, material, environment, management and measurement.

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121

Implementation involves the activities associated with realisation and industrialisation of the chosen system solution. Material and equipment of different kinds are required. One way to take this into consideration is to regard development of production systems as a form of acquisition. The acquisition process is described by Johansson and Nord (1999) as consisting of eight phases, starting with a pre-study and ending with start-up of production, see Fig. 5.6. The description comprises both the technical and the commercial part of machines and equipment acquisition. Johansson and Nord (1999) emphasise the importance of the early development phases and recommend usage of checklists as a way of reducing the risk of miss ing relevant aspects. The content of each phase of the acquisition process is briefly described in Table 5.1. The description above is concerned with acquisition of production equipment, rather than development of production systems. The actual design of a production system requires a holistic perspective including for example work organisation and work environment.

5.2.3 Industrial versus Academic Perspectives A distinction can be made concerning the industrial and the academic perspective on production system design. According to Chryssolouris (1992) in a somewhat bantering description industrial practice consists of trial-and-error which can be described in two steps: 1. guess a suitable production system (i.e. guess values for an appropriate set of design variables); and 2. evaluate the performance of the system. If it satisfies the performance requirements, then stop the design process, otherwise return to step 1. This is, however, an exaggeration even if the use of systematic approaches for different reasons is found to be limited in industry, which also was clear from the descriptions in Chap. 4. To be able to guess a suitable solution, fairly extensive experience is required. Designing production systems is not an everyday activity, which might be a hindrance in the utilisation of previous experiences. Suitable production systems do not necessarily have to be based on guesswork, as suggested above. One way of obtaining input for a suitable production system is benchmarking of successful examples. It is not unusual that successful solutions are models for own development. One typical example of this is the Western world’s fascination with the Japanese success during the 1980s. What was the formula for the Japanese success? Since the Japanese obviously were successful, everyone wanted to and still wants to copy their production systems. A slightly different perspective on production system design is described in the literature, where the problem is often decomposed into manageable subproblems, such as resource allocation, layout, material flow or buffer capacity (Chryssolouris 1992). This is also recognised as the partial theories of production system

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Table 5.2 Different perspectives on system design Industrial perspective

Academic perspective Partial theories

Holistic (integrated) theories

Resource allocation

Framework and strategies (e.g. manufacturing strategy)

Trial-and-error Layout

Philosophies with sets of techniques and methods (e.g. JIT, CIM, TPM)

Material flow

Design by philosophy (e.g. TPS)

Buffer capacity

System engineering/design frameworks

design (Ruffini 1999), see Table 5.2. Apart from the partial theories, there are holistic theories taking a broader approach to the production system design. Within operations management Design frameworks and strategies and Philosophies with sets of techniques and methods are mentioned as holistic theories of production system design (Ruffini 1999). Design frameworks and strategies involve manufacturing strategy, which, however, lacks a methodology for choosing between design alternatives and does not lead to detailed designs. Manufacturing strategies are, as previously described, linking the overall corporate goals and production, and in that way the manufacturing strategy is important for the production system design. The manufacturing strategy for example supports the system designers in their specification of production system requirements. Philosophies with sets of techniques and methods refers to certain techniques and methods supporting different philosophies, as an example just-in-time (JIT) is mentioned (Ruffini 1999). Other similar techniques and methods mentioned are Computer Integrated Manufacturing (CIM) and Total Productivity Maintenance (TPM). Similar to Philosophies with sets of techniques and methods, Duda (2000) describes Design by philosophy as an integrated approach to production system design. Design by philosophy is based on a high-level general philosophy of what constitutes a good production system. One example of philosophy guiding system designers is the Toyota Production System (TPS). There are several similarities between Philosophies with sets of techniques and methods and Design by philosophy, the main difference is concerned with the extent. The first-mentioned, Philosophies with sets of techniques and methods, implies that a specific problem is focused upon, such as supply, lead-time or maintenance. Design by philosophy on the other hand is concerned with a more holistic perspective, changing the way of thinking, changing the entire way of producing. Duda (2000) also mentions systems engineering as an integrated approach to production system design. Systems engineering is a top-down design approach aimed at creating products, systems, and structures that will be cost-effective and competitive, taking a life-cycle perspective (Blanchard and Fabrycky 1998). There are also different models or frameworks for system development focusing on parts of production systems. A general design framework is suggested by Wu (1994),

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see Fig. 5.5. Relatively general models for problem solving can be translated into methods and tools supporting system designers in their practical work designing production systems. Such methods can be presented as checklists, handbooks or software-based tools.

5.2.4 Different Approaches to the Design Process As indicated there are several different ways of designing production systems, not only at a detailed level but also concerning the fundamental assumptions behind each design process. The integrated theories Philosophies with sets of techniques and methods and Design by philosophy can be used as examples. Both theories are based on more or less far-reaching assumptions that there is one best way of designing production systems, in terms of preferred production system solution. When the design process is driven by something external; for example, a preexisting design or the interest of an actor, the process is what Engström et al. (1998) refers to as concept-driven. Depending on how the objectives for the production system are formulated, the result from the design process has different consequences. Objectives can stem from a vision based on a certain philosophy such as for example lean production. With this approach the design process starts with a set of objectives. A model that fits the objectives is created, but without considering previous systems. The official view of the development of Volvo’s assembly plant in Uddevalla, see Sect. 4.6, is that the design process was concept-driven (Engström et al. 1998). However, the design process did not follow the norms of ends-means rationality, where design decisions are determined by predetermined design goals. The design process is described as following an internal logic, starting with an analysis of the requirements and the specific situation, and working towards a solution. The design process is guided by a number of constraints (requirements), such as the type of product, volume and number of variants. The design options were successively eliminated through irreversible design decisions resulting in new constraints, until only one alternative remained. The design process is described as constraintdriven rather than concept-driven (Engström et al. 1998). When the result from the design process is a new production concept, the design process can be described as concept-generating. In a similar way, the Toyota Production System evolved. Concepts created with the concept-generating design processes often constitute the basis in concept-driven design processes. This is especially clear for all production systems developed with the Toyota Production System as a model. Hence, there are two main approaches to production system design in manufacturing companies: • concept-driven approach; and • concept-generating approach.

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5 Production System Development in Theory Concept-generating approach

Concept-driven approach

Problem Setting of objectives

Analysis of situation

Supplier-driven approach

Problem Analysis of situation

Problem Setting of objectives

Analysis of situation

Setting of objectives

Conceptual modelling

Conceptual modelling

Conceptual modelling

Evaluation of concepts

Evaluation of concepts

Evaluation of concepts

Decision

Decision

Detailed design

Detailed design

Detailed design

Decision

Evaluation of alternatives

Evaluation of alternatives

Evaluation of alternatives

Decision

Decision

Decision

Solution

Solution

Solution

(a)

(b)

(c)

Fig. 5.7 Different approaches to the design process from the perspective of the manufacturing company, (a) concept-generating approach, (b) concept-driven approach, and (c) supplier-driven approach (Säfsten 2002)

Since several manufacturing companies do not design their production systems by themselves but with support from for example system suppliers there is a reason to emphasise a third approach, a supplier-driven approach. With this approach the manufacturing company leaves parts of or the entire design process to a system supplier. This approach implies various degrees of involvement from the manufacturing company. One extreme is when the supplier takes care of everything, from requirement specification to a complete production system in operation. The three design approaches affect the design process from the manufacturing company’s point of view. Activities are to various degrees carried out within the company, depending on the applied approach, which can be illustrated with the general design framework introduced in Sect. 5.2.2, see Fig. 5.7. In the 15-company study some of the companies followed a concept-generating design process, see Fig. 5.7a (Säfsten 2002). The starting-point in several of these companies was the introduction of a new product and requirements were formulated based on the constraints given by the product. A couple of other companies had in advance determined the design of the new assembly system. Strategic reasons were mentioned for the chosen concepts in one company, and in the other company the preferences of the production manager were decisive. In none of these companies were different conceptual solutions suggested, see Fig. 5.7b. The concept-driven approach is quite common in manufacturing industry today. A well-known example in Sweden is the production system at Scania, developed with the Toyota Production System as a model, or as the concept driving the development.

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125

INDUSTRIAL EXAMPLE: SCANIA PRODUCTION SYSTEM A CONCEPT-DRIVEN APPROACH The development of the Scania Production System (SPS) was initiated at the beginning of the 1990s. The work was initiated by two researchers who, for a while, had been studying successful companies within the automotive industry. Two companies were outstanding, Toyota and Scania. Both companies had grown organically, that is by themselves and not through purchase. Both companies were considered to have unique capabilities, developed through time. Toyota had the well-known production system which gradually evolved since the 1940s. The unique capability of Scania was the modularised product system, initiated in the 1950s. The companies considered these capabilities as being the source of their success. The question posed by the researchers was: what would happen if these capabilities were combined? To find an answer to this question the two companies were brought together. During 1995 seven persons from Scania spent three weeks in one of Toyota’s production sites in USA. Back in Sweden the work continued with regular discussions for approximately one year, trying to understand the uniqueness of Toyota’s production capability and how this could be applied to Scania. Subsequently, in 1997, a project called Production 2000, P 2000, was initiated. P 2000 became the first step towards the Scania Production System. P 2000 was carried out in three steps: arrange workplace, arrange equipment and arrange process. In parallel the work of understanding and translating the Toyota Production System continued. In 1998 the fundamental principles from Toyota had been transformed into the world of Scania The development of the Scania Production System was initiated, principles realised in every Scania production site today. The work has been going on for a while. The starting-point was a company who already had adopted certain principles, such as for example “right from me”. The full implementation of the Scania Production System is ongoing, and today an organisational unit is dedicated to the task of training, educating and problem-solving related to the Scania Production System. Sources: Carrick (2004); Johnson and Bröms (2000)

The third approach is necessary in order to describe the design process from the perspective of the manufacturing company. Several of the companies in the 15-company study engaged system suppliers to provide suggestions for assembly systems. A common way of working was that a requirement specification was handed over to a number of potential suppliers. Suggested solutions and offers were received, and evaluated, which is illustrated in Fig. 5.7c. The involvement from the suppliers varied. Among other things the way of specifying requirements varied as did the concluding evaluation. The degree of external involvement in the development of a production system is seldom a strategic decision, but rather a decision made by the responsible production engineer (Johansson and Nord 1996). The degree of external involvement can also vary over time. INDUSTRIAL EXAMPLE: SUPPLIER-DRIVEN APPROACH In one company there was a strategic decision for an automated final assembly system replacing the present manual assembly system. A supplier (of equipment) was selected before the design process was initiated. When the cooperation was initiated the supplier had a major role in the design of the assembly system. In this case evaluation was described as superfluous since the solution was a consequence of the chosen supplier. In subsequent product projects when the company had developed their own competence concerning automatic assembly, they took a more active role during assembly system design. Source: Säfsten (2002)

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5.3 The Evaluation Process Evaluation is part of the production system development process, and thereby its content is relevant to elucidate. In this context, evaluation is the process of investigation and judgment of a production system in the light of certain criteria, or the result of that process. Evaluation is a rational activity dealing with three main questions (Åberg 1997): 1. knowledge: handling and understanding the object of evaluation, the evaluand (in this case a production system); 2. valuing: judging the value of the evaluated object, the evaluand; and 3. use of the result: handles issues concerning the purpose of the evaluation and the actual use of the result. To talk about evaluation process elucidates the evaluating activity – and not the result thereof. The evaluation process normally involves (Scriven 1991): • identification of relevant evaluation criteria; • investigation of the performance of the evaluand (in this case the production system) concerning chosen evaluation criteria; and • synthesis of partial results to determine the value of the totality. Similarly to design, evaluation is an example of a double task. A plan for the evaluation is a precondition, although not a guarantee, for a proper evaluation. Evaluation is a complex and extensive activity; it is therefore relevant to distinguish the preparatory phase from the main phase, the actual evaluation (Stevrin 1991; Karlsson 1999). Suggested activities in the different phases are presented in Table 5.3. Initially the purpose and the planned use of the evaluation need to be specified (P1). The purpose of evaluation is often to improve or to control, which also is called formative and summative evaluation (Scriven 1967). Summative evaluation aims at investigating (control) the achieved results from for example a change and

P1

State the purpose and the planned use of the evaluation

Preparatory phase

P2

Describe the evaluand (production system/s)

P3

Preliminary analysis

P4

Evaluation criteria

P5

Plan the data collection and the investigation

Main phase

Table 5.3 The main phases and activities in an evaluation process

M1

Carry out the planned data collection and investigation

M2

Carry out the necessary judgements and present the results in an adequate way

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127

with formative evaluation the possibility to improve an ongoing activity is sought (improvement). Evaluation is relevant in different phases of a production systems life-cycle, and the purpose of the evaluation varies with the phases of the lifecycle. Investigation of the performance of an existing production system is relevant before a change is initiated. Alternative production systems have to be compared during development. When the production system is realised it is relevant to control whether the results are achieved (summative evaluation). It is also of relevance to evaluate production systems in operation and in this case the purpose might be to find possible areas of improvement (formative evaluation). Different purposes of evaluation of production systems are, for example: • to find out how good a system is; • to compare alternative systems; • to assess whether a system conforms to requirement specifications and formulated objectives; and • to identify possible areas of improvement in a system. It is also necessary to consider the use of the results from an evaluation since this might affect how the evaluation should be carried out. In the evaluation literature the use of the result, or rather the lack of use is a topical question. It can be noted that the use of evaluation results can be regarded from different perspectives (Karlsson 1999): • • • •

instrumentally or conceptually; now or later; individual or organisation; and legitimating.

Instrumental use refers to direct actions, such as for example an immediate change of a production system. Conceptual use can imply a change in attitude towards the production system. The result can be used now or later. The result from an evaluation can be used later, for example when a requirement specification of a new system is to be formulated. It also varies whether the results are used at an individual or organisational level. For example, evaluation of work place design can be used by an individual to improve one single work station, or it can be used by the organisation to improve all work stations according to the results from the evaluation. The result from an evaluation can be legitimating, which might be useful for example when the intention is to get support for an already chosen solution. If evaluation of production systems is carried out it is also relevant to consider the risk of not using the results. The main reason for not using the results are deficiencies in the evaluation, deficiencies in the communication between the evaluation and the user, and deficiencies at the user (Åberg 1997). The second step in the preparatory phase (P2) is concerned with describing the product system/s to evaluate. As described in Chap. 2 system borders are critical in a system description. It is also necessary to specify all elements and their relations. The preliminary analysis (P3) constitutes the foundation for the formulation of evaluation criteria (P4). The concluding step in the preparatory phase (P5) concerns

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Table 5.4 Advantages and disadvantages with internal and external evaluators Internal evaluator Advantages

Disadvantages

Familiar with the production system Familiar with the organisation and with the production system context Possibility to investigate activities in depth

Difficult to differentiate the role as evaluator from the ordinary professional role A risk that failures are neglected and successes over-emphasised A lack of experiences from evaluation

External evaluator Advantages

Disadvantages

No “back-pack” of previous experiences Can have another perspective on the production system and relate to other production systems Good knowledge in evaluation

A lack of knowledge concerning the production system A lack of involvement Difficult to adapt the result to practical use in the production system

planning, both of data collection and the actual investigation. Available techniques for data collection are measurement, interviews, surveys, observations and internal documentation (Patton 1987). A decision has to be made concerning who the evaluator should be. Depending on the purpose of the evaluation, different evaluators are more or less appropriate. Evaluation can be carried out by someone working in the production system, an internal evaluator, for example an operator or a production engineer. Evaluation can also be carried out by someone outside the production system, an external evaluator, which for example can be a consultant or a system suppler. Both alternatives have advantages and disadvantages, which should be considered before the decision is made (Karlsson 1999), see Table 5.4. The most appropriate evaluator depends, as previously mentioned, on the purpose of the evaluation. If new perspectives are required an external evaluator is obviously advantageous. There is always a risk that people working in the production system for several years become blind to defects and thereby are not able to discover its potential. If the purpose is change or improvement of an existing production system an internal evaluator might be advantageous. To carry out an evaluation involves participation and the result belongs to those participating in the evaluation (Karlsson 1999). Another argument supporting internal evaluators is that evaluation has to be a natural part of the daily activities and the ambition should be sleep-learning and self-evaluating production systems (Vedung 1998). During the main phase activities planned for in the preparatory phase should be carried out. Required data should be collected (M1). The concluding activities (M2), especially judgement, the valuation of the evaluand, are critical. Valuation is the kernel in evaluation. There are several aspects to pay attention to concerning valuation. Important to determine is what criteria to use for judgement and what principle to use for comparison. Comparison can, for example, be made against ideals, between different alternatives, or over time. Evaluation is not always easy, as illustrated in the industrial example below.

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129

INDUSTRIAL EXAMPLE: EVALUATION OF PRODUCTION SYSTEM PERFORMANCE The task was to evaluate Volvo’s assembly shop in Uddevalla. The plan was to document the results achieved in the production system, before the workforce disappeared as a consequence of the shut-down. Quite soon it was obvious that documentation alone could not provide a valuation. A result can only be evaluated in relation to another result. Therefore, it was decided that the results should be compared with results from other Volvo plants. A new problem arose – the different plants were competitors. A comparison between plants could be used as a political weapon within the organisation; it could be used to support decisions in one plant and to criticise another. Source: Berggren (1993)

Two important issues are illustrated in the industrial box above. First, pure descriptions of the production system performance do not constitute an evaluation. Evaluation requires valuation of the performance; it has to be related to something. Secondly, it is not trivial to evaluate organisations or other activities. There is always a risk of faulty data, either due to defective measuring instruments or due to people working in the organisations that in some way cheat the measuring system. Reasons for this can be as described above, if several plants within the same organisation compete, all of them want to be the best. When a description is to be related to something, a reference point is required. A reference point can be based on one’s own results/activities or others. Suggestions of reference points are (based on Karlsson 1999; Slack et al. 2000): • • • •

historical data: performance over time; objective or ideal value: for example 0 faults, 100% delivery precision; performance of other plants within the organisation; and performance of competitive organisations.

The difference between evaluation and pure measurement is the synthesis and integration of different aspects (Scriven 1991). Hubka and Eder (1988) suggests different strategies to amalgamate different criteria: 1. 2. 3. 4.

monetary expression of all criteria; use some kind of grading; look for combinations of criteria showing significant trends; and compare all alternatives, use judgements such as better, worse, equal, etc.

Finally the results from the evaluation are to be presented in an appropriate way (M2). Different ways of presentation are recommended based on the purpose of the evaluation; if the purpose was improvement (formative evaluation) or control (summative evaluation) (Jerkedal 1999). The result from a formative evaluation, with the purpose of identifying areas of improvement in an existing production system, is appropriate to communicate directly and regularly with involved persons. If the purpose is to control goal fulfilment in a changed production system (summative evaluation), it is more appropriate to present the evaluation results in a written report. The different ways of presenting results can be compared to dif-

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ferent learning strategies. When the result is communicated between people we use a personalised learning strategy, while a documented result is the foundation for a codified learning strategy. More details concerning these strategies and other questions related to the use of previous experiences and learning are described in Sect. 5.5.

5.4 Production Development: Part of Product Realisation Product realisation comprises product development and production development as integrated and dependent processes. The coordination and cooperation between product development and production development is not without difficulties. Despite a great deal of effort to solve the interface-related problems, both in practice and among researchers, there are still several problems remaining. The work with production system development is often one of the later activities in the product realisation process. Awareness among corporate management, production management and system designers concerning required resources to carry out this activity is essential. Development of the production system is not as a matter of course given the same preconditions as the development of the product. We know that a majority of the production costs are determined during the early phases of product development, which for example is mentioned by Herbertsson (1995). Production is not an end in itself but a consequence of the product developed and the need to realise that. When it is necessary to give priority to some activities, the work with the product is often done prior to the work with the production system. There are, however, several disadvantages with this: • risk of too limited time and resources for planning and development of production system; • problem during realisation and start-up of the production system; • production disturbances during operation; • need for a lot of maintenance; • mismatch between work organisation and technical system; and • required changes in the new system as a consequence of low prioritised preparatory work and poor requirement specifications. In the subsequent section examples are given of how product development and production development can be coordinated into a successful product realisation process. Ways of working with integrated product realisation and different principles and methods to use during product realisation are described.

5.4.1 Parallel Development Processes The focus in development is gradually changed in three steps when new technology emerges in a line of business (Andersson et al. 1992).

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Step 1: focus on product technology and innovations Step 2: efficiency in production Step 3: reducing costs A lot of attention is given to the first step, innovation processes and product development. There are difficulties with working in parallel with step 1 and step 2 since the production system partly follows the product sequentially. In the 15-company study (Säfsten and Aresu 2000) three approaches to cooperation between product development and production system development were identified, see the industrial example below. INDUSTRIAL EXAMPLE: COOPERATION BETWEEN PRODUCT DEVELOPMENT AND PRODUCTION DEVELOPMENT The studied companies worked in different ways concerning work principles, organisational and human aspects in product development and assembly system development. Three different forms of cooperation between the two processes were identified by Aresu et al. (1999): 1. The traditional approach, also called over-the-wall engineering, which refers to a minimum of cooperation and integration between the processes. Product development and production system development are separate processes and are carried out sequentially. 2. The parallel and iterative approach, where production is involved during the early phases of the product development process. The processes are not fully integrated despite a certain level of cooperation. 3. When the concurrent engineering approach is used the processes are integrated and characterised by close cooperation, team work and support from computerised communication networks. Focus is on time-to-market, the time for the market introduction. Source: Aresu et al. (1999), Säfsten and Aresu (2000)

Traditional design processes have often allowed certain criteria to have more weight than necessary, which has resulted in unnecessarily large restraint of the space of action (Engström and Karlsson 1981). For example a fixed product design reduces the number of production technology options. The principle is not only valid for the relation between product design and production technology, but also for other criteria relevant for the development of production systems. It only depends on the frame of reference used. With a comprehensive view of the production system the criticism might concern a lack of coordination between work organisation, work environment and production engineering. The result is similar; the number of good work organisational and work environmental solutions is restricted. Furthermore, today it is fairly established that late changes in the product realisation process imply higher costs than early changes. The ideal design process is one where the design criteria can affect each other in an iterative (Fig. 5.8a) rather than a sequential (Fig. 5.8b) design process, see Fig. 5.8. Simultaneous design of work organisation and technology is about the consequences; whenever a technical solution or a subsystem is designed, the consequences are also designed directly or indirectly (this also applies to work organisation). If the consequences are to be seriously handled the best opportunity to do so is during the design phase (Klein 1994). Optimal relations between the social and the technical system can be achieved through carefully prepared work design (Forslin 1991).

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Fig. 5.8 Sequential (a) and iterative (b) design processes (based on Engström and Karlsson 1981)

Product design

Production technology

Layout

Work organisation

(a) Product design

Layout

Production technology

Work organisation

(b)

NEED

As described earlier several companies have put in a great deal of work on reducing the time required for product development. Activities that previously were carried out sequentially have largely been replaced with parallel and integrated activities. The changed way of working with product development has several names. It is known as simultaneous or concurrent engineering, which more or less is equal to integrated product development. Integrated product development implies that activities concerning market, product and production are carried out in parallel (e.g. Andreasen and Hein 1987; Ulrich and Eppinger 2000). The notion product realisation can be used since product development and production development are considered as equivalent, parallel processes, which for example can be illustrated as in Fig. 5.9. Similar phases as in Fig. 5.9 are also described in other product development models (e.g. Roozenburg and Eekels 1995; Ulrich and Eppinger 2000). Commonly the phases planning, conceptual development, system-level design, detail design, testing and refinement, and production ramp-up are mentioned. The tasks and the responsibility for the involved key functions, which are marketing, design and production, are summarised in Table 5.5. Determine basic need

User investigation

Market investigation

Preparation for sales

Determine type of product

Product principle design

Preliminary product design

Adaption for production

Product development

Consider process type

Determine type of production

Determine production principles

Preparation for production

Production

Investigation of need

Product principle

Product design

Fig. 5.9 Integrated product development

Production preparation

Market

Execution

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133

Access to correct information and relevant data for decisions is a prerequisite for parallel activities in the product realisation process. The sooner subsequent activities get preliminary information, the sooner these activities can begin. This also implies that information continuously has to be transferred between different activities. Changes of parameters controlling the product design immediately give consequences for the subsequent and parallel activities. There is always a need for a certain degree of sequential information between different activities and this is unavoidable. It is, for example, difficult to start the detailed design activities before the preconditions are settled on a conceptual level. Table 5.5 The generic product development process (Ulrich and Eppinger 2000) Phase/ Marketing Key function

Design

Production

Planning

Articulate market oppor- Consider product platIdentify production tunity form constraints Define market segment Assess new technologies Set supply chain strategy

Conceptual design

Customer needs Lead user Competitive products

System-level design

Plan product options and Alternative product extended product family architectures Set target sales price Define major subsystems and interfaces Refine industrial design

Identify suppliers for key components Make/buy analysis Define final assembly scheme Set target cost

Detail design

Marketing plan

Define part geometry Choose materials Assign tolerances Complete industrial design documentation

Define piece-part production process Design tooling Define quality assurance process Begin procurement of long-lead tooling

Testing and refinement

Promotion and launch material Facilitate field test

Reliability testing Life testing Performance testing Obtain regulatory approvals Implement design changes

Facilitate supplier rampup Refine fabrication and assembly processes Train workforce Refine quality assurance process

Production ramp-up

Place early production with key customers

Evaluate early production output

Begin operation of entire production system

Feasibility of product concepts Industrial design concepts Build and test experimental prototypes

Estimate production costs Assess production feasibility

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INDUSTRIAL EXAMPLE: SIMULTANEOUS DEVELOPMENT OF PRODUCT AND PRODUCTION SYSTEM Companies X, Y and Z all had the intention to develop the product and the assembly system simultaneously. However, delays in product design affected assembly system design. The preconditions were not set in time, which resulted in uncertain input to the assembly system design process. In general there was a lot of uncertainty in the development projects and difficulties to foresee different complications, which also resulted in delays. In two of the companies the planned product realisation time, from project start to volume production, was 3–4 years due to very high product complexity. In these two companies resources were transferred from system design to product design, which also affected the assembly system design process in a negative way. Source: Bellgran (1998)

Information concerning the product such as product design, number of variants, volume, etc., is essential for the production system. Early involvement of production engineering and production development in product development projects increases the possibility to improve the manufacturability of the product. Early planning of machine and equipment investments, design of work organisation, workplace design, work environment and material supply system also reduces the lead-time for the production system and with that the lead-time for the entire product realisation process. It is always problematic if production systems are designed based on faulty data; therefore a prerequisite is relevant, correct and continuous information. The consequence is that involvement in the creation of information is important (Eppinger 1991).

5.4.2 Design Activity Dependency Looking at product and production system design as integrated and inseparable processes implies a different way of running development projects compared to traditional sequential projects. Three possible sequences of development activities are described by Eppinger (1991), see Fig. 5.10. The product and production system design activities can be either dependent or interdependent. Dependent activities can be in series or coupled. Some of the preparatory production system design activities are independent of the product and can therefore be carried out in parallel with product design. Creating production system alternatives is on the other hand dependent on the product design. For the product specific production equipment such as fixtures, the design processes may be coupled. The same type of division of tasks can be made within the production system development process as well. The detailed design of work places is for example dependent on the conceptual system solution and on the determined level of automation, whereas work organisation strategies can be determined in an earlier stage, even in parallel with certain product development activities. The requirement specification for the production system is dependent on both product development activities and system development activities, see Fig. 5.11.

5.5 Learning and Production System Development Fig. 5.10 Three possible sequences for the two design tasks A and B (Eppinger 1991)

A

135

A

A

B

B

B

Dependent tasks (Series)

Independent tasks (Parallel)

Interdependent tasks (Coupled)

Production system design

Sequential activities

Parallel activities

Production system design

Time

Background study

System design

Pre-study

Conceptual design

Requirement specification Evaluation

Detailed design

Fig. 5.11 The possibility of reducing time when designing in parallel (Bellgran 1998)

Empirical studies (Bellgran 1998) indicate that parallel development of product and production system is not a trivial task. The reason is that several of the prerequisites for production system design are determined during product design. Therefore, it is valuable to identify activities that may be carried out in parallel, reducing the risk of extensive reworking late in the design process. An integrated approach does not necessarily mean that there is a balance between the product design process and the production system design process. The overall attitude towards the production discipline is an important precondition for the creation of such a balance. This implies, among other things, that production systems design also has to be regarded as a process, similarly as product design.

5.5 Learning and Production System Development A lack of a comprehensive view and absence of a process perspective can be devastating for a manufacturing company. Production systems not using the possibility of integration between included components are achieved. Furthermore, the

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possibility of creating long-term competitive production ability for the company is reduced. The question raised below is: what does it mean to have a comprehensive view and a process perspective when developing production systems?

5.5.1 Comprehensive View and Process Perspective In Chap. 2 the production system was described from a system theoretical perspective. The importance of using a system perspective was emphasised since this perspective provides a comprehensive view of all included system components and their relations. When a production system is regarded from a system theoretical perspective a comprehensive view is applied. Thereby the risk of suboptimisation and one-sided focus on either technology or organisation is reduced. Previously processes constituting the basis for development of production systems have been described and the use of a process perspective has been emphasised. But the question is, is it purposeful to talk about system perspective and process perspective, at the same time? The answer is that there are attractive advantages with both perspectives, some of them pointed out by Lind (2001). With a system perspective a good overall picture of production systems is achieved through the study of the different elements and their relations. This gives an overview of the production system, which is not provided with the process perspective. The process perspective on the other hand contributes with a horizontal view of the activities which, for example, makes responsibility spread between departments possible, see Fig. 5.12. Furthermore, a process perspective provides a focus on those the businesses are aimed at: the customers. A process perspective when developing production systems provides good prospects of successful development. Arguments supporting this are: • you look over the functional borders to solve a common task; • a better balance between product development and development of production systems can be achieved since both activities are part of a common process – to supply products; and • feedback of experiences and achieved knowledge contributes to a continuous learning which increases the knowledge concerning development of production systems. A system perspective increases our understanding of the production system, its different elements and their relations. A process perspective provides us with tools to handle the development of the system, the actual development process.

5.5 Learning and Production System Development

Department Input

Department

137

Department

PROCESS

Output

PROCESS

PROCESS

Fig. 5.12 Departments versus processes (Lind 2001)

5.5.2 Development of Production Systems as Process and Project A metaphor sometimes used to describe a process is as a road (e.g. Ljungberg and Larsson 2001; Johansson and Nord 1999). The road runs between the Need village and the Satisfaction village and is used by different kind of vehicles (projects), in our case production system development projects, see Fig. 5.13. A project is commonly defined as a temporary organisation solving a specific task, within a given time limit and with given resources. The size and the length of the project vary, depending on the task.

Fig. 5.13 A process can be regarded as a road, used by different vehicles (projects) (Illustration: Mario Celegin)

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Fig. 5.14 Well done project work but poorly maintained process (Illustration: Mario Celegin)

The appearance of the road varies, it can be winding with marked speed bumps between different parts, or it can be straight and two-laned. To keep the road passable there is an obvious need for maintenance and improvement. In a similar way, when production system development is considered as a process, the development process continuously needs improvement. Continuous improvement of the production system development process is of use for subsequent development projects, and in the long run a supportive development process is achieved. The opposite, to not work with continuous improvement of the development process, is illustrated in Fig. 5.14. A development project (the nice looking car) is carried out in an adequate way, but the process (the bumpy road) which is supposed to support the development activities is inferior and thereby not supportive. It is also possible that the project, the vehicle using the process, is not appropriate for the road, see Fig. 5.15. This might be the case when development of production systems is not considered as a specific task, a project. The problem might be an inability to take advantage of previous experiences and the benefits of an appropriate development process, an inability to use the process as a mean. The attitude towards production system development strongly depends on the company culture. The accepted ways of working within the company and the atti-

Fig. 5.15 Inability to use the process as a mean during the production system development project (Illustration: Mario Celegin)

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Maturity level of the production system development process Process maturity Innovation and testing of new development process Improving the development process Development process under control Problem solving (fire-fighting), instable development process Time

Fig. 5.16 The possible evolution of the production system development (Bellgran 1998)

tude among the project participants are decisive for how the development activities are carried out. The establishment of a clear and distinct production system development process is advantageous for manufacturing companies (Johansson and Rydebrink 1996). A clear process provides support for quality assurance and planning. It also provides a comprehensive view of all included activities. A well described and implemented process provides incentives to start in time with production system development activities since it is clear from the process what activities are to be carried out. The risk of being exposed to surprises such as “we didn’t think about that” is reduced. A clear and distinct process furthermore provides a foundation for comparisons between projects and thereby a means of utilisation of achieved experiences. Accordingly, the objective should be that the way production systems are developed, the development process, is refined and improved as time goes by. With an awareness of the value of a continuously improved development process, the production system development process evolves and eventually the process is matured, see Fig. 5.16. The evolving production system development process may start at a level characterised by fire-fighting activities, immediate problem solving and an unstable process. At the next level the production system development process is under control, and at the third level issues concerning improvement of the process are considered. At a stage when the system development process is improved on an overall level, and the knowledge and experience of this have increased, a paradigmatic shift may be found. At this level the system development process may be undergoing larger innovations and the experimenting towards radically changed development procedures are continued. Process maturity can be evaluated on the basis of the following criteria (Johansson and Rydebrink 1996): • • • • •

if and how the process is documented; if the process is followed; if focus is on early development phases, and if pre-studies are carried out; if measurement and improvement of the process is carried out; and if comparison or benchmarking of processes are carried out.

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5.5.3 Learning During System Development Carrying out development projects are opportunities for gaining new experiences and insights concerning production system development. It is also an opportunity for learning, if these experiences and insights are taken care of in appropriate ways. It is required that the experiences gained during the temporary projects are transferred to the company’s development process, and thereafter used in subsequent projects. In Fig. 5.17 the arrows correspond to transfer of experience between projects and process by means of various strategies. As previously mentioned the task of developing production systems is often carried out as a project. Working in projects implies some specific problems when it comes to learning and transfer of experiences. Generalisation and transfer of experiences from different development projects are difficult due to, among other things, discontinuity in project manning, but also because of the relatively short planning horizon in industrial projects. Tell and Söderlund (2001) point out three project characteristics making learning between projects problematic: • projects are well-defined delimited activities; • projects handle unique tasks; and • projects are carried out by unique constellations of participants. Yet another aspect complicating the transfer of experiences, and thereby the possibilities of learning, is the time perspective. A difference can be seen between concurrent and sequential transfer of experiences between development projects (Nobeoka 1995; Antoni 2000), see Fig. 5.18. When the time span between projects is large, as it usually is between production system development projects, and a sequential transfer mode is applied, it is more likely that the learning is ad hoc rather than planned (Nobeoka 1995). A consequence is that to really achieve learning between production system projects requires an extra effort. To develop production systems is far from a daily activity (Bellgran 1998). Among the companies participating in the 15-company study the time span between more extensive changes in production systems was mentioned to be beCompany/organisation

Project 1

Project 2

Knowledge Learning strategy PRODUCTION SYSTEM DEVELOPMENT PROCESS

Fig. 5.17 Transfer of experiences between project and process

Project n

5.5 Learning and Production System Development Concurrent transfer mode

141

Sequential transfer mode

Past project

Past project

New project

New project

Time

Time

Fig. 5.18 Sequential and concurrent transfer of experiences (Antoni 2000)

tween 4 and 5 years (Säfsten and Aresu 2000). With long intervals between projects the possibility of learning between projects becomes even more intriguing. One way to cope with this situation is to focus on the underlying processes. Even if projects are more or less unique, as stated by Tell and Söderlund (2001), there are certain similarities which make it worthwhile to try to transfer knowledge and experiences to the underlying process and between different projects. Knowledge and experiences are of different character and concern different parts of production system development. To be able to transfer these you need to know what to transfer, when it should be transferred, and how it should and could be transferred. It is also relevant to consider different learning strategies. The transfer activities can be made easier if potential obstacles and facilitators are identified. Previous experiences and knowledge about existing production systems and their performance and qualities are valuable when identifying requirements for the next production system and during the design of different conceptual system solutions. This is clear from the tendency to use or copy existing solutions when developing new production systems. During the phase of development when the task is to create different system solutions, knowledge about possible abilities with different system alternatives is important in order to determine the degree of requirement fulfilment. It is also important with knowledge about the development process, since this is a means to achieving successful production systems. When a suitable production system alternative is chosen, the implementation phase is started, aiming at realisation and start-up of the production system. It is important to nurture experiences gained during the design activities. This is sometimes neglected, people might already be involved in new projects and thereby there is not much time available to work on transfer of experiences from previous projects – if it is not an explicit activity in the development process. The result from the development project, the implemented production system itself, should be handed over from the temporary project organisation to the permanent organisation which also requires a transfer of production system knowledge.

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FURTHER STUDIES: KNOWLEDGE, EXPERIENCE AND INFORMATION To define knowledge is not easy; there are many people that have spent a lot of time trying to understand and describe the nature of knowledge. When we talk about knowledge here we refer to a traditional definition: knowledge is justified true belief. Knowledge requires interpretation and action, whereas information only is a flow of data. The transition from information to knowledge requires that the observer take in the information, interprets it and thereafter uses the knowledge in some way. A similar concept is experiences, which also is used more or less interchangeably with knowledge. Experiences are not necessarily associated with theory. We can by experience know how to do something, but we cannot provide a theoretical explanation as to why we should do it in a certain way. We can for example know how to design a good production system, but not provide an explanation of why it works. Sources: Filosofilexikonet (1988); Nonaka et al. (2001)

When production system development projects are concerned the following areas of knowledge can be identified: • production system related knowledge; • development process related knowledge; and • project related knowledge. 5.5.3.1

Preconditions for Transfer of Experiences

There are different kinds of knowledge. A common distinction is between tacit knowledge and explicit knowledge (Nonaka 1991). Explicit knowledge is formal and systematic; it can easily be communicated and shared, for example through written documents and data files. Explicit knowledge is possible to codify. The difference between knowledge and information is made clear with the codification of explicit knowledge. Explicit knowledge, which by the sender is formulated as for example an instruction, is only information for the receiver until the receiver has taken in the information, interpreted it and is able to use it. Tacit knowledge is, unlike explicit knowledge, highly personal and difficult to communicate. Despite all possible difficulties knowledge concerning a production system in general and production system development in particular is valuable and attempts should be made to transfer knowledge between projects and between projects and process. The model suggested by Tell and Söderlund (2001) may be used to illustrate how knowledge transfer can be carried out when developing production systems, see Fig. 5.19. Below the different transfer processes are briefly described (Tell and Söderlund 2001) and applied to system development. The first step in the model, articulation, is concerned with the transition from tacit knowledge to articulated knowledge. One example of articulation is prototyping, more commonly used in product development. When developing production systems, prototypes could be the models developed when working with different tools for simulation. The transition from articulated knowledge to objectified knowledge is called codification. When the articulated knowledge is codified as for example reports, routines or work descrip-

5.5 Learning and Production System Development

143 Codification

Articulated knowledge

Objectified knowledge

Tacit knowledge

Institutional knowledge

Institutionalisation

Articulation

Fig. 5.19 Knowledge transfer processes (Tell and Söderlund 2001)

Internalisation

tions it is available for everyone in the project. Through codification it is possible to preserve knowledge within an organisation, independent of the individuals. The third step, institutionalisation, is a consequence of the objectified knowledge available within the company. The transition from objectified knowledge to institutional knowledge makes things “stick to the walls”, networks are formed, often within specific areas, and rules for accepted behaviour gradually evolve. It is also common that specific parlance is developed. The final transition, closing the circle, is internalisation, which represents the transition from institutional knowledge to tacit knowledge. One example of this is the “master and apprentice” situation, where for example an experienced system designer works together with an inexperienced designer. In this case knowledge is transferred without being explicit or systematic. On an overall level two main learning strategies are found (Hansen et al. 1999): • codification – knowledge is codified and stored in a way that makes it available to everyone within a company, for example as manuals, guidelines, reports; and • personalisation – knowledge is associated with individuals and can only be shared with others through direct contact between individuals, where interaction is essential. If personalisation is chosen as the learning strategy contact between individuals needs to be brought about. One way to achieve this is through rotation of personnel within the organisation. Interaction is achieved and knowledge can be transferred between individuals. Another way is to establish networks aimed at knowledge transfer, within the organisation or between different organisations. Some examples of different means of implementing the two learning strategies are presented in Table 5.6. It is important to point out that it neither is possible nor desirable to codify everything. The learning strategy has to be determined based on the purpose of the communication of knowledge. Table 5.6 Means for codification and personalisation (Antoni 2000) Codification as strategy

Personalisation as strategy

Documents Manuals Guidelines Reports

Rotation Meetings Networks Arena

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5 Production System Development in Theory

Obstacles and Facilitators for Knowledge Transfer

A formulated learning strategy is unfortunately not a guarantee of learning. There are obstacles as well as facilitators affecting the actual use of the different strategies and their means of realisation. When presenting different obstacles and facilitators it is important to remember that each aspect can be either a hindrance or a facilitator, depending on how it is used. This is also the case with the bearers and barriers for knowledge transfer between projects identified by Björkegren (1999). Individuals and routines were identified as bearers of knowledge transfer between projects, and time, organisational structure, limitations of language and cognitive closures were found to be barriers. That both individuals and routines facilitate learning is confirmed by our studies within the manufacturing industry (e.g. Säfsten 2002). This also shows that both personalisation and codification can facilitate learning. Knowledge concerning production system development is often individual which makes codification an important step towards spreading general knowledge. Routines are one example of things that can be codified making them generally available. One of the aspects often mentioned as a barrier for knowledge transfer is time, or rather limited time. Most of the product realisation projects are carried out under severe time pressure. The product life-cycles are getting shorter and it is essential that the production system can produce required volumes, with high quality on time. Yet another problem associated with time is the fact that the time between different production system development projects tends to be quite long and the transfer of experiences can thereby be described as sequential, see also Fig. 5.18. The organisational structure, also mentioned as a barrier obstructing knowledge transfer between projects, can however also be a facilitator. Ljungberg and Larsson (2001) point out that a process-oriented organisation for example facilitates transfer of knowledge between different functions. We have also advocated process orientation as a way to support learning concerning production system development. The third barrier identified by Björkegren (1999) is the limitations of language. The limitations of language are a problem also when learning and production system development is the issue. The lack of standardised or accepted terminology indicates that the field is not mature. In order to develop knowledge, the use of a stringent terminology certainly facilitates communication and the possibility of understanding others, making correct descriptions etc. (knowledge transfer). A stringent terminology also improves the possibility of continuing from the knowledge of others when developing new knowledge. The fourth barrier mentioned by Björkegren (1999) was cognitive closure. This was explained by the perceived uniqueness of each project, which also was confirmed by studies concerning assembly system evaluation (Säfsten 2002). Although each project is unique, there are enough similarities between different projects to make it worthwhile to consider the learning and long-term aspects of improved production system development knowledge.

Chapter 6

Planning and Preparation for Efficient Development

Abstract In this chapter a framework is presented describing the development of production systems. The framework is structured according to the principle of the double task, which means that planning as well as the actual development activities is included. The framework consists of four parts: context and performance, planning, design and implementation. By way of introduction different contextual aspects which need consideration when developing production systems are presented. After that the description of the first part of the framework is deepened, that is the part about planning. Planning involves management and control and a structured way of working. The remaining parts of the framework are presented in the subsequent sections.

6.1 A Framework Supporting Development of the Production System A systematic development process implies a clear idea concerning how to work. A process prescribes the activities to go through, and the relative order between these activities. If management and system designers understand that the organisation and dynamics of the development process affects the final result, that is the production system, it also becomes necessary to plan the development better. This implies that the development process needs to be kept under control during or in parallel with actual development activities carried out, which is a typical example of the double task. To create a systematic development process it is necessary to know which phases and activities are relevant, and to structure them in advance. Through this both planning and actual development activities are facilitated. It is also essential to know what resources are required, the initial values for the different activities, and the expected results.

M. Bellgran, K. Säftsen, Production Development, © Springer 2010

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PLAN Management and control

Structured way of working

DESIGN AND EVALUATE Preparatory design

Design specification

IMPLEMENT Realisation and planning

Start-up

www.produktionsutveckling.se

Fig. 6.1 Production system development framework (further developed from Bellgran 1998)

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© Bellgran & Säfsten 2004

In this chapter, and the subsequent four chapters (Chaps. 7–10), the development process is described in detail by means of a framework and a structured way of working. The framework and way of working were initially formulated for the assembly system design process (Bellgran/Lundström 1993; Bellgran 1998). Both framework and way of working are based on empirical and theoretical foundation. For the purpose of this book the framework and the way of working have expanded and refined to also encompass implementation of the system solution resulting from the design process. Furthermore, the parts concerning evaluation have been added with deeper studies, theoretical as well as empirical (Säfsten 2002), see Fig. 6.1. The framework is based on the principle of the double task, which is elucidated through the distinction between planning and accomplishment. The framework, which in totality structures development of production systems, consists of four parts and six elements (see Table 6.1). The framework provides a way of regarding and analysing the development process on a theoretical, comprehensive level. The structured way of working which is one element of the framework, Table 6.1 Parts and elements of the framework with reference to the chapter in the book where the elements are treated Parts

Elements

Chapter

Planning

Management and control Structured way of working

6 6

Design and evaluation

Preparatory design Design specification

7 8

Implementation

Physical realisation Planning and start-up

9 9

Context and performance

Contextual aspects Production system performance

6 10

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comprises a method that is supportive during planning and development (see also Bellgran 1998). The need for a framework capturing the complexity of production system development has been made clear both through empirical investigations (as described in Chap. 4) and through theory (as described in Chap. 5). Merely presenting a normative method prescribing what to do during development of production systems does not increase understanding; neither does it facilitate long-term refinement of the development process. The most important contributions from the framework are: 1. increased understanding of the task of developing production systems; 2. the principle of the double task is elucidated: to plan and accomplish; and 3. a presentation of (a) the influence from the contextual aspects during development and (b) the production system performance as a consequence of the development activities. The first part of the framework, planning, embraces management and control which partly can be considered typical project management questions such as time and resources, work team, priority, and so on, and partly structural questions. The structural questions are concerned with providing a structure among the activities in order to facilitate the work with change of existing or development of new production systems. If planning should have any effect a fundamental issue among the production system designers is a distinction between planning and development together with a comprehensive view (systems perspective) and a process perspective (see Sect. 5.5). Evidently, a continuous control and check against the planned development continues in parallel with the accomplishment of the actual development activities. The result from the planning activities is a plan for the accomplishment of the development activities. The plan is not static, but rather a document that changes along the way, which is necessary since development is associated with a lot of insecurity especially when it is a part of product development projects. Input to the production system development changes as long as the product design changes, which in the worst case might continue until start of production. Another common source of insecurity is the expected production volumes which among other things guides dimensioning of the production system. It is often quite difficult to predict the expected production volume. Another source of insecurity is the expected time on the market for the product. Insecurity concerning the two most important factors affecting the production system development, the product and the volume, makes the development difficult. There is, however, a considerable difference between having a plan as a starting-point for the activities, compared to being without such a control and quality assurance document. The second part of the framework, design and evaluation, embraces preparatory design and design specification, which is treated in detail in Chaps. 7 and 8. According to the empirical experiences the preparatory design activities are decisive for the possibility of designing a production system appropriate for the conditions in each company and each situation. Therefore, it is relevant to separate the preparatory

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design activities from the design specification activities to elucidate the differences. The preparatory design activities concern analysis of the prerequisites and summing up in a requirement specification for the production system to be. The activities during design specification are concerned with creation of different solutions, evaluating these and a detailed system solution. How this is done is described in Chap. 8. The system solution is a detailed description of the production system. Even if it is the latter activities, i.e. design specification that results in a system solution the quality of the chosen solution depends on the previous preparatory activities. Input to the third part of the framework, implementation is a detailed description of the production system to be, a system solution. Here, the activities associated with the realisation of the production system according to the detailed description are initiated. In parallel with the physical realisation the planning of the start-up is initiated. Start-up is carried out as soon as the system is built. The activities during this phase are strongly dependent on the preceding activities, both with design and planning for implementation. Start-up is further treated in Chap. 9. The fourth part of the framework has a slightly different character than the other three parts. In the fourth part contextual aspects and performance of the production system are considered. The empirical studies show that the dignity of the contextual aspects affects both planning and development to such an extent that it motivates its own part of the framework. Several of the contextual aspects concern the preconditions within a specific company, which affects the planning and development activities both directly and indirectly. Awareness of the contextual aspects and their importance facilitates the decisions which have to be taken before and during the development process. The other aspect, the performance of the production system, is affected during the development process. Furthermore, it is important to know how production systems perform before a change. How to measure and evaluate performance during the development process is described in Chap. 8 and the performance of the resulting production system is detailed in Chap. 10. By using the above-described framework when developing production systems it is easier to maintain a comprehensive view of the task. The framework makes it possible to create partial objectives and to see the transfer of results between the different parts. The contextual aspects have an obvious influence both on planning and development and can be translated into affecting or controlling aspects concerning these parts in the model.

6.2 Contextual Aspects The importance of the contextual aspects for development projects cannot be emphasised enough. Some of the aspects affect the development in different ways, and some of the aspects are controlling parts of, or the entire, course of events. As a result from industrial studies a number of contextual aspects have been identified

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(Bellgran 1998). These aspects can be grouped in different ways, and we have chosen a grouping into three areas: • perspectives and attitudes; • company preconditions; and • investment considerations.

6.2.1 Perspectives and Attitudes The first group of contextual aspects concerns the perspectives and attitudes towards the task of developing production systems among those people involved. All levels are concerned, from management to machine operators. This is the most important aspect, of course not unique for the task of developing production systems, but fundamental for each development task. How, what, and in what way people think affects of course the final result, and not least – the way to get there. The way of thinking which constitutes the basis for different decisions is important in several ways, and on several levels: • Individual characteristics among management and system designers affect everything from resource allocation and priority to the design of solutions on a conceptual and detailed level. Attitudes and perspectives on production are fundamental for the entire development project. • Resource allocation to production engineering and production development concerns competence, knowledge development and resource allocation to different projects. It is also concerned with short-term versus long-term activities. Whether development of production systems are given high priority and good financial and personnel resources already in the early stages is largely determined by the management’s attitude towards the task and thereby the project. • Focus on the output from production is necessary, but may at the same time imply that activities concerning long-term development are given lower priority. If the same persons participate both in the daily operation and in system development projects there is a risk that acute problem solving is given higher priority than long-term development. • A comprehensive view on production systems, which means that the system is considered as a combination of technology and humans, is an important prerequisite for a successful development project. There is a risk that activities are concentrated on either the technological aspects or the human aspects which may result in suboptimisation. • Separating means and ends simply concerns identification of the means required to achieve certain ends. Means and ends are easily mixed up. One example is layout planning which sometimes is treated as an end in itself instead of a mean to achieve good system solutions. In a similar way for example automation can be regarded as an end, instead of a mean to attain ends such as efficient production.

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One aspect of particular importance is the commitment from management concerning development of production systems (individual characteristics). In most cases management has the responsibility to make strategic decisions, approve projects and keep an overall control on project status. There is often a need for a more active role among management to achieve organisational learning and change in order to attain the best production system possible (O’Sullivan 1994). An important, but not always highly prioritised, task for management is to determine and communicate an explicit manufacturing strategy. A manufacturing strategy is important in order to provide the system development team with the fundamental starting-points for the development. According to Skinner (1969) top management delegates a surprisingly great amount of decisions concerning production to lower levels within the production area. One reason is supposed to be the lack of awareness of the importance of production decisions on the entire company and organisation. The importance of manufacturing strategies as a starting-point and guideline for system development was previously discussed in Chap. 3. With an explicit relation between the corporate strategy, the manufacturing strategy and the tangible task of developing the production system the development task for the project team is facilitated and the possibility to support the success of a company increases. Yet another aspect to consider concerning the engagement from management is that the actual participation tends to decrease as the project proceeds. Management is more involved during project specification than during the actual development phases (Karlsson 1990). It is reasonable that the engagement from management is not concerned with detailed design issues. Nevertheless, it is essential with continuous reports concerning project status to secure that the production system is developed according to established manufacturing strategy. Thereby late changes in projects due to sudden awareness of divergence from the manufacturing strategy can be avoided. The individual profession among each person in management is also critical for the engagement in the development project. However, not only managers are important, system designers actually working with the development tasks have of course a significant influence. In Table 6.2 questions concerning contextual aspects related to perspectives and attitudes affecting development of production systems are summarised. Correspondingly contextual aspects related to the company’s preconditions and investment considerations are presented in Tables 6.3 and 6.4. These questions can be used as a starting-point for analysis of the company’s perspectives and attitudes, which can be done either within a project team or through involvement from different functions in the company. Awareness of the company’s perspectives and attitudes increases the possibility of proactive activities, i.e. to take measures required to carry out successful development projects.

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Table 6.2 Assessment concerning perspectives and attitudes affecting production system development (based on Bellgran 1998) Is production a core activity within the company? Is the potential of an improved production system by means of its design process identified and relevant? Is the production system design process focused? Questions to iden- What are the intentions with the planning of the development activities? tify perspectives and What are the consequences from the product development process? attitudes among What are the attitudes towards a structured approach and a structured way managers and sys- of working (supportive or bureaucratic)? tem designers, Are there any differences between the managers’ and the system designwhich affect the ers’ perspectives and attitudes towards production system development? way of working Is there a method available supporting a structured way of working with with production production system development? Is the method integrated with the product system developdevelopment process or with the project management process? Are methods ment. used? How are the attitudes towards (1) production, (2) production system, (3) system development process in general and (4) the specific development project, related to each other? What are the consequences for the development project in question? How is the production system defined? What terminology is used and is the terminology common for all involved? Is the production system regarded as a combination of a social system and Questions to inves- a technical system (technology, humans, and the organisation of these tigate whether a into totality) or regarded in another way? comprehensive view Is the totality, of which the production system is a part, considered? on the production What about the interfaces towards other parts of the company? system is applied. Is the size of the production system affecting the relations and the borders towards other parts? Is the level of technology and level of automation having an affect? Are there any risks for suboptimisation and if so, where? Questions to determine the risks of mixing means and ends during system development.

Is the development process separated from the production system? Is the planning separated from the development? Is it possible to identify input and output for the development process? How is the planning of the layout going to be utilised? As a tool to outline possible solutions, or as an end in itself?

Is production engineering and production development separated at (1) an organisational level, (2) between personnel, (3) at the operators’ level? How are the company preconditions, financial situation, manufacturing strategy, and planned production process affecting the resources allocated to production development? How about the size, competence, experience, and training of the staff Questions to deter- working with production engineering and production development? mine the conseHow do the company size, geographical localisation, project time horiquences from rezon, and attitudes of those recruiting personnel, affect recruitment and source allocation in retention of production engineering and production development staff? the project. What resources and supportive methods can be found or are to be obtained? Are preparatory planning activities made, for example implementation or development of tools and methods? Is the proportion of resources allocated to production system development reasonable in relation to the resources allocated to product development? Is there a balance with respect to input and output (e.g. the risk of achieving production systems that are not supportive)?

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Table 6.2 continued Questions to determine the priority between system development and ongoing production.

Is production development obstructed by a strong focus on ongoing production? What are the consequences of a priority situation, and how can these be handled? Are fire-fighting and short-term activities an essential part of the daily work for involved system designers?

6.2.2 Company Preconditions The second group of contextual aspects affecting the development of production systems is the company’s preconditions. Examples of such preconditions are the consequences on production from the market requirements, the role of production in the product realisation process, the company culture, and management involvement. Table 6.3 summarises a number of questions concerning the influence of company preconditions on production system development. Table 6.3 Questions concerning the influence of company preconditions on production system development (based on Bellgran 1998) What are the main competitive means, the product or the production process? Is it an incentive to develop a robust production system with high efficiency? How is the market and competition affecting production? Questions to determine the How important are the product/production costs, delivery precision, and consequences on flexibility to the company and its ability to compete? production from How important is time-to-market? How does it affect the possibility of market require- achieving a robust product design before start of production? Are there risks ments. for late engineering changes after start of production? If so, how should this be handled? How much time is available for production preparatory and planning activities? Questions to determine the role of production in the production realisation process.

What are the material costs for the product? What are the production costs of the product? How are the costs in the specific part of the production system related to the complete production cost? How can an efficient production system increase the revenues for the product? What are the order-winners and order-qualifiers for the specific product?

Questions to determine the role of the company culture.

How do the traditions, experience, knowledge of methods, products and processes, etc. affect the production system design? Is the character of the company culture static or dynamic? To what extent are the system designers familiar with and devoted to the company culture? How are production system development practices incorporated into company culture? What are the strengths of the company culture and how can these be used? What are the weaknesses of the company culture and how can these be avoided? How is the company culture affecting working procedures? To what extent is there an ability to change working procedures to develop future production systems?

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Table 6.3 continued Are top management and production management taking active roles in production system development projects? How is the responsibility distributed concerning project- and investment Questions to approval, control of project status, and other development related project determine the questions? management During what phases of the development project are the management expected involvement and to be involved (specification, actual development, etc.)? the use of manu- How does the professional field of the managers affect the involvement in facturing stratdevelopment projects? egy during How do project sizes, investment, expected level of automation and the development progress of the project affect the involvement? projects. Is the corporate strategy transferred to a manufacturing strategy? How is the manufacturing strategy implemented among system designers (indirectly through requirements in the investment documentation, or directly through communication)?

6.2.3 Investment Considerations The preconditions that affect investment and resource allocation can be derived from attitudes and perspectives among management and other people involved in the development process. Investment consideration is presented here as part of the contextual aspects for a development project, but should be regarded as fundamental for development of production systems. INDUSTRAL EXAMPLE: INVESTMENT IN AN ASSEMBLY SYSTEM Preparation for the investment request was ongoing during a major part of the product realisation project in Company C. The project was concerned with development of a new product generation and its associated assembly system. The time and effort required to prepare the investment request was relative extensive, partly due to changed owner conditions during the project which altered the investment situation. The initially suggested investment level was changed in a stepwise manner from high to low due to changed prognosis for production volume and changed product design. The changed investment strategy led to an increased level of automation in the assembly system, starting with manual assembly. At the same time the changes concerning the investments also resulted in uncertainty whether resources should be allocated for the new system or not. A more favourable situation was described in Company D, where financial resources already were allocated for investment in an assembly system. The resource allocation was specified in the investment decision concerning a new product and a new assembly system. In a similar way in Company F, the investment in a new assembly system was associated with the investment in a new product. However, the project team working with the assembly system design only got a couple of months to prepare a suggested system solution. This meant that very little time was available for planning and the initial ambition to carry out the activities according to a structured way of working was limited due to time criticality. The requirements placed on the investment documentation were that it should contain the following: choice of machines and estimate of costs, product specification and stipulated product cost, time plan including time to build the assembly system, specification of required project re-

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sources, risk analysis, degree of efficiency, suggested product organisation, requirements on the facility, type of work organisation and number of persons. The suggested solution was finalised to 60–80% just by satisfying the requirements in the investment documentation. Source: Bellgran (1998)

An affirmative investment decision is fundamental for a development project. Yet empirical studies have shown that the actual design task is carried out in parallel with the task of preparing the investment documentation to get a decision (Bellgran 1998). Investments in production systems may be made because it is necessary in order to produce, it can also be carried out in order to take advantage of new opportunities, see Fig. 6.2. The strategic significance of an investment increases with its size. The investment decision also gains in importance when the reason for a new investment is that new opportunities are created rather than of necessity. Financial resources are seldom allocated for the development project at the same time as preliminary acceptance of the investment is given. Early resource allocation creates preconditions for successful design activities. However, several reasons for changed rules of the game might appear along the way until receiving the final investment approval for the new production system. The level of detail required in the investment documentation varies with among other things the distance between production and where the investment decision is taken. With good knowledge among management and directors concerning the activities in general and the production situation in specific the risk of a complicated investment process is reduced. There is a contradiction between the investment request and the investment decision. To be able to make a decision concerning an investment some basic data (investment documentation/request) are required, but to create this a formal or informal preliminary decision concerning the development of the system is required. If such preliminary decisions do not exist there is a risk that the design Reason for the investment

Increasing strategic significance

New opportunity

Necessity

0

Small

Large

Size of the investment

Fig. 6.2 Classification of the investment reasons and size (Pirttilä and Sandström 1995)

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process has low priority, especially concerning the preparatory activities. Furthermore, there is a risk of strict time restrictions if a quick investment decision is desirable. As a consequence, a conceptual system solution has to be prepared in a relatively short time. One way to handle the contradiction between the completion of a suggestion in a short time and the possibility of carrying out the development work in a good way is to allocate enough resources to the development project. It can possibly be divided into several steps of investment where planning and preparatory activities constitute a first step, development and evaluation of different solutions a second step, and the final step is the actual implementation. It is not unusual that an informal investment decision precedes the formal decision. As an example the project leader can be appointed or time critical equipment can be ordered, before the formal decision is made. With a common starting-point in the common situation where the development of the production system is part of a product realisation project it is possible to identify different levels for investment decisions: 1. An investment decision for the complete product realisation project, where the production system development is one part. The investment decision can be formal and the level specified. The decision can also be informal or preliminary, with further requirements on documentation before a final decision can be made. 2. An investment decision involving only the development of a specific production system. The level of investment is governing. Planning of the project and the way of working is easier if it is included in the investment decision as a specific task. In a situation characterised by time pressure it is often hard to justify new ways of working. In these situations more tangible and visible activities such as creating system solutions based on a layout are given higher priority. Here a lot can be learned from the Japanese who are believed to spend a lot of time and resources in the early phases of a development project, for example front loading. The reason is evident, activities in the development project determine the final result, the production system, which the company should have for several years ahead. Therefore, it can be worth spending some resources during this decisive phase of development. Worth commenting concerning the investments, as noticed in a number of our empirical studies, is how delays and problems related to the investment decisions affect development projects. Delayed investment decisions, and explicit deadline for product launch, leaves basically two alternatives for the system designers: 1. continue to work with the development project while waiting for the investment decision; or 2. wait for the investment decision which implies a risk of imminent time pressure. As noted in one of the empirical studies uncertain investment situations obstruct the development project since, among other things, the system designers might lose some of their motivation.

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Table 6.4 Assessment concerning investment request and investment decisions affecting production system development (based on Bellgran 1998)

Questions related to investment requests.

What are the requirements on the investment request? At what detail should the proposal be presented? Where is the investment decision taken (close to the production unit or at business group management level)? How formalised is the investment decision-making process? Are the investment levels determined before hand? How critical is time?

Questions related to investment decisions and investment levels.

Are the development activities financed as a separate project? How is the investment situation perceived from the system designers’ point of view? Is there a connection between the investment decision and the existing production system if any? Should the existing production system (for an existing product) be replaced? If so, when and at what rate? How much of the existing equipment should be reused? How much of the existing system solution concept is relevant or strategically important to reuse? Is investment approval prior to the decision on investment level? Do early allocation of resources, tools, and personnel indicate late investments?

Questions to determine the influence from the investment decision on lead-time.

Is the investment request done at an early stage of the project? How is the investment request handled? (An early decision may be needed by those working with system design, not risking wasted effort, however a rather detailed proposal and cost estimation is required by those deciding about the investment). Is it possible to balance requirements on the investment request with a systematic and efficient design process? What happens with the production system development project if the investment decision is postponed? Is the preparation for the investment request receiving highest priority? What happens to less concrete and target-oriented activities such as the planning of the development project? How is the system designers’ motivation for the design task affected by the investment request and lead-time?

In Table 6.4 a number of questions concerning investment requests and investment decisions are gathered. The questions are mainly based on experiences from industrial projects and can, in a similar way as the previous two tables in this chapter, be used as checklists when planning system development projects.

6.3 Management and Control A precondition for efficient development is that management and control of the project is satisfactory. Available resources in terms of personnel, financing, and time are fundamental questions. The proportion between these variables affects significantly what priorities have to be set. These are common questions within project management, which can be studied in other literature. Here, we have

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chosen to focus on some areas specifically shown to be of special interest within production system development projects: • • • •

resource allocation to production engineering and production development; time perspective; work team composition; and creativity and analytical ability.

6.3.1 Resource Allocation to Production Engineering and Production Development Many contextual aspects affect the allocation of resources for production system development projects, as previously discussed, and the importance of resources for successful development projects is obvious. It is, therefore, relevant to consider the resources that are assigned to production engineering, most often representing the daily operation of the production systems, and to production development which mostly is concerned with long-term development. It is also of interest to compare the resource allocation between production engineering/production development and product engineering/product development. The amount of resources allocated to support and develop production depends, among other things, on the company’s preconditions, financial resources, manufacturing strategy and production process. The attitude towards production among owners, managers and other decision-makers within a company is one affecting factor. Resource allocation to production engineering and production development influences development of production systems in terms of competence and available personal, process development and development and use of supportive methods. The importance of production compared to other functions within the company also has consequences in terms of internal priorities. Allocation of resources for operational production engineering on one hand, and long-term production development on the other hand signals the amount of time that can be spent on fire-fighting compared to on strategic development of production. The number of employees in production engineering, and in production-oriented staff functions, might give an indication. Educational level and staff turnover are other aspects providing a picture of the situation in production, as is the transfer of production personnel to other functions such as supply, marketing, etc. within the company. According to Bloch and Prager Conrad (1988) the importance of production and process improvement is often underestimated in favour of product development and product engineering. Further, Bloch and Prager Conrad (1988) state that since production has not been considered as an intellectual challenge, the intellectual base has not expanded concurrently with the increased complexity in the products. This is considered as both an explanation and a consequence of the limited attraction production has rendered on the American universities during the last decades.

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The dominance of a discipline can create powerful possibilities (Leonard-Barton et al. 1994). At the same time a consequence might be that other disciplines undeservedly receive too little attention and thereby low status. Level of education, experience and competence among those involved in the development activities are important. Since system designers are often production engineers resource allocation to the production engineering function is decisive for the possibilities of successful development work, if not specific resources are allocated through investments. General production knowledge, and company and project specific knowledge, might be lost when someone leaves the company. At the same time a certain level of staff turnover is healthy for a company. FURTHER STUDIES: THE STATUS OF PRODUCTION Many American companies already experienced production problems ten years ago, which was considered as an explanation for the country’s weakness in production engineering and development of process equipment. In two American companies’ product development was regarded as the most critical function, which created a strong discipline and sophisticated products. However, this situation also created the attitude that the market function and production were not equally important in the company. As a consequence problems related to production were considered late in the projects, which led to delays, re-work and high expenses. With a perceived lower status the production discipline attracted less competent people, which made the discipline even less capable of complex problem-solving. Source: Leonard-Barton et al. (1994)

Staff turnover influences large development projects with long lead-time. In smaller projects, or in smaller companies, staff turnover can be very critical since it often concerns key persons. It might be difficult to immediately replace these key persons. In larger companies there is a possibility that replacement can be done with other people within the company. Smaller companies have fewer people to choose between when allocating personnel resources to new development projects. Available production competence is a consequence of the company’s strategy and recruitment policy, which is expressed in requirements on level of education, experience and other competences. Ability to produce with high efficiency without disturbances is decisive for manufacturing companies. It affects the possibility of keeping delivery times and delivery precision. It also affects the possibility of keeping good product quality and low production costs. In most manufacturing companies the focus is, for natural reasons, on output which becomes clear when priority of resources is discussed. Such priorities also influence ongoing development projects since personnel have to step in and solve problems during on-going production. Unfortunately, this means that if a lot of people have to work with disturbance handling and problem-solving of fire-fighting character, fewer are available to work with long-term questions aiming at elimination of these disturbances and problems. As one system designer in a company expressed it: “… a production engineer solving an acute problem is more appreciated than someone trying to find a sustainable solution.”

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One way to handle the problem is to explicitly allocate people to different roles in production engineering or production development. In that way the work with production development and its result are more visible.

6.3.2 Time Perspective The time required to develop new, or change, existing production systems varies from a couple of weeks to several years. Extremely short development time is only possible for simple manual production systems, whereas complex automated systems often require much more time. Whether the company from the beginning knows which solution to choose, i.e. a concept-driven approach, or whether the development project is concept-generating or supplier-driven certainly affects the required time for the development project. When a new production system is designed for a new product, and the development activities are carried out in parallel with the product development project, the total production system development time is longer than if the development is carried out sequentially. This does not necessarily imply higher total costs. On the contrary, early participation of production in product development projects among other things increases the possibility to affect the manufacturability of the product, which reduces the total cost. The required time in production system development projects is influenced by a number of factors such as (Bellgran 1998): • • • • • • • • •

system complexity; size and extent of the system; level of automation; system designers: choice of internal and/or external personnel; delivery time for equipment; time-to-market of the product; education/training for the personnel; system designers knowledge about the product; parallel realisation of a new production system and phase-out of an old system; and • routines for investment request and investment decisions. Time has always been one of the most important competitive advantages for manufacturing companies. From focus on increasing efficiency in on-going production, focus is now placed on the earlier stages in the product realisation process, i.e. on the development phase. The product life-cycle for several products, for example mobile phones, is very short. Sometimes the product life-cycle is even shorter than the development time. In companies where the products have longer development time than product life-cycle, development of the next product generation has to start before the preceding generation has even reached the market. A disadvantage is the lack of feedback from the market to the next product or product generation. Another

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Table 6.5 Underlying causes for exceeded time and cost budget in development projects in the manufacturing industry in Sweden (Lindberg et al. 1993) Causes for exceeded time

Causes for exceeded cost

Optimistic planning Technology barriers Changed requirement specifications Lack of resources /competence Start-up problems in production

Technology barriers Optimistic planning Changed requirement specifications Start-up problems in production Extensive engineering changes

consequence is that competitors with shorter development time can start later and await a new technology or market information – and still get the product on the market in the same time or even before. There are strong financial reasons to shorten the product development time; not least important is the possibility for the company to take early market shares and to determine the price level for a product being first on the market. Margins are larger during product introduction than during production of a mature product. However, rapid product development is not necessarily an advantage. Time should also be related to cost and quality. Short development time is of advantage when it contributes to a companies’ ability to compete. Studies have shown that reduced development time results in increased revenues, but also in increased costs for development due to, among other things, less efficient use of information and resources (Lindberg et al. 1993). A study carried out at the beginning of the 1990s among 160 of the largest manufacturing companies in Sweden shows that they had major problems with keeping budgeted time and cost for development projects (Lindberg et al. 1993). The study indicated that the budgeted time was exceeded in 61% of the projects, and the budgeted cost in 63%. Both time and cost exceeded budget for more than 40%. The most common underlying causes for exceeded budgets are summarised in Table 6.5, in the order of frequency, i.e. the most common reason is presented first.

6.3.3 Work Team Composition The composition of the work team and questions concerning project management, information flow and communication within the team are critical for the project. Developing production systems is a complex task, involving a large number of different aspects. There is not one single educational background or experiencebased background that in itself provides enough knowledge to identify and understand the influence from all different aspects. Therefore, the members of the work team should represent different functions and disciplines. Production system designers should have knowledge and experience from a broad spectrum of areas. Relevant areas are, apart from production engineering and assembly technology, product engineering, product preparation, work organisation, quality, management and handling of material.

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In addition to the required expert knowledge, knowledge concerning the actual way of working during development of production systems is required. Since the number of technical and work organisational possibilities to choose between increases, higher requirements are placed both on the way of working with system development and on the system designers to take advantage of the available possibilities. A system designer can participate in a project team in different ways (O’Sullivan 1994): • as project member or project leader (different hierarchical levels); • in one or several phases of the development project; or • in a subproject with a certain specialisation within a larger development project. Selection of the project team is an important question, both when developing new production systems and changing existing ones. In Fig. 6.3 suggestions on participating disciplines and different ways of participating are presented (Bellgran 1998). Apart from these ways of distinguishing the participants and their involvement it is also possible to distinguish system designers from facilitators (O’Sullivan 1994). Facilitators such as for example system analysts, project managers, and system engineers’ are those who support and facilitate the activities in the project team. A few of the companies in one of the industrial studies had reference teams supporting the project team (Bellgran 1998). Those reference teams could be considered as facilitators for the development project. The usage of facilitators

Participating functions in a project group Production development • Production engineer • Industrial engineer • Tooling engineer • Maintenance engineer

Different ways of participation in a project group Participation on different hierarchical levels • Involved in the system development • Involved in project management Participation in different phases Involvement during certain phases of the development project

Information system • System analyst

Participation in expert groups/sub-projects Formation of expert groups or sub-projects to handle specific tasks within a development project

Product development • Product engineer • Product designer

2

Production • Production supervisor • Production planning • Operator Support functions • Accountant • Human resources • Quality engineer

Selection of production system development group

Management • General manager • Manager • Group leader External functions • System consultancies • Organisational specialist • Suppliers

1

Factors affecting the selection: 1. The specific task 2. Size, extent, time perspective 3. Priority of the task 4. Perspective of the project manager 5. Knowledge and experience required and available at the company 6. Expected technology and automation level of the production system 7. Corporate organisational structure

Fig. 6.3 Participation in system development projects (Bellgran 1998)

3

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might be an efficient way to utilise knowledge and experiences from different key persons, without requiring complete operative involvement. FURTHER STUDIES: CHAMPION, CONSULTANT AND SENSEI To achieve world-class production systems champions are required, making sure that goals become reality. Champions are internal leaders showing the way and applying the principle of continuous improvement. Champions develop leaders and support the processes. Consultants can support the infrastructure or the foundation of the production system, but should be used with care. Therefore, consultants should be led and supported by the company in order to contribute in a positive way, without causing any waste. Sensei is a Japanese word meaning senior teacher or master. A sensei talks about waste and how it can be eliminated, but not tomorrow – today. With decades of experience a sensei can solve problems on the shop floor and teach others, everything with the purpose of achieving change towards becoming world-class. Source: Black (1998)

Yet another aspect to consider when creating a project team is whether internal or external personnel should be used for the development of production systems. When selecting personnel for the project team there are several options: • internal personnel develop the production system; • external personnel develop the production system; or • a combination of internal and external personnel develops the production system. Industrial studies shows that internal and external personnel respectively are more or less appropriate for the accomplishment of different activities during system development, see Table 6.6 below (Bellgran 1998). There are several advantages of internal personnel identifying and analysing preconditions and formulating the requirement specification. Internal personnel have knowledge and experiences concerning the product and the situation within the company. To collect this information by means of external personnel would be unnecessarily time- and resource consuming. Another aspect also supporting the usage of internal personnel for these activities is that it is a way of getting internal support for the development activities. When external personnel are engaged the company pays the supplier or consultant to develop their knowledge, instead of improving knowledge within the company. Table 6.6 Development activity and appropriate personnel for its accomplishment Activity

Preferably accomplished by

Identify and analyse preconditions

Internal personnel

Requirement specification

Internal personnel

Creation of system solutions

Internal or external personnel

Build/realise equipment

Internal or external personnel

Build/realise complete production systems

Internal or external personnel, depending on level of automation

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Some of the reasons for choosing internal personnel mentioned among companies participating in the industrial studies are (Bellgran 1998): • good knowledge of the company, the product, previous development projects, the specific situation and context; • possibility to spend more time on planning and preparatory work; • increased possibilities for the company to own the technology instead of supporting competence development outside the company; • less dependent on external personnel for start-up and maintenance; and • easier to get internal support and acceptance for the suggested production system solution. The companies in the industrial studies also mentioned some reasons for choosing external personnel (Bellgran 1998): • access to specialist knowledge in areas where the company lacks experience. • Experience from similar tasks, for example concerning technical solutions, processes, capacity questions, etc.; • the need to build internal competence concerning for example machine building is reduced; • external personnel can apply new perspectives and new ideas in the company; • external personnel are not affected by company culture and previous internal experiences of how to develop production systems, which can stimulate the usage of new ways of working and new system solutions; and • external personnel reduce the risk of internal protectionism. It is wise to consider which part of the development activities should be carried out internally, and which parts should be carried out by external personnel. FURTHER STUDIES: CHANGE AGENTS Change agents are important as catalysts and driving forces to bring about great changes within organisations. A change agent is often an outsider breaking traditional rules, but succeeding in relation to selling ideas with potential for all involved. It is not about change for its own sake, change agents are used when traditional companies transform towards lean production. Note: When developing production systems, and new ideas and new ways of working are to be introduced, there might be a need for a change agent driving the development in the new direction. Source: Womack and Jones (1996)

6.3.4 Creativity and Analytical Ability To change an existing production system or to develop a new system requires both creativity and analytical ability among those involved (Bellgran 1998). The task of developing different solutions can be used as an illustration. First of all a number of possible solutions are produced. After analysis and evaluation of the possible

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solutions, the numbers of solutions are reduced until one satisfactory solution remains (Dandy and Warner 1989). Creative thinking tends to be a divergent process, while analytical thinking is more of a convergent process. Analytical thinking is important since it among other things is concerned with collection and analysis of valuable information which eventually should result in a requirement specification. Knowledge and experiences among the system designers are put to the test. The challenge is to produce a synthesis of all information and at an early stage determine which information is relevant and required. Analysis of different conceptual solutions during the design phase implies that the actual evaluation phase is anticipated. The idea with evaluation of different conceptual solutions is to compare all alternatives based on a number of predetermined evaluation criteria. If the different alternative solutions are evaluated as they come up, resulting in one single solution, there is no need for a systematic evaluation of all alternatives. If only one alternative solution remains, the convergent analysis process is already completed, although not in a conscious and structured way. The advantage with this natural selection is that it is carried out without extra efforts and thereby no extra time is required for the evaluation. Nevertheless, there are several disadvantages. There is the risk of missing alternatives which would have worked in the completed solution. The creation of different alternative system solutions is a divergent process, where the creativity among the system designers can be fully utilised. Innovative system solutions can emerge as a consequence of ideas from others or as a merger of several different suggestions. Whether previous knowledge and experience among the system designers is always of advantage is a question that sometimes is raised. In general, previous experiences provide a starting-point for the generation of new ideas. If the system designer has seen several different technical and organisational solutions the prerequisites of a creative design process increases through the possibility of new combinations. Yet there is a risk that previous experiences restrict new thinking and that the realism of different solutions is evaluated too early. Another question to be raised is whether a structured way of working when developing production systems obstructs creativity. It reflects the perspective where methods and structures are looked upon as controlling rather than supporting the development process. A method may be helpful in supporting associations and leading to new questions, pushing creative thinking further. With a predefined work structure more time is available for creative thinking. The challenge is to find a balance between control and creativity during production system development. Along with this creativity and analysis discussion, it is also relevant to discuss the utilisation of the abilities of each individual in the design team. A creative thought always arises in a single brain, which has naturally stored up knowledge, experiences and impressions from others that are of importance for the new thought (Ekvall 1988). However, it does not make the creative impulse into a collective product. In other words, creativity is individual, but dependent on im-

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pressions and inspiration from others. A mixture of people with different characteristics is important in a development project. Creative and new thinking team members are required, as much as analytical and reflective persons, essential for production system development.

6.4 A Structured Way of Working The second element of the first part of the framework is a structured way of working. In one of the studied companies a member of the development project described the development of the assembly systems as “order is grown out from chaos” (Bellgran 1998). One purpose of structuring the way of working is to minimise the initial “chaos” and achieve “order” already in the early phases of a development project. A structured way of working simplifies the development process which thereby can reduce the cost of the development project. It also provides prerequisites for good and balanced system solutions. As previously mentioned a structured way of working provides more time for the activities associated with the actual development of a production system rather than spending time on thinking how it should be done. Instead of spending time on structuring activities and thinking of the appropriate order of doing things, what factors to consider, etc. the system designers can concentrate on collecting relevant information, develop and evaluate alternative solutions and eventually select the best alternative. With a structured way of working it is also easier to achieve improvements in the way of working before the next project starts. Experiences gained during the development project can be incorporated in the way of working making it gradually more effective and adapted for a specific company. Thereby prerequisites to reduce the development time for each project are provided. The responsibility for the actual design of the production system rests always on the system designers. A structured way of working does not provide a solution, it can only guide the system designers through the design process. Output from a design process can never be better than the input, which is valid in all situations, not least during simulation and optimisation of processes. Similarly the effect of a structured way of working is only as good as the user makes it. One way to structure activities is to first identify a number of fundamental phases and after that detach each phase on a detailed level into its constituting activities. A structured way of working has been compiled in order to support production system development. The development activities are divided into 11 phases (Phase AX – Phase I) which is illustrated in Fig. 6.4. Each phase contains a number of questions, elucidations and specification of importance for the progress of designing production systems. Phase AX concerns the preparation of the investment request and Phase BX structures the planning and preparation of system development. The result from the two initial phases is a plan for the production system development. After that the preparatory design activities are initiated comprising a background study

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(Phase A) and a pre-study (Phase B). The expected result from the preparatory design is a requirement specification. On the basis of the requirement specification the design specification begins, initially with design of conceptual production (Phase C) which is to be evaluated in the subsequent phase (Phase D). With the results from the evaluation as a starting-point a conceptual system solution is chosen which is given a detailed design (Phase E). The result is a complete system solution which is the staring-point for the subsequent implementation (realisation, planning and start-up). Realisation and planning is concerned with the physical realisation of the production system (Phase F) and in parallel plan the start-up (Phase G). The result is a physical production system, ready for start-up (Phase H). Evaluation of the result, a physical production system and a structured way of working, are the important activities concluding the development process (Phase I). The final result is, hopefully, an efficient production system in operation. One remark concerning the structured way of working is related to the partial sequential and partial parallel structure. Industrial application has shown that it might be difficult to entirely follow a sequential structure. It might, for example, be difficult to collect all relevant information or people might be away, etc. Besides that some phases are advantageously carried out in parallel, not least due to the fact that the development time thereby can be reduced. However, there are certain phases which preferably are carried out sequentially. Evaluation and selection of conceptual system solution (Phase D) should be done before the detailed design in Phase E. It should be emphasised that it is advantageous if all phases are at least briefly completed to assure that no important issues are forgotten. This is more important than that the sequential order being exactly followed. Things to consider when using the structured way of working are described briefly in Table 6.7. More detailed descriptions can be found in the subsequent chapters. A structured way of working with production system development creates prerequisites for a better balance between the development of product and production system. This can be done through coordination or integration of the two processes. A structured way of working can guide the project team working with system development; it can for example work as an agenda during project meetings. It should be noted that it neither is possible nor desirable to achieve a completely general way of working which at the same time is specific enough for each situation in all companies. Therefore, a structured way of working should be adapted to each specific company, which is done in Phase BX, development planning. The idea is that each company eventually has created their own, company-adapted procedure for production system development based on the supporting structure from the structured way of working suggested herein.

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© Bellgran & Säfsten 2004

www.produktionsutveckling.se

MANAGEMENT AND CONTROL Phase AX

Phase BX

Prepare investment request

Development planning

PRODUCTION SYSTEM DEVELOPMENT PROCESS

Plan for production system development PREPARATORY DESIGN Phase A

Phase B

Background study

Pre-study Requirement specification

DESIGN SPECIFICATION Phase C

Design of conceptual production systems

Phase D

Evaluation of conceptual production systems Phase E

Detailed design of chosen production system

System solution

REALISATION AND PLANNING Phase F

Phase G

Build production system

Plan start-up Physical production system

START -UP Phase H

Carry out start-up Phase I

Evaluate the result and the way of working

Production system in operation

Fig. 6.4 Description of a way of working with production system development further developed based on Bellgran (1998)

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Table 6.7 A structured way of working with production system development Phase AX: prepare investment request Preparation of the investment documentation based on requirements and investment decision process.

Management and control

Phase BX: project planning Project planning: project management, resources, time plan, work team composition, routines for administration and information. Establish the outlines for the requirement specification and system solutions. Plan for establishment of support, evaluation, and learning. Adapt the way of working to the specific situation. RESULT: PLAN FOR PRODUCTION SYSTEM DEVELOPMENT

Preparatory design

Phase A: background study Analysis of product and existing production system. Evaluate existing production systems, one’s own as well as others. Study existing documentation. Benchmarking. Collect data about the product. Transfer the results into requirement specification. Phase B: pre-study Analysis of the development and market potential. Identify requirements from interested parties, objectives/strategies at management level, interfaces. Identify internal/external production processes. Information about system factors. Transfer the results into requirement specification. RESULT: REQUIREMENT SPECIFICATION Phase C: design of conceptual production systems Select methods/tools and strategies. Establish modules, subsystems, operations, process and layout, supply, automation level, information, management and control, machines and equipment, work environment. Handle complexity. Iterations until several solutions are suggested. Communicate and establish support.

Design specification

Phase D: evaluation of conceptual production systems Determine method of evaluation. Compare alternative system solutions concerning formulated requirements. Estimate cost. Summarise and communicate result from evaluation. Choose, communicate and establish support for chosen solutions. Phase E: detailed design of chosen production system Continue working with the chosen solution, carry out the detailed design. Design work place and work tasks. Evaluate and establish support for chosen solution. RESULT: SYSTEM SOLUTION

Realisation and planning

Phase F: build production system Make or buy decisions concerning the equipment. Ask for offers. Evaluate suppliers. Equipment procurement. Install equipment. Verify. Phase G: plan start-up Chose start-up strategy. Prepare the organisation, appoint responsible people. Plan for training of involved personnel. RESULT: PHYSICAL PRODUCTION SYSTEM Phase H: carry out start-up Work according to the plan resulting from phase G.

Start-up

Phase I: evaluate the result and the way of working Evaluate the production system and the development process; transfer the result from the evaluation to the process owner. RESULT: PRODUCTION SYSTEM IN OPERATION

© Bellgran and Säfsten (2004)

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System Aspects – Checklist Production engineering Production layout Level of automation (dynamic) Flexibility Production volume Product life-cycle Number of product variants Cycle time, lead time, change-over time Availability, reliability Separation of production processes Disturbances Modularisation Operation sequences Tolerances Production process demands Reliability – equipment Spare parts Tool supply Follow-up system Material handling Control principle: push/pull Work in progress, buffers MRP-system Information system Handling equipment, handling volumes Material and product flows Queuing time Transport, transport time Inventory capacity, routines Quality control Plant and equipment Plant characteristics: floor, ceiling, pillars, truck roads, etc. Layout planning Equipment Stores Media Capacity Personal premises

Financing Investment level Method of calculation Pay-off time for machines/equipment Offer inquiry Staff turnover Absence costs Profitability demands Life-cycle cost, Life-cycle profit Work organisation and personnel Type of work organisation, team work Available personnel, personnel structure Education, training Competence, personnel flexibility Information Attitudes, creativity, adaptability for changes Work environment Physical environment Man-machine, ergonomics Safety Noise, vibrations, light Chemical health risks Psycho-social work environment Stress level related to work tasks Cleaning routines Work studies Market – strategic level New markets, market demands Competitors, customers Price level, stability, prognoses Company – strategic level Company strategy, future plans Investment policy Resources, competence Core activities Make or buy strategy Product concept – strategic level Price Quality, design Product mix, product complexity Delivery time, delivery precision Customer adaptation

Fig. 6.5 Checklist with system aspects to consider during production system development (Bellgran 1998)

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Even when a structured way of working is used it is necessary to assure that all aspects that need to be considered actually are considered. Exactly what these aspects are depends naturally on the company. The manufacturing strategy has previously been pointed out as giving possible guidance during production system development. Starting from the decision categories some of the aspects that need consideration have been identified and structured in order to work as a checklist for system designers, see Fig. 6.5. This list needs to be completed by each company to assure that all situation-specific aspects are considered. It is preferable if all aspects are noted and thoroughly discussed to make sure that all aspects are understood and included.

Chapter 7

Preparatory Design of Production Systems

Abstract In this chapter, the framework and way of working, presented in Chap. 6, is detailed. Preparatory design consists of background study and pre-study, resulting in a requirement specification.

7.1 Background Study A lot of preparatory work is required to achieve a good production system. Sound preparatory work provides reliable data as a basis for the actual design activities and for different decisions. The preparatory work also provides valuable knowledge which can contribute to improvements of existing production systems. The activities preceding the preparatory work resulted in a plan for the production system development. The preparatory design of the production system comprises of a background study and a pre-study, see Fig. 7.1. The result from the preparatory design work is a requirement specification. The requirement specification is the starting point for

CONTEXT AND PERFORMANCE

PLAN Management and control

Structured way of working

Plan for production system development PREPARATORY DESIGN

DESIGN AND EVALUATE Phase A

Preparatory design

Design specification

IMPLEMENT Realisation and planning

Phase B

Background study

Pre-study Requirement specification

Start-up

Fig. 7.1 Preparatory design M. Bellgran, K. Säftsen, Production Development, © Springer 2010

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the subsequent step, the design specification which among other things involves suggestion of alternative system solutions.

7.1.1 The Importance of Solid Preparatory Work To avoid too rapid conclusions and decisions when developing production systems, the prerequisites should be analysed in a thorough background analysis. A background study involves, among other things, evaluation of existing production systems if any, and studies of the performance in other production systems. Background analysis is both about looking backwards and inwards in order to bring obtained experiences into the coming production system. It should be noted that not only faults and problems are to be identified during the background study. It is at least equally important to point out where things work well. Investigations of production system design activities indicate that the present situation is not always properly analysed before a change (Bellgran 1998). Hubka and Eder (1988) warn of going straight to the solution without beforehand investigating current circumstances and the actual problem. Knowledge from successful production systems and changes within production systems is spread slowly, or not at all (Karlsson 1990). One reason is said to be that everyone perceives their own production system to be unique. Therefore, learning from best practices may be neglected. If companies to a larger extent than today set aside resources to systematise and document experiences from their own production systems, this would constitute an important source of knowledge, both for the company in question and for other manufacturing companies. Different persons in a company have knowledge and experiences about various parts of the production system in that company. Very seldom can one single person have a comprehensive overview and knowledge of the entire system. An interesting aspect to consider where knowledge about existing production systems is concerned is the dynamic of a production system. All the time changes are carried out, which makes it more difficult to have a correct picture of the production system. Changes are carried out quite ungrammatically, for example alternative ways of working are developed or minor technical modifications are carried out. Smaller changes are seldom explicated to all levels within a company. As a consequence, the individual’s picture of the production system does not always correspond with reality. This is yet another argument supporting the need for analysis of existing production systems before a change, or before new production systems are developed. Documentation, continuously updated to capture the dynamic of the production system, naturally facilitate this background analysis.

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7.1.2 Starting Point for System Design The starting point for production system design is often related to the product design and its status. Here product status refers to whether the product is entirely new for the company or if it is a variant of an existing product. There are both internal and external reasons for production system development, as illustrated in Chap. 4. If the reasons for system development can be found outside the production system, there is often greater motivation for a more thorough background study compared to when internal reasons are the main driving force. If the reason for change is a problem with ergonomics or specific technical solutions this indicates a good knowledge of the existing production system’s function and performance. Thereby, the need to evaluate the existing production system is probably reduced. However, knowledge should be compiled and documented. The existing production system may also be an important starting point for system development. The influence can be variable in character, i.e.: • constitute restrictions; • be a starting point for change; and • provide inspiration. If the development of a new production system at the same time implies that the existing production system is to be phased-out, there might be equipment and machines that could or should be reused, with or without modification. Existing equipment and machines can, thereby, constitute a restriction when developing a new production system. Some scenarios are described by Karlsson (1990) where existing, especially expensive equipment, plays an important role: • equipment has to be reused and causes restrictions especially concerning flows; • equipment has to be moved which implies that future lower production costs should pay for this; or • it is not possible to reuse equipment which implies that future lower production costs should pay for this. Irrespective of any valid alternative, these restrictions have to be considered when calculating for the new production system (Karlsson 1990). The existing production system often constitutes the actual starting point, both physically and conceptually, for the development. This is valid also when the change is carried out due to an introduction of a new product by the company. Investigations show that 38% of the new products are manufactured in modified, existing production systems (Johnson and Karlsson 1998). Before changes benchmarking with the purpose of learning from others experiences and to elicit inspiration is not unusual. An important part of the background study is a systematic evaluation of the performance of various production systems.

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7.1.3 Evaluation of Existing Production Systems If the existing production system is not considered, there is an imminent risk that good solutions are thrown away (Karlsson 1990). Yet another reason to evaluate an existing production system is, as previously argued, the dynamic of the system. In several companies the work with continuous improvement is carried out in smaller groups, tied to various parts of the production system. This implies that changes carried out may be of a local character and a comprehensive view of the system is only achieved if the entire production system is evaluated. Before a change, existing physical systems are evaluated. The result from an evaluation provides valuable input to system development. Evaluation of the existing production system can reveal good as well as bad system characteristics. The obtained knowledge is very useful and should be transferred to subsequent systems when the requirements for system characteristics are specified. Evaluation of an existing production system can be seen as a type of selfassessment. Tools for self-assessment are available which, for example, can indicate progress of transforming to lean production. This type of tool can also be used, for example, when study visits are carried out, to determine the progress within other companies. One tool is Rapid Plant Assessment (RPA) (Goodson 2002). This tool has two parts: one sheet for judgements within 11 categories, and a questionnaire comprising 20 yes/no questions. Among the 11 categories some examples are cleanness, order, visibility, space utilisation, team work and motivation, status on equipment and tools. Each category should be graded from weak/bad (which render 1 point) to best in group (which renders 11 points). In total 121 points can be achieved. The questionnaire is designed so that the number of yes-answers reflects the degree of lean-transformation. These two judgements taken together provide a picture of how far a company has come in their transformation to lean production (Goodson 2002)1. Tools for self-assessment of the entire company are also available, for example, from quality organisations such as the European Foundation for Quality Management (EFQM) and Swedish Institute for Quality Development (SIQ). These tools involve evaluation of all functions of a company, and do not include any specific section for evaluation of production systems. Process flow analysis can be used for unbiased investigation of an existing production system. A process flow analysis elucidates possible improvements of a process (or of the material and production flow). As described by Shingo (1989), it is no use starting on the operations level unless the flow is good: “In order to maximise production efficiency, thoroughly analyse and improve process before attempting to improve operations.” (Shingo 1989, p. 5)

Process flow analysis is also useful when designing production systems, see description in Chap. 8. 1 Material and descriptions are available at www.bus.umich.edu/rpa. A database with results from other companies is also available.

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There are several reasons to also involve operative personnel when evaluating the existing production system. Operators possess good knowledge of the actual situation which provides a possibility to increase the quality of both the requirements specification and the system solution. Besides that evaluation provides input for the coming production system, and all involved in the evaluation achieve a comprehensive picture of the existing production system’s capabilities. Through active participation, the work with attaining anchorage and acceptance is facilitated. Furthermore, it gives an indication of the company’s wish to take advantage of the knowledge and experiences among their employees, which in the long run can contribute to increased motivation and well-being. To make full use of the result from the evaluation, the way of working should be formalised and all possible input investigated. Today, evaluations are carried out more by chance, often dependent on the individuals responsible for the production system. Therefore, necessary incentives to highlight the importance of the results are lacking. In our studies, we have seen a difference in the amount of evaluation activities carried out, dependent on the circumstances of the changed production system. When a new solution had already been suggested, the incentive to evaluate the existing production system was almost non-existent (concept-driven approach). If the company works with some type of preventive maintenance, such as for example Total Productivity Maintenance (TPM), data for use in evaluating the existing production system is easily available. By gathering information about production disturbances and their reasons, the same mistake can be avoided in the next generation of production system. Relevant data for the background study may also be available in the company’s overall performance measurement system (further described in Chap. 10). If data from a performance measurement system is used it is essential to make sure that available data reflects the production systems’ performances in an accurate way. In earlier studies we have seen examples where measures and objectives are formulated, and also fulfilled, but the path to fulfilment is anything but straight (Säfsten 2002). Unfortunately, not all overall performance measurement systems provide accurate pictures of how things actually work. A reason for this might be that the chosen measures do not reflect the reality in an accurate way. Another reason might be that those working in the company have learnt to report results in a way that makes them look good. Therefore data from these types of systems should only be used if their quality is good and without doubt reflects the production system’s capabilities. During evaluation of existing production systems it is possible, as previously mentioned, to use other production systems as a point of reference. A well functioning production system is chosen. This can, for example, be a system identified by involved personnel during a visit of study (benchmarking) or a production system described in the literature. When it comes to the principles advocated in Toyota’s Production System there are several tools available to determine how one’s own production system performs with respect to these principles. Previously self evaluation and Rapid Plant Assessment (RPA) were mentioned, another tool is value stream mapping (VSM) (© Copyright 1999–2008 Lean Enterprise Institute, Inc. All rights reserved, Rother and Shook 2002).

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Value Stream Mapping A tool associated with lean production is value stream mapping. Value stream mapping aims at mapping and also improving value streams. The foundation for this “paper-and-pencil” tool is to be found in Toyota’s Production System where it is used to describe current and future state. The mapping provides a picture of the material and information flow along the products path through the production system. Below a very short description of the parts of the tool which are applicable to evaluation of an existing production system is presented. The tool in totality is available from Lean Enterprise Institute2 (Rother and Shook 2002) and our description is based on material available from their website. The work with value stream mapping can be summarised in a number of steps, see Fig. 7.2. During the background study emphasis is placed on the mapping of the current state, which constitutes the foundation for the design of the future state. It is also necessary to decide on what level of detail the analysis should be carried out. Value stream mapping can be used for subprocesses within one company as well as between and through several companies, see Fig. 7.3. Fig. 7.2 Steps involved in value stream analysis (Rother and Shook 2002)

Product family

Map of current state

Map of future state

Plan of action to achieve the future state

Fig. 7.3 Alternative levels of detail for a product family’s value stream (Rother and Shook 2002)

Subprocess Single factory (from door to door) Several factories Between and through several companies

2 © Copyright 1999–2008 Lean Enterprise Institute, Inc. All rights reserved. Lean Enterprise Institute (www.lean.org) is a non-profit organisation founded in 1997 to support the development of ‘Lean Thinking’ An important part of the work is the development of tools, supporting efficient production systems.

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ASSEMBLY C/T=45 s S/T=30 min External organisations and processes

Production process

3 shift 2 % cassation

L 300 pieces 1 day

Operator

Stock

Factual box

Movement of products ready for customer

Manual information flow

Electronic information flow

Fig. 7.4 Examples of symbols to use when mapping a value stream (Rother and Shook 2002)

The level “single factory” might be an appropriate level of detail when analysing a production system. To obtain detailed knowledge about the subprocesses within the factory, these should also be mapped. When an appropriate level is determined the actual mapping can start. First of all a product family is specified, which depends on the purpose of the value stream mapping. A product family is a group of products having similar flow through various processes and equipment in the factory. If a new product generation is about to be introduced in a factory it might be relevant to carry out an analysis of previous product generations’ value stream. Secondly, the value stream is followed, upstream to downstream, i.e. the product family is followed backwards through the factory starting where the products are ready for the customer. Tools required are paper, a pencil, and a stop-watch. A number of symbols are available to draw the map, some examples can be seen in Fig. 7.4. It is not critical which symbols are used, but it is essential that all involved agree on the meaning of the used symbols. The map is constructed with four major parts: 1. 2. 3. 4.

customer; processes, factual boxes, and stock; material flow; and information flow and whether it is a pull or push system.

On its way through the factory the product passes a number of production processes such as shearing, bending, spot welding, subassembly, and final assembly. When mapping is carried out at factory level each product process box usually corresponds to a flow without stop. This implies that, for example, an assembly line comprising several assembly stations connected with conveyor belts is represented as one product process box in the map. If detailed knowledge is required about separate processes, mapping has to be carried out on subprocess level, see Fig. 7.3. Different production processes can be located sequentially as well as in parallel. Facts should be gathered for each process. The type of process facts that are of interest needs to be decided? Examples of process fact are cycle time (C/T), set-up time (S/T), number of operators, available work time, cassations, etc. Dependent on the purpose of the value stream mapping different process facts are more or less suitable. Furthermore, the products lead time and tact time through the flow should be determined (Rother and Shook 2002), for explanations see Table 7.1.

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Table 7.1 Measures to use during value stream mapping Measure

Explanation

Tact time

Synchronised production tact corresponding to the sales tact, available work time per shift/customer needs under a shift

Cycle time

The time required to complete an article in a subprocess, the time required for an operator to complete his tasks

Lead time

The time required for an article through an entire process, or through the entire value stream

Set-up time

The time required to set-up equipment when changing product variants

When all facts are gathered and the map is drawn it might look as in Fig. 7.5. This is a very simple map and the main purpose is to illustrate what it may look like. The final step of the mapping is to draw a time line for the entire lead time in the bottom of the map. Here we can see how long it takes from when rawmaterial enters the factory until the product is ready for the customer. By adding the value-adding time it is possible to see the relation between value-adding time and total lead time. In a similar way we can draw corresponding maps for each single subprocess.

PLANNING Prognosis Customer Prognosis 23 400 pieces/ month Supplier

Box = 100 Weekly plans

Daily delivery order

2 times/week

1 time/day

STAMPING

WELDING

L

L

6000

rolls 4 days

L 1800

3200

C/T=2 s

C/T=3 s

C/T=345 s

S/T=60min

S/T=10 min

S/T=0

1 shift

1 shift

2 shift

25200 sec avail.

25200 sec avail.

25200 sec avail.

5.1 days

4 days 2 seconds

2.7 days 3 seconds

DELIVERY

ASSEMBLY

L

1.5 days 345 seconds

Fig. 7.5 Map describing a simple value stream (Rother and Shook 2002)

Lead time = 13.3 days Value-adding = 350 sec time

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On an overall level value stream mapping is similar to how the industry today describes their procedures when creating an overview of the current activities. The major difference is that value stream mapping is carried out with a specific tool as a starting point. Advantages of a specific tool are, for example, that a common language is created and that subsequent mappings are comparable since they are carried out based on the same principles. On the other hand there are aspects of a production system that are not captured by value stream mapping. Supplementary analyses are, therefore, necessary in order to obtain a comprehensive picture. However, the mapping can indicate where deeper knowledge is required.

7.2 Pre-Study The preparatory design work should also include some activities looking ahead, work which we have chosen to call pre-study. The term pre-study describes preparatory work. A pre-study involves an overview with a pushing purpose, looking ahead and outwards. This is necessary as a complement to the background study, looking backwards and inwards to learn from the existing production system and to bring in previous experiences. During the pre-study questions about the company’s goals and strategies are raised, with the purpose to capture this into requirements of the production system.

7.2.1 Pre-Study Content: Strategic and Pushing The pre-study should reflect strategic and tactical decisions at company and production system level. An analysis of the company’s growth potential and market requirements is required when designing production systems adaptable to future demands. During the pre-study the task is to gather information from relevant functions within the company, rather than making any decisions. Questions which can be appropriate during the pre-study involve areas such as market, product, production volume, suitable level of technology, personnel, etc. (Bellgran 1998), see Table 7.2. Goals and strategies on management level should be compiled during the prestudy. Overall goals and strategies should be formulated as concrete subgoals governing the development activities. In Chap. 3 it was described how a company’s overall strategies are broken down into a number of functional strategies, of which the manufacturing strategy is one. During the pre-study it is essential to make clear what competitive factors the company is aiming at, and how to realise these through decisions within relevant decision categories. During the pre-study one important question is the definition of the company’s core business and critical processes. To classify an activity as a core com-

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petence three criteria should be fulfilled (Ljungberg and Larsson 2001). The activity should: • create customer value: substantially contribute to customer value; • differentiate: be separated from the competitors; and • be expandable: imply possibilities in terms of new products and markets. The activities identified as core business within a company bear the stamp of the core competence. This is significant for what competence to keep and develop in the coming production system. The question, whether processing of components, assembly of subsystems, and final assembly should be carried out within the company or be outsourced to other companies, is relevant and it often assumes decisive and far-reaching consequences. Knowledge about the capabilities of one’s own production system, knowledge about various production processes, work organisation and material supply, are core competences for a manufacturing company. By taking advantage of the core competence, good opportunities are created for a competitive business. Core competence is always a key factor when a company is faced with the question whether they should buy or produce a component or a subsystem themselves. Table 7.2 Questions to ask during the pre-study to create a picture of a future situation (Bellgran 1998) AREA

Examples of questions to pose in the pre-study

Market

Who are the customers today, and who might be the customers of the future? Are there any new possible markets? What are the calculated production volumes, spread over time? How important is time-to-market, is it an affecting or controlling aspect? What other market aspects affect the coming production system?

Product

What is the prognosis for the product and the product mix? How many variants are determined, and how many can be possible? What is the estimated product life-cycle? Are there any future disassembly requirements put on the product, on parts of, or on the entire production system?

Risk

What is the result from risk analysis concerning the production volume forecast? What volume flexibility is required? What is the result from the risk analysis concerning the number of product variants? What will happen if the number of variants considerably increases or decreases? What type of changeover flexibility is relevant?

Level of technology

What is the level of technology in the present production system? What level of technology is required in the future? What development is required to achieve the expected level? Are verified technologies available and possible to use?

Personnel

What does the future personnel situation look like? What are the future requirements on competence, education and training? What competence concerning production engineering and production development is available, and what are the requirements over short- and long-term?

Other interested parties

What other parties, internal or external, are interested in the production system, and what are the requirements on the system from e.g. customers, suppliers, union, employees, management, and owners?

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7.2.2 To Handle Uncertainties To achieve a good foundation for a new or changed production system, reliable data and information are required. When production system development is carried out as part of a product development project, fundamental prerequisites concerning the product may continuously change which creates uncertainties. One aspect to consider is therefore uncertainty concerning information. It is very difficult to predict batch sizes, annual production volume, and the total production volume for the entire length of life of the products. Required capacity can therefore vary during the development project as well as during serial production. Variation in forecasted volume can dramatically change the prerequisites, and the production system needs to be designed to handle certain volume fluctuation. If the variation between forecasted and actual production volume is extreme, there is a risk that the production system has not enough capacity to manage the actual volume, which may require late changes in the system design. During the design process flexibility is required to allow adjustment to uncertain and changed prerequisites. Yet, this does not mean that system designers or the project team should accept an unlimited amount of uncertainty, since this makes the design process extremely difficult and reduces the possibility to create the best possible production system. Therefore, the preparatory design activities are very important in order to identify and determine prerequisites as accurately as possible. Close cooperation with product development and engineering design is necessary. INDUSTRIAL EXAMPLE: REASONS FOR UNCERTAINTY Significant difficulties in determining accurate prerequisites concerning the product design, production volume, level of capacity expansion and level of utilisation in the production system and the equipment were perceived in an industrial production system development project. Some of the reasons mentioned were: • The preconditions were not yet determined by those having the authority or responsibility to do this. • The product was designed in parallel with the production system, and it was difficult to obtain complete information on the product characteristics as it changed slightly over time. • It was difficult to know where to get the right information, and what the quality of this information was. • Some pieces of information were sometimes considered to be well-known by the system designers, but could still be found to be missing when that information should be specified in detail. • Information from the marketing and sales department changed. Source: Bellgran (1998)

Identifying and determining the prerequisites when designing a production system is about receiving answers to a number of questions, and thereby about obtaining a certain quantity of information. It is also about analysis and evalua-

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tion of the obtained information from a quality perspective, i.e. is the information relevant and reliable? What are the possible alternatives for a project team having difficulties in determining relevant prerequisites for a specific project? 1. The team accepts the difficulties and designs the production system based on known prerequisites concerning product, volume at a specific point of time, etc. 2. The team continuously changes the system solutions based on new and changed prerequisites. 3. The team chooses not to suggest any system solutions until relevant prerequisites are determined. The best solution is probably a compromise of these extreme alternatives. It can be observed that the more uncertain information is available, the higher the requirements on flexible system solutions, and not least on a flexible system design process. With uncertainty in the information follows uncertainty about when the final decision has to be made concerning what system solution to choose. Also the subsequent phase of the system design process, a detailed design of the conceptual solution, is largely dependent on reliable information. Uncertainty in the foundation affects the system solutions to various degrees, from affecting the entire system concept to minor affects on fixtures or tools.

7.2.3 Strategy for Future Production Systems The industrial reality of today means that production systems can be moved, copied, or relocated within or between companies, nationally as well as internationally. One example is when a company creates a production system, which later on is copied in all factories in those countries the company has chosen to produce in. It is also common that production is moved from plants in Sweden to, for example, Poland or China. How and why this is done varies. What is important is that decisions are based on relevant foundations and that knowledge about the consequences of the decision is available. Here it is appropriate to point out the difference between a company that chooses to locate its production in its own national or international plants, and when the company chooses to have someone else produce their products, i.e. outsourcing of production. By developing standard principles for production systems, such as for example done by Toyota (Toyota Production System) and Scania (Scania Production System), a possibility to maintain control over, as well as knowledge about, production is obtained. The question concerning buying or producing is further treated in Chap. 12. A company, not developing their own products, but with production as their core business must have a strategy adapted to the changes in the surrounding world. The type of product is also conclusive for different decisions concerning production.

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183

A company producing end products for consumption has to consider other questions than, for example, producers of components for business-to-business products. To cope with future requirements, a long-term strategy for the production system is desirable. The strategy should be based on a life-cycle perspective (see Chap. 2) and include: • • • • • • •

phase-out of existing production system (for possible reuse in new system); design of new systems; realisation and installation of system; start-up of system; production system in operation; future phase-out; and future production system.

If the chosen strategy involves different generations of production systems, there is a possibility to use and reuse ideas and equipment, i.e. utilisation flexibility becomes important. Ideas, for example in terms of technical and work organisational conceptual solutions, are often reused between different generations of production systems within a company (Bellgran 1998). Similarly, machines and equipment can be reused in the new system, since it might be economically defensible to reuse certain equipment. It is quite common that existing production systems are models for future systems. It is relevant to consider the life of a production system in terms of conceptual, technical and economical length of life INDUSTRIAL EXAMPLE: REUSE OF CONCEPT AND EQUIPMENT For the middle-sized Company X, time-to-market and low cost were fundamental requirements, which together with product and production-related prerequisites for their high volume product governed the development of the new assembly system. The abovementioned requirements made the system designers decide that it was necessary to use verified technology to reduce the risk level and increase the reliability of the coming system. This implied that the chosen solutions concerning technology and material were familiar to the system designer to 60–70% (according to their own estimates). The short timetable forced rapid reduction of the number of possible solutions to only making one single solution. This solution involved rebuilding existing system modules, and two new copies of existing modules. In other words, both the existing conceptual solution and physical equipment were reused in the new production system. Source: Bellgran (1998)

Conclusions from the studies of different assembly systems in several companies are among other things that: • the technical and conceptual length of life of the assembly system are often longer than the length of life of the product that the system originally was designed for; and • conceptual length of life of an assembly system is often longer than its technical and economical length of life.

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These conclusions are highly valid for other types of production system than assembly systems. With a, in relative terms, quite long length of life how a production system was originally developed is highly relevant. Production systems tend to live longer than initially planned for, and preparation for this is important in the development work. A strategy, based on long-term thinking concerning system generations is of advantage. Considering the high investment level of a new production system, those involved are quickly motivated to take the time to develop a carefully thought out strategy. Shorter and shorter length of life of products also drives the need for long-term thinking when developing production systems, since it is not economically justifiable to develop a new system for each product generation. On the contrary – in the future it will be more urgent that new products are adapted to the existing production systems, at least when the investments of the system are high. To use and increase the utilisation flexibility of production systems, a continuous recycling loop may be relevant. It involves the following steps: 1. learn from existing production systems; 2. utilise and develop system solutions further in new production systems; and 3. think ahead and plan for future production systems. To facilitate reuse, production systems should be designed according to principles which make reuse possible. Modularity is one such principle, which implies that production systems are built from more or less standardised modules. Through combining the modules in different ways, a production system can be reconfigured when required, within the limits given by the chosen modules. Modularity is used more and more in industry to achieve flexibility, both concerning products and production systems. Well-known products, based on modularity are Scania trucks. Through combining components, Scania can offer custom-made solutions to their customers and the number of combinations are described as close to infinite (Scania 2004). It is not entirely new to apply modularity in production systems. According to Makino and Arai (1994) the first reconfigurable system, a manual line, was developed by Bosch already in 1982. With primary application on assembly systems, von Yxkull (1994) goes one step further with the idea of modularisation and recommends that when planning new product generations the assembly system for the last generation should be planned first. With the last generation’s assembly system as a starting point (a kind of goal system) based on a number of modules, system solutions for the previous generations are developed. Such a course of action is advantageous from a reuse perspective, but can be relatively difficult to apply in practice since plans for future product generations are often missing. With or without a plan – flexibility and preparedness for changed prerequisites is crucial. There are several ways to use the advantages given by a modular production system. One way is that the production system initially is built up from simple modules, which easily can be replaced or changed when the prerequisites are altered. One situation where this would be suitable is when future volumes of the product are uncertain. To handle a volume increase changing the level of automa-

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185

tion in the equipment can be one solution. Another way is to develop efficient and flexible modules which later on can be copied. Besides the possibility to reuse and copy solutions easily, there are yet further reasons to use modular production systems. A modular production system provides the possibility to: • • • •

gradually change and update modules as new technology develops; separate parts of the production system that are sensitive to disturbances; duplicate and separate bottleneck operations; and easily increase capacity.

The advantages of a modular production system should be weighed against the risk of suboptimisation and of losing a comprehensive view of the production system due to going too far in modularity.

7.3 Resulting Requirement Specification Background study and pre-study together constitutes preparatory design. The result from the preparatory design is synthesised into a requirement specification, which thereby constitutes the link between the preparatory design and the design specification, see Fig. 7.6. The background study looks backwards by making use of previous experiences and the existing production system. It is of interest to know what is working well, and what is not working, both within one’s own production systems and in other’s. During the pre-study a number of questions concerning the present situation and future strategies are answered. Important questions concern, for example, market, product, volumes, level of technology, personnel and other interested parties. The purpose with the pre-study is to look ahead. The requirement specification should reflect the manufacturing strategy. A key issue is what desirable capabilities the new production system should have. Both the background study and the pre-study provide information to further develop when formulating the requirement specification. Preparatory work should be reflected in the requirement specification, which can be regarded as governing the rest of the system development. Irrespective of whether a new production system is to be developed, or if an existing system is to be changed, a requirement specification is necessary as a starting point to create, evaluate, and decide about new system solutions. The larger and more expensive the production system, and the more radical changes, the more important the requirement specification becomes.

PREPARATORY DESIGN Requirement specification

Fig. 7.6 The requirement specification is a link between preparatory design and design specification

DESIGN SPECIFICATION

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7 Preparatory Design of Production Systems

Fig. 7.7 Requirements and wishes during the design process

Alternative solutions

Requirements

Acceptable solutions

Wishes

Best solution

Before going any further with the production system’s requirement specification, it is necessary to clarify what is intended with the requirements. Objectives for a production system are usually expressed in terms of, for example, flexibility, delivery precision, or cost effectiveness. These are recognised as competitive factors (see Chap. 3), that is the overall objective for the production system. It is through these capabilities the production system actually can contribute to the company’s competitiveness. However, it is not recommended to have only one objective, such as for example cost effectiveness, as a starting point when designing a production system. The design activities are considerably facilitated if the objectives are broken down into a number of subgoals. A requirement specification means to determine what capabilities the production system should have, but on a more concrete level than the objectives of high profitability or flexibility. Roozenburg and Eekels (1995) clarify this by stating that those objectives that have to be fulfilled are requirements, see Fig. 7.7. It is also possible to talk about necessary or desired requirements and wishes. The design process is not linear and well structured as illustrated in Fig. 7.7. Visions and objectives are often mixed up in the preparatory design activities. When these have been separated, it is possible to identify requirements and wishes. An acceptable solution is achieved when necessary requirements are fulfilled. If there is an opportunity to choose between different acceptable solutions, wishes might be decisive for the final solution. The best solution is achieved when the requirements are the basis for the solution, and the wishes provide the solution with that “little extra”. According to Roozenburg and Eekles (1995) the requirement specification serves two important purposes: 1. to provide a direction for the process of generating solutions; and 2. to provide the work with normative information for evaluation. This can be illustrated as in Fig. 7.8. The objective for a production system is generally formulated based on business economics or technical aspects (Engström et al. 1997). It might be advantageous to have different types of objectives, even objectives with a “soft value”, can be derived from existing production systems since this makes them easier to map (Engström et al. 1997). This presupposes a technical analysis, including a requirement

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specification involving the requirements the production activities place on the operators and how they perceive their work situation. In other words, a combination of technical and workforce-related requirements is needed, which we also have seen in our studies. In the ten-company study the requirement specification for an assembly system in one company involved aspects such as ergonomics, production volume/day, number of and type of work stations, flexibility, capacity, set-up time, delivery time, cost, quality, requirements on standards, and fundamental layout principles (Bellgran 1998). Similar requirements were mentioned in the 15-company study. Quality, material handling, flexibility, efficiency, work environment, and ergonomics are common requirements of production systems (Säfsten and Aresu 2000). In some situations the requirement specification can be divided into different types of specifications such as technical specification, commercial specification, ergonomic and psychosocial requirement specification (Johansson and Nord 1999). To determine the structure of the requirement specification, it is advisable to consider who will use it. A technical requirement specification for acquisition of equipment may be signed by various persons and competences in the company to show that they are behind the content. The requirements should be described based on the desired functions and normally international standards and legal demands are used, prior to the company specific demands. Important for the extent of the requirement specification are also the people who are designing and realising the actual system. In those situations when the design process can be described as supplier-driven, meaning that most of the development is handed over to a system supplier, higher requirements are placed on the requirement specification since it has not only to involve the requirements for the actual production system but also issues concerning system delivery and implementation. A requirement specification, especially for acquisition of equipment, has to secure that the equipment corresponds to the technical requirements, at desired cost. Such a requirement specification should, according to Johansson and Nord (1999), also explain the division of responsibility between customer and supplier, be used as an acquisition specification, and document the product. With this as a starting point, Johansson and Nord (1999) gave some examples of possible headings in a requirement specification, see Table 7.3. Requirement specification

How can the requirements be satisfied?

Design

Are the requirements satisfied?

Production system Specification

Evaluation

The production system’s capabilities

Fig. 7.8 The role of the requirement specification in the development process (Öhrström 1997)

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It is advantageous to establish a general template for the content of a requirement specification. The requirements ought to be the same irrespective of whether the design process follows a concept-driven or concept-generating approach. Similarly, the requirement specification is important when a supplier-driven approach is followed. The major difference concerns who is responsible for the accomplishment. Among the studied companies, the establishment of more formal requirement specifications was made both when external system suppliers were contacted, but also when the changes were carried out by internal personnel. Above all, requireTable 7.3 Suggested headings in a requirement specification addressing a supplier of mechanical equipment Heading

Content

Generally

Reasons for changing the production system, expectations, context. Base fact.

System overview

Layout, flows, batch sizes, transportation to and from the equipment, superior system, number of operators. Descriptions of the main functions to fulfil.

Functions and objectives

What functions to carry out and requirements on these functions such as cycle time, maintainability. Description of physical parameters.

Interfaces

Adjoining systems and units, such as mechanical, electrical, power, pneumatic, functional interfaces.

Other capabilities

Checklists with aspects ordered according to priorities can be used.

Design

Detailed restrictions for the design and manufacturing of equipment (choice of material, surface treatment, joining methods, traceability, tolerances, etc.).

Documentation

Specification of the number of drawings and their form, user friendliness, etc.

Training

Requirements on the training provided by the supplier.

Installation and start-up

Specific requests.

Quality assurance, standards, legal requirements and directives

Reference to standards or directions concerning requirements on quality assurance of equipment. Different rules for different countries.

Phase-out of equipment

Phase-out based on for example an environmental perspective.

If the customer wants to participate or have insight in The customers planned activity at the the suppliers work with engineering design or manufacsuppliers premises turing, this has to be arranged. Requirements on management, project organisation, Project management and coordination project meetings, check points, change routines, work with second and third part suppliers, etc. Abbreviations and definitions

Expressions and abbreviations are explained to avoid misunderstanding.

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189

ment specifications are written when larger changes are to be carried out. When the changes are smaller, requirements are often just verbally communicated among those people involved (Säfsten and Aresu 2000). Other studies indicate a tendency to underestimate the value of a requirement specification, especially if it is for internal use and not established with the purpose of acquiring (expensive) mechanical equipment (Bellgran 1998). However, the importance of the requirement specification must not be underestimated, and there seems to be a lot to learn from product development where the requirement specification is fundamental. FURTHER STUDIES: REQUIREMENT SPECIFICATION FOR PRODUCT DEVELOPMENT Within product development there is a theory of Requirements Management. If the production system is considered as a product (according to a machine model, without concern of the social system) it is possible to see interesting parallels concerning the use of requirement specifications. Requirements in general, and the requirement specification specifically, play an important role when developing products. Continuous focus on requirements might seem necessary to achieve good products, at the same time as powerful and formal efforts to fulfil them can result in suboptimisation or stagnation in the project, since requirements in practice often are incomplete and contradictory. In practice, individual requirements are not static through an entire project, they change in one or several steps. Changed requirements are often preceded by verbal discussions and hypothetical testing and concern for solutions, before formal agreement and documentation in the specification. This is quite natural since prerequisites often are changed and new knowledge is acquired during the project. Source: Almefeldt (2003)

The quality of the requirement specification has to be commented. If system designers cannot be sure that all the relevant requirements have been carefully determined and put in priority order, or if the information is reliable, the requirement specification loses its value. In the preferable situation, the requirement specification should work as a guiding star for the design specification activities. An awareness of the instability of the requirements, and thereby the dynamic of the requirement specification, provides good opportunities to secure the quality of the requirement specification. The longer the project lead-time, the more reason to expect that at least some of the requirements need to be revised in order to suit the changing conditions. This is yet another motive for reducing lead-time for production system development projects.

Chapter 8

Design and Evaluation of Production Systems

Abstract In this chapter, the next step in the development process will be presented. It describes the different phases that form the system. The starting point is the specification of requirements. Design specification is about design and evaluation of conceptual production systems, as well as detailed design of the chosen concept. The result is a systems solution, i.e. a detailed description of the production system that is to be realised.

8.1 Design Specification The production system is now starting to take shape. If the preparatory work is done we now have a specification of requirements to guide us in future work. An overview of the tasks included in the design specification phase is shown in Fig. 8.1. Developing conceptual production systems includes dealing with overall questions, such as process choice, layout, technological level, material supply, work place design, and work environmental considerations. Formulated alternatives are evaluated in order to determine which alternative best fulfils stated demands. Thereafter, the work continues with the detailed design. The final result is a detailed description of the chosen systems solution. Development and evaluation of different conceptual solutions are performed iteratively and partly overlapping, just as many other problem-solving tasks. System development is a decision process and as soon as alternate solutions are available, they are intuitively evaluated in one way or another (Säfsten 2002). The activities are thus not carried out entirely sequentially, which is expressed in Fig. 8.1. It is, however, preferable that the different phases and their relative relations are made explicit in the development work. If the company’s development process to develop production systems is to be refined, it is necessary that its different activities are made clear and communicated internally.

M. Bellgran, K. Säftsen, Production Development, © Springer 2010

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8 Design and Evaluation of Production Systems

Requirement specification

CONTEXT AND PERFORMANCE

PLAN Management and control

DESIGN SPECIFICATION Phase C

Structured way of working

Design of conceptual production systems

DESIGN AND EVALUATE Preparatory design

Phase D

Evaluation of conceptual production systems

Design specification

Phase E

Detailed design of chosen production system

IMPLEMENT Realisation and planning

Start-up System solution

Fig. 8.1 Design specification of production system

8.1.1 Handling Complexity Production systems are complex due to the many parameters that are to act together. This is also believed to be one of the major reasons for the different problems that occur when managing industrial production (Wiendahl and Scholtissek 1994). Reasons for the increased complexity in production systems are among others an increased demand for systems instead of single components, new materials and products, as well as an increase of life-cycle perspective awareness (Wiendahl and Scholtissek 1994). It is desirable to reduce complexity and encourage simplicity if possible. Production will, however, always imply a certain degree of complexity. Thus, it is necessary to learn how to handle complexity instead of avoiding it. It is relevant to a production system to consider both product complexity as well as production complexity. Product complexity is often about number of components and operations, but it may also involve level of technology of components and modules, as well as the interface between them. A classification can be made where the product complexity depends on the number of parts that build up the product, see Table 8.1. Another aspect affecting the product complexity is the dependencies between the different parts. Number of variants, product structure, product design, material, size, and weight are examples of more factors that affect product complexity in terms of production and handling. Table 8.1 Product complexity can be described based on the number of parts Simple products

Medium complex products

Complex products

<31 parts

31–500 parts

>500 parts

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The production system is, however, more difficult to characterise regarding complexity since it consists of both technology and humans in the system and the formation of them into a totality. Production system complexity is in the end determined by how things are being handled at product system and production system levels. It is also dependent upon if the complexity of the entire system or just single work stations are to be described. An entire production system, with all its components, represents in itself a high level of complexity while a work station represents a lower level of complexity. The actual level of production complexity at different system levels depends on the choice of solutions and how that complexity is handled. By dividing a complex product into smaller units, so-called modules or subassemblies, it will also be easier to handle the product complexity in the production system. One example is SONY, who developed a production system consisting of a larger number of standard robot cells where each robot assembles only three to four components (Sato 1997). Large production volume enables choosing a production concept where product complexity in each assembly cell is low, but where the total product complexity still can be relatively high. In this example, a low product complexity was achieved with high production complexity. Another example of how production complexity can be reduced is through pre-assembly carried out in separate lines at the end of the final assembly, see Fig. 8.2. The influence of the number of product variants on production complexity depends on where in the production process the product becomes customer specific or variant specific. Number of variants in production does not necessarily have to be the same as the number of variants delivered to the customer. If the product is customer specific at a late stage in the production chain, such as in final assembly, high numbers of variants do not have to lead to increased production complexity. Customisation late in the chain is thus preferable.

Fig. 8.2 Production complexity is reduced through pre-assembly (Photo: Mario Celegin)

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In general the goal is always to reduce production system complexity. A high level of complexity often results in disturbances of the machinery which demands extensive maintenance. At the same time, skilled production personnel with training and commitment to work with problem solving and continuous improvements of the system are needed. Complex system integration should be avoided until both product and production system complexities have been reduced and work is done more efficiently (Roth and Miller 1992). How complexity should be handled and reduced is an important aspect to consider during the entire development process.

8.1.2 Modelling It is essential that a production system is regarded as a whole, even though each part of the system, such as a machine or specific equipment, is important (Bennett and Forrester 1993). The complexity of a complete production system implies that it is impossible for any system designer to fully comprehend the whole system. This creates a need for conceptualisation regarding use of system models. A model is an abstract representation of the production system, its activities, and accompanying decision processes (Bennett and Forrester 1993). A reason for introducing production system models is the necessity to rapidly introduce new products on the market. Rapid product introduction also requests rapid introduction of corresponding production systems, which increases the need for efficient models and methods (Bennett and Forrester 1993).

A1 A0

A2 A3

A21 A2

A22 A23

A231 A23

A232

Fig. 8.3 Structure illustrating how IDEF0 methodology is used in order to describe different functions of the production system and the flows between them

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Azari (1993) states that it is necessary during the development process to determine system structure and how the system is linked to the surrounding environment. The Structured Analysis and Design Technique (SADT) is a method for describing production systems at conceptual level. GRAI, IDEF0, and SSADM are other examples of modelling methods for systems analysis (O’Sullivan 1994). Bennett and Forrester (1993) also mention CIM-OSA and AMICE as methods for conceptual design of systems architecture. SADT is the starting-point for Integrated Computer-Aided Manufacturing Definition (IDEF). IDEF0 is a methodology for describing systems which provides a useful way of specifying organisational structure and information of complex production systems (Wu 1994). The methodology is used for creating a functional model, where different functions of the production system and flows are represented. The highest level of function block A0 consists of subfunctions A1, A2, and A3, which in turn are divided up so that A2 becomes A21, A22 etc., as illustrated in Fig. 8.3. IDEF0 inspired the methodology described in Chap. 6. The difference is that IDEF0 structures the production system, whilst the principle here is applied on structuring the production system development process.

8.2 Developing Conceptual Production Systems Preparing production is about estimating capacity need, planning material and product flows, selecting type of processes and operations, specifying equipment, choosing level of automation, developing layout, deciding on work organisation etc. There is an obvious linkage between manufacturing strategy decision categories (see Chap. 3) and aspects to consider when developing production systems. This is the time for creating production capabilities contributing to company success. Some of the questions that are dealt with in production strategy are, however, on a more comprehensive level and thus represent a prerequisite for the development work. These are, for example, decisions on facilities and vertical integration. These types of decisions need to be made prior to starting system development. Many choices and decisions concerning development of production systems are taken already during the conceptual phase. This is necessary in order to be able to evaluate the different solutions during the evaluation phase. The next phase, detailed design, is about refining chosen alternatives. At a more detailed level it is, for example, about finding the best location for different equipment and detailed design of the work place.

8.2.1 Flows and Flow Principles A production system contains several different flows. In this connection, a flow describes a transfer of something in the plant. These transfers must be carried out

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Direction of flow

in a way that the subject to transfer reaches the right receiver, to the right extent, in the right time. When developing production systems flows of material, information, and humans need consideration. Material transfer within a production system is dealt with within the production logistics discipline. There are many connections between questions within production logistics and production development. An obvious difference is, however, that logistics emphasises flow while production is more focused on describing transformation of raw material into products. How information is handled and transferred is dealt with for instance in information logistics. Just as with material it is about making the right receiver get the right information at the right time. Flow of people is partly linked to material flow as well as to information flow. Humans may be carriers of both material and information. The actual flow of humans in a production system depends to a great extent on how work organisation is designed. It is also interesting to study how different flows interact. Relations between the production system’s elements are central for the system’s final ability. If flow taken as a whole is regarded, operations can be described outgoing from different types of material flows, which can be illustrated with the four shapes: A, V, X, and T, see Fig. 8.4. The different flow shapes have a close connection to the transformation in a production system (Mattsson and Jonsson 2003), see also Table 2.1 in Chap. 2. The A-shape illustrates a converging flow where many components are transformed into a few products. This represents transformation method assembly, i.e. a large number of components are put together into a final product. This is the usual type of material flow in for instance an assembly system (Mattsson and Jonsson 2003). The V-shape demonstrates the opposite, a diverging flow where a few input or raw material is transformed into different final products. In this case, the transformation method is division. Typical examples of companies with diverging flows are saw mills and slaughter-houses (Mattsson and Jonsson 2003). The X-type shows elements of both converging and diverging flows. The starting-point is modular products. A large number of components are here put together into a few standardised modules, which are combined according to customer requirements at a late stage. This creates a wide product range for the customer, while at the same time it is preferable from a production perspective to customise late based on standard modules. The heavily modularised trucks of Scania are usually used as a successful example of this (Aniander et al. 1998).

Fig. 8.4 Different shapes of material flows (Aniander et al. 1998)

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The T-shape illustrates a production flow where products are given a specific shape right before being delivered to the customer, for example aluminium cans where variants are created through different surface printing (Aniander et al. 1998). Development of a production system is primarily focused on the material flow within a plant. Material flow could concern raw material, material at different refinement stage, and final products. It is about component flow to and from the actual refinement station. Work in progress also describes a flow in the workshop. Finally, the final products are transferred to a stock or to a delivery station. There are different solutions for transporting material. Material flow can be mechanised as well as non-mechanised. One mechanised solution is continuous flow. The actual choice depends to a great extent on the rest of the system. Flows are rarely continuous through an entire production system. There are usually disruptions between different subprocesses. Disengaging different subflows reduces the risk for disturbances, in single subflows, to progress to the entire flow (Mattsson and Jonsson 2003). Inventory has a disengaging function for the flow, even though it should to be regarded as a necessary investment for handling fluctuations between production and demand (Storhagen 1995). Depending on where in the material flow the inventory is located, different types of stocks are identified such as store of raw material, work in progress, and stock of finished products (Mattsson and Jonsson 2003). The store contains the supply of raw material, components (purchased or manufactured), and semi-finished products. Work in Progress (WIP) concerns inventory of material under refinement. Hence, the material is in production for further treatment or assembly. Work in progress, or buffers, are inventory that evens fluctuations between in- and out-flow. Stock of finished products contains products waiting for delivery to the customer. The main task is to absorb fluctuations between production and demand of a product. It can also be utilised for enabling just-in-time (JIT) delivery in small quantities. Stock of finished products can be either located close to the production unit or in special terminals. Safety stock is the margin between the level where replenishment normally is done and an entirely empty warehouse (Storhagen 1995).

8.2.2 Flowcharts Flow in planned as well as in existing production systems can be graphically described by means of flowcharts or different types of charts. There are different solutions depending on its purpose and what aspects need to be illustrated. Process Flow Analysis is a method for documenting activities, detailed and graphically. It may be performed at different levels of detail and provides a basis for better understanding of the process. Process flow analysis comprises analysis of process flow, material flow, and layout flow. The basic steps of a process flow analysis are (Olhager 2000):

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identify and categorise process activities; document the entire process; analyse the process and identify possible improvements; recommend suitable process changes; and carry through the decided changes.

During the process analysis, all activities are assessed in a process chart through questions such as What? When? By whom? Where? For how long? How? and Why? One typical question could be: Why is this process carried out? Could it be done differently? See for example Olhager (2000). When improving an existing process in an existing production system, the Process Flow Analysis may be used in order to clarify which improvements can be made in the process (or material and production flow). Process Flow Analysis may also be used when designing a new production system in order to illustrate which production activities will be included in the new system. In that way, the Process Flow Analysis will be a type of simulation of the future flow. The analysis is also an important starting point for identification of value-adding as well as non-valueadding activities (Value Stream Mapping was described in Chap. 7). In the Process Flow Analysis, where different schemes and charts are being used, it is possible to use different symbols for the ongoing activities of the flow. The activities operation, handling, transportation, storing, and control are each illustrated with specific symbols, see Fig. 8.5. Operation implies a process activity which in one way or another deliberately changes or transforms inlet material, which however could be the case also for example for planning and calculation. Transportation involves moving the object between different locations. Control is about examining and verifying the result of an activity. Storing means that the object or tool is stored while waiting for operation or control. Handling is actually about shorter transportation and can for example mean that the object is moved from a buffer at a cell into the cell for operation (Olhager 2000).

8.2.2.1

Process Flow Chart

When a process flow (ingoing in the process flow analysis) is to be analysed, the production procedure of a product or service can be useful. The symbols for operation, transportation, control, storing, and handling are used, see Fig. 8.5. The process flow chart is also used for estimating time and distance for each activity. An evaluation may also be linked to each process. There are several similar charts to that presented in Fig. 8.5. Shingo (1994), who describes the Japanese production philosophy, presents a chart that, besides the previously described activities, also distinguishes between different types of storage: material stock, inventory, queuing, and stock of final products. The activity storing is thereby divided into four different storage types which are given

Inspection

Storing

Transp

Handling

Fig. 8.5 Chart of the process flow that starts with material in stock, which is transported to the work station where it is buffered at the machine prior to being treated during an operation. The operation adds value to the process

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Operation

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different symbols in order to give a more detailed Process Flow Analysis. The division into more storage types can be regarded as characteristic for the Japanese production philosophy that adopts a clear flow focus. Both when developing new production systems as well as during improvement of existing systems, it may be useful to distinguish between different storage activities. To act proactively, to already during the initial phase of the production system development process prepare and simulate the future flow and to question everything that will not contribute to adding value to the product, is more successful than to react to the already established production flow. The starting point when analysing production flow can either be the process or work operations. When analysing a process, the primary object is to study how the product proceeds through different operations and how the material gradually is transformed into a final product. When analysing an operation, the starting point is, however, the single man/machine operations and how different products pass through the operation, i.e. how an operator or machine treats the products, is studied (Shingo 1994). It is essential in production system development to decide which operations the material will pass on its way to a product. Also analysis outgoing from the operations is an important input. But, as Shingo (1994) emphasises, a general rule is to study and improve the processes prior to dealing with the operations. The fact is that by focusing on the process it can be proven that certain operations will not even be needed.

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8.2.2.2

Material Flow Chart

A part of the process flow analysis is the study of the material flow. A material flow chart can here be used in order to illustrate material flow between different activities and operations. The same symbols may be used for operation, transport, handling, inspection, and storage. Sometimes simple arrows can illustrate transportation between activities. Notifications on capacity, storage points, and bottle necks in the process can be added to the material flow chart (Olhager 2000). 8.2.2.3

Layout Flow Chart

The layout flow chart is the visual result when activities of a process flow chart are shown in a production facility, see Fig. 8.6. The individual positions of the different work stations, material flow routes, as well as direction of material flow are shown (Olhager 2000). The actual layout planning is further described in connection with the detailed design of the production system, see Sect. 8.5. Painting

Subassembly

Central and intermediate storage

Final assembly

Testing

Fig. 8.6 Example of layout flow chart for manufacturing of printed circuit boards

8.2.3 Production Planning The way in which production is planned is essential for many decisions on design of production system operations. One of the major questions in production planning is how production orders are provided, see Fig. 8.7. FURTHER STUDIES: MAKE TO STOCK OR TO CUSTOMER ORDER Decisions on customer order production or production to stock is a planning issue. Make to stock means that production is planned and carried out based on forecast of future demand. It is affected by market development, cyclical factors etc. The main drawbacks are that it responds slowly to change and the large tie-up of assets in production and final stock. The main

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advantages are short delivery times and long and efficient production series since setups are limited. Customer order planning is the most common way of planning production today since it increases the possibility to customise products, improves flexibility, and limits tie-up of assets. Disadvantages are in general longer delivery times and higher production costs. The importance of reducing set-up times is highlighted in customer order planning. Source: Storhagen (1995)

A conventional planning method is a push system, where products are being pushed through the factory. A production plan is established which provides information and production orders for each station involved in the value adding. Production follows this plan and possible disturbances are reduced through buffer storage. Production is often performed in large batches leading to comparatively high equipment utilisation. A pull system implies that production order is only given to the last station of the material flow, which gets its parts from the previous station etc. Flow is controlled by customer order and not by forecast. Planning is based on actual need and not on plan. A pull system may lead to certain operations not being fully utilised since there is not always a need for the proceeding operation. The Toyota production system follows the pull principle and is based on Just-in-Time, which is actually about providing the right product in the right quantity at the right time. Production order may be provided by means of kanban (card in Japanese), which follow the pull principle. Kanban cards are sent to the department or supplier who produces the article in question and gives a signal that it is time to start production of the specific component (Lumsden 1998; Storhagen 1995). It is important to consider aspects regarding material and production planning when developing production systems, on the conceptual level as well as on a detailed level. Some of these areas are decided on an overall level and are thus included in the corporate strategies, for example decisions concerning make to customer order or make to stock. Other issues are more specific for each production system, for example packaging or material handling at cell level. It is thus neces-

Push

Order

Order

Order

Order

Op

Op

Op

Op

Product flow

Order (One planning point)

Pull

Op

Op

Op

Op

Product flow

Fig. 8.7 Comparison between conventional push production planning and Kanban planning in a pull system (Storhagen 1995)

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sary to guarantee that material handling is an integrated part of the production system to be developed in parallel with other activities in the production development process. In spite of its importance, these questions are unfortunately not always concurrent with other development processes within the total product realisation process. Like other disregarded areas such as work organisation and work environment, material supply is often not sufficiently considered in the development work. In order to establish good conditions for a well working material supply system at ramp-up of production, it is important to integrate material supply aspects in the product development project in order to identify problems and solve them at an early stage (Johansson 2001). We will, however, not go any deeper into material and production control since it is a large area of its own (see e.g. Lumsden 1998; Mattsson and Jonsson 2003). It is however, as mentioned earlier, important to emphasise that production and logistics more and more deal with the same type of questions concerning the fundamental prevailing basic production philosophies. The common area of interest increases concurrently with the increased focus on finding comprehensive solutions and process thinking. An integration of these two areas to a common area called production and logistic development would hence be a natural consequence. We would also like to highlight the importance of involving logistics experts in the project team for development of production systems. If the degree of concurrency in development processes could be increased this would most likely give better final solutions.

8.2.4 Choice of Process and Layout Choice of process and layout is linked to the decision category called production process. Production process is here used as a generic term for describing the technical part of the system. In Chap. 3 three decisions concerning the decision category production process were described. The first decision concerns process choice, the second layout, and the third detailed layout (Slack et al. 2001; Mattsson and Jonsson 2003; Hayes et al. 2004). On the basis of this we can go into further detail on these different decisions, see Fig. 8.8. The content of the figure is explained in detail in the rest of this chapter. There are different types of processes and, as described in Chap. 3, process choice is mainly based on volume and number of variants. Process types can be categorised into (Mattsson and Jonsson 2003; Hayes et al. 2004): • single item process; • intermittent process (coupled or uncoupled); and • continuous flow process. The different process types are here described in more detail. In a single item process and intermittent process, discrete products are being manufactured which means that products are regarded as individual units that can be counted (e.g. number of stows). The individual units may in turn be separated into simple and

8.2 Developing Conceptual Production Systems

Volume and variants Decision 1 Process choice Strategic performance targets

Decision 2 Layout choice

Single Intermittent Continuous Fixed position Functional layout Batch flow Line based layout

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Process choice

Layout choice

Single flow process

Fixed position layout

Functional layout Intermittent process Batch flow

Decision 3 Detailed layout

Physical location of all transforming resources

Continuous process

Line based layout

Fig. 8.8 Decisions concerning process and layout choices (Slack et al. 2001)

composite products, where the latter consists of at least two components that are put together as a unit. The same product type recurs with different time intervals. In an intermittent process, the product types are often quite similar, for example a manufacturer of staplers often produces a family of models instead of more diversified products. The products are often made in steps where products are stored between the different operations. This is the most common form of industrial production where products can vary from cars and other consumer products to subsystems or modules in e.g. business to business products. The intermittent process can also be divided into coupled and uncoupled flows (Hayes et al. 2004). One example of a coupled flow is an assembly line, where products appear in a continuous flow, but they are still separate units. In an uncoupled flow, there is some sort of buffer or intermediate storage separating parts of the flow. In a continuous flow process, the same product is produced continuously and flows between different process steps. Continuous production always constitutes a production line from raw material to final product. This is often the case within process industries such as the paper industry, pulp-mill industry, chemical industry, or steel manufacturing. Production volumes are thus measured in terms of weight, volume, or length, such as tons or litres (for example ton pulp). This type of non-individual products is often named bulk products or dimensional products. The different process types can be realised by means of different arrangements of machinery and other equipment. The physical positioning of system components in a workshop is called production system layout. In analogy with process types, there are some basic layouts (see e.g. Miltenburg 1995): • fixed position: all value-adding activities are performed at one and the same place; • functional layout: equipment of the same type is colocated;

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• batch flow (cell): different equipment and processes needed for making a product are colocated; and • line-based flow layout: equipment needed for making a product are arranged in line according to order of activities. When the process is chosen, i.e. when it has been decided whether it is a single item or intermittent process, a suitable layout can be chosen. Process type can be realised through different layouts: • single item process can be realised in fixed position layout; • intermittent process can be realised in: functional layout, batch flow system, line-based layout; and • continuous process can be realised in a line-based layout. Often no distinction is being made between the terms process type and layout. Most commonly the main layouts are used to describe the arrangement in the workshop, i.e. how machinery and other equipment are located in relation to each other. Choice of layout gives, however, other consequences. The layout has implications on other decisions regarding the production systems conceptual layout. It influences flows, planning, storage etc. The different layouts thus need to be further described.

8.2.4.1

Fixed Position Layout

Production of very large products, such as special products in small quantities, needs a production arrangement that is adapted to these specific conditions. Instead of moving the product between different stations, material and personnel are being transported to the product at a certain location, i.e. to a fixed position. Production methods vary and activities are often man power intense. Production and assembly tasks are carried out by skilled workers. There are limited possibilities for automation since tasks seldom are standard. Examples of products suitable for fixed position layout are ships, airplanes, and oil rigs. Even smaller but complex products in low volumes can be produced in fixed position layout, for example machine tools. For a few years even assembly factories existed based on this layout. INDUSTRIAL EXAMPLE: COMPLETE ASSEMBLY IN ASSEMBLY TEAMS Small scale, team based, complete assembly is described as a new concept developed during the 1980s. This development was to a large extent performed at Volvo’s factories, but it is not relevant to call it “Volvoism” (compare with Fordism). The reason is that it was more based on the prevailing social conditions rather than company culture. This was proven in comparisons between a Volvo factory in Gent, Belgium, and factories in Sweden. A stationary group carrying out complete assembly is called an assembly group, which is an example of fixed position layout. An assembly group assembles stationary objects to a predecided level and this group is regarded as one order point with a known capacity. The starting point is that the assembly sequence is not of vital importance. It is thus possible for sev-

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eral assemblers to work simultaneously assembling different components in the product independently of each other. The larger the collective competence of the team, the larger is the possibility to make final products. All material needed for the assembly is guided to each assembly team. The team may also pick necessary material from stock or from picking stations. Source: Berggren (1990)

The process, described above, was intermittent. We can also see in Fig. 8.8 that it is possible to realise also intermittent processes in a fixed position layout. 8.2.4.2

Functional Layout

In a functional layout, equipment of the same type is colocated. This may also be described as being process oriented (examples of processes in this context are turning, milling etc). Functional layout is the prevailing layout in mixed production, where a large number of products are manufactured in small volumes. Machines are organised after types with similar functions and are usually referred to as grouping of different machines for part manufacturing and machining such as drilling machines, milling machines, grinding machines, turning machines, presses, see Fig. 8.9. The order flows between the different machine groups depending on which operations are involved for making a certain product. A machine or a group of similar machines thus constitute a planning point. Machines can be manned by an operator per machine or one operator can handle several machines depending on the actual level of automation of the equipment. Capacity utilisation may theoretically be high in a functional layout, in addition to the possibility for flexibility due to large routing possibilities. Flexibility is also achieved since it is possible to choose the machine in a group that is available at a particular moment. Theoretically, functional layout has many advantages for manufacturing in smaller series of many different products. In reality, one disadvantage is linked to control and coordination, since a large part of the throughput time for a product is waiting between operations. Thus, queues are built up at different machines and waiting times occur for transport between machine groups causing the need for extensive planning. As disturbances occur for some reason in a machine, there is a risk that the subsequent machines

Turning

Drilling

Goods in and out

Assembly

Stock of finished products

Office Cutting Painting

Milling

Fig. 8.9 Functional layout (Olhager 2000)

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will be affected by interrupts causing urgent rescheduling. Consequences are superfluous stock, long throughput times that lead to high tie-up of assets, and low delivery precision. There is also a risk of quality problems and rejections. 8.2.4.3

Batch Flow System

The batch flow system is also called the cell. In a batch flow system, machines are located in the direction of the flow instead of after functional similarity, see Fig. 8.10. This leads to a product-oriented layout instead of process oriented, i.e. equipment is arranged after product. Batch flow systems have increased flow orientation, which gives possibilities for short throughput times and low tie-up of assets (Olhager 2000). The batch flow system is common for making products in large volumes and perhaps in many variants. It may also be suitable for products with long throughput times. If possible, expensive/pace-setting machines are placed at the beginning of the flow, followed by different supplementary machines. The issue is to make sure that the pace-setting machine is fully utilised, whilst over-capacity is allowed for the less expensive supplementary machines. The aim is to avoid queues before less expensive machines since there is a risk that a more expensive machine will not be fully utilised. The batch flow system is also a way of handling some of the problems that occur in a functional layout. The batch flow system constitutes a single planning point, which is not the case in functional layouts. In the batch flow system, a considerable degree of finishing is reached and thus it is sufficient only to give one production order to the entire group. The target is to create a sequential flow for as many parts/products as possible, which however may lead to changes of the operation sequence for some parts. Short set-up times are also important since flexibility is needed. It may, however, be difficult to replace the entire manufacturing with batch flow systems since certain parts of the product range do not fit into any batch flow. Batch flow systems are also less flexible than the functional layout which is illustrated by the fact that new products are initially tested in a functional layout. If the capacity need is reduced in the batch flow systems, the advantages are also reduced. Normally each machine group in a batch flow system is manned with fewer operators than the number of machines which demands a wider operator competence. Working in a team in a flow-oriented production setup gives possibilities for job-

Inlet buffer

Pace setting machine

Auxiliary machines Outlet buffer

Fig. 8.10 In a batch flow system, the entire group is one planning point and machines or functions are located in the direction of the flow (Olhager 2000)

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rotation between work tasks and larger work content through more responsibility for planning, quality, and capacity utilisation. Questions to be dealt with in a more detailed design of a batch flow system are which products to group. This can be done through production flow analysis. Read more about this in detailed design. 8.2.4.4

Line-Based Layout

A line-based layout is suitable in mass production of standardised products. The layout is linked to the products rather than to the machines and this is consequently also a product-oriented layout. Equipment is placed in operations order, often with intermediate material handling, see Fig. 8.11. It is possible to describe material handling between stations in terms of controlling conveyor and floating conveyor. The controlling conveyor has some sort of mechanical transportation between stations without buffering possibilities. The floating conveyor has on the contrary a transport system that can be handled manually thus allowing intermediate buffers, see Fig. 8.12.

Station 1

Station 2

Station 3

Station 4

15 min

15 min

15 min

15 min

4 items per hour

Fig. 8.11 Line-based layout with 15 min operation time per station (Olhager 2000)

Fig. 8.12 Example of a floating conveyor with buffer possibilities which release the operator from the line (Photo: Mario Celegin)

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One purpose of the floating conveyor is to reduce operator restraint. Sensitivity to disturbances between buffers is also reduced. The task to distribute operations to suitable work stations is called line balancing and the main objective is that all work stations should have about the same work content. A line-based layout requires considerable balancing. This is illustrated in Fig. 8.11, which shows that the balancing target is 10 minutes of operation time at each station. This is decided during the detailed design phase, after the conceptual production system has been chosen. In order to increase production capacity, to improve flexibility for introduction of more product variants, or to reduce sensitivity to disturbances, parallel flows may be created, see Fig. 8.13. In this example, capacity has not been increased. A product will still be made four times per hour. The difference is that the work content per station has increased and at the same time the sensitivity to disturbances has been reduced. In parallel flows, operators will not be as restrained to the system or work pace as with simple line flow. By introducing buffers between stations the restraint will be further reduced. Parallel flow thus reduces balancing loss. Another name for a controlling conveyor is production process line. In a production process line, assembly is carried out for a large number of components into a limited number of products, which is called converging flow. Its advantages are that material control and handling is facilitated. Throughput times are shortened which reduces tie-up of assets. Dividing work tasks into short work cycles leads to short learning times for operators, which in turn increases workforce flexibility. Its advantages are, however, also its disadvantages. Exchangeability of workforce and limited work tasks create simple and monotonous work tasks, which leads to several negative consequences for the workforce environment. There is also a risk that the production process line becomes sensitive to disturbances and inflexible. Advantages and disadvantages with a line-based layout are presented in Table 8.2. Also in continuous production within the process industry, production is usually performed in a line-based layout. The line-based flow is here utilised for realising a continuous flow without interruptions. Production is here, however, a diverging flow, where raw material is transformed through division into a large variety of products. The paper and pulp industry belong to the process industry as well as companies making products such as iron, steel, chemical products, and tiles.

1-2

3-4

1-2

3-4

30 min

30 min

Fig. 8.13 Parallel flows (Olhager 2000)

4 items per hour

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Table 8.2 Advantages and disadvantages with line-based layout Advantages with line-based layout

Disadvantages with line-based layout

Short throughput times Low tie-up of assets Simple material flow High resource utilisation Short learning time High degree of exchangeability Simple control Simple inspection

Sensitive to disturbances Inflexible Difficult to balance Monotonous work tasks Restraint Few social contacts

Literature on different layouts for production systems is quite extensive since the issue is valid in many production-oriented disciplines, however with different angles of approach. Layouts are for example handled within operations management (Hill 2000; Slack et al. 2001), within production logistics (Mattsson and Jonsson 2003; Segerstedt 1999; Lumsden 1998; Storhagen 1995), within production economics (Olhager 2000), and within industrial engineering (Andersson et al. 1992). Until now, different layouts have been described from a more overall perspective. Once a conceptual production system has been chosen, a detailed design should be made. Depending on the choice of overall layout, different questions need to be solved such as minimisation of transport costs in a functional layout and line balancing in a line layout.

8.2.5 Level of Technology and Automation The third choice that needs to be taken concerning production process deals with the choice of technology level. Slack et al. (2001) describe this as detailed layout, see Fig. 8.8. Product and production volume are the guiding parameters when choosing technology level and level of automation. Automation has during the past decades been a mean for manufacturing companies to improve efficiency and for quality development. Already in the 1960s the development of flexible manufacturing systems (FMS), and computer integrated manufacturing (CIM), started with the purpose of achieving more efficient production. FMS is one example of an automated batch flow system. They consist normally of a number of numerically controlled machines connected through an automated material and storage system controlled by an integrated computer system. FMS is based on the group technology principle (GT), where similar parts are identified and grouped (in component families) in order to draw advantages from their similarities in design and production. Similarities can be from geometrical shapes and size, or through the process steps that are used for manufacturing. Group technology enables simplification of component manufacturing when production equipment is organised in cells, where each cell manufactures a specific component

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family or a limited number of similar families. Each cell includes dedicated equipment, tooling, and fixtures. This enables optimisation of the cell for its specific component family (Groover 2001). Automation within parts manufacturing was eventually followed also by an increase in automation within the assembly field in terms of different rigid or flexible automated manufacturing systems (FAM systems). The level of automation for parts manufacturing is, however, still higher than for the actual assembly of components, since this is a process that is more difficult to automate due to the high demands for set-up flexibility. It is common that manufacturing companies have high levels of automation in their machining and part manufacturing processes, whilst assembly still is performed entirely manually since the technology is not well developed for each application (Wu 1994). According to Nevins and Whitney (1989), knowledge on assembly needs to be as deep as metal machining in order to improve this situation. During the 1980s robots were expected to be highly utilised in assembly and several attempts were made to automate assembly by means of robots, with varying results. Today, companies have another view on automation and most companies do not consider automation to be the ultimate objective or as one company in the 15-company study put it (Säfsten and Aresu 2000): “Automation is purely a financial issue. If we mechanise or automate, it has no value on its own today.”

Not only the actual production processes but also other processes such as feeding, handling, transportation, and storage may be automated. The former objective, to achieve almost fully automated systems, was illustrated by introduction of terms such as production with limited manpower (in Sweden called PBB) during the development of FMS. The objective of production with limited manpower was to utilise expensive equipment around the clock, with or without operative personnel. If this is to be feasible, all operations and work tasks need to be able to execute automatically without any surveillance, which places large demands on equipment reliability (Andersson et al. 1992). Today PBB is not extensively used. The cost for investing and developing PBB should be set against demands for flexibility and short set-up times of the manufacturing systems, which makes it hard to justify PBB. In general, manufacturing systems are semi-automated, i.e. they consist of both automated and manual resources. This is the case also for assembly systems. Before 1980, automation of assembly tasks concerned primarily automated special machinery. This was enabled by splitting assembly tasks into simple operations that could be automated with the aim of making products in high volumes (Makino and Arai 1994). At that time, the technology could not handle flexible automatic assembly. During the 1980s, a new generation of automated assembly systems based on industrial robots was developed with the purpose to improve flexibility. Flexible automated cells with programmable industrial robots have gradually become more sophisticated. Since the early 1990s the increase in use of

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such cells has, however, slowed and stagnated (Onori 1996). The cost for flexibility becomes too high to motivate investments in flexible automated assembly equipment compared to the advantages the systems can offer. Flexibility is always in focus for automation, i.e. the ability to adjust to changes of the environment. This concerns, for example, the flexibility to rapidly set up the equipment or the entire system to suit new variants, models, or even entirely new product generations. It is also essential to be flexible enough to handle changes in conditions. Humans are, however, more flexible than technology, since they can handle both predictable and unpredictable situations. Automatic equipment is also sensible to situations where no predefined solutions are available. This is the reason why we today have very sophisticated manufacturing systems that meet expectations when they work very well in production, but are unfortunately not particularly reliable and have a large proportion of down-time. The reasons why manual production operations or process segments have been automated are for example: • • • • •

possibility to increase capacity; improved productivity; reduction of manpower; reduction of repetitive and hazardous work tasks; and more even (and possibly improved) product quality.

It is often best to develop a process that can be managed manually prior to adding technology for supporting the process (Liker 2004). This approach is shared by many people, i.e. it is possible to automate only if it works manually. It is seldom successful to reduce problems by automating. It is thus necessary to identify the root cause of the problem prior to automating (which could be linked to product design, operational sequence, material flow, production planning, etc.). Shingo (1994) talked about pre-automation or autonomation, which is about automation combined with human intelligence. This implies that not only typically manual tasks are transferred to machines but that they also assume some mental tasks. The purpose of pre-automation is also that the operator should be able to leave the machine during normal operation. If something unexpected occurs, the machines stops and attracts the operator’s attention, who can deal with the problem. These actions eventually lead to more robust manufacturing.

8.2.6 Work Organisation and Work Environment Work organisation deals with how to organise work and work tasks, see Fig. 8.14. The single operator’s work tasks and competence are in focus as well as how the staff works as a team and which technical and other means are used. Other important questions concern how the objectives for the work are formulated, how the work is controlled, and which social rules and cultures are included (Bruzelius and

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Fig. 8.14 Components in work organisation (Bruzelius and Skärvad 1995)

Aim Work tasks and competence

Co-operation and interplay

Work organisation Technical resources

Culture Control and follow-up

Skärvad 1995). It is essential to define the work organisation when designing a new manufacturing system since it is necessary in order to achieve a good work environment for staff and possibilities to reach efficient and robust production. Work organisation may also be described as: “The relation between people and production; how people are fitted into and coordinated with other production factors in a system for making products or services that is developed by an authority or owner for a specific purpose.” (Broström 1991, p. 9)

Splitting work tasks, task allocation, can be done in multiple ways. Usually, a distinction is made between horizontal and vertical task allocation. Vertical task allocation distinguishes between planning and problem solving work tasks and executing work tasks, while horizontal task allocation aims at splitting the entire work process into as short time units as possible (Forslin 1991). Assembly is an area within production which normally involves many human operators. An important question is how this work best can be performed, both for satisfying human needs and for reaching sufficient efficiency in production. How can the vertical and horizontal task allocation be done? There is not a single solution to this problem. In an open system, such as an assembly system, equifinality exists, which means that there are several different ways of reaching a certain aim. Forslin (1991) refers to this and emphasises what he describes as the most important decision concerning work organisation: “… even with identical technical ansd financial conditions, there are several possibilities to organise operations, thus leading to different social consequences, but also to a different function of the rest of the system.” (Forslin 1991, p. 166, translated from Swedish)

A general trend in different industrialised countries is that industrial engineering and work organisation have become more integrated when developing new production systems (Sandkull and Johansson 2000). The new solutions are, according to Sandkull and Johansson (2000), characterised by new production technology, group organised work, and qualified personnel, even though there might be exceptions. The work organisation should be formulated in parallel with the technical system. Aspects to consider or decide upon are summarised in Table 8.3. The question on the amount of work tasks in the production flow to be integrated is to be

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Table 8.3 Aspects to consider during formulation of work organisation in parallel with the technical system Aspect

Different options to consider

Type of work organisation

Centralised or de-centralised organisation, type of leadership, responsibility, and authority of different employees need to be clarified.

Relation between related functions

Maintenance relations to production need to be established, as well as towards production planning, material supply and quality function.

Formulation and allocation of tasks

Type of tasks – sequential or parallel execution, degree of technical and administrative autonomy1, cycle times for different operations, decisions on individual or group organisation and, in case of group organisation, also the group size.

Work content

Work content needs to be defined both for the chosen production system as well as in detail for each role/employee. Variation2, job enrichment, work integration, and job rotation should be considered as means for job enlargement.

Creativity and problem solving

Improvement groups and a larger number of maintenance tasks in the plant organisation are means for accomplishing this goal.

Creating a learning organisation

Training, practice, trainee programs, documentation of routines and methods as well as method development are means to work actively with knowledge transfer and the learning process.

Human resources

Selection of personnel for different tasks and choosing team members, flexibility demands, competence demands etc.

Reward system

Definition of working hours and its flexibility, incentive system, bonus or contract work, career opportunities, etc. are important components in the formulation of a work organisation

decided in connection with the system design work (which is linked to work content and the linkages to other functions). Should for example material supply, packing, and transport to store be handled by the production organisation in a smaller production system or do these tasks functionally belong to another organisation? Is this task allocation preferable? That is one of the questions that need to be asked during a development project. It is about questioning the present organisation and work organisation from an overall perspective. As presented earlier in Sect. 8.2, there are a number of different layouts, which to a great extent control the choice of work organisation. Fixed position may for instance mean station assembly, where the location of the product is fixed and other resources are being provided. In a functional layout, the operators are as-

1

Technical autonomy involves limiting the control from the machine, i.e. humans become less tied to the machine. Administrative autonomy means to be able to carry out the work without surveillance (Karlsson 1990). 2 Variation is divided into task variation (different work tasks) and motoric variation (different motion patterns). Task variation contributes to work satisfaction only when the tasks are dissimilar (Karlsson 1990).

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sisted by a group of similar machines. In a batch flow system, one operator may be managing one or several machines in the group. Manning of the production system is related to work load and capacity and is an important issue regarding work organisation. Variations in work load normally occur, since it is difficult to achieve an even influx of orders. Seasonal variations also occur in branches with products such as lawn mowers and snow blowers. Larger variations in work load may also be caused by an uneven order frequency with extremely few, but in return larger quantities such as in export sales of military equipment. Shift work and overtime have traditionally been a way to handle variations in work load. The trend towards increased flexibility through employment on a special project and production flexible work hours2 can also be 125. Wider competence among personnel also increases the possibility to balance variations in work load in different production systems or production groups since personnel can be moved between them. Work organisation is closely linked to work environment issues. Work environmental factors are several and very important, both short and long term for a producing company. For a number of years, mostly during the 1980s, work environment was focused on basic issues such as noise, lighting, indoor climate/ventilation, vibrations (i.e. physical work environment factors) as well as ergonomic factors such as physical ergonomics, working positions, heavy lifting, and monotonous movements. These issues are still burning questions. Ergonomic demands should reflect company personnel and may be related to differences in physical strength, handicap etc. Work tasks with low load but high frequency should for example be paid special attention (Karlsson 1990). Also protection and safety aspects, as well as man-machine and usability issues constitute important work environment aspects. Psycho-social factors have been in focus for even longer, but have during the 21st century become even more interesting since modern society and work have increased the mental load. The increase in the amount of information, a higher speed, and more decisions to make are probably some reasons, even if it is difficult to give a general explanation since the question is very complex. When developing or changing a production system it is thus necessary to consider the increased complexity also regarding the psycho-social work environment.

8.3 Evaluation of Solution Alternatives Evaluation of alternative solutions during the development process can be done in connection with both conceptual as well as detailed design. The different activities, development and evaluation, should be carried out iteratively. More or less explicit evaluations are being carried out during development work, often repeatedly. This can be illustrated through an example, see Fig. 8.15, as well as in the explaining text in the industrial box below. Note that the description was done afterwards; the studies were performed retrospectively, when the development

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process was already finished. A consequence of this is that the picture we can draw is simplified, but hopefully clear enough to illustrate an iterative decisionmaking process. INDUSTRIAL EXAMPLE: DEVELOPMENT OF ASSEMBLY SYSTEMS AS AN ITERATIVE DECISION-MAKING PROCESS A new product was to be introduced at company G. In order to cope with increased capacity demands, a new assembly system was needed; see decision-making process in Fig. 8.15. The development of the assembly system was carried out as a subproject within the overall product project. In the beginning the possibilities of the existing system were examined (diagnosis) and this was subsequently changed into a discussion of different possibilities and alternatives (develop). In order to collect more information on possibilities, other companies were visited and internal reports on different production arrangements were read (diagnosis). The individuals involved made individual specifications on what to avoid and what to include in a new assembly system (design). The different demands and wishes were brought into line with each other (evaluate/choose) and a specification of requirements was established (design). Then a number of systems suppliers were contacted (search). System solutions from the different suppliers were compared (evaluate/choose), the solution modified (design) and finally realised (implement/carry out). Source: Säfsten (2002)

Figure 8.15 illustrates the fact that evaluation of different alternatives is not an activity that can be performed only once. The choice between different conceptual solutions is often made on limited knowledge. A solution is often crystallised early in the process, without any real evaluation of all alternatives being made (Säfsten 2002). The further work in developing alternative solutions is often done by the same people that evaluated the existing system. The existing production system is furthermore often one of the alternatives that are being compared with the new solution suggestions. Evaluations are often comparative. An ambition is to be Contact with system supplier

Search

Diagnosis

Design Solutions from system suppliers

Collection of impulses

New product, Increased capacity

Approve

Implement / carry out

Evaluate/choose

Does existing system cope? Benchmarking

Realise solution Alternatives and opportunities Individual specifications Establish requirement specification Adjust chosen solution

Bring requirements and wishes into line

Fig. 8.15 Simplified picture of the decision-making process when developing a new assembly system at Company G, see below (Säfsten 2002)

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objective, even if most evaluations are described by the companies as being subjective. In some cases the evaluation criteria were being interpreted by the people that were involved in the evaluation work (Säfsten 2002). It is thus obvious that there are a large number of aspects to consider when evaluating different solutions. The value of carrying out an evaluation is also dependent on when in the development process the evaluation is being done, but the ideal time for doing this also varies. By identifying the most critical activities or phases where evaluations are necessary, the chance of achieving resource effective development work increases. In Sect. 5.2.4 three different approaches are described that characterise the development process: the concept-generating, concept-driven, and supplier-driven approach. Depending on which approach is driving the development process evaluation of alternative solutions achieves varying importance. When the development process is more conceptually driven, i.e. when a conceptual solution guides the development, more effort can be put on evaluating detailed solutions than on conceptual solutions. The reason is that the conceptual solution is known already from the beginning, often decided on an overall strategic level. It is not unusual today that companies decide to go for lean production principles, which give clear outlines for how to develop the production system and on what criteria the evaluation of the result shall focus, see Fig. 8.16. When the development process is concept generating evaluation of both the conceptual alternatives as well as the detailed design is very valuable. A common procedure when evaluating concepts is to list and compare advantages and disadvantages of the different alternatives. In the detailed development work, evaluation is often formative, thus iteratively seeking ways to improve. In a couple of the studied

Does the production system support the advocated production principles?

Production principles

Are the production principles correct?

Fig. 8.16 Adopting a concept-driven approach, the evaluation is about how the suggested production system fits the target system (Säfsten 2002)

Does the production system support the advocated production principles?

Production principles

Are the production principles correct?

Fig. 8.17 A concept-generating approach leads to the question whether the generated production principles are the most appropriate (Säfsten 2002)

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companies, this evaluation was done on physical systems where experimental assembly stations were built in order to develop and test different detailed solutions (Säfsten 2002). For a concept-generating approach, evaluation is about determining if the suggested production principles are the most appropriate, see Fig. 8.17. The third, supplier driven, approach implies an evaluation of mainly ready formulated solutions from suppliers. It is interesting to, based on our studies, note that this evaluation to a great deal is about judging the different suppliers rather than their proposals. The comparison between different supplier alternatives is very important and should be performed from a holistic perspective.

8.3.1 Conditions for Evaluation During the Development Process When evaluating production systems during the actual development process, the subject of evaluation is not a physical production system but a conceptual solution. Consequently, real practical experience on what different work organisational and technical solutions might imply, unless the solution is based on existing physical examples of production systems is missing. Thus, there might be a risk that solutions that are being inherited from existing systems dominate over new suggestions. The reason may not be that the inherited solution is better, but more that it is easier to judge the actual abilities of a physical system at the company than of a conceptual solution on paper. The big challenge when evaluating conceptual solutions is to create a mutual understanding for the properties that different solutions represent and for the evaluation criteria that are to be used. A common picture of what is to be evaluated, and on which criteria, is a basic requirement for achieving good results. Sufficient time needs to be allocated to communicating within the evaluation group since often only a few individuals have sufficient knowledge of the different concepts. The conceptual solutions need to be verbalised, since solutions are often to be found only in the heads of a few people. Layout proposals or CAD drawings are other ways of presenting different solutions. Both evaluation and future realisation of the system are enabled by the proposed and established ways of presenting the different system solutions. The conditions for performing an evaluation are affected by the uncertainty during the development process. Many companies act in a market where conditions are constantly being changed. This is especially obvious when production system development is carried out as a part of a product project. When the system development work has advanced, different types of changes may affect the demands on the production system. This may not only make the initial specification of requirements obsolete, but also the results of the evaluations that have been done based on that specification. The relevance of the evaluation depends on having stable conditions if the evaluation is based on the specification. This is a common approach when evaluating, a so-called target-based evaluation. The purpose of the evaluation is to investigate to what extent the solution meets the specification of

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Table 8.4 Success factors for evaluation during the production system development process Success factor

Activity/suggested procedure

Evaluate during an appropriate stage

Consider when the evaluation result is most valuable and focus the efforts there. Decide if the approach is concept driven, concept generating, or supplier driven.

Mutual understanding

Find mutual ways of describing the concept/system to evaluate. Communicate clearly content of evaluation criteria and solution proposals. Involve people that are concerned in the work.

Manage changes

Complement the traditional target-based evaluation with target-free evaluation.

requirements (summative evaluation). Another alternative is target-free evaluation (Patton 1990). This method emphasises the result. Applied to different production system solutions, this would describe the capabilities of the different alternatives. In this way, the results from evaluations can be used even if the conditions are being changed. An awareness of the different conditions during the evaluation of the development process increases the possibility that the result may provide relevant input data to the work, see Table 8.4.

8.3.2 Methods for Evaluation 8.3.2.1

Failure Mode and Effect Analysis

Failure Mode and Effect Analysis (FMEA), is a method for investigating connections between different failure modes and their effects. FMEA is a relatively simple inspection routine, where each function, process, or activity is examined in order to identify failure mode, their effects, cause, and suitable actions (Britsman et al. 1993; Wikman 1993). FMEA has the largest effect if it is applied in several steps all through the development work. Some important issues to consider to achieve successful FMEA are: start early, plan for FMEA, allocate resources, consider the entire system, make selections and prioritise FMEA objects, carry out FMEA, and finally to compile and report the results prior to making decisions on suitable actions (and follow up). FMEA is a useful tool during product and production development phases, for example during methods planning with the purpose to identify possible failure causes (Britsman et al. 1993). The method presumes a systematic methodology and cooperation in groups. It is used both as design FMEA and process FMEA. Process FMEA is most suitable during methods planning, but needs to be coordinated with design FMEA. When developing production systems, from a single machine group to an entire factory, both process and design FMEA are applicable. Analysis of a plant project is first made at an overall conceptual level prior to

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analysing the more detailed design solutions at subsystems level. FMEA is based upon efficient handling of earlier experiences, available data, and competence. It is about examining each function/detail or process step from the approach: “What may possibly go wrong?”

8.3.2.2

Fault Tree Analysis

Fault tree analysis (FTA), is regarded as a quality management method and is consequently often described in quality literature. FTA is, however, a good complement to FMEA since it is about realising connections and failure causes. FTA is above all used for identifying possible causes to larger system or functional failures, which can be designated as “top failures” or a “top occurrence”. In FTA, symbols for different conditions and occurrences are used when drawing tree-like diagrams that describe combinations and chains of failures leading to top failures. The methodology may be used manually or as computer support, which is preferable since the models quickly become very complex. Good knowledge about the system to be analysed is needed and therefore, it is more suitable for changes of the existing system than when developing new production systems. A rough standard value is that half a day is needed for performing a qualitative analysis of a ten-component system.

8.3.2.3

Event Tree Analysis

Event tree analysis (ETA), is one method of a group of event analysis methods that is similar to FTA. The major difference is that ETA is supposed to investigate what a certain event or near-failure may lead to at a later stage of a process or operation. The starting point is here a number of defined unwanted starting events and to investigate the course of events that may occur in terms of chain of events. The methodology is considered to be lucid when applied to limited systems and has good coverage, even if it may be time consuming. Failure causes and possibilities to detect failures are not specifically treated in ETA.

8.3.2.4

Risk Calculation, Risk Analysis and System Security

Risk analysis involves both identification and judgment of risks. Identified failure risks need to be ranked by judging a quantified risk measure for each failure possibility. Risk measures may be used in order to facilitate choices between different system alternatives or for judging the effect of different actions taken to reduce risk. Wikman (1993) refers to a three degree scale for risk evaluation that was described in a book on risk analysis published by the Swedish employers organisation (SAF) already in 1986, see Table 8.5.

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Table 8.5 Tentative scale for risk evaluation Risk index

Probability

Consequence

Risk level

1

LOW Infrequent

SMALL Low cost Small damage/loss

ACCEPTABLE Can be allowed but should be attended to

2

MEDIUM Not often, but also not infrequent

MEDIUM Larger cost Larger damage/loss

NOT ACCEPTABLE Not allowed Must be attended to

3

HIGH Frequent

LARGE Cost cannot be accounted for

CATASTROPHIC Must immediately be taken care of

Methods for risk analysis and system reliability can to some extent be regarded as examples of other important aspects of evaluation than the traditional. System security methodology is a term sometimes used for working more proactively and preventively when developing production systems, plants, and processes (Wikman 1993). It is about getting things right from the beginning in order to create production systems that are free from disturbances and free from risks or fool-proof in their subprocesses, operations, and supportive processes. Areas, included in a wider systems security conception, comprise security and risk analysis, reliability technology, maintenance, logistics analysis, analysis of the human factor, software analysis, robust systems design, and quality management in project work. In systems security technology, security is regarded as a property of highest priority that is to be designed into the system, enabling systematic methods to be used to identify risks and causes of accidents, and to enable formal work programs of system security analysis to be established and integrated with other project activities (Wikman 1993). Risk analyses that are performed in the manufacturing industry are often focused on personal safety and work environmental hazards. Risk analysis is based on a few simple principles, for example that it is important to start as soon as possible in projects and to utilise all available information on earlier failures in order to avoid repeating the same mistakes. To organise all previous failure information in order to avoid new failure possibilities is also a principle as well as to secure planning and control for performing the risk analysis and to carry through corrective action plans. Widening the view on risk analysis and system security, and also to include it as part of the evaluation of system alternatives, increases the possibility to eliminate or reduce ramp-up problems and production disturbances in a later stage of the production system life-cycle.

8.4 Detailed Design of the Chosen Alternative The detailed design of the chosen system alternative includes several of the areas described in Chap. 8, but on a more detailed level. The greater the level of detail,

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the more company and project specific the development work. If large portions of the future production system are based on acquisition of machinery, there are also other important aspects to consider, see Chap. 9. It is relevant to state that the conceptual design of the production system has led to a model that presents the system’s different functions and their mutual relationships (Wu 1994). It is both about proposals regarding the physical hardware as well as proposals involving control and inspection systems and information systems, and also about proposals concerning work organisational and work environmental issues. The detailed development work is about creating a layout on a detailed level. All issues related to machinery and equipment, flows as well as equipment for transportation and warehousing, should be solved on a detailed level. At the same time, all technology should be linked together through systems, hardware and software for control and inspection. Wu (1994) elaborates on the possibility to create a plant register where all equipment, inclusive status and capacity of industrial engineering, should be registered. Such a register would be of valuable help when working on the detailed design. A production system is built up of several interacting parts. Machinery and equipment of a system need to fulfil a number of functions, in the same way as telephones or computers need to fulfil predefined functions. Different systems components contribute to fulfilling the required functions, see Fig. 8.18. Superior system for material and production planning, surveillance, follow up, etc.

Transport equipment

Pneumatic system

Motors Handling system Fixtures

Hydraulic system

Tools

Fig. 8.18 Different units of the equipment form the functions needed in order to make the product (Photo: Mario Celegin)

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Design and manufacturing of machinery and equipment is naturally an important part of the detailed design work. It is either performed at the own company or it is acquired from an external supplier, which is most common. Manufacturing of machinery and equipment follows the stages of the product development process, which mainly involves pre-study, specification of requirements, development and design, test and verification. Equipment needs to be produced and tested both prior to and after delivery to customer.

8.4.1 Detailed Layout As described earlier, the layout is a common tool or drawing that is used when developing a production system. The layout describes the premises where it will be located. On the basis of the drawing, it is possible to elaborate different alternatives for placing machinery, equipment, staff room, etc. In that way, it is possible to test if there is enough space based on the available floor area, existing pillar index, and other limitations. It also enables testing different solutions for example for materials and product flows, truck paths, warehouses etc. It is normal to use an existing floor area for the production system. The layout may, however, also be used when developing conceptual as well as detailed solutions of entirely new production systems based on the layout to illustrate how these new premises should be designed. The layout planning can more formally be described as a plan for, or planning activity for an optimum arrangement of industrial facilities that include personnel, machinery, and equipment for the production processes, warehousing, materials handling equipment, as well as other equipment that support the personnel. Together with the design, this is the best structure for these facilities (Moore 1959). Layout planning can also be described from its different phases (Muther 1974): • • • •

to establish the location of the area/premises; to establish the general arrangement for using the premises; to place every specific machinery and equipment; and to plan for installation, apply for approval, and make physical rearrangements.

8.4.1.1

Systematic Facility Planning

Muther and Wheeler (1977) developed a simplified method for systematic facility planning. The methodology has gained extensive industrial coverage and is still presented in literature on, for example, operations management (see e.g. Slack et al. 2001). The simplified methodology may be applied to office areas of maximum 300 m2, small workshops, or laboratories of about 500 m2, and storage areas of maximum 1,000 m2. The areas need to be reduced if the number of subdepartments or functions that are to be included increase. The methodology “Simplified Systematic Facility Planning” consists of six steps, see Fig. 8.19.

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Fig. 8.19 Outline of the different steps in Simplified Systematic Facility Planning

Every step has also its own symbol around the number (for step 1, 2 etc.) indicating what is being done in that particular methodology step (step 1 is a triangle, step 2 is a square etc, see Fig. 8.19). The six steps illustrated in Fig. 8.19 are described below. 1. Clarify the connections (this step is symbolised by a triangle – a triangular connection chart) In this step, each function/area/activity involved should be studied and noted in a connection chart. The functions should be described in sequential order, which provides a certain classification. Then, the desired closeness between each function is to be decided. The desired closeness is noted in the connection chart with one of the codes A, E, I, O or U, which describes a scale from “absolutely necessary” to “not necessary”. The reasons for this evaluation are also noted in the connection chart, thus enabling later follow up. The result from step 1 is thus a connection chart that states which functions need to/should not be close to each other and why. 2. Establish functional demands (this step is symbolised by a square – for space in square meter and demand for service) In step 2, the area for each of the mapped functions should be decided and noted on a special form together with special demands on constructional design (roof height, roof load, floor load, and pillar index), media need, service, and equipment. The result also gives the need for space, shape of area, and area type for each function based on how it is to be used.

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3. Line functional connection (this step is symbolised by a star – for charts that connect functions at different points) Step 3 is about drawing on paper how the different functions are to be visually linked together based on the evaluation of demands for nearness that has been done in step 1. This is done by linking functions with a different number of lines depending on the demand for nearness, for example absolutely necessary (A) gives four lines, E gives three lines, I gives two lines etc. The process starts with the A connections and proceeds in falling order of nearness demand. The connection chart is iterated until all functions are located as well as possible. At that point, the necessary floor area for each function is calculated. 4. Draw alternative master plans (this step is symbolised by a circle – the lined solution is adjusted) In step 4, the identified space requirements for all functions are geographically grouped to scale on a checked paper. Also all construction technical preconditions have to be noted. A successful master plan is essential for the final detailed design. It is thus necessary to make a few alternative and practical feasible master plans that can be compared in step 5. Different solutions for product and material flow may be the starting point for producing different alternatives. 5. Assess the different alternatives (this step is symbolised by a hexagon which refers to assessment from different perspectives, evaluation of all factors) In the fifth step, the different layout alternatives are to be assessed, see Table 8.6 below. This is about assessing each alternative for a number of factors that have been identified as important for the final layout proposal. Criteria, that are to act as a starting point for the assessment, are identified and weighted based on its relative importance for the efficiency of the suggested solution. Examples of criteria can be: flexibility, availability, flow etc. In the example in Table 8.6, flexibility is considered to be much more important than for example low investment and is therefore weighted with 6 compared with low investment which is weighted 2. Each alternative is then assessed regarding each criteria from an assessment scale if the proposal is absolutely perfect (A = 4), efficient solution (E = 3), interesting solution (I = 2), ordinary solution (O = 1), unimportant (U = 0), and unwanted (X = –). The assessment of each alternative and criteria are multiplied by the criteria’s own weight and all weighted figures are summarised for each alternative. Alternative A provides for instance an interesting solution regarding flexibility (I = 2) which is multiplied by the weight 6 giving the total sum of 12. In that way, relevant figures on how each alternative performs regarding the chosen assessment criteria are produced. If assessment criteria were identified, together with a relevant weighting, and correct assessment of alternatives were made, the proposal that has been appointed the highest total score is the best.

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Table 8.6 Example assessment chart ASSESSMENT CHART Assessment of alternatives A, B and C

Assessment scale

1. Each assessment criteria is weighted. 2. Each alternative is assessed by means of the assessment scale (A–X) 3. Summing-up of weight and assessment provides a sum for each alternative Assessment criteria 1. Flexibility

Weight

Alt. A

Alt. B

Alt. C

6

I/12

E/18

E/18

2. Availability

5

A/20

B/15

A/20

3. Rational flow

8

X/-

I/16

I/16

4. Efficient utilisation of floor area

4

I/8

A/16

O/4

5. Low investments

2

0/2

0/2

I/4

42

67

62

SUM

A = Absolutely perfect = 4 E = Efficient solution = 3 I = Interesting solution = 2 O = Ordinary solution = 1 U = Unimportant = 0 X = Unwanted = -

Note

6. Design the chosen plan solution in detail (this step is symbolised by a rectangle – sketch or drawing of final proposal) During the final stage of the methodology, the chosen layout is drawn and machinery and equipment are clearly marked on the drawing. Details that need to be fitted are investigated and adjusted if necessary. Construction details are checked, as well as door clearance, transport paths, pillar spacing, etc. The final detailed plan can then be used as the basis for carrying through the project.

8.4.2 Planning the Layout Earlier empirical studies indicate that the layout is not only used as a useful and valuable tool for designing production systems (see e.g. Bellgran 1998). The layout constituted in some cases the starting point for the work by systems designers and thus it was used for designing the production system. The reason for focusing on layout planning can be multiple: • developing a production system is not defined as a process, which makes it easier to start from a concrete layout; • layout planning provides a concrete, fast and visual result. This can be compared with the development process, which in itself is a more abstract expression for developing production systems;

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• it is advantageous to communicate, discuss, and simulate different solutions based on the layout since it provides the possibility to visualise; and • the investment decision often demands a layout describing the proposed production system. An important aspect, when using the layout as a tool, is the ability of systems designers, operators, decision makers, and other persons involved to read and translate a, usually, two-dimensional layout into how it will be realised in reality (Bellgran and Öhrström 1995). Transforming ideas from an abstract layout proposal into a real solution with the purpose to analyse, evaluate, and improve the solution demands a certain experience and competence. This aspect needs to be taken into consideration when selecting members in a development project team. If for example operators are to take an active part in the development work, they also need to be properly trained in reading and understanding a layout. Giving opinions based on a layout proposal with different status, all the way from an initial sketch to a rather finished layout, is a common way for the project team to get feedback from the operators. When the task to develop a production system is regarded as layout planning, the view of the task is different than when developing the system based on a process approach. The latter situation facilitates the use of a layout as a tool for creating and testing different alternative solutions, both at conceptual level as well as at detailed level. If layout planning on the other hand is regarded as the objective of the activity rather than a mean, one should also be aware of the possible risks: • the production system is not given a comprehensive view; • layout planning starts too early in the development process, thus increasing the risk for making a mediocre pre-study; • conditions and limitations have not been thoroughly identified and analysed thus resulting in difficulties in writing a relevant specification of requirements; and • it is easier to forget abstract issues than to forget machinery since they are easier to illustrate on a layout. A consequence might be that organisational solutions in the production systems are omitted since they are not as visible as the technical equipment. A relevant question is how far can you go by creating mental abstractions of the object/system that is to be developed. Other tools and methodologies may be advantageous when visualising and testing different systems solutions on a more concrete level, such as functional models and prototypes, but also simulation tools. A common way, often used in industry, to test less complicated systems is to cut out functions (e.g. machinery, equipment, warehouses) to scale models and test different possible locations on a layout in order to determine the best solution (Bellgran and Öhrström 1995). There are also examples where test stations are built up in order to test the detailed layout. There is always a risk that the layout is regarded as an objective rather than a mean for illustrating different solutions. On the other hand, if the layout planning

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does not take place until most of the preparatory activities are finished and the demands have been specified, the risk of creating systems alternatives that do not match the conditions is reduced.

8.4.3 Work Studies In order to be able to perform detailed planning of a production system, work studies are relevant. Work studies systematically study factors affecting efficiency and economy in a specific situation in order to identify improvements. Work studies involve both methods study and work measurement for investigating human work in all aspects. Method studies focus on establishing methods and activities that are to be included in a work task (Slack et al. 2001). A method study contributes directly to job design. It is a systematic approach specified in six steps (Slack et al. 2001): 1. 2. 3. 4. 5. 6.

choose the work for the study; collect all relevant facts on the actual method; examine facts critically and in sequence; develop the most practical, economical, and efficient method; implement new method; and sustain the method by periodically investigating its use.

The other part of the work study, work measurement, is often used for evaluating alternative work tasks from a time perspective. In work measurement, the time it takes to carry out a task is measured. There are several different techniques for time planning of work. The final result is a standard time, measured in standard minutes or standard hours (Slack et al. 2001). Taylor started to develop methods for work studies at the beginning of the twentieth century. The Gilbreth couple developed the Taylor methodology further into what is now called Method-Time-Measure (MTM). The methodology is based on a system where each manual work operation can be split into a number of basic movements that are either performed by arms or by hands, fingers, eyes, chest, legs or feet. Each basic movement is assigned a certain time in a special time unit, the Time Measurement Unit (TMU), defined as 1/100,000 hour (Sandkull and Johansson 2000). On the basis of these basic movements, it is theoretically possible to time set a work task.

8.4.4 Detailed Design of Work and Work Place When designing each specific work place, both the technical, work organisational, and work environmental aspects are tied together at a concrete and practical level, see Sect. 8.3. The work place should balance the demands that the work tasks

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include, with the abilities each individual has to fulfil the tasks. It is about creating good work conditions for individuals who have different abilities and to see that everybody can do their work tasks maintaining high quality and productivity. Conditions, such as ethnicity, sex, age, and disabilities, need to be considered to create a good physical and psycho-social work environment. The specific operation and the work tasks to be done are the very centre when designing the work place. If for example work tasks are about providing material to several machining centres and to control and survey the machining processes, the basis for designing the work place is different than a work place for manual assembly of subsystems for a larger product. Figure 8.20 illustrates a manual work place for assembly of chain saws at Husqvarna AB. Instead of assembling on a work table, the saw is mounted at a fixture. Initial material is placed on a material trolley and in boxes on shelves close to the location of the assembly operations. The work place is designed to have room for the necessary material, as well as equipment and auxiliary devices such as power screw drivers. Roller conveyors are being used to move the products to and from the work place. This releases the operator from the line. Three larger boxes in different colours for assorting different types of scrap and combustible material are also found at the work place. Mårtensson (1999) presents a number of criteria, linked to work demands, that are relevant to consider when designing the work organisation for a production system, see Table 8.7. The table content could be considered as a checklist to ensure that the work organisation really supports the production operations in a good way. A good or a bad work organisation and work environment affect the personnel’s and individual’s motivation, well-being, and work pace. This, in turn,

Fig. 8.20 Detailed design of a work place in an assembly system (Photo: Mario Celegin)

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has consequences in many areas, not the least on employee turnover, sick leave, and productivity. The table completes Table 8.3 where different aspects to consider when designing work organisation were presented. When designing a production system including work organisation, it is all about giving the best possible conditions for each individual to carry out his/her work tasks. Knowledge and skills of each individual need to be taken care of. In today’s and future production systems it is equally important to be able to carry out the actual work tasks, as it is to work with problem solving in order to continuously improve ways of working, methods, and machinery/equipment. The work is a continuous learning process and strategies for knowledge transfer and learning are important components for companies that regard production as being a successful competitive means. The mindset of each individual and the ideas involved in the company culture is another important issue when creating an efficient production system. The employee’s attitude towards the work has consequences from all aspects in a manufacturing company. Each of the factors around the physical, ergonomic, and psycho-social work environment, as well as factors concerning work organisation, constitutes a specific problem area with substantial national and international research as a base for knowledge development. This book does not claim to be state-of-the-art or a handbook for how to proceed. But we want to point out the extreme importance of developing both work organisation and work environment in parallel, or rather integrated with the development of the technical system. It is very easy to focus on Table 8.7 Work organisation: requirements and criteria for the design of the work task (Mårtensson 1999) Requirements

Criteria

Versatile work content

The individual should plan, perform and monitor his job which will become a well-defined part of the process

Responsibility and participation

Individual/group responsible for the whole task Participation in design process

Information processing

Planning of one’s work Provide appropriate cognitive activity in new situations, e.g. problem solving followed by decision making

Influence on the physical work performance

Work pace is only temporarily controlled by the process Possibility to influence choice of methods The work permits moving within the department and variation in the pattern of movements Possibility to leave work place for short periods

Contact and cooperation

Verbal and visual contacts with at least one person Contact with colleagues in other departments Opportunities for team work

Competence development

Level of qualification acceptable to the individual Personal knowledge is utilised in more qualified work tasks Continuous training

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technology, since it is more visible, involves major obvious and short-term investments, and perhaps concerns the knowledge area that is closest to many of the systems designers in the project team, who mostly are engineers. More activities from other work categories, such as cognition and psychology would perhaps lead to a deeper discussion on work organisational and work environmental issues in connection with designing a production system. The discussion around the enormous success Toyota has had with their production system and the importance of how to think and act also leads to an increased insight into these issues, which is a positive trend.

8.5 Systems Solution The final result of the specifying development work on a conceptual and detailed level is a description of what the production system should look like, a systems solution. Depending on who should realise the system, it may look different and be variably detailed. The systems solution is the most important engineering design document, which defines the system’s functional platform and includes results from earlier phases (Blanchard and Fabrycky 1998). The systems solution includes different types of documents, descriptions and investigations on technical solutions, work organisational and work environmental solutions, work instructions, drawings and layouts with different resolution. Training plans for operators in the system are also an important part of a comprehensive systems solution. If suppliers are to be contracted, specifications of requirements and formal agreements with thorough guidelines according to standards are written. Experiences from industry show that previous solutions are often copied, not least on a conceptual level, in terms of technology and work organisation. It has also been shown that the production systems often have a much longer life-cycle than was originally intended. It is, therefore, of outmost importance how they are designed. It is good if existing concepts can be re-used together with equipment and software. It should, however, always be suitable to the company and to the specific production system that is being developed. A thorough pre-study is the foundation for choosing the right systems solution and a well-described systems solution provides the best conditions for the next phase of the work, the realisation.

Chapter 9

From System Solution to Production System in Operation

Abstract When design and evaluation of a production system is concluded, the implementation remains. The system solution from the previous phase is used as a foundation during the implementation. The actual implementation is, together with the design, critical for the final result; a production system in operation. Implementation involves both realisation and start-up. According to experience there are several things that might be problematic during start-up, therefore it is important to consider these aspects during planning and realisation of the startup. When start-up is completed, evaluation of the result remains. This activity is essential, both to secure goal fulfilment and to facilitate long-term development capability.

9.1 Implement Production Systems The result from the accomplished design and evaluation activities is a system solution describing how the production system looks. The next part involves implementation of the system. Implementation consists of the realisation, planning, and start-up, see Fig. 9.1. In parallel with the building of the production system (Phase F), planning of the start-up is carried out (Phase G). The result from the realisation and planning is a physical production system, and a plan for the start-up. When start-up is carried out, evaluation of the production system should be carried out. Start-up of the production system is the final activity before volume production. As a consequence of, among other things, shorter product life-cycles the requirements for rapid development and start-up of production systems increase. Irrespective of whether the product concerned is entirely new, or a modified existing product, time is often critical. Besides the fact that the market window when the product has to be available is small, there are additional arguments for rapid implementation. Primarily it is about using available resources efficiently, and M. Bellgran, K. Säftsen, Production Development, © Springer 2010

231

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9 From System Solution to Production System in Operation

REALISATION AND PLANNING Phase F

Phase G

Build production system

Plan start-up

Physical production system

START-UP Phase H

Carry out start-up IMPLEMENT Realisation and planning

Start-up

Phase I

Evaluate the result and the way of working

Production system in operation

Fig. 9.1 Implementation concludes the production system development process

reducing the need for overcapacity in other facilities. Efficient start-up can, for example, be achieved through careful planning and control. Careful planning can also contribute to a problem-free start-up. There are quite a few empirical experiences about what types of problem might appear during start-up. Careful preparation for facing these problems, how to avoid them or at least how to handle them, can facilitate the start-up. Start-up of production systems is, for example, treated within product development literature. Preparatory work with production is described as parallel with various engineering design and market activities, which also was described in Chap. 5 (see for example Andreasen and Hein 1987; Ulrich and Eppinger 2000). Here, the importance of early planning of start-up is emphasised, however the mode of procedure is not focused on to any larger extent. Neither are aspects affecting time and quality, which on the other hand have been investigated in connection to start-up of assembly lines (Almgren 1999). There have also been studies carried out where experiences from several different start-ups were reported (e.g. Johansson and Nord 1999; Berglund et al. 2001). Despite the fact that production systems generally involve large investments, knowledge concerning realisation and start-up is still poorly documented. It is not enough to focus on the design of production systems, the implementation of these systems is a question that also needs elucidation. Since the terminology used to describe start-up and the thereby associated activities is not entirely unambiguous, we start with a description of the meaning of various concepts. Which concepts you choose to use is not critical, the most important is that the chosen concepts are well communicated to make sure that it is clear what is intended. In a project where a new production system is to be developed, it is essential that everybody within the product organisation agrees on the included phases. It is also required that a common terminology is applied within the project. A common understanding of the concepts used is furthermore, as we previously pointed out, a prerequisite for deeper understanding.

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9.1.1 Terminology To make the meaning of the concepts, associated with production start-up, clear, two perspectives are used. It is suitable to separate preparatory activities, ideally carried out in parallel with product development, from activities carried out associated with the actual start of production (SOP), see Table 9.1. The concepts are partly overlapping since the preparatory activities gradually grow into the actual start of production. Table 9.1 Brief explanations of terminology associated with production start-up Terminology

Brief explanation

Product introduction, industriali- Involves the transfer from engineering design to production, sation, methods planning includes those activities required to make the product manufacturable and to prepare production Production start-up Production ramp-up Pre-series production Serial production

9.1.1.1

Involves all activities needed from when a production system is realised until it is in operation A successive increase of the production rate until planned targets, e.g. on volume and quality are reached Production of for example prototypes, not intended for customers Production of products intended for the customer

Product Introduction, Industrialisation and Methods Planning

The preparatory activities associated with production, carried out during product development, can be called product introduction (Johansen 2005). The purpose with product introduction is to adapt product and production system to each other, and involves activities all the way to volume production, see Fig. 9.2. A lot of these activities can be carried out with support from designing, building, and analysing prototypes. The result from this pushes the product and production system towards the final result, which is volume production (Johansen 2005). The prototypes made during product introduction that are engineering prototypes aim at validating the product, while factory prototypes aim at validation of the adaptation to production and of the production process. A concept which is used more or less synonymously with product introduction is industrialisation. Industrialisation also involves those activities carried out in order to make the product possible to produce in planned volume to the customer. Industrialisation aims at: • manufacturable products, i.e. to secure that the product is adapted for production, assembly, etc.; • selection and design of production process, i.e. determine what production processes are suitable/necessary, and how to design and combine these to allow production of the product as efficiently as possible; and

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• secure production, i.e. secure that components are available in the right volume, with the right quality, and at the right prices during the products length of life. The third similar concept handling activities in the transfer between engineering design and production is methods planning. The activities associated with methods planning aim at making the product possible to produce, and to prepare the reference documents for production. According to Olhager (2000) methods planning involves: • • • •

design reviews; make or buy decisions; determine and plan the production process; and calculate operations time, i.e. calculating piece and set-up time.

As we can see, product introduction, industrialisation, and methods planning more or less are synonymous concepts which can be used interchangeably. 9.1.1.2

Production Start-Up and Ramp-Up

Today, several different concepts are used to describe those activities carried out after the production system has been realised until production is carried out with the speed and quality that is desired. We can use production start-up as a gathering concept for pre-series production and production ramp-up. Production ramp-up is the concluding phase in the model for product development presented by Ulrich and

Conceptual design Engineering prototype 1 Engineering prototype X Factory prototype 1 Factory prototype Y Ramp-up production Volume production Fig. 9.2 Different types of prototypes during product introduction (Johansen 2005)

9.1 Implement Production Systems

Pre-series production

235

Ramp-up

Start of production

Production

Time

Production targets

Production start-up

Product and production problem Production tact

Fig. 9.3 Production start-up and ramp-up

Eppinger (2000). In a similar way, Clark and Fujimoto (1991) refer to pilot production, start-up, and ramp-up of production as the concluding activities of product development. Pre-series production and production ramp-up can be further described if we use the notions start of production and production targets (Almgren 1999; Johansson and Karlsson 1998), see Fig. 9.3. Start of production means that produced products are aimed at customers. Production targets represent those objectives initially formulated by the company for production of the specific product. All activities, from pre-series production until the production targets are reached can be called production start-up. Production ramp-up involves production of the product in the intended production system. In Fig. 9.3, production ramp-up is initiated after start of production. It is also possible that ramp-up is initiated before start of production (Ulrich and Eppinger 2000). This can be necessary if the personnel were not trained during pre-series production, or if the production system is not entirely verified. Here, we can see that the concepts product introduction, industrialisation, and methods planning overlap with production start-up, since pre-series production also can include, for example, test series with engineering prototypes and factory prototypes. Important to note is that those involved in the activities, during different phases, and in different ways, know what is expected and what activities are included. Therefore, it is essential in every project to make clear what is included in each activity respectively.

9.1.2 Different Start-Up Situations When starting up a production system, the former situation is essential to consider. It is relevant to differentiate between introduction of an entirely new product and of an existing, but changed product. Several of the activities carried out are similar, but the difficulties are of different character in the two situations. When a new product is introduced, there is no experience and knowledge available concerning

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Fig. 9.4 A model for classifying different production start-up situations (Almgren 1999)

most complex

new

Product

modified

existing existing

modified

new

Production system

how to produce it. When an existing, but changed, product is to be introduced production experience is available. On the other hand, in this situation you have to consider possible ongoing production instead. A production system ready for start-up is the result of a design process. Dependent on the degree of change in the product and the production system, the production start-up will be more or less complex, which Almgren (1999) illustrates as in Fig. 9.4. The most common situation is that the production system to start-up is a modified version of an existing production system, since the starting point for system design is often the existing production system. The judgement whether a product or a production system is new or modified is based on what was available within the company before the change. Dependent on where in the matrix above the situation fits, the production start-up is expected to be more or less complex. There are differences between various businesses in how they choose to work with industrialisation, or product introduction. It is not a matter of course that industrialisation is done by the own company. Two businesses with relatively high degree of outsourcing, the electronics industry and the car industry, have different solutions (Johansen 2002). Within the electronics industry it is common that the product owner focuses on concept and product development and leaves the responsibility for product introduction, volume production, and delivery to the end customer, to a producer. This is based on the fact that separate companies, specialised in industrialisation, participate in various forms of corporate networks where they contribute with this specific competence. One example of a company focusing on industrialisation is Flextronics, see below. INDUSTRIAL EXAMPLE: INDUSTRIALISATION BY FLEXTRONICS When Flextronics was no longer contracted to produce Sony Ericsson’s phones, in the autumn of 2002, this was the end of volume production of mobile phones in Sweden. Today, Flextronics works with several different product owners, not only Sony Ericsson. Flextronics sells industrialisation, they secure that designed products are possible to produce. Turnkey production lines are made, for further shipping to plants in China, Malaysia, etc. With the frequent and rapid model changes characterising the business today, time is too limited and therefore the production lines are designed for manual assembly. Furthermore, the engineering designers at Sony Ericsson do not have time to focus on design for assembly, according to one of the managers in Flextronics. When the production lines developed at Flextronics are

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ready for delivery, personnel from the receiving plant come to Flextronics to train on the new phone. Personnel from Flextronics in Sweden accompany the production line to its final destination and make sure that everything is working according to plan. Source: Ny Teknik, Wednesday 7 April, 2004

A corporate network, as described above, can for example consist of product owners, producers, and suppliers of components, material and equipment. This type of network has become more and more common concurrently with the increasing outsourcing trend. If we compare the electronics industry and the car industry, we can see that it is more common in the car industry that the product owner also carries out the industrialisation, the volume production, and the delivery to the end customer by themselves (Johansen 2002). A more thorough discussion of outsourcing is provided in Chap. 12.

9.2 Building Production Systems The actual building, the physical realisation of the production system requires a great deal of planning and preparatory work. The starting point for the realisation is naturally the system solution. Already during the detailed design of the production system, questions concerning the realisation were taken into consideration. Identified potential problems have been handled as far as possible. Realisation of the production system largely involves acquisition and installation of technical equipment. However, the need for securing the operation should not be forgotten. Training of personnel such as operators, production engineers, and maintenance personnel is also important. For the manufacturing company the choice lies in whether to buy a complete system, parts of a system, or to build the system by themselves. Irrespective of the chosen alternative, it is likely that some equipment has to be acquired. When a decision is made concerning what to buy, the next step is to contact possible suppliers and get offers. In the offer, besides the technical requirements on the equipment, a commercial and a legal part should also be included. Furthermore Johansson and Nord (1999) recommend that offers are brought in from two or three suppliers. The offers from the different suppliers have to be evaluated. When this is ready and the parts have been agreed, a contract can be formulated. Some important issues during purchasing are (Johansson and Nord 1999): • • • • •

to carry out careful evaluation of the suppliers; to keep the technical and the commercial part of the project separated; to regularly demand progress reports from the suppliers; to use well-defined methods for verification; and to keep track of all changes that occur during the project, and make sure that you agree on how to split additional costs.

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Before delivery, the equipment needs to be verified at the supplier’s premises. This provides an opportunity to discover and correct faults before delivery. What tests to carry out depends on what requirements the company has raised. The takeover test at the suppliers’ premises is one of those aspects that has been found to facilitate production start-up (Berglund et al. 2001). Before the take-over test, it is essential to think through what to test, and what the expected result is. This is about verification of the production system, i.e. to secure that the requirement specification is fulfilled. Tests to be carried out, before as well as after delivery involve a number of aspects such as, for example, function fulfilment according to specification, tact and cycle time, availability and set-up times according to specifications, and a well-functioning man–machine interface. What to test naturally depends on the contract with the system supplier. On the basis of experiences from several manufacturing companies, Berglund et al. (2001) gave some advice for take-over of production equipment: • make sure that equipment that should work together actually works together; • use serial made parts, exactly the same as used in ordinary production, when running the take-over test; • run the take-over test as close to full speed as possible, since that provides a better idea about how the equipment actually works; and • think of which persons should participate in the take-over test, such as production engineers, operators, maintenance personnel, and the project manager. As soon as the equipment has been approved and taken over by the manufacturing company, it is time for installation. As soon as the production system is installed, full speed tests are performed. At this stage, it is usually more difficult to correct problems discovered. A number of tests are carried out to make sure that everything works as planned. This is also pointed out by Berglund et al. (2001) as important for a smooth production start-up. The full speed test requires planning, but is essential in order to make sure that everything works as planned before start of production. In connection with this, the concepts of delivery should be checked to see if the guarantee time starts running when the full speed test is approved. If parts of, or the entire equipment is bought from external suppliers there are certain things to consider to facilitate the start-up (Berglund et al. 2001). First of all, the right supplier should be chosen in ample time, to allow them enough time before the approaching start-up. To avoid surprises, it is recommendable to choose suppliers with experience of production start-up, and with good references. Other aspects to consider are the suppliers will and ability to customise the equipment when necessary, and the supplier’s resources. The supplier’s available resources are relevant for the judgement of whether they will be able to deliver on time. It is also relevant to assess the stability of the company. Not least important is the contact with the supplier, do they have an organisation facilitating a simple and smooth contact? A central question is of course the price label. However, it is important to not only look at the cost, but actually take into account what is included in the delivery as a totality (Berglund et al. 2001).

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It is also possible to choose the supplier before the requirement specification is formulated, which for example was described by one company in the 15-company study (Säfsten and Aresu 2000). The reason in this case was that the company did not consider themselves to have the required competence to specify and build the production system. One issue that has been shown to be crucial when choosing the equipment supplier is the established relation between buyer and seller. Whether the supplier has been able to show confidence is an important decision parameter. In several situations, also described in the 15-company study, the choice of supplier was based on a judgement of the supplier as such, and not primarily on the solutions they were to deliver. A question associated with the issues above is how much cooperation the manufacturing company intends to have with the supplier. Already in the foundation for the offer it should be made clear to what extent the manufacturing company wants to participate during the development of the equipment. It should also be made clear what is expected from the supplier in terms of installation, training, etc. In some cases it might be suitable to involve a supplier in the work with the requirement specification as a foundation for the offer request. Whether it is suitable depends on the prerequisites within the manufacturing company to prepare for purchasing. In parallel with the building or purchasing of the production equipment, planning and preparation for the production start-up should be made.

9.3 Planning and Preparing Production Start-Up The importance of planning and preparing for production start-up is often emphasised as crucial for a successful accomplishment (e.g. Berglund et al. 2001; Johansson and Nord 1999). The questions to consider during planning of the startup are of various characters. In a checklist for implementation of a new production system, the start-up model, management involvement, training, work organisation, and wage system is emphasised (Karlsson 1990). In another compilation of issues to consider before start-up we can find process choice and verification, cooperation with suppliers, time and resources and the human as a success factor (Berglund et al. 2001). It is about how the actual production start-up should be carried out, but it is also about the surrounding structure required to support the start-up. On the basis of this, a classification of aspects to consider when planning start-up has been made into: • start-up model; and • organisation and management.

9.3.1 Start-Up Model A suitable start-up model, describing the rate and the support given for the production system during the initial period of operation has to be adapted to the prerequi-

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sites given. If the actual production ramp-up is successful or not, depends highly on the capability of production and the conformity with the choices made concerning the actual start-up. Clark and Fujimoto (1991) suggested various strategies concerning: • how to handle the transition from production of an existing product to producing the new product (choice of ramp-up curve); • production speed, number of products in the system, and operation time per day (operation pattern); and • how to man the production system (workforce policy).

(a)

Time

Production rate

Production rate

Production rate

During production ramp-up the transition from existing production can be done in two ways. The existing production can be closed down before the new production system is taken into operation, or the existing and the new production system are overlapping, see Fig. 9.5. The grey parts illustrate existing production, and the black parts new production. The alternative to close down existing production before the new system is taken into operation is relevant when a new or upgraded product is to replace an existing product, and where the production system is new or existing (Almgren 1999). Regional differences have been found concerning the preferred alternative. Clark and Fujimoto (1991) claims that alternative A (shut down) is common in Europe and USA. With this simple alternative you do not have to mix production, on the other hand there is a risk that you get production and sales losses. Alternative B (mixed models, existing system) is more common in Japan, and this alternative requires more efforts in coordinating material supply, work tasks, and planning. Alternative B appears when an upgraded product replaces an existing product in an existing production system. Alternative C (mixed models, increased production rate) is when an upgraded product is produced in the existing production system, which results in mixed models and increased production rate (Almgren 1999). Both alternatives B and C reduce losses in production capacity to a minimum. How difficult it is to realise the different alternatives depends on the operation pattern and the workforce policies. Different operation patterns govern the production speed during ramp-up (Clark and Fujimoto 1991). The operation pattern involves three variables: production speed, number of products in the system, and operation

(b)

Time

(c)

Time

Fig. 9.5 Choice of ramp-up curve (Clark and Fujimoto 1991). a Shut down; b Mixed models, existing system; c Mixed models, increased production rate

241

Production speed

9.3 Planning and Preparing Production Start-Up

Number of products In the system

Time

Operation time per day

Time

(a)

Time

(b)

(c)

Fig. 9.6 Choice of operation pattern (Clark and Fujimoto 1991). a Adjusted production speed. b Adjusted number of products in the system. c Adjusted operating time

time per day, see Fig. 9.6. Depending on how these variables are combined, various prerequisites are achieved. Adjusted production speed (Fig. 9.6a) is a common strategy when starting up both labour intensive and machine intensive production (Almgren 1999). Here, the number of products per day and operating time per day is kept constant. In a similar way the production speed and operating time per day are constant when the number of products gradually increases in the system (Fig. 9.6b). If there is any time left with an adjusted operating time per day (Fig. 9.6c) it is possible to use it for other activities (Almgren 1999). The third choice that has to be made in the start-up model concerns the manning of the system, which is described by the workforce policy, see Fig. 9.7. The transition between the grey and the black field represents the transition between existing production and the production system under start-up. The choice of manning highly determines productivity and the cost of production during production ramp-up (Clark and Fujimoto 1991). The first alternative of manning (Fig. 9.7a) represents a situation where the workforce is variable. More personnel can be called in when required, and laid off when they not are needed. With a stable workforce (Fig. 9.7b) number of persons in production is constant. If not needed for operating the system, they can, for example, participate in training. This gives a high workforce cost, but it decreases in the long run as the production rate increases (Almgren 1999). The third and final alternative is a temporary increase of personnel (Fig. 9.7c). This provides an extra support to the personnel during start-up, who thereby can spend more time on disturbance handling, if necessary.

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Number of persons in the system

242

(a)

(b)

(c)

Fig. 9.7 Choice of workforce policy in the production system during start-up (Clark and Fujimoto 1991). a Lay off/call in. b Stable workforce. c Temporary increase

Also when it comes to operating patterns and manning, regional differences between Japan and USA/Europe have been found. In Japan empty hangers in the system are used (Fig. 9.6b) and some increase of workforce (Fig. 9.7c), while USA/Europe prefers to adjust the production speed (Fig. 9.6a) and lay off/call in (Fig. 9.7a), especially in USA (Clark and Fujimoto 1991). Start-up of assembly systems have been studied at Volvo Car Corporation in Sweden, with the ideas described above as one of the starting points (Almgren 1999). Among other things, the studies identified six principles supporting production start-up in an advantageous way. These principles are: • • • • • •

full speed; empty hangers; operating time; batch production; organisational support; and engineering deployment.

Among the above-mentioned principles, full speed and organisational support are said to be more important for successful start-up than the others (Almgren 1999). Full speed and organisational support are mutually dependent. If one of them is not applied, the effect from the other is reduced. The other four principles should also be applied together with full speed and organisational support to be really effective. In the following section the focus is placed on how to plan the organisation and management before a production start-up. Also discussion of the fifth principle, organisational support, is deepened.

9.3.2 Organisation and Management During production start-up, there is a lot to do to reduce and handle disturbances, in order to keep the time for start-up as short as possible. As we have seen earlier the organisational support is essential for smooth production start-up. To make this possible it is necessary to consider this already during planning. Almgren (1999) suggests temporary organisations during the start-up phase, formed when

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243

needed in areas particularly exposed to disturbances. The task for such temporary organisations is to solve problems, not to report problems upwards in the organisation. A further step is to place engineering designers in production during critical phases, above all during pre-series production. To emphasise the importance of production start-up for the success of a product project you should organise for start-up (Johansson and Nord 1999). It is important to appoint someone responsible for the start-up, likewise it is important that someone has a comprehensive picture of the entire start-up, see Fig. 9.8. Figure 9.8 illustrates a temporary organisation where one subproject is concerned with start-up. Here, you can also use the concept industrialisation to emphasise the activities parallel with product development. If the company has frequent projects involving start-up industrialisation you should consider the possibility to create a permanent part of the organisation dealing with these types of questions on a long-term basis. A crucial question is the manning of the subprojects, in the same way as manning of the overall production system development project. Management, both of the project and of the line organisation, has as always an important role. During start-up, management should be involved, supportive, and pushing (Karlsson 1990). In connection with this, several of the aspects mentioned for production development in general, are relevant to consider. Perspective and attitudes among management are decisive for several questions (Bellgran 1998). It is required that management supports the questions concerning production. It is also required that the responsibility for start-up is clearly articulated. Someone needs to keep track of the totality, make sure that objectives are fulfilled, and create daily plans to bring the activities forward (Johansson and Nord 1999). Production start-up is an activity that often involves internal as well as external personnel, which implies even higher requirements on clarity and communication. With a clear division of responsibility in each project, and responsibility for startup appointed, the work during start-up is facilitated, and the risk of missing things is reduced. Since a lot of people are often involved in a production start-up, communication is important. Therefore, Johansson and Nord (1999) suggest that a communication plan is established. Such a plan should include a description of relevant information, what media/communication channels can be used for different information, and who is to be responsible for what information. When plan-

Main project

Subproject engineering design

Subproject production engineering

Subproject purchasing

Fig. 9.8 Organise for start-up/industrialisation

Subproject start-up/ industrialisation

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ning the start-up the resources are critical. Above all, resources in terms of concepts of time and personnel have to be regarded (Berglund et al. 2001). To prevent a lack of time during and at the end of a start-up project, the involved personnel’s available time should be run-through before the project starts. As with most projects, it is worth spending more time in the beginning to avoid late changes. Berglund et al. (2001) point out that development and training/education are two activities that often require more time than initially planned for and, therefore, it might be of advantage to plan for some extra time. There are several activities that can be prepared before the start-up. Johansson and Nord (1999) suggest that the following tasks are completed well in time before start-up: • • • •

material supply; installation of peripheral equipment; installation and rebuilding of media systems, such as water and air; and education and training of involved personnel.

9.4 Carry-Out Production Start-Up When the production system is physically realised, it is important to reach full production speed as soon as possible. Several products have a short length of life, and the market window is small. It is crucial to be in place at the right moment, with the right volume.

9.4.1 Efficient Start-Up of Production Systems There are several arguments to why it is important for rapid and efficient start-up of production systems. Time is one of the strongest arguments. The possibility to affect the most critical time factors, such as time to market and time to customer, depends on several aspects since they are relevant during different phases of the production system’s life-cycle, see Fig. 9.9. Time to market is associated with development and introduction of new products. This means that activities during the product development process, methods planning, planning of production process, etc. precedes the actual start-up. Time to customer refers to delivery, or shipment, from the existing product assortment. In this situation the ability to rapidly start-up production can be relevant in case of possible disturbances and non-conformances in the ordinary planned activities. In the former situation, when for example a new product family is to be introduced, the start-up probably ends up high in the right-hand corner of the complexity matrix in Fig. 9.4. The latter situation can, for example, concern one part of the assembly system not working properly, which, therefore, is changed and restarted. In

9.4 Carry-Out Production Start-Up

Develop and introduce new products

Supplier

Shipment of existing product assortment

245

Product development Prognosis Methods planning Production process Stock Direct delivery

Production Assembly

Supply Distribution Transport

Detail planning Material planning Inventory control Sales and activity planning

TTM = Time To Market

Customer

TTC = Time To Customer

Fig. 9.9 Time to customer and time to market – related activities in the production system (based on Olhager 2000)

this situation we have an existing product and a modified production system, which represents a lower degree of complexity for production start-up. Besides the fact that you rapidly can get your products on the market, fast startup also implies that those involved are released sooner and thereby can start working on other tasks. Further, less capital is locked up since the need for overcapacity in other plants is reduced (Johansson and Nord 1999). Production start-up in controlled forms provides prerequisites for efficient use of resources. What happens during start-up is highly dependent on previous activities. Therefore, production start-up can be seen as a measure of value as to whether the production system development process is functioning. Comments such as “that can be fixed later” or “it will be OK” are not acceptable during start-up, since time is really critical. If a lot of problems occur during production start-up, in the worst case this may lead to a delay in product introduction, despite several years of work with product development. Therefore, it is essential to throw light upon and handle problems which might affect the start-up during the entire development process. One of the consequences of not doing so is illustrated in terms of lost production in Fig. 9.10. Questions of particular interest according to Johansson and Nord (1999): 1. How to design a production system in terms of work organisation, training, production speed, and methods for start-up to facilitate rapid start-up, etc.? 2. How much can be spent on production start-up, and still be financially defendable? 3. What is the effect from the products manufacturability on the start-up? Where the cost of production start-up is concerned, Johansson and Nord (1999) state that there are investigations showing that the potential life-cycle profit is reduced by up to one third if the product is late on the market. Whereas if the product is introduced on time, but with an increased cost of 50% compared to plan, the life-cycle profit is only reduced by 4%. Accordingly, losing time can be very costly.

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9 From System Solution to Production System in Operation Lost production

Lost production Targets

Time

Concept Design Test Installation

Targets Number of problems Production targets

Number of problems Production targets

Start-up

Start-up

Time

Concept Design Test Installation

Fig. 9.10 Focus on the early phases is a prerequisite for efficient start-up (based on Johansson and Nord 1999)

9.4.2 Problems During Production Start-Up Consequences from various problems during production start-up are for example delays, higher costs, and worse performance than expected. When evaluating production start-up, emphasis is often put on aspects such as capacity, quality and cost (Almgren 1999). Capacity-related problems can often be assigned to machines, equipment, personnel and material supply (Johansson and Nord 1999). Another important aspect concerns the desired quality, and whether it could be reached during start-up. Quality-related problems can, for example, be assigned to the status of incoming material, competence among the operators and technicians, and product and equipment specification. Furthermore, Johansson and Nord (1999) describe that cost-related problems can be assigned to extra personnel, temporary solutions, and extra controls and inspections. The problem situation can be summarised as follows: the total amount of problems during production start-up depends on how well the company has succeeded with verification of the product, the production system, and the supporting structures. Problems during production system start-up should not be underestimated. Not only do the problems increase the cost and decrease the total production efficiency, they also increase the time required to get the product out on the market. Some examples of why problems occur during start-up are (Karlsson 1990): 1. Work organisational solutions are neglected, since these are not visible in the same way as technical equipment. 2. Misunderstanding among various personnel categories and departments, due to a lack of coordinating information about the production system.

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247

3. The own production system is perceived as unique, and therefore it is not believed to be possible to learn from others experiences (internal or external). 4. Lack of a common knowledge platform. Involved parties often have varying background and experiences, and therefore discussions in various groups may be carried out on various levels and not necessarily concerning the same question, due to misinterpretations. 5. Some problems during start-up have repeatedly been found, irrespective of country and company. All groups are started at the same time, instead of starting a few groups at full speed and with full support. The former implies that no norm is established for what full speed is. Knowledge is not transferred between the groups. A and B groups are formed, where the latter have a long period of training due to inexperienced operators. When a group-oriented organisation is introduced there are positive personnel and opponents (the latter may be insecure or getting worse work tasks with work integration). 6. Lack of information concerning the implications of the new production system for various personnel categories. 7. The management involvement decreases after the development activities are completed. 8. Incorrect education/training (associated with tempo, time perspective, allocation between theory/practice, etc.) A couple of good pieces of advice to reduce the problems during start-up are given by Karlsson (1990), suggesting that all personnel who either directly or indirectly are affected by the changes should be given some fundamental education early. A common knowledge base about alternative production systems facilitates discussions in work teams and project teams. It is also of advantage if involved parties get an opportunity to discuss matters with neutral experts from outside the company. Yet another piece of advice concerns the consequences of the learning curve when starting up a new production system, see Fig. 9.11. People tend to learn more slowly at the end of the learning curve, which is yet another argument supporting the appropriateness of running production at full speed from the beginning. Furthermore, possible faults in the new system are displayed earlier and correct norms concerning the work pace are established from the beginning. Work pace

Correct curve

Faulty curve

Fig. 9.11 Correct versus faulty learning

Time

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9.5 Evaluate the Result The final phase of the way of working (Phase I), before the production system is in operation, describes evaluation of the result. Related to development, it is relevant to evaluate both the result from the development activities, in this case a production system, but also how the work with development has proceeded. In the following both these perspectives are elucidated.

9.5.1 Evaluation of Production System After Start-Up The development activities are concluded and the resulting production system is in operation. Now it is time to evaluate the physical system. It is natural that the final production system is affected by the activities carried out during the realisation. The built up and realised production system should be in accordance with the system intended according to the specified system solution. Nof et al. (1997) point out that the success of a production system depends on the transition from the specified system solution to the realised, working production system. In several of the studied companies, evaluation after start-up was only carried out to a limited extent (Säfsten 2002). When a supplier-driven approach (see Chap. 5) is used for the design process, and the manufacturing company for example purchases a turnkey production system, the final full speed tests are described as an essential part of the evaluation after realisation. When the design process is concept-driven or concept-generating (see Chap. 5), evaluation is more often carried out during the design process. Here, good knowledge of the production system’s performance is perceived, and evaluation after start-up is carried out less often. Working through the design process in a relatively structured way, provides a feeling that you know the resulting system. However, there is still a point to control how the final system actually came out, and how the process to get there proceeded. Evaluation of a production system can be done from a user perspective, from an owner perspective, or from a customer perspective. Users, owners, and customers are all interested parties to the production system, who both can affect and be affected by the production system. Understanding this makes the interested parties view on the production system relevant during its entire life-cycle. Thus, it can be relevant to carry out an evaluation from the perspective of the interested parties (Karlsson 1999). For such an evaluation all interested parties need to be brought together to form an opinion of the production system. One starting point might be the overall objectives of the system, and advantages and disadvantages for the different interested parties. Evaluations from the perspective of the interested parties provide a comprehensive view of a production system from the perspective of all interested parties. It can also be of advantage to only choose one perspective and carry out a user evaluation. This is a variant of evaluation from

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249

the perspective of the interested parties but with just one interested party, i.e. the user (Karlsson 1999). Also in this case, the focus is on the overall objectives of the system and the user’s preferences. The production system’s transition from development to operation plays some role in the evaluation, both concerning who is doing the evaluation and what to evaluate. When the production system is handed over to the line organisation, the involvement from the development organisation decreases rapidly. Thereby, it is the task of the line organisation to make sure that the production system has the requested capabilities. This is a validation of the system, a check if the system can satisfy the initially identified need, i.e. if it is the right production system. When the production system is in operation, continuous follow-up of the system performance is initiated with the company’s overall measurement system, if available. Data so obtained can be used when evaluating the existing production system. In a similar way it is possible to allow the continuous follow-up to be a part of the evaluation after start-up. However, it is suitable to combine this with additional aspects since the continuous follow-up does not always involve all relevant aspects from the development process. Furthermore, the possibility to make use of the experiences gained during the development process might be lost. Thus, it is not possible to replace evaluation after start-up with continuous follow-up, but continuous follow-up can be complementary. It may not be possible to evaluate some of the requirements initially raised on the production system until the system is handed over to the line organisation. The development organisation has to make sure that it is possible to realise the requirements when the system is in operation, and they also have to make a plan for the follow-up. This provides prerequisites for evaluation after start-up.

9.5.2 Prerequisites for Evaluation After Start-Up It can be concluded that evaluation after realisation has low priority. Several of the studied companies state that evaluation is important, however just as many state that they usually do not evaluate a realised production system (Säfsten 2002). Reasons for not evaluating are lack of time and limited knowledge on how to do the evaluation. When production system development is part of a product project, the time schedule is often very tight. It is not unusual that the personnel involved in the production system development are already working fulltime on another project, even before serial production has started of the previous product. To make it possible to evaluate a production system after realisation and startup, some preparation is required, if we choose not to do a goal-free evaluation as described in Sect. 8.3. If the purpose is to control the level of goal fulfilment, planning is required. We have to, in advance, consider which parameters we think are relevant to evaluate, and make sure that we have possible comparative data available. It is necessary that evaluation is elucidated both during and after the

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development process. If not, there is an imminent risk that the advantages of a well-accomplished evaluation are lost. It is fundamental to follow-up to what degree the requirement specification is fulfilled. As mentioned in Sect. 8.3.1, the often prevailing uncertainty is a problem, since changed circumstances often call for changes in the requirement specification. If the requirement specification is to function as a useful tool during evaluation of a production system after realisation, it has to be continuously updated at the same rate as the circumstances change. The requirement specification often has low dignity after realisation. Also in companies where requirement specifications were formulated before the development process, one of the reasons mentioned to not evaluate after the change was that they didn’t know what to evaluate against (Säfsten 2002). The requirement specification ought to be a natural starting point. A general problem which significantly affects the possibility to carry out evaluations is that very little attention is given to the three main issues of evaluation: the evaluation object, evaluation criteria, and the use/purpose of the evaluation (Åberg 1997). The evaluation object, the production system, is only briefly described in various evaluation situations. The second problem is associated with the valuation. Various measures are reported in various companies; however, it is not certain that these measures are in accordance with the companies’ overall objectives and the intentions with the production system. Things are measured because the company is used to measuring a particular measure or because it is easy to measure, which means the chosen measures do not always reflect relevant aspects of the production system. The third problem is associated with the use of the evaluation. Evaluation, just as other parts of the development process, is seldom described as a means to achieving successful production systems. Evaluation after realisation and start-up thus requires: • planning; • allocation of responsibility; and • utilisation of given opportunities.

9.5.3 Analysis of the Development Process One of the introductory remarks in this book was the need to focus on the production system’s development process, to adapt a process perspective. This idea was further elaborated on in Chap. 5, where we discussed how to bring experiences from completed development projects back to the development process. Provided that the development process for the production system is considered as a valuable process for the company, in terms of contribution to identity and success, there are many reasons to analyse and develop the process as such. The importance of not over-elaborating less important processes was, however, emphasised by Keen (1997), who also arranged the processes based on their importance. Most impor-

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tant is the identity process which defines the company, differentiates the company from its competitors, and represents the heart of the company’s success. Thereafter is the priority process, described as the engine in the company’s efficiency. The priority process decides largely how the identity processes are carried out and how the company remains related to competitors. The background process is necessary as a support for the daily business, and usually involves several administrative processes. Background processes are core in the daily business but it is a mistake to let them be the focus. At the lower end Keen (1999) describes the mandated processes which are carried out since they are imperative, maybe due to legislation, and seldom value adding. Finally, folklore processes are described as being carried out through habit or rigid tradition. Folklore processes do not serve any purpose and do not add value. The company must consider product realisation as an identity process, and production as an essential part of this, if the development of the production system should be considered important. When overhauling processes, Ljungberg and Larsson (2001) suggest two levels: • process revision: an overall review and judgement of the process; and • process analysis: a more detailed and situation specific run-through of the process. During process revision the focus is on process maturity, see also Sect. 5.5.2. A number of yes/no questions are posed, aiming at giving an overall review. The following questions are for example relevant during process revision of the production system’s development process (based on Johansson and Rydebrink 1996; Ljungberg and Larsson 2001): • Are the most important customers and their requirements and expectations identified? • Is the development process for the production system mapped? • Is the development process for the production system documented? • Is process owner appointed? • Is the development process for the production system observed when changes are carried out in the production system? • Is the process measured and updated regularly? Process analysis is more detailed, and may for example be carried out if a problem is identified within a process or when process orientation of a business is initiated (Ljungberg and Larsson 2001). Process analysis is situation specific; its content is determined by the situation in focus and the thereby given conditions. A good start is to decide the appropriate level of ambition and what resources are available for the work. There are several different methods to use for process analysis. Irrespective of the method used, some data are required. Ljungberg and Larsson (2001) suggest that the following is at hand: • process specification: overall description of the purpose, input, output, and effects of the process; • process revision: base for the understanding of the process and its context;

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• description of customer and interested parties: identified and understood requirements and expectations from customers and other interested parties; • process map: an honest picture of the process and its subprocesses, activities, input, output, resources, information, flows; and • measures for the most important capabilities of the process. Dependent on what is perceived as problematic, the method for analysis can be chosen based on what to place in focus. Methods to use for process analysis are for example value analysis and analysis with support from a process map. Other examples are bottleneck analysis and lead-time analysis (Ljungberg and Larsson 2001). If the development process for a production system has not yet been made explicit in the company, a first step might be to map the development activities. In order to not get stuck in functions, processes should be named as for example to develop production systems, or supply products. There are also tools available for self-evaluation of the company’s capability to realise a production system. An evaluation model for self-evaluation of the own company’s ability to plan and realise a new production system is described by Johansson and Rydebrink (1996), see Table 9.2. This might be useful in a concluding phase and the result can be used to improve the way of working the next time. Each criterion can be described based on four levels, where level 1 corresponds to a low level of maturity and level 4 a high level of maturity. It is possible to set a number to describe the level of maturity, or each level of maturity can be verbally described (for example from low to high, or from not at all/unstructured via relatively structured to structured and documented). To exemplify a base for valuation, we illustrate how process maturity can be judged from various criteria, see Table 9.3. The entire development process for the production system has thereby been described and analysed from a number of perspectives. There are several questions to think about, and a lot of affecting factors to take into consideration before the target is reached, i.e. an efficient and robust production system in operation. Our approach is that a structured way of working makes it easier to handle the complexity, and helps in identifying and above all prioritising between activities. Since the task of developing a production system is also a process, it means that it continuously can be improved. Making the process explicit, or developing an already existing process further, is a first step towards a better way of working already in the next development project. One of the key issues is evaluation and feedback of the result, in order to learn before the next project.

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Table 9.2 Self-evaluation of strengths and weaknesses when realising a production system (Johansson and Rydebrink 1996) PARAMETERS/CRITERIA COMPANY STRATEGY Recourses Supplier cooperation Clearness in strategy and policy Organisation characterised by… Focus PROCESS MATURITY Process, documentation Process, obedience Focus on early phases (pre study) Measurement, updating the process Comparison/Benchmarking PROJECT MATURITY Time required, % of man time Risk analysis on the project Follow-up/control group (or similar) Project management role Prioritising, resources and project Goal focus GROUP COMPOSITION Composition principles Functional integration of product development and line organisation Composition concerning competence and age Versatile for focused teams METHOD USE Number of methods mastered by the project group Method use, balance Method use, frequency EXPERIENCE AND LEARNING Experience building Experience usage Strategies for experience building Contemporary social and environmental coverage

Level 1

Level 2

Level 3

Level 4

Goal

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Table 9.3 Criteria for judgement of process maturity (Johansson and Rydebrink 1996) Level/criteria

Level 1

Level 2

Level 3

Level 4

Process, documentation

No

Partly, not over functional borders

Partly, not over functional borders

Yes, the process is spread all over the company

Process, obedience

No

Sporadic

Often

Always

Focus on early phases (pre-study)

Low

Varying

Strong, in terms of time

Strong, in terms of time and money

Measurement, updating the process

Never

Sporadic

Continuously without analysis and updating

Continuously with analysis and updating

Comparison/ Benchmarking

No

Yes, parts of the process

Yes, the entire process

Yes, benchmarking of the entire process

Chapter 10

Production System Performance

Abstract When the development process is completed and the production system is in operation it is essential to know how it performs. Production system abilities considered advantageous for companies are gathered under the notion world-class manufacturing. In this chapter world-class manufacturing (WCM) is initially described. The two main issues when it comes to measuring performance are what and how to measure. Some different performance measures are presented, both traditional and newer productivity measures, as well as different measures associated with possible competitive factors. Examples from industrial studies are given to illustrate some of the problems with performance measurement that manufacturing companies are facing. To conclude, different measurement systems are presented as a way to handle sets of measures and the continuous follow-up of production system performance. We also discuss some issues to consider during implementation of performance measures and measurement systems.

10.1 World-Class Manufacturing Over the last century, as industrial development proceeded, the idea of how to produce in the best way has varied. This concerns both the objectives to reach, and the how to reach them. Topical issues are for example the choice of production technology and the way to organise production. A notion used to describe the best way to produce is world-class manufacturing. The notion was first used in 1984 by Hayes and Wheelwright (1984) to describe the production abilities developed in Japan and Germany to compete on an export market. The meaning of world-class manufacturing was that a superior result for the manufacturing company was achieved by a certain line of action within different areas. Within six areas appropriate lines of action were described, see Table 10.1. A lot of things have changed during the last 20 years; despite that a study from 1999 shows that the framework suggested by Hayes and Wheelwright in 1984 is M. Bellgran, K. Säftsen, Production Development, © Springer 2010

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Table 10.1 Appropriate lines of action to achieve world-class manufacturing (Hayes and Wheelwright 1984) Area

Appropriate line of action

Workforce ability and knowledge

Extensive training Cooperation with technical institutes Apprentice programs Internal training programs

Technical competence among management

Managers with technical education Train managers in the company’s core technologies Rotate managers between functions

Compete with quality

Fit between customer requirements and product/process Long-term commitment concerning quality Importance of product design Involvement of all functions in product design and quality improvement

Participating workforce

Establish trust between staff in different functions and between staff and managers Routine, and close contact between managers and staff Formulate principles for participation to make sure that “all are there together”

Sustainable production engineering

Invest in appropriate equipment and competence Support the possibility of handling maintenance and continuous improvement through maintained production competence

Continuous improvements

Continuous improvements in small steps Continuous adaptation to changed customer needs

still valid (Flynn et al. 1999). In 1989 a study carried out in USA was presented (Dertouzos 1989). Six issues were identified as best practice among studied companies: • • • • •

focus on simultaneous improvement of cost, quality and delivery; closer contact with customers; closer relations with suppliers; efficient use of technology to achieve strategic advantages; functional organisations and less hierarchical levels to achieve higher flexibility; and • personnel policy supporting learning, team work, participation and flexibility. The content of these six issues should be regarded as mutually supportive. The insight that these issues should be regarded as a whole and not as separate improvements is what differentiates the best companies from the others (Dertouzos 1989). The above-described issues complement the lines of action described by Hayes and Wheelwright (1984). The former does not mention how to organise the company. Another difference is that Dertouzos (1989) points out how the company should act during contact with customers and suppliers, which is not men-

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257

tioned by Hayes and Wheelwright. In a later work by Schonberger (1996) 16 principles giving strength to industrial companies are mentioned. On the basis of these principles, the best practices presented by Dertouzos (1989) and the world-class areas of Hayes and Wheelwright (1984), we have developed a list of world-class parameters, see Table 10.2. The heart of the vision of world-class manufacturing is according to Black (1998) the fundamental belief in people and people in groups. A management style characterised by control makes it more difficult to achieve an environment stimulating changes and improvement by the production personnel. A setting which offers possibilities and authorisation to challenge and change procedures and processes is preferable. Companies making the most of, and focusing on, the human potential are those achieving the most success (Black 1998). A general conclusion is also that it takes time to reach the world-class manufacturing level. The process has to be carried out step by step as the evolution of the, today, very successful Toyota Production System shows. Table 10.2 World-class parameters WORLD-CLASS PARAMETERS Customer • Organise according to product family/ customer • Pay attention to customer, competition and information before actions • Continuous and fast adaptation to customer needs (quality, speed, flexibility, value) • Associate measures with customer needs • Produce close to customer and secure close customer contact

Production • Improve existing capacity before new equipment and automation • Reduce to a few of the best: components, operations, suppliers • Reduce lead-time, distance, set-up time • Look for simple, flexible, movable, cheap equipment • Reduce variations and defects • Compete with quality simultaneously with cost and delivery • Efficient use of technology to achieve strategic advantages

People • The work group collects and owns process data on the work place • Increased possibility to get reward, acknowledgement and salary • Continuous training • Key persons involved in changes and strategic planning • Affect primary cause to reduce internal transactions and reporting • Rebuild production engineering • Technical competence among management • Participating workforce • Human resources (HR) policy supporting learning, team work, participation and flexibility • Less hierarchical levels to achieve higher flexibility Marketing and supplier • Secure close relation with suppliers • Market and sell each improvement

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Successful Production Systems How do you achieve successful assembly systems and what makes an assembly system successful? These questions were two of several questions posed in the 15-company study (Säfsten and Aresu 2000). The answers depended, among other things, on the experience of the people answering the questions, their view on production systems and their personal opinion concerning what a good system is. The question generated answers concerning mainly three issues: 1. the required fundamental prerequisites; 2. what components/parts and abilities of an assembly system are required to make it successful; and 3. what the result is from an assembly system which is considered as successful. The three types of answer are illustrated in a way which associates them with the system theoretical input–output model presented in Chap. 2. In the resulting Table 10.3 a division has been made into technical and social aspects. Table 10.3 Characteristics of successful assembly systems (Säfsten and Aresu 2000) Result

Technical aspects

Assembly system ability

Good system suppliers Good component suppliers Modularised product Subassembly close to final assembly Good product design

Modularised process Short set-up time Re-use flexibility, general reusable equipment Standard systems Integration between assembly and other processes Assembly capacity in balance with the entire plant Coupled flows in balance Efficient materials handling Parallel process Free from disturbances, reliable Balance between subsystems through right dimensioning Different types of material supply possible Efficiency

Flexibility – product mix, volume Delivery reliability, precision, security Competitive prices Quality assured Fast assembly, limited time consumption Cheap Quality products

Social aspects

Fundamental prerequisites

Good work methods and work descriptions Competence development Wide learning Competent personnel Group organisation As little people as possible

Simplicity Visual, possible to overview Cleanness Rotation possibility Good control of the flow Responsibility for the totality Flexibility allowing personnel changes Good organisation

Work pleasure Work satisfaction Operator friendly Consideration for humans Healthy personnel

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As indicated above there are almost as many descriptions of successful assembly systems as there are manufacturing companies. A lot of aspects affect the apprehension of what a successful system is. A production system considered as successful in one company might not be considered as equally successful in another company or as one person in the 15-company study summarises the problem: “… there is no such thing as an ideal assembly system since the prerequisites vary ….”

With this knowledge the prospect of designing a production system adapted for the specific prerequisites in the own company are good. The ambition for manufacturing companies regarding production as a competitive mean is to have production systems contributing to success. What’s successful in one company might not be successful in another company, and what’s successful today may not be successful in the future. There are several aspects, such as for example the product, market, legislation, that affect the requirements on the production system, and thereby the criteria for a successful production system. If the objectives for the production system are associated with the company’s business strategy it is easier to realise the customer needs. This association can preferably be done with support from a well formulated and implemented manufacturing strategy, as described in Chap. 3.

10.2 What Should Be Measured? The overall goal for every company in a competitive environment is profit and a leading position, to achieve business success. On an overall level, performance can be expressed in terms of profit, return on investment (ROI) and other financial terms. Within a company, there are a number of functions contributing to performance. The production system can be one of several, direct or indirect, contributors to business success. There are several occasions when it is essential to be able to determine the production system performance, and its ability to fulfil the stated requirements. This ability depends on the qualities of the production system. Depending on the perspective from which the production system is regarded, various performance aspects are more or less appropriate. As a customer you are interested in the products, not in the production system as such. As owner of the company you want the production system to contribute to the profitability. Finally, if you work in the production system you naturally want a decent workplace. Common for all perspectives is that we want to give expression on the performance of the production system, to be able to do that we need to know what to measure and how. For a long time the main problem has been to know what to measure. However, during the 1990s the area of performance measurement underwent a revolution (Neely 1999). As a consequence several companies are literally drowning in

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Fig. 10.1 Measures are used as a support to determine whether activities are going in the right direction

Measure Mean

End Measure

Measure

measure, which is most certainly undesirable. A new crisis is predicted, this time the problem is not measurement scarcity but rather an abundance, a measurement madness (Neely and Austin 2000). Reasons for this are among other things increased competition, improvement initiatives in the companies, national and international quality awards, changed external requirements, and an improved possibility to collect data thanks to the development within information technology. To not drown in measures it is necessary to know what you want to achieve in your production system and moreover to make sure that measures are defined supporting these objectives, see Fig. 10.1. Neely and Austin (2000) point out that it is important to remember that measuring only is a mean to reach the end: “Measurement data might provide insight into which actions should be taken, assuming the measures are good ones, but in today’s society Albert Einstein’s message that ’not everything that counts can be counted, and not everything that can be counted counts’ appears to have been forgotten.” (Neely and Austin 2000, p. 240)

10.2.1

Productivity and Efficiency

Productivity and efficiency are presumably the measures which during the years have been, and still are, most commonly used to describe the performance of a production system, despite the fact that high productivity not necessarily implies high profitability. Productivity can be used to describe the performance of departments, companies and countries. In spite of the fact that it is always essential to know what you want to measure and what you mean, there is still a lot of confusion concerning these two concepts, see the Industrial Box below. Productivity and efficiency are sometimes even used with the same meaning (Produktivitetsdelegationen 1991) and perhaps without the people who use the concepts knowing exactly what they mean (Chew 1988). It can have disastrous effects for a company trying to improve its performance if the measures used for performance are not used correctly and with different factors included from time to time (Hayes and Clark 1995). Productivity is an absolute measure, stating the relation between what is achieved in production and the efforts required in achieving this. Productivity relates output to input at a certain point of time. Productivity =

Output Input

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261

INDUSTRIAL EXAMPLE: DEFINING PROUCTIVITY AND EFFICIENCY In the 15-company study one of the questions posed was how the companies measured production system performance. Several of the companies stated that they measured productivity or efficiency, which they defined as follows: Efficiency was defined as: • actual operating time/total operating time (including stop, set-up, waiting, etc.) • part of time used for assembly • goal-hours compared to used hours • number of products per man and time • how much of the used time that is value adding Productivity was defined as: • planned time per machine x number of produced machines/total work time • estimated time per product related to the actual time used • used time/devoted time As we can see several of the companies used time to measure both productivity and efficiency. One of the companies stated that they measured both productivity and efficiency. The described difference was that efficiency was measured as the amount of value adding time related to the actual time, and productivity was measured as the relation between consumed time and estimated time. Source: Säfsten and Aresu (2000)

The definition of productivity presented above (output/input) implies that all activities that are carried out in the production system have to contribute to output, it has to be value adding, and to not be considered as waste1. Measures of productivity as such are mainly of interest for comparisons. This can be done to see whether the utilisation of available resources has changed over time. INDUSTRIAL EXAMPLE: SWEDISH PRODUCTIVITY IS TOP IN EUROPE During 2003 productivity reached a top level in Swedish manufacturing companies. Together with the US, Sweden had the top position among the 12 countries compared in the annual investigation carried out by the American Ministry of Labor. Swedish productivity, measured as production per hour, was raised by 5.9% during 2003. This could be compared with the increase in productivity during the period 1980–2003 which was approximately 4.5%. This occurs at the same time as the number of employees in the manufacturing industry decreases. Since 1990 the number of employees has been reduced by 20%. But what is the explanation? Has the manufacturing industry in Sweden improved, or have low-performance activities been out-sourced? Source: Bättre Produktivitet, nr 7, 2004

Sometimes a distinction is made between efficiency and effectiveness. Efficiency is to do things right and effectiveness to do the right things (e.g. Olhager 2000; Hill 2000; Neely et al. 1995). When productivity is related to efficiency and effectiveness we can see that effectiveness is related to output and efficiency to input (Sink and Tuttle 1989), see Fig. 10.2. 1

According to Toyota’s production philosophy the seven main forms of waste are overproduction, waiting, transportation, inappropriate processing, unnecessary inventory, unnecessary motion, defects (Ohno 1988).

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Fig. 10.2 Productivity, efficiency and effectiveness related to a production system Input

Output

Resources

Products

Production system Efficiency

Effectiveness

(to do things right)

(to do the right things)

To avoid misinterpretations when using productivity as a performance measure it is important to always be clear when specifying how productivity is defined and used in each special case. When measuring productivity the choice of input and output is important. Traditionally there are three types of productivity measures, which can be grouped according to their content: • partial productivity: output related to one single form of input, for example labour, capital, material; • total-factor productivity: several output and input factors are included; and • total productivity: all output and input factors are included. All measures have strengths and weaknesses. Partial productivity is the simplest measure, both to understand and to measure. The most commonly used partial productivity measure is labour productivity, output per worked hour or output per employee (Tangen 2004). However, it is important to be aware of the risk that partial productivity provides a deceptive picture of the entire situation (Coelli et al. 1998). A better totality is given by measuring total-factor productivity or total productivity. The difference between these two is that total-factor productivity excludes intermediate goods and services purchased from output which is included in total productivity (Tangen 2004). It is, however, difficult to handle all input and output in one and the same measure. Another problem with the traditional productivity measures, as pointed out by Tangen (2004), is to define input and output. One of the problems is that output is more than a product. This can be solved by associating output and input with costs. Something that seems to become more and more common is to use time, which is emphasised by Jackson and Peterson (1999). They suggest a time-based productivity measure where the value adding time (output) is related to the total time (input). P=

tva t tot

× 100

P = productivity (%) tva= value adding time (s, min, h) t tot= total time (s, min, h)

Some of the advantages mentioned with using time when measuring productivity are (Jackson and Petersson 1999; Petersson 2000) that time:

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263

• is easy to measure; • is easy to understand; • facilitates comparison between plants since time is independent of cost structure; and • facilitates comparison between countries since time is independent of currency. A couple of disadvantages should also be mentioned according to Tangen (2004): • what’s value adding might be subjective; and • the definition supports activities with long processing time (without questioning whether it is the right processing). As a conclusion we can note that it seems to be important to pursue more than one measure, and to define what we mean with the measures used.

10.2.2

Overall Equipment Effectiveness

Another time-based measure is overall equipment effectiveness (OEE), which is one of the pillars of total productivity maintenance (TPM) further described in Chap. 11. OEE consists of three parts (measures): • availability; • performance efficiency; and • quality rate. By multiplying these measures OEE is obtained: Overall Equipment Effectiveness = Availability × Performance efficiency × Quality rate Losses

Equipment

1. Failures

available time – down time x 100

Availability =

Available time

available time

Down time losses

2. Set-up and adjustments

Value adding operating time

Defect losses

Net operating time

Speed losses

Operating time

3. Idling and minor stoppages 4. Reduced speed 5. Defects in process

Performance = efficiency

Quality rate

ideal cycle time x processed products x 100 operating time

processed products – defects =

x 100

processed products

6. Reduced yield

Fig. 10.3 Calculation of OEE

OEE = Availability x Performance efficiency x Quality rate

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To achieve OEE activities are carried out to minimise waste and losses. Losses can be found in operating time, net operating time and value adding operating time, which is further described in Fig. 10.3.

Calculation of Overall Equipment Effectiveness The following example is from Ljungberg (2000). In Table 10.4 the required data is presented and the actual calculation is presented in Table 10.5. Table 10.4 Data for calculation of overall equipment effectiveness (Ljungberg 2000) A: B: C: D: E: F: G: H: I: J: K:

L: M:

N: O:

Assume one working-day: 8 h á 60 min gives gross work time 480 minutes. Planned down time 30 min. Available time is gross time minus planned down time. In this example we have had down time for 15 min due to failures. Set-ups and adjustments have resulted in 55 min loss. Operating time is available time minus down time. Availability is operating time divided by available time. Number of processed products is on average 250 units/day. Ideal cycle time is the required time for one machine to produce a certain unit, here 1.0 min. The actual cycle time is 1.3 min in average. Performance efficiency indicates the share of the operating time actually used and constitutes the quotient between processing time (processed products × actual cycle time) and available time. Used production rate measures the losses due to machines that are run with reduced speed (ideal cycle time/actual cycle time). Performance efficiency measures the efficiency in use of the available time, which is done by multiplying used production rate with actual utilisation rate (measured in percent). Defects concern the number of faulty products during one day, here the number of defects is five. The quality rate measures the share of complete products of the total number of processed products. Right the first time is counted, which means that every reworked component is counted as a defect.

The OEE in the example below is 54%. If you take a closer look at the numbers given in the example they seem to be quite realistic, which means that it is quite difficult to achieve an OEE close to 100%. To win the Japanese prize in total productivity maintenance the requirement is an OEE of at least 85% (the availability should be higher than 90%, the performance efficiency higher than 95% and the quality rate over 99%). A way to find a realistic goal to reach these levels is to multiply the best values from different measurements (Ljungberg 2000).

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Table 10.5 Calculation of overall equipment effectiveness (Ljungberg 2000) A. GROSS WORK TIME B. PLANNED DOWN TIME C. AVAILABLE TIME D. FAILURE LOSSES E. SET-UP LOSSES F. OPERATING TIME G. AVAILABILITY H. PROCESSED PRODUCTS I. IDEAL CYCLE TIME J. ACTUAL CYCLE TIME K. ACTUAL UTILISATION RATE L. USED PRODUCTION RATE M. PERFORMANCE EFFICIENCY N. DEFECTS O. QUALITY RATE OVERALL EQUIPMENT EFFECTIVENESS

Fig. 10.4 Field of application for OEE in production systems (Petersson 2000)

8 × 60 (A-B)

(480-30)

(C-D-E) (F/C)

(450-15-55) 380/450

(H × J/F) (I/J) (K × L)

250 × 1,3/380 1/1,3 86% × 77%

((H-N)/H) (G × M × O)

(250-5)/250 84% × 6% × 98%

= 480 min = 30 min = 450 min = 15 min = 55 min = 380 min = 84% = 250 ST = 1.0 min = 1.3 min = 86% = 77% = 66% = 5 ST = 98% = 54%

Production system Manual

Semiautomatic

Automatic

Field of application, OEE

OEE is useful for determining the performance of semiautomatic and automatic production systems (Petersson 2000) see Fig. 10.4. The reason is that OEE expects a certain ideal cycle time for each machine which determines the maximum speed. Furthermore, OEE does not consider the number of people working in the production system. To describe the effectiveness of for example manual assembly slight modifications are required.

10.2.3

Manual Assembly Efficiency

An alternative to OEE applicable in manual production systems was suggested by Petersson (2000). This measure is called manual assembly efficiency (MAE), and the field of application supplements OEE, see Fig. 10.5. Production system

Fig. 10.5 Field of application for MAE in production systems (Petersson 2000)

Manual

Semiautomatic

Field of application, MAE

Automatic

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MAE considers possible variations in the time used, which might occur in manual assembly. Variations in time consumption are, for example, a consequence of assembly content in different product variants, due to different specifications. MAE can be calculated as follows (Petersson 2000): N

Σ

(tIai – tRi )

i=1

MAE =

× 100

NA (t TOT -t PS -t UN)

MAE = Manual assembly efficiency (%) N = Number of assembled units (units) tIai = Ideal assembly time for unit i (time/unit) tRi = Rework for unit i after the assembly process (time/unit) NA = Number of assemblers that are registered for work (number) tTOT = All available time (time) tPS = Total planned stop time (time) tUN = Total unused assembly time due to lack of order (time)

10.2.4

Measures Associated with Competitive Factors

For different reasons, as partly mentioned previously in this chapter, it is not trivial to find appropriate measures for production system performance. A huge amount of performance measures are described in the literature (White 1996; Duda 2000; Slack et al. 2001). Within the manufacturing industry several measures are used because of tradition and the ease of measurement (Neely and Austin 2000). It is generally accepted that using only financial measures is insufficient. Production system performance requires a holistic view, low cost and productivity has to be supplemented with for example quality, reliable delivery and flexibility. One way to determine performance measures is to start from the manufacturing strategy. With this approach a holistic view is achieved and a link to the company’s business strategy. As described in Chap. 3, cost, quality, speed, dependability and flexibility are often mentioned as the main competitive factors, the overall goals to strive for with support from the production system. A polar representation can be used to illustrate the pattern of the production system performance in relation to the market requirements, see Fig. 10.6. The example shows that the production system performance almost fulfils the requirements from the market concerning cost and speed, on the contrary, flexibility is considerable lower than required. Performance objectives do not necessarily remain the same, they might change during the lifetime of the production system. “The world keeps changing. It is one of the paradoxes of success that the things and the ways which got you where you are, are seldom the things to keep you there.” (Handy 1994, p. 50)

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267

Cost

Speed

Dependability

Production system performance

Quality

Requirements of the market

Flexibility

Fig. 10.6 A polar representation of performance objectives

The performance objectives may be linked to the life-cycle of the product. On the basis of a generalised picture of customer and competitor behaviour, the product’s life-cycle will pass through four different phases: Introduction, Growth, Maturity, and Decline, which have a great impact on the requirements of the production system, see Slack et al. (2001). In the different phases of the product’s life-cycle, which can be related to the production system’s life-cycle, the sales volume changes and certain aspects of the performance objectives are likely to dominate. In the Introduction phase, the sales volume is small but growing. The product characteristics, performance and novelty are likely order-winners, while quality and range are likely to be order-qualifiers. The dominant performance objectives are flexibility and quality. In the Growth phase the sales volume is growing rapidly which means that the availability of quality products are likely to be orderwinners, while price and range are qualifiers. Speed, dependability and quality are the performance objectives that are most dominant. In the Maturity phase the growth rate of the sales volume is lower than in the growth phase. Now low price, dependability and supply become order-winners while range and quality are likely to have become qualifiers. Cost and dependability are performance objectives. In the Decline phase we see a clear decline in sales volume. Here, low price is most likely the order-winner and dependable supply is the qualifier. Cost is the dominant performance objective in this phase. The performance objectives for the production system described above may be related to a number of different performance measures, see Table 10.6. When determining the production system performance it is essential that the measures used support the formulated objectives, which in turn supports the company’s overall strategies and visions. Furthermore, it is essential that the company satisfy the market. However, satisfactory results on several performance measures

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Table 10.6 Performance objectives, explanations and performance measures (Säfsten 2002) Performance objective

Explanation

Performance measure

Cost

The cost of material, labour, and other resources to produce a product.

Unit production cost Cost relative to competitors Total factor productivity Direct labour Inventory

Quality

The manufacturing of products with high performance and conformance.

Number of complaints Warranty returns Percentage scrap Scrap and rework cost Quality of incoming components Mean Time Between Failure (MTBF)

Speed

Speed of delivery.

Cycle time Vendor delivery time Response time, Lead time

Dependability

The reliability of delivery.

Percentage on time delivery Average lateness Proportion of products in stock

Flexibility

The ability to react to changes in Set-up time volume, changes in product mix, Time needed to develop product modification to design, etc. Range of products Time to change schedule Minimum order size Number of options Percentage of workforce cross trained

are no guarantee for success and survival. There must be a receiver of the produced products, a customer. This is not always the case as discussed further in the subsequent sections, where industrial experiences from measuring performance and from different performance measures are presented.

10.3 Measures and Methods for Follow-Up in Practice As we discussed earlier measurement is part of the follow-up of production performance. In the 15-company study, previously referred to, it was also investigated how companies described their assembly system performance, if performance was continuously followed-up and, if so, what measures were used (Säfsten and Aresu 2000). At the end of this section some of the measures used in the studied companies are gathered. The study focused on assembly systems but the experiences from performance measurement are considered to be valid also for other parts of the production system. However, assembly is often a personnel-intensive activity which might complicate performance measurement since many aspects have to be considered.

10.3 Measures and Methods for Follow-Up in Practice

269

Fig. 10.7 Board indicating results in an assembly system in Sweden (Photo: Mario Celegin)

Most of the companies stated that they followed-up the assembly system performance. In most of the plants it was common to have boards showing the results, in Swedish. One example of such a board is given in Fig. 10.7. Only two of the 15 companies did not consider it necessary to continuously follow-up the assembly system performance. The explanation given by one of the companies was that assembly was considered to be craftsmanship and follow-up was thereby not necessary. According to this company it was more important to make sure that the assembly personnel were competent enough to carry out the required assembly tasks. The other company who did not consider it necessary to measure assembly system performance stated that they had reached the required level of delivery precision. Thereby, they received confirmation that everything was working and follow-up was considered unnecessary. This company, however, also mentioned that they usually added a few days when specifying delivery day, to make sure that deliveries were made in time. Another company used delivery precision and quality (zero faults) as overall objectives. If the results from performance measurement are to give a correct picture of the actual activities it is essential that the used measures are appropriate. In the example above, where some extra days were added to make sure that delivery time could be achieved, a combination with, for example, cost of reworking might give a better picture of the actual performance (if the extra days were used for reworking). It is most often required that a combination of several measures are used, which together describe the activities in an appropriate way. If the performance measures are not thoroughly determined there is a risk that available time is used in an inappropriate way. One company described the following scenario. Efficiency was measured as the amount of time used for assembly. Cost was calculated based on the assumption that a certain amount of products should be assembled per time unit, which resulted in: “… we should produce a certain amount [products]. If we produce less the cost is higher, if we produce more it is cheaper, provided that the personnel is the same.”

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The consequence was that required efficiency was reached by assembly to stock, although assembly was to be carried out on customer order. Another problem in the same company was that the cost level was determined in the annual budget. Thereby, it varied from one year to another which made the long-term follow-up of the performance quite difficult. The possibility to compare and relate measures to something is an important aspect of performance measurement. It is only by comparing with other measures that it could be possible to say something about improvement or deterioration. One example of successful measurement design was described by another company. They measured productivity per assembly line and achieved what they called a productivity factor. The productivity factor could be used to see how the performance of the assembly system developed, which was considered to be the most important comparison. The fact that assembly is a personnel-intensive activity might affect how performance should be measured, which also is indicated in Sect. 10.2 with the different measures OEE and MAE. One company described the performance of the personnel as separate from the assembly system performance. This reflects a perspective where assembly systems not are considered in totality (with a system perspective). The technical system is differentiated from the social system and the performance is not thought of as being a result of the cooperation and relation between them. The company divided the measures into system-related measures (referring to the technical system) and individual-related measures. As one example they mentioned lead-time, which was considered to depend on the system design, i.e. lead-time was considered a system-related measure. The volume, the number of products assembled, was on the other hand considered to be individualdependent, i.e. an individual-related measure. A common mistake is that things that are easy to measure are measured. In one of the studied companies availability and productivity were measured, and also regarded as easy things to measure. Their experience was that it was important to measure the right things. If that was not possible or if you were not sure you were measuring the right things, their opinion was that it was better to not measure at all. The owner of a company can also affect the work with performance measurement. One company described that the owner determined how they should work in their production system. The company was regularly assessed to control whether the advocated strategies were followed, which was considered to give a good picture of the activities. Productivity and efficiency are often used to describe and follow-up the production system performance. As mentioned in Sect. 10.2 these measures are not unambiguous, and several of the studied companies used productivity as synonymous with efficiency. Other aspects often measured and followed-up are capacity, time and quality. Some companies also mentioned different measurement systems to follow-up personnel-related issues and ergonomics. There are different experiences from performance measurement and various performance measures. To illustrate the variation some of the measures used by the studied companies are gathered in Table 10.7. How productivity and efficiency are defined and measured is described in the previous chapter.

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271

Table 10.7 Some of the measures used in the studied companies Measure

Measured as

Pleasure of work

Attitude study

Ergonomics

Number of first-time visits to doctor

Number of products Capacity

Number of products assembled/week Number of products/week (goal fulfilment or not?) What they get and the time consumed

Quality

10, 50, 100 points dependent on type of defect Internal and external inspection, A-, B- and C-defects

Tact Time

Total work time/number of output Time consumption to assemble one product

Availability

Number of products possible to produce/number of products actually produced

Equipment productivity

Theoretical tact × number output/total work time

Some of the aspects illustrated by the examples presented in this chapter are that: • with a combination of various measures the actual activities are better described; • measurement results have to be related to something such as goals, earlier measures, etc.; • a systems perspective is required to catch production system performance; • it is important to measure the right things; and • performance measures have to be supported by the organisation.

10.4 Continuous Follow-Up of Performance Evaluation and follow-up are often used synonymously by manufacturing companies. When a new production system is implemented, the system is evaluated and production is running as required, measurement is carried out to follow-up the production performance. Continuous evaluation of the production system in operation is often called follow-up, which refers to measures and methods for continuous control and management of production systems.

10.4.1

Different Measurement Systems

One way to handle various measures is to gather them into performance measurement systems (PMS). A performance measurement system is a group of measures organised in a certain way. To various degrees the performance measurement system might indicate how to measure and handle the different issues considered. A measurement system can be defined as: “… the mechanism supporting the measurement process, by which the required performance information is gathered, recorded and processed.” (Kerssens-van Drongelen 1999, p. 4)

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There are several reasons for using measurement systems. Measuring as such does not provide any guidance, neither does it provide holistic pictures of activities. A measurement system can play several roles in the control of different activities. The purpose of a measurement system can according to Kerssens-van Drongelen (1999) be to: 1. provide insight into deviations from objectives, which can support the decisions concerning possible actions to correct the situation; 2. fuelling the improvement of the process to control; 3. alignment and communication of objectives, agreements and policies; 4. support decision making on performance-based rewards; 5. justification of existence, decisions and performance; and 6. motivating people through feedback. Quite a number of different performance measurement systems exist today. In the footsteps of the balanced scorecards, introduced at the beginning of the 1990s (Kaplan and Norton 1992), a tremendous development has taken place. Balanced scorecards are widely spread, both in industry and in academia. It has a wide field of application and it is probably the most used and discussed measurement system (Neely 1999). The basic idea is to use a group of measures elucidating the activity from different perspectives in a balanced way, see Fig. 10.8. One of the major advantages with balanced scorecards is that more than one perspective is used to assess an activity. It assists, for example, the management to

Financial Objective

Measure

Learning and growth

Customer Objective Measure

Vision and strategy

Internal business process Objective

Fig. 10.8 A balanced scorecard

Measure

Objective

Measure

10.4 Continuous Follow-Up of Performance

273

focus on a handful of critical measures. To use more than one perspective is also a way to avoid suboptimisation (Kaplan and Norton 1992). A majority of the existing performance measurement systems are concerned with overall business performance and are not applicable to production systems, even if the production system represents one part of the totality. Criticism has also been raised on existing performance measurement systems for being just frameworks, not providing much guidance on how to identify, introduce and use appropriate measures. This criticism has partly been answered and today there is more knowledge concerning these issues than during the 1990s. Apart from balanced scorecards, there are several different types of performance measurement systems. De Toni and Tonchia (2001) suggested a classification of the different systems. Three basic structures are identified, based on the architectonic structure of the performance measurement systems: vertical, balanced and horizontal (by process). Strictly hierarchical performance measurement systems are characterised by cost (e.g. production cost, productivity) and non-cost (time, flexibility, quality) measures on different levels of aggregation, which finally ends up as economic-financial. In the balanced models several different measures, corresponding to different perspectives, are considered. One example of a balanced model is the previously described balanced scorecard. There are also systems distinguishing between internal and external measures, the latter are the measures perceived by the customer. Finally, there are performance measurement systems related to the value chain. According to De Toni and Tonchia (2001) these models consider the relation between customer/supplier. Measurement systems considering the value chain might be applicable for production systems, as exemplified in Sink and Tuttle (1989). We can find the performance measures related to a production system and its surroundings as shown in Fig. 10.9. This figure is a further development of Fig. 10.2, adding also innovation, quality and work environmental measures besides overall profitability. The different measures in Fig. 10.9 are rather general and have been described theoretically and implemented in practice by many, often in combination with other measures. One description given by Sink and Tuttle (1989) is the following: • effectiveness: to do the right things, often described in terms of punctuality and quality, the relation between actual output and expected output or to achieve the right things, in the right time with the right quality; • efficiency: to do things right, the relation between the resources expected to be used and the actually used resources; • quality: relevant for the entire value chain, considered to be an extensive concept, which can be described by different check points for quality; • good work environment: how people within the system perceive different aspects, how they feel about different things such as the wage system, task identity, culture, leadership, aspects to measure depends on the situation: • innovation: the creative ability; and • profitability: the relation between revenues and cost.

274

10 Production System Performance Quality

Input

Output

Resources

Products

Efficiency

Production system

Innovation

Customers

Effectiveness Good work environment

Productivity Profitability

Fig. 10.9 Performance measures related to a production system and its surroundings

These measures are still topical. However, Tangen (2004) points out that a measurement system should also consider flexibility (not discussed here) and the customer (here illustrated in Fig. 10.9). A common deficit among existing measurement systems is the limited support provided for the assessment of production systems. Measures have to be adapted to each situation.

10.4.2

Use of Measurement Systems

The problem is not to create performance measurement systems, the real challenge is to implement them and to get them working. With a systems perspective applied to the measurement system, the system can be considered on three levels (Neely et al. 1995): 1. single measures (subsystem); 2. set of measures, measurement system as a unit (system); and 3. relation between measurement system and environment (system environment). Previously focus has been on single measures and sets of measures. The importance of the third level, the relation between the measurement system and its environment, was emphasised by Neely et al. (1995). It is necessary to consider both the influence from the environment on the measurement system, and vice versa. This level has so far received less attention than the former two, despite its criticality for the use of the performance measurement system. Success or failure with a measurement system is eventually determined by the use of the result within the company. How the results are used depends on how the measurement system was implemented in the organisation. Acceptance of the measurement system among intended users is likely to affect the use of the result. Lynch and Cross (1995) present different reasons why companies might perceive reluctance towards measuring and using measurement systems:

10.4 Continuous Follow-Up of Performance

• • • • • • •

275

limited understanding of the need; fear of failure; fear of the unknown; cost and time limits; a threat towards personal integrity; lack of patience among management; and short-term perspective.

Hence, the possibility of implementing the performance measurement system within the organisation is important to consider. A number of difficulties might appear when implementing measurement systems (Neely and Bourne 2000). These difficulties can be grouped under three headings: politic, infrastructure and focus. The political aspect is concerned with the risk that people involved feel threatened by the measurement system. Results from the measurement system can, for example, be used to compare departments or plants within a company. If results are used incorrectly, the result may be that people manipulate the measuring system. People become concerned with delivering measurement data (correct) rather than performance. This problem predominantly appears when measurement data is reported upwards in the organisation. If those involved in measuring also are involved in the analysis of the achieved data and the consequent decisions the risk of manipulated data is reduced. Another difficulty mentioned by Neely and Bourne (2000) is concerned with infrastructure. It can simply be difficult to get appropriate measurement data. Required data might be available within the company but spread out in several computer systems and thereby difficult to compile. The third difficulty with implementing measurement systems mentioned, lack of focus, often is due to the time and effort required to create good measurement systems. It is important to be aware of this when planning implementation. The trick to succeed with a measurement system, according to Neely and Bourne (2000), is to measure as little as possible, and to make sure that the right things are measured. It is also essential that the result of measurement is action.

Chapter 11

The Art of Avoiding Production Disturbances

Abstract Production system development is carried out with the coming system’s production efficiency in mind. In this chapter various concepts related to production efficiency such as availability, reliability, maintainability, and capability are described, as are concepts related to disturbances and losses. The question of what to do if the production system is not as good as expected is discussed. Furthermore, a comparison between three so-called improvement models is presented. The chapter is concluded with a presentation of a guide to eliminate disturbances during the development phase. In the guide, a number of success factors are summarised, divided into seven categories. The guide can also be used as a summary of several of the issues previously handled in the book, but here from the perspective of how to avoid the emergence of disturbances.

11.1 Related Concepts When the subject is disturbance handling several different concepts are available to describe various aspects of this. By way of introduction we provide some definitions of the concepts which are used in the rest of the chapter. On an overall level it is about the challenge of avoiding disturbances, and if they cannot be avoided, to be able to handle them. A production system possessing this capability is what we call a robust production system.

11.1.1

Dependability

A Swedish standard from the Swedish Standards Institute (SIS) defines a number of concepts concerning reliability technique. The foundation for the word list provided by SIS is primarily gathered from the electronic area, where the M. Bellgran, K. Säftsen, Production Development, © Springer 2010

277

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11 The Art of Avoiding Production Disturbances

reliability technique has been previously developed and applied to a larger extent than in other technical areas. Concepts, definitions, and terms in the word list are, however, not specific for the electronic area but are chosen and designed to allow application within all areas, including technical and administrative systems with built-in software. Through an agreement with the International Organisation for Standardisation (ISO), the International Electro-technical Commission (IEC) has the responsibility for standards within the area of reliability, and ISO are responsible for quality standards (SS 441 05 05 2000). Reliability Reliability is an essential quality parameter, and reliability engineering is, therefore, an important tool in quality development. The purpose of reliability engineering is according to Bergman and Klefsjö (2002): • to identify the causes of failures and try to eliminate these, in order to increase a failure resistance of the product; and • to identify the consequences of failures and, if possible, reduce or eliminate their effects, in order to increase the products tolerance towards failures, which sometimes is called increased fault tolerance. The concept of reliability initially appeared in the Nordic countries at the beginning of the 1960s. The concept was considered to be more appropriate than trustworthiness, which is more associated with people than equipment and technical systems. Internationally, the umbrella-term dependability has been used since 1990. The relation between the basic concepts related to the reliability technique is illustrated in Fig. 11.1 (Bergman and Klefsjö 2003). The concept reliability is used for a number of connected characteristics related to availability and its affecting factors reliability, maintainability, and maintenance support system, see Fig. 11.1 The reliability of a system is affected by its hardware, software, management and environment (SS 441 05 05 2000). The concept reliability is normally used as a comprehensive term and should, according to Bergman and Klefsjö (2002) only be used in a general meaning. Furthermore, it is stated that when you express yourself in quantitative terms or refer to a specific characteristic this should be made more precise through use of the specific term in question, for example function probability or maintenance support system. When you are to describe and apply the reliability technique, a need to make a distinction between operation and maintenance often appears. Other concepts that DEPENDABILITY Fig. 11.1 Factors affecting system dependability (Bergman and Klefsjö 2003)

Reliability

Maintainability

Maintenance support

11.1 Related Concepts

279

need clarification related to the reliability technique are modification and change. The object in focus for operation, maintenance, and modification is a more or less complex unit, in our case a production system. Intended performance is defined by the performance requirements on output, it can vary during time, and depends on input (see system theory in Chap. 2). One way to distinguish operation, maintenance, and modification from each other can be based on the purpose of various activities in the production system (SS 441 05 05 2000), hence: • activities affecting input are part of the units operation; • activities affecting a unit’s functional ability with the intention to uphold it, or to bring it back to a previous level, are maintenance; and • activities affecting a unit’s functional ability with the intention to change it to fulfil new performance requirements are modification. The problem of distinguishing operation from maintenance or modification is thereby reduced to a distinction between the affect in input on a unit’s functional ability. To separate maintenance from modification, it is necessary to consider the way in which the functions are affected. Where the dividing line is depends in many situations on how the unit is marked off from the surrounding world. Note that the overall purpose with operation, maintenance and modification is the same; to achieve intended performance from the unit (SS 441 05 05 2000). FURTHER STUDIES: DEFINITIONS OF CONCEPTS RELATED TO PRODUCTION SYSTEM PERFORMANCE AND RELIABILITY Operation represents all technical and administrative actions taken with the intention to achieve an intended performance from a unit, considering changes in external conditions (e.g. service need and environmental conditions). Operation can include changes of the unit’s functional state. Performance implies a measurable result of the utilised functional ability of a unit. Maintenance concerns technical and administrative actions, including supervision, intended to maintain or restore a unit to a condition that allows the required function to be accomplished. Availability concerns the ability of a unit to accomplish a required function under given circumstances, at a given point of time or time span, if required external maintenance resources are supplied. Availability is stated as reliability and can concern different functional states and functional methods of a unit. Steady-state availability is the mean value of the momentary availability during a certain time. Reliability is the ability of a unit to carry out a required function under given circumstances, under a given time span. Maintainability is the probability that a given active maintenance step can be carried out within a given time span, for a unit during given circumstances, when the maintenance is carried out under given circumstances, when the maintenance is carried out with support from given procedures and resources. Can also be expressed in maintenance time. Maintenance support is the ability of a maintenance organisation to, during given conditions, when needed, supply resources required to maintain a unit according to a given maintenance policy. Source: SS 441 05 05 (2000)

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Capability The ability of a process to produce units with dimensions within given tolerances is called capability (with respect to the characteristic of interest). The capability of a process is determined by the statistical distribution of the studied product quantity. When the process is in statistic balance, this distribution can in several cases with good approximation be described by a normal distribution. The capability is in such a case determined by a corresponding mean value (expected value) and dispersion (standard deviation), and by the higher and lower tolerance limits (Bergman and Klefsjö 2002). The possibility of the production process to produce units within the determined tolerance limits, when an upper and lower tolerance limit is defined, is its capability index. Bergman and Klefsjö (2002) discuss the concepts process and machine capability. The mean value of the production process often varies with time, which can be due to variations between day and night shift, team machines, input material, etc. This can be explained with two dispersion components, partly variation from unit to unit, and partly variation due to slower variation of the mean level. Machine capability relates to the variation between units and process capability, and considers both dispersion components.

11.1.2

Production Disturbances

As discussed in previous chapters, the terminology within an area is of importance both for understanding and for the handling of various issues. Production disturbances are one example of a concept differently defined in theory and practice, and the concept is also dependent on the perspective from which the production disturbances are regarded. Ylipää (2000) provides some examples of how production disturbances can be described from various perspectives. From a maintenance perspective, disturbances can be seen as technical errors or interruption, while from a production perspective they are rather seen from an efficiency aspect. With a quality perspective the focus is on variation in product quality, and from a security perspective the risks and consequences of disturbances are in focus (Ylipää 2000). When all these perspectives are regarded, the prerequisite for a best way of handling the disturbances increases. This is valid both during operation and for more preventive purposes, during development or change of production systems. Disturbances can among other things be seen as losses. Various types of losses can be classified into (Ljungberg 2000): • • • • • •

equipment faults and interruptions; set-up time and adjustments; idling and small stops; reduced speed; defects in the process during serial production; and reduced exchange, start-up losses.

11.1 Related Concepts

281

Losses usually referred to in assembly situations are system losses, handling losses, and balancing losses. Olhager (2000) discusses, for example, balancing losses, and how to handle the problem with line balancing when designing a production system with line-based flow. Here, a correspondence between the work content at each work station and the cycle time, i.e. the time each product spends at each station, is sought. If some of the work stations require much more time than the others, queues before stations are created which result in balancing losses. One way to define production disturbances is as follows (see for example Ylipää 2000; Harlin et al. 2002, and the TIME-handbook 2004). Production disturbances can be defined as a discrete or decreasing, planned or unplanned disruption or change during planned production time, which might affect availability, operational performance, product quality, security, work conditions, environment, etc. Thus, production disturbances should be separated from planned, desirable conditions. Furthermore, a number of issues might be defined as production disturbances if they appear during the planned production time or if they affect the ideal state of the production system. Examples of production disturbances are: equipment faults/breakdown on machine or equipment, handling error, faults in the peripheral equipment such as the external transportation system, faults in software to the production equipment such as the PLC-program or robot program, mistakes in planning, change of tools, time to change/refill (adding) material, setup, preventive maintenance actions, cleaning, work place meetings, pause, breaks, stop caused by waiting on products/material for the station/machine, stop in the output from a station/machine, lack of personnel, media faults such as power failure, voltage tops, compressed air, cooling water, speed losses, etc (Ylipää 2000; Harlin et al. 2002, and the TIME-handbook 2004). It is important to define what a production disturbance is in order to be able to work with structured and systematic improvements. What is not measured and followed-up is naturally difficult to improve and control. It is also essential to have a common view on how to regard production disturbances among various personnel categories since cooperation with improvements is required (Ylipää et al. 2004; the TIMEhandbook 2004). In a study of 80 companies Ylipää et al. (2004) show that various functions have various ideas concerning what a production disturbance is. In Fig. 11.2 the difference between the production function and the maintenance function is illustrated. Ylipää (2000) discusses both the fact that various concepts and terms are used with approximately the same meaning, and that the definition of a production disturbance varies. For example, if planned stops or planned breaks should be regarded as a disturbance or not varies. Another relevant dimension of production disturbances is their extent in time. Minor disturbances frequently returning are as important to consider as larger and time-consuming, but less frequent, disturbances. The accumulated time for short but frequent disturbances is often considerable, sometimes even longer than for major stops (Ylipää 2000). Major and time-consuming disturbances are often easier to discover and requires often more eextensive measures than the minor disturbances, which

282

11 The Art of Avoiding Production Disturbances Equipment faults/breakdown / Handling error 100% Faults in peripheral equipment 90% 80% 70% Faults in software 60% 50% Reprogramming 40% 30% 20% Mistakes in planning 10% 0%

Incidents Cassation Speed losses

Media faults

Lack of personnel

Stop in output

Change of tools

Stop waiting

Time to change/refill

Pause, breaks

Set-up Adjustments

Work place meetings Cleaning

Preventive maintenance actions

Production

Maintenance

n=51 (114) persons

n=51 (114) persons

Fig. 11.2 Differences and similarities between the production function and the maintenance function concerning what they regard as production disturbances (Ylipää et al. 2004)

might explain why they achieve more attention. Elimination of disturbances and disturbance handling are, however, areas receiving more and more attention in industry, above all through the perspective focusing on elimination of waste and continuous improvements. Through this, prerequisites for a better balance between handling of major technical faults and minor disturbances with short duration are achieved.

11.2 Production Efficiency There is still a large potential for improvements of production efficiency in the manufacturing industry. Measurements show that production efficiency is slightly more than 50% on average (Ljungberg 2000). Similar results are reported by Ericsson (1997) who, after disturbance analyses, could show that machines were used for operative work 59% of the planned time for operation: “The easiest way to elucidate disturbances is to measure the total effectiveness of the machine equipment.” (Ljungberg 2000, p. 3, translated from Swedish)

11.2 Production Efficiency

11.2.1

283

Reduced Disturbances Increases Production Efficiency

The research project “TIME-Production efficiency and effectiveness: IT-support and methods”, carried out 2001–2004, focused on the production efficiency and effectiveness of production system and production equipment. This was done from a life-cycle perspective, which implies feedback of knowledge and information about production disturbances in the production system’s different phases (design, start-up, operation, and phase-out). The results from the project have, for example, been presented in a handbook1 “Efficient manufacturing! Handbook for systematic reduction of production disturbances” (TIME-handbook 2004). The handbook comprises a methodology and a number of guidelines describing how to work with disturbances on operative, tactic, and strategic level. One of these guidelines concerns the elimination of disturbances already during the development phase. It is possible to work with reduction of disturbances and handling of disturbances on several levels of the production system. A division into three decision levels provides an opportunity to adapt activities, information, and improvements to different actors. The division into operative, tactic, and strategic decision levels is based on results presented in for example Ylipää (2000) and Harlin (2000) and have been used in the TIME project. The most offensive approach towards high production efficiency is the total elimination of faults, or total avoidance of the appearance of faults, in existing and new production systems. This requires long-term activities on a strategic level to improve the design of the production systems. This can, for example, be done through requirement specifications, risk analysis, etc. The target group for this work is management functions, system designers, method planners, system suppliers, and to some extent the engineering designers. On a tactical level, it is about carrying out preventive measures to improve an existing production system. This can, for example, be supported by discrete-event simulation (Ingemansson 2004). The target group involves maintenance personnel, production engineering personnel, production management, suppliers, and consultants. Disturbance handling on an operative decision level is mainly about remediation and short-term actions in the existing production system. The target group on an operative level is personnel close to production, operators, and production maintenance. To work with disturbance handling on operative, tactic, and strategic level implies that it is necessary to have a life-cycle perspective. The elimination of disturbances on a strategic level is preferably done during the early development phases, while disturbance handling on the operative level is about the daily 1

The handbook is written in cooperation between researchers from Swerea IVF, Chalmers, and Lund University. The authors are Jens von Axelsson, Monica Bellgran, Sabina Fjällström, Per Gullander, Ulrika Harlin, Arne Ingemansson, Mats Lundin, and Torbjörn Ylipää. The research project was financially supported by the VINNOVA (Swedish Governmental Agency for Innovation Systems).

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operation of the production system, which occurs later in the production system life-cycle, see Fig. 11.3. In the handbook a way of working to systematically reduce production disturbances is described, see Fig. 11.4. Change

Development

Work procedures Support systems Information

Continuous improvement

Havarie!

Test

Installation

Start-up Maintenance

Operation

Fig. 11.3 By regarding production efficiency from a life-cycle perspective the possibility to eliminate and reduce disturbances increases, see further discussions in Bellgran and Gullander (2003) and in the TIME-handbook (2004) where the illustration above is presented (translated from Swedish) MEASUREMENT and VALUATION of PRESENT SITUATION Part 2 Key figures Part 2 Key figures Part 3 Way of working Part 3 Way of working Part 4 Co-operation Part 4 Co-operation Part 5 Knowledge Part 5 Knowledge Part 6 Information Part 6 Information Part 7 IT-support Part 7 IT-support

SUMMARY of PRESENT SITUATION Part 8 Part 8 Summary – suggested Summary – suggested actions actions

START and RE-START Instruction – step by step description of the handbook

Part 1 Limitation and description of the production system

GUIDELINES Production efficiency, the concept of disturbance, design, installation, maintenance, start-up, follow-up system, simulation tools, improvement groups, key figures, etc.

PLANNING of SYSTEMATIC WAY OF WORKING Part 10 Part 10 Planning and preparation before Planning and preparation before re-start re-start

ANALYSIS OF TODAY - How does it work in practice? • Overview • Survey • Deepening studies

DECISION and PLANNING of ACTIONS Part 9 Part 9 Objectives and actions list Objectives and actions list

Fig. 11.4 A way of working to systematically reduce production disturbances (TIME-handbook 2004)

11.3 Comparison Between Improvement Models

285

The systematic way of working consists of several steps which should be carried out regularly at the company. The objective is to enhance the company’s own way of working to improve the production efficiency. When the production system is demarcated and described, an inventory is made together with measurements, to clarify the company’s position today concerning handling of production disturbances (way of working, key figures, IT-support). The result from this is gathered in a description of the present situation, which is the foundation for decisions and planning of steps to take. After that improvements are carried out by concrete actions. Finally, planning and updating of the way of working is carried out in preparation for a new review. As a support for the concrete actions various guidelines are available, see Fig. 11.4. The guidelines for the elimination of disturbances during the development phase are presented in Sect. 11.4.

11.3 Comparison Between Improvement Models A number of change or improvement models are used in industrial application with the purpose to for example improve performance of production systems in operation. One example of such a model is Total Productive Maintenance (TPM). TPM is not only about maintenance, but also about development of the selflearning organisation with engaged staff primarily working with continuous improvement of the production equipment. The objective is to reduce disturbances and thereby increase the production efficiency. Other examples of improvement models are Business Process Re-engineering (BPR) and Total Quality Management (TQM). The way of working described in the TIME-handbook (2004) mainly differs from these improvement models by the use of a life-cycle perspective, where the interaction between the various lifecycle phases is important in order to eliminate, prevent, and remedy production disturbances. This in turn puts requirements on cooperation between various functions within the company. TPM is a way of working in order to increase the total equipment efficiency and to develop the productive processes of a company. TPM is an extensive change process where everyone in the company is engaged to eliminate different losses in machine equipment and other processes. TPM is based on three building stones (Ljungberg 2000): follow-up of operational disturbances (brain), operators’ maintenance (heart), and improvement groups (muscles). These building stones are described as follows by Ljungberg (2000): 1. Follow-up of operational disturbances is about focusing on the reality as it is, to face its deficiencies and limitations. To make this possible it is necessary to use measurements. The total efficiency of the production equipment (OEE, see Chap. 10) is common and through this measure it can be shown that only 50– 60% of the machine equipments entire capability is used (not true for the process industry, which normally has higher values).

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2. The second building stone of TPM is to care for processes and equipment, basically to take care of the production system. It is about operators’ maintenance as a way of reducing disturbances and to increase the efficiency among the machines. To achieve this, production and maintenance have to approach each other. Machine care should to a higher degree be handled by production personnel instead of maintenance personnel. 3. The third building stone is about organising the personnel in improvement groups. This implies that ways of encouraging a continuous learning environment have to be found in order to realise the self-learning organisation. The environment should be supportive, making people suggest improvements, and tools should be found that stimulate creativity and learning. With support from improvement groups, it is possible to create a forum providing continuous cooperation between production and maintenance, improved communication between shift teams, and not least a model describing how to work with continuous improvements in production.

Table 11.1 Similarities and differences between the improvement models TPM, BPR and TQM (Ljungberg 2000) AREA

TPM

BPR

TQM

Focus

Make work more effective. Maintain equipment

Radical productivity rise

Customers and suppliers

Long-term

Continuous work, continuous improvement

Short projects

Continuous work, continuous improvement

Improvement group

Compulsory

Voluntary

Voluntary

Risk

Medium

High

Medium

Participation

Large, everyone actively participates

Not that big, most determined by management

All employees and suppliers should participate

Goal

Well-functioning processes, increased efficiency

Short

Long, ca. 5–10 years

Time for implementation

Long, requires a lot of education

Short

Long, ca. 5–10 years

Methods for measurement

OEE to discover improvement potentials

Compare output and input

Uses QC-tools

Starting point

Existing processes

Re-structuring

Existing processes

Tools

Measurement of OEE. Operators maintenance, improvement teams

IT technology

Market surveys, QC-tools

Looking for problems

Want to find faults, provides Find processes to impossibilities for improveprove, provide lower ment input

Market surveys

11.4 To Handle Uncertainty

287

There is a lot more to say about TPM and the other change and improvement models. This is, however, not the main task of this book, which is why we refer the reader to the extensive amount of literature available in the area. We conclude by presenting a brief comparison between the three improvement models mentioned here, based on Ljungberg (2000), see Table 11.1. It is possible to discuss whether the above-described improvement models really are possible to compare as shown in Table 11.1. TQM means (Bergman and Klefsjö 2003): “… a constant endeavour to fulfil, and preferably exceed, customer needs and expectations at the lowest cost, by continuous improvement work, to which all involved are committed, focusing on the processes in the organisation.” (Bergman and Klefsjö 2003, p. 34)

TQM is an overall approach, involving quality issues concerning the entire organisation and thereby TQM can be regarded as superior to several other improvement models, handling specific areas of an organisation.

11.4 To Handle Uncertainty From the perspective of Toyota’s production philosophy the performance of production systems is reduced by anything that does not add value, i.e. waste. Another way of reducing production system performance is through disturbances. The ambition is of course to create production systems that work fault-free during their entire length of life. However, reality is not always perfect since both internal and external disturbances can affect the possibility to maintain expected performance during all life-cycle phases. These disturbances affect the systems availability, and can be more or less planned and desired. Another way to regard the disturbances is in terms of handling uncertainty. By being prepared for uncertainty in various areas, and by finding ways to handle these uncertainties, disturbances can be avoided or at least reduced. To work with the potential risks in a production system is another way of improving the production efficiency. Different abilities are required to handle uncertainty of various kinds. Corrêa (1994) presents ten examples of uncertainties and how these can be dealt with. A summary of these is presented below: 1. Parts and material supply could be handled by rescheduling, coordination with the suppliers, buffer stocks or internal machine capacity. 2. Product mix demand and uncertainties related to this could be dealt with by fast set-up, rescheduling, stock, and short lead time from suppliers. 3. Machine breakdown could be handled by preventive maintenance, corrective actions or by rerouting flow. 4. Workforce absenteeism could be handled by having a multi-skilled workforce and excess capacity of workforce.

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5. New product introduction implies uncertainties and a way to handle this is by integrating design/development/production, and by subcontracting supply. 6. Management behaviour during change implies training and higher problem awareness in order to handle the uncertainties. 7. Global demand requires a forecasting system. 8. Workforce supply needs internal training. 9. Technology information could be handled by having a possibility to subcontract supply. 10. Union behaviour needs close environment monitoring.

11.5 Eliminating Disturbances During Development One approach towards increased production efficiency is through disturbance elimination already during the design of the production system. The largest possibility, to the lowest cost, to affect the final result is during the development phase. The cost for changes increases almost exponentially when changes are carried out later in the production system’s lifecycle. By regarding the production efficiency of a production system from a lifecycle perspective it is even clearer that it is essential to spend time and resources during the development phase. If not, it is difficult to reach the best production efficiency calculated for the entire length of life of a production system. A number of advantages are obtained with a focus on elimination of disturbances during the development phase: • improved prerequisites for time and cost-effective implementation of production system; • reduced start-up problems; • reduced ramp-up time; • reduced number of production disturbances during operation; • improved cooperation between production and maintenance as part of the work with elimination of disturbances; and • an explicit strategy to achieve balance between flexibility, level of technology, and risk of disturbances. In the following, material from the TIME-handbook is presented (TIME-handbook 2004). The material is based on a design guideline concerning elimination of disturbances during the development phase (see Bellgran in the TIME-handbook 2004). The subsequent description can be seen as a summary of the issues, especially concerning design, presented earlier in this book. The difference is that here the authors focus on how to eliminate disturbances during the early development phases. The design guideline involves a selection of success factors for elimination or reduction of disturbances during the development phase, and general success factors to develop the best possible production system. The success factors are based on the accomplished industrial studies in the research project TIME (TIME-handbook 2004) and on results from previously carried out industrial studies on pro-

11.5 Eliminating Disturbances During Development

289

Table 11.2 Success factors for elimination of disturbances during the development phase Category

Description

Approach

Values and perspectives that are the general starting points for the work with change and development of the production system.

Competence development and knowledge transfer

Prerequisites for the project group and for system designers to create robust production systems.

Strategic concerns

Basic strategies governing the development activities.

Development process

Involves ways of working and structure for change and development of the production system.

Participants

Those developing and changing production systems have a major influence on the final result and on the possibility to identify potential start-up problems and disturbances during operation.

Means of assistance

The production engineering toolbox should comprise methods and tools for production development and specific aid to support change and development of the production system.

Cooperation with suppliers Close cooperation with suppliers delivering machines and equip(machine and equipment ment to the production system affects the possibilities to eliminate suppliers) or reduce potential disturbances.

duction systems and assembly systems (Bellgran 1998). The success factors can be divided into seven categories, see Table 11.2. Below each category of success factor is described in more detail.

11.5.1

Approach

Disturbance Elimination during the Development Phase With many improvement models, improvement work starts when the production system is in operation. However, it is advantageous to start already during the development phase, since this allows elimination of disturbances both during startup and operation. This approach implies that a common frame of reference is created in the company, involving how to determine total production efficiency. The production efficiency for the production system in all life-cycle phases is weighted together, i.e. measurement is not only carried out during operation. Through this, incitement for efficient development work, short and problem-free installation and start-up, and optimal production conditions is created. During the development phase, actions to eliminate disturbances can be carried out. It is about doing risk analyses. It is also about trying to simulate or predict possible problem sources during installation, start-up, ramp-up, and full production. Through this, the prerequisites are provided for production systems to be developed that are robust enough to manage planned and unplanned events of various kinds.

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Systematise the Way of Working with the Double Task By planning the development work in advance, prerequisites for a systematic way of working are created, which favours the final result. Planning should among other things result in a structured way of working, an activity and time planning, decisions about resource allocation, selection of system designers, decision about the projects priority level, etc. By planning and controlling the development process, the possibility to consider aspects increasing robustness is facilitated. Process thinking is also relevant, i.e. to look at production system development as a continuously improving process, based on experiences from each specific development project. The objective is to increase process maturity, where the development process is continuously improved. A Holistic View on the Production System By regarding the production system as a totality, comprising people, machine/equipment, and facilities, prerequisites are created to avoid suboptimisation of various parts of the system and thereby reduce the risk of disturbances. People in the system, work organisation, and working environment are important parts of a production system, which should be developed in parallel with the technical system. The tendency to create work organisation and working environment when the technical system has already been built carries the risk that the solutions are not the best for people in the system. The solutions also tend to be more expensive than necessary, especially if changes are involved. With a holistic view on the production system it is easier to see how various phases of the production system’s life-cycle affect each other and how resources should be used to eliminate/reduce disturbances. Disturbances are generated and arise during various phases of a production system’s life-cycle. By linking the phase where disturbances are created with the phase where they arise, the possibility of disturbance preventive work increases. For example, a mistake during installation can appear later as a start-up problem and/or as disturbances during operation.

11.5.2

Competence Development and Knowledge Transfer

Common Terminology Common terminology involving relevant concepts, key figures, and measures is important. A common language facilitates information and communication. A common terminology also facilitates measurement and work in improvement groups (for example by the use of statistics, possibilities of comparison, etc.) with the purpose to achieve a robust production system.

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Models for Knowledge Transfer Within a very slim organisation it is hard to have any time over to transfer important knowledge and experiences between individuals and between various functions in the company. This is valid not least concerning the knowledge available on design and start-up of new and changed production systems, machines, equipment, and system suppliers important for the ability to develop robust production systems. Knowledge and experiences among individuals which is important to transfer and keep within the company has to be identified. After that it is possible to determine how to transfer it. Examples of models or ways of transferring knowledge are documentation, training, the apprentice system, doubled competence within prioritised areas of responsibility to obtain continuity, use of staff organisation and work rotation. An explicit strategy for how to keep and develop knowledge and competence among individuals is a key issue, rather than what models to use. Part of this strategy is about allocation of tasks between production development and production engineering, and how knowledge should be transferred between and within these functions. Education of system designers in various subject fields, and in development methodology and use of methodology is also of great importance. Orderer Competence To eliminate disturbances at an early stage, orderer competence for procurement of disturbance-free solutions of machines and equipment is important. Among other things it is about being able to specify requirements towards the machine supplier, and about the experiences you have of various suppliers. As an orderer, a purchaser of production equipment, you have to know what possible levels of technology to start out with, what technology is actually to be ordered, and if that is the right choice for the intended production system. It is also important to put the right questions to the supplier to come to good agreements. It might be an advantage to know the supplier – and thereby its technology, service and educational ability. Relevant knowledge for cooperation with machine and equipment suppliers might be spread all over the company, not least among operators and maintenance personnel. Studying other companies who have installed equipment from the supplier might be valuable. Yet another issue worth mentioning is the consequences of mixing equipment from several different suppliers. The consequences should be considered since there is a risk of disturbances in the interfaces between various subsystems. To sum up, without orderer competence in the company there is a risk of becoming dependent on the supplier, bad and poorly adapted solutions, disturbances and problems with equipment, and in the long run probably a risk of out-sourced production.

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Benchmarking A method suitable for knowledge development when developing and changing production systems in order to prevent disturbances is benchmarking. Benchmarking may involve comparison of successful companies within the line of business, among other companies with similar production and production equipment. Benchmarking can also be carried out within other lines of business to increase knowledge about processes, machines, and equipment. Visits to reference plants can provide valuable information to eliminate disturbances before procurement of mechanical equipment.

11.5.3

Strategic Concerns

Strategy for Balancing Flexibility, Level of Technology, and the Risk of Disturbances When a production system is developed, several decisions have to be made. It is common that an old concept with verified technology is compared with new technology, with a different potential for development, but with increased risk of disturbances as an evident disadvantage. The choice highly affects the possibility to predict unplanned disturbances. First-generation technology conveys an imminent risk of teething problems and disturbances, and at the same time it involves a technology leap with increased capacity and production efficiency. For example, a well-tried control system can lose time and capacity compared to a new control system, which on the contrary can cause a lot of its own problems. System complexity, in terms of autonomy of each piece of subequipment related to the entire system, can also affect the change-over possibilities and the set-up times. This will have consequences on the extent of the production disturbances in totality. A strategic decision also involves the choice between entirely new machines, or a combination of old and new machines. A strategic factor to consider, affecting disturbances is, therefore, whether to stick with the chosen machine concept and find a suitable niche, which, for example, allows the use of the same tools, or if a new machine concept should be tested. A risk analysis of the consequences from a technology leap on the conceptual level, level of technology and organisational level provides a base for the type of decisions mentioned above. Other strategic choices such as level of flexibility of the machines, the people in the system, and the production system in totality affect the investment level and the possibility to affect future level of disturbances/production efficiency. Level of automation for various operations in the production system is yet another strategic decision affecting future level of disturbances. A possibility to vary the level of automation between various grades of manual and automatic work can be one way

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to increase the system robustness, i.e. an ability to handle planned and unplanned events with unchanged output2. Another decision of strategic importance is the number of product generations a production system should manage to produce. Similarly, a decision concerning generation thinking for the system is required, that is if development of the production system is part of a long-term strategy involving a series of coming production systems or if the developed production system is solitary. Strategy for Internal and/or External Development (and Production) of Production Systems There are several reasons for manufacturing companies to use internal system designers. On the other hand there are also reasons to engage external system designers, see Table 11.3. The specific situation determines what is preferable in each specific case. It is of advantage to make the choice explicit, based on the consequences during system development in terms of expected advantages. Table 11.3 Arguments to consider when choosing between internal and external system designers Arguments supporting internal system designers

Arguments supporting external system designers

Good knowledge about the company, the product, and other internal issues

External specialist knowledge (technology and method) in the area

Increased possibility to spend time on the prestudy at a lower cost

External system designers have experience from previous commissions and various solutions

Interest in owning technology and concept

Reduces the cost of keeping own competence within system development

Reduced dependence on external personnel for Makes input of new and fresh ideas possible start-up, production, and maintenance Improved prerequisites to improve the system, External personal are not affected by the more rapid and smooth implementation of companies previous traditions from system changes development or existing system solutions Easier to get support for solutions and possibility of faster acceptance of chosen solution

Avoids the risk of internal protectionism

Possibility of increased engagement and responsibility among the personnel for development activities and the production system

2 This was focused on in a research project called “DYNAMO: Dynamic levels of automation”, financed by the Swedish Foundation for Strategic Research (SSF).

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Appointed system designers are decisive for the technical solutions and the knowledge and experiences gained, and are required to eliminate and handle disturbances during the production systems entire life-cycle. An interesting aspect to consider is the fact that when external personnel are engaged, the company involved at the same time finances the knowledge and competence development of others. As a compromise, a combination of internal and external personnel can be used for production system development. Those developing the production system do not have to be the same persons as those manufacturing the mechanical equipment, or working with installation and start-up. In this case, the transfer between project and line-organisation becomes an important issue. Strategy for Arrangement of Spare Parts for Mechanical Equipment With new machines and equipment it might be necessary to identify the vital parts, and to arrange a spare part stock. Knowledge about the time of delivery for various spare parts, and the optimal number of parts to stock affects the arrangements. Spare parts can either be repaired, or discarded and thereby replaced with new. The value of the spare parts, regularity in consumption, time of delivery, and uncertainty in consumption are some issues that determine how to formulate a strategy for spare parts arrangement, which in turn affects disturbance handling and maintenance. Maintenance by External Suppliers versus Internal Maintenance The organisation of the maintenance department depends on the company’s overall strategy for maintenance and production issues. A larger, separate maintenance department might admit a better service. Lack of internal maintenance personnel can in such a case be compensated through specialised staff with specific areas of responsibility, which increases the knowledge about the machines and equipment. An increased closeness between the maintenance organisation, production engineering, and production/operation can offer many advantages in terms of elimination of disturbances. The interface between these functions in terms of responsibility for preventive and remedying maintenance are examples of issues which have to be made clear on a strategic level. Questions to Consider when Purchasing Tools On an overall decision level we find the question whether to buy or make the tools for the machines. Whether using well-tried out or new tool concepts when purchasing tools for mechanical equipment affects levels of disturbance at a later stage. Time of delivery for the tools, and number of functions and combinations of tools are examples of affecting factors.

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11.5.4

295

Development Process

Robust Product Design An important prerequisite for the development of efficient production systems is naturally the product design. Therefore, it is advisable that personnel from production and methods planning participate in product development to give their point of view on the product design, based on the possibility to produce it in a rational way with a minimum of disturbances. Different methods for adaptation of the product to production are advisable to use such as Design for Manufacturing (DfM) and Design for Assembly (DfA). Several, and late engineering changes during start-up and operation increase the risk of disturbances and losses in the production system. The risk of cassation also increases, as does the risk of obsolete products with various change orders to adjust. Systematic Way of Working The development activities can be separated into preparatory design resulting in a requirement specification, and design specification resulting in a suggested production system solution. Often, too little time and resources are allocated for the important preparatory design activities. The result is revealed in terms of problems and disturbances during start-up and operation. One aspect is the possibility to finance the development activities. Requirements for the foundation of the investment request are another. Aspects of importance related to the way of working are experience and knowledge among the decision makers, system designers, and operators. The choice of system designers, time and other resources allocated for the development project, and the machine suppliers’ knowledge and interest in cooperation, affect the way of working, which is of importance for the final result. The use of various methods and their integration in the product development process is also of importance to support a systematic way of working where various affecting aspects are considered. What methods and tools are available should therefore be investigated. Preparatory Work: The Foundation for a Successful Production System The preparatory work aims at gathering and putting reliable data together, which forms the basis for the subsequent development activities. The importance of this cannot be emphasised enough when aiming at early disturbance elimination. Limited resource allocation during this phase is, for example, justified by a risk that no project will be started. This should be weighed against the risk associated with low resources allocation if the project actually starts. The preparatory work builds up knowledge. The gathered knowledge and experience from the existing production

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system, among the company’s operators, production engineers, and maintenance personnel, is useful for elimination/reduction of disturbances already when manufacturing/purchasing new equipment and when changing/building production systems. Performing evaluations of the existing production system during the development phase, before designing a new system, can result in improvements of the existing production system as well. One industrial study showed that an investigation of existing mechanical equipment carried out with the purpose to learn from its pros and cons before investing in new equipment, resulted in faults being discovered and taken care of in the existing equipment. The preparatory work should include pushing investigations to determine objectives and strategies for production systems to come. The background for this is analysis of development possibilities and market requirements, identification of requirements from various interested parties, objectives and strategies on company level affecting the production system, analysis of the interface with the surroundings and the establishment of core competence. Production volume and production design have the largest impact on the final design and function of the production system. Requirement Specification: The Result from the Preparatory Work and Basis for Design Specification In the requirement specification, goals for the production system are specified on a concrete level as a result of the preparatory work carried out. The requirement specification is the starting point for the subsequent work on the design specification and detailed solutions for the production system. The requirement specification is also a starting point for coming evaluations and follow-ups of the production system’s fulfilment of the specified requirements. It is necessary to have a specific requirement specification for the procurement of machines and equipment. In several companies, handbooks with technical specifications to start from are available with information about legal requirements and guidelines associated with various types of machines and equipment. The extent and level of detail in a requirement specification depends on issues such as the size of the equipment, complexity, cost, and level of automation. It might be relevant to focus on other issues in the requirement specification, such as financial and legal issues. A requirement specification should also comprise requirements related to work organisation, working environment, and personnel-related issues such as education. Even if the changes are small and all activities are carried out by internal personnel, it is necessary to specify the requirements carefully. The quality of the requirement specification is decisive. If the requirement specification has good support and is developed in an adequate way, its purpose to be a guide for the work team during development is fulfilled. If not, it loses its function. This does not mean that it should be constant over time; on the contrary the dynamics should be reflected in the requirement specification. A good requirement

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specification can also involve a distinction between requirements and wishes, and a prioritisation of the requirements. Development and Choice of Production System Solution You can either choose to develop one detailed production system solution, or have guidelines prescribing how many alternatives you want to have and choose between. Industrial studies show that it is common that one solution is chosen quite early in the development process. With several suggested solutions, evaluations can be carried out to identify the best final solution, based on the specific requirements. It is also possible to combine conceptual solutions or detailed solutions from the different alternatives into a new suggested solution which might be judged as most advantageous for the production system’s total production efficiency. The production system’s technical, economical, and conceptual length of life (see Chap. 2) is not always equal. The conceptual length of life, i.e. the length of life of the principal solution described by the system, might be much longer than initially planned for. The relation between product generations and system generations is relevant to consider when developing systems based on a long-term perspective on production efficiency. The work with system changes, and above all with developing suggestions for a new production system, is very demanding and involves a large number of activities in several phases. Various methods are of great help to identify and structure activities in order to support the creative and analytical process when aiming at robustness. Dependent on whether it is an assembly system or a parts production system, the prerequisites vary. The extent and the complexity of the task are too extensive to be described in detail here. The system aspects presented in Chap. 6, Fig. 6.5, can be used as a support when identifying interesting aspects and choices. Explicit Strategy Forming the Work Organisation The operators’ knowledge is naturally very important for the production efficiency. Aspects such as experience and education of operators, strategy for training for example operators training operators, and possibility to widen the area of knowledge and responsibility, are of importance for the production efficiency through the possibilities for the personnel to prevent and handle disturbances. Another aspect of importance is the necessity of planning for an attractive work place. A production system should be planned to be both efficient and attractive as a work place. By planning the work organisation and the work environment in parallel with the technical system, the possibility to achieve good solutions with high robustness increases.

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Participants

The Significance of the Project Team The project leader’s role is obviously important for successful development of a production system. The project leader’s knowledge, competence, and perspective affects or governs the management of the project, what activities are focused upon, which work procedures are chosen, if methods are used, etc. The project leader’s view on what to do during the development phase to eliminate and reduce possible start-up problems and disturbances are decisive. The reason for developing a new production system is often reflected by those working with the development. If, for example, it is a new production system for a new product, involvement from engineering design/product development is more important than if the development is due to a demand for increased capacity. The system designers are usually production engineers. Development and change of production systems is a non-routine task, normally part of the area of responsibility of the production engineer, unless production development is separated from production engineering. The need for methods has been shown to largely depend on how long the person involved has been working as a production engineer, i.e. knowledge and experiences governs. The combination of good knowledge and experience, and a systematic way of working, where methods and tools are used in a good way to create a robust production system is unbeatable in a team composed of various specialist competences. Operator Involvement in the Development Phase Operator involvement in the development and start-up phases increases the quality of the production system. It is also important for the support and training of handling and maintenance of machines and equipment. Operator involvement when visiting equipment suppliers can, for example, lead to an improved basis for decisions in relation to which supplier to choose. The possibility and need for operator involvement varies depending on the project, the technical complexity of the system, and whether operators can be recruited from the existing organisation or if new operators have to be employed. Involvement should be weighed against efficiency from a time and resource perspective, and convenience for ordinary activities. Usually, operator involvement means that the operators give their point of view on suggested solutions, often represented as a layout. A phase in the development process where the involvement of operators is especially relevant is during evaluation of the existing production system. Participation in projects on the operator level can also be used as a strategic tool to teach others.

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The Maintenance Organisation and its Involvement in Early Phases The maintenance personnel’s knowledge about specific machines and their handling determines how production disturbances are taken care of. Machine operators often need to be in place when maintenance personnel are to trouble-shoot and take care of problems. Simultaneous education or training of operators and maintenance personnel on specific machines is therefore of advantage. Early involvement of the maintenance function in development projects makes comparison with existing equipment possible which provides important information when deciding what equipment to purchase. The maintenance personnel have good knowledge about what is functioning and what is not functioning since they work close to production. It is advantageous if the maintenance function participates when areas of responsibility for operator maintenance are formulated. Involvement when specifying requirements for procurement of standard machines can for example concern a request for a specific type of component, for example a lubricating system, of which maintenance have experience and know works well. Cooperation between Product Development, Engineering, and Development of Production Systems Various methods for adapting the product to production during engineering design aim at developing production friendly products. To work with elimination of disturbances when developing the production system also means a necessary feedback to the product design. It is valuable if engineering designers can participate with their experience in the system development project. However, it is more common that system designers participate in product development than vice versa.

11.5.6

Means of Assistance

A Structured Way of Working and Use of Methods During the Development Process Methods used to support product development often emphasise the industrialisation of the product. Production development often lacks support. It may, therefore, be necessary to develop further methodology and tools for this to create a balance between product development and production development. Generic methods supporting the development of the production process could be adapted to suit the specific company. Sometimes it is also necessary to make modifications suiting the specific project. When the company follows a generic project methodology, specific adjustments are needed in order to support a project that deals with the development of a production system. Various simulation tools are useful during system development, for example flow simulation, simulation of work places and

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layout planning. A tool for risk analysis is process-FMEA which is useful to eliminate potential disturbances at an early stage. Examples of Tools for Trouble-Shooting and Maintenance A machine supplier can suggest a maintenance schedule, which later can be modified by the maintenance department based on their experiences. Other participants can be operators since formulation of a maintenance schedule should be carried out with personnel from various functions and levels. When it comes to marking to facilitate trouble-shooting, the maintenance department can have valuable knowledge on how to mark machines concerning electric cables, machine signs, or different components. With a stringent principle for marking, trouble-shooting is facilitated. Documented Evaluation of Supplier A continuously updated guide or check-list for evaluation of machine suppliers facilitates the choice of supplier. With a systematic and documented evaluation process the risk of allowing only the lowest cost determine what supplier to choose is decreased.

11.5.7

Cooperation with Suppliers

Evaluation of Suppliers and Criteria for Selection A thorough evaluation of machines and suppliers increases the possibility to avoid purchasing mistakes. A common reason for mistakes, when purchasing, is that the suppliers initially present large price differences in their offers, a difference which might be shown to be incorrect when the offers are thoroughly reviewed. This underlines the need to make relevant comparisons between various choices and possibilities in the offers. It is important to investigate the machines and evaluate the suppliers since this allows relevant comparison between suppliers, products, machine capacity, delivery time, delivery reliability, final price, and analysis of consequences. The investigations should also be documented in a structured way. Similar advice is valid also for the suppliers’ organisation concerning mechanical equipment such as service, distribution organisation, stock, and delivery possibilities. Yet another important aspect is the suppliers view of their customers, an issue that will determine how the company is prioritised compared to other customers (attention and priority in the customer–supplier relation). A structured and documented comparison makes it possible to develop a methodology for supplier evaluation, which increases the orderer competence and the possibility of successful machine projects.

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Knowledge and Service by Distributing Agents The machine supplier’s knowledge and ability to provide sufficient education and service for delivered equipment should be taken into account when mechanical equipment is procured. This is relevant for coming maintenance and disturbance handling. Supplier maintenance by on-line connection to the machine is one way to involve machine suppliers in the work with maintenance and production disturbances. Information and Quality Assurance when Cooperating with the Supplier Exchange of information between the buying company and the company supplying the machine is of great importance for the achievement of a good final result, in terms of robust machines based on specified requirements. Components from third- or fourth-tier suppliers are in several cases the root-causes for start-up problems and disturbances during operation. Therefore, quality assurance of the supply chain is important, especially for critical components and subsystems. Through identification of critical components and their suppliers, risk assessment can be carried out and relevant decisions can be made in order to prevent disturbances. Supplier cooperation in the interface between various machines/equipment might be a way to reduce problems and disturbances when connecting subsystems. The machine design should be evaluated based on requirements and user-friendliness, in order to reduce the risks for handling faults and disturbances. The motivation for various interested parties to identify and find faults before serial production is of importance among other things for the test results.

11.5.8

Systematic Way of Working: Basis for Robust Production Systems

When changing or developing new production systems it is important to place high requirements on good quality of the decision process and on reliability in the basis for decisions. Reasons are, as previously mentioned, that the consequences in later stages often are severe. With a well-functioning systematic way of working, prerequisites are created to achieve a well-worked out and complete foundation for decisions concerning the design and functions of the coming production system. The objective is a robust production system that can handle both planned and unplanned events with maintained performance.

Chapter 12

Production Development in the Future

Abstract How important will industrial production be for Sweden and other Western countries in the future? Will production be an important part of the companies’ core competence or will the outsourcing trend continue? These are a few of the issues we will discuss in this chapter. Other topics are possible future trends, success factors and key areas related to production development. A brief international view will also be given as well as a summary.

12.1 Trends and Visions Trying to extrapolate the development and trends we see today in order to predict the future is not simple, see Fig. 12.1. The most likely result is that the prediction will be incorrect. It is, however, still important to do this experiment or scenario planning regarding industrial production. It is very much about the purpose of looking ahead. Is the purpose to identify different future scenarios in order to be better prepared for handling them or is it to identify different alternatives and strategies to be a part of the future and to have an influence on the process? In this chapter some interesting issues and identified success factors are discussed, however, without the ambition to be fully comprehensive.

12.1.1

Assembly: The Mirror of Change

Different philosophies have been prevailing in production during the past century. In earlier chapters, we classify dominant philosophies into craftsmanship, mass production, and lean production. The philosophies cover different ideas around for example technology, work organisation, handling of volumes and variants, as well as time and quality aspects. Dominating philosophies have often had a great M. Bellgran, K. Säftsen, Production Development, © Springer 2010

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Fig. 12.1 It is not easy to extrapolate the development of future production systems (Illustration: Mario Celegin)

impact on assembly operations and assembly systems. The assembly lines that existed in the 1970s still looked more or less as during the Ford era, but major changes have been made during the past 30 years. It is possible to divide assembly layouts into layouts from the 1970s, 1980s, and 1990s. During the 1970s, the dominating system was straight, driven assembly lines where operators were controlled by the line. The “good work” was discussed and major principles were developed during the 1980s, and that work continued into the 1990s. Several assembly lines, developed in the middle of the 1990s, are considered to be a combination of the straight assembly lines and the good work. The most recent assembly systems from the beginning of the 2000s indicate a return towards assembly lines, however, while being conscious of creating a good work environment. This trend has also been noted by for example Springer (1999), who calls this re-Taylorism. Assembly is an activity that is highly manpower consuming and thus often difficult to fully automate. Lower levels of investment, compared with the highly automated systems used in machining and part manufacturing, enable somewhat simpler changes. The high personnel intensity also makes it very interesting to test and study different work organisational concepts. Assembly is the last step in the value adding chain of activities, prior to testing, packing, and distribution, and thus it is the step that ties all activities together. The consequences of product development, part manufacturing, and materials supply are shown in assembly, which makes this step extremely interesting from many perspectives. The degree of change is different for assembly compared with for example parts manufacturing depending on the chosen perspective of change. A technical perspective gives another picture than a work organisational perspective. The global struc-

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tural transformation, which can be seen in the entire production area will, however, lead to significant consequences for both technology and work organisation. INDUSTRIAL EXAMPLE: 15 COMPANIES’ VISIONS OF THEIR FUTURE PRODUCTION SYSTEMS Most companies have more or less expressed visions of the design of their future production systems. In 1999, 15 companies described their visions in the following way (in short): “… A future production or assembly system shall correspond to expected requirements. Assembly systems, in particular, need to be prepared for handling outsourcing. This includes for example the ability to buy subsystems from suppliers, whilst final assembly still is performed at the own company. An assembly system shall be easy to change and the possibility to adapt to changes of demand is an important flexibility aspect. Reconfigurability is a commonly used word. One way of achieving this flexibility is through a modular production process. This simplifies future layout changes and transfer of parts from one production system to another. It also facilitates a gradual extension of a system. This could be for example gradually adding more equipment or a gradually increasing mechanisation. Modularised products were also considered important in order to prepare for future outsourcing. A product module is not necessarily equal to a production module. More mutual factors for future production/assembly systems were identified such as line layout, clear division in part assembly and final assembly, sequential assembly. Already at the end of the 1990s, an increased focus on line layouts of final assembly could be noticed. This trend has continued ever since. Several companies noticed a change in the view on assembly lines, from a large resistance mainly from operators, to a more positive view. The possibility to reduce the borders between machining and assembly, or to a greater extent to integrate these processes, was also mentioned as a future issue for success. On the contrary, instead of making a part and then assembling it to a base object, it may be made directly onto the base object. Another important part of the total vision links to a new view on mechanisation. A reduction of the need for mechanisation was described, especially in the final assembly, to be a consequence of improved product designs. Clear modules simplify final assembly and the need for mechanisation will become minimal since the tasks will become very simple to perform manually. Complex and automated assembly systems with low availability were considered by many companies as a great disadvantage. As one company expressed: “Thus we are of course not resistant to mechanisation in any way but it has become a purely financial issue and a question about how to design products … The most important buzz word today is simplicity; we are filled up with complex robot systems and complex logistic systems.” Source: Säfsten and Aresu (2000)

Future assembly may take different shapes. Companies and industrial sectors are also differently mature and a good assumption is that small- and medium-sized manufacturing enterprises (SMMEs) in the future will be at the level of development of today’s larger companies.

12.1.2

Trends Within Two Sectors

The automotive industry is often described as a good example, both regarding visionary and on-going development projects. Concepts developed by the automotive industry often become standard to many companies and not only to their suppliers.

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Why is the automotive industry often in focus and why is it always in the very forefront of production? These questions have many answers. Vehicles are complex products in a prestigious business which attract public interest. The automotive industry has about 150,000 employees in Sweden alone which has 9 million inhabitants. The main actors are Volvo Cars Corporation, Saab Automobile AB, Volvo AB and Scania AB. The automotive industry represents 15% of the Swedish export industry and about 20% of industry-related R&D activities (Näringsdepartementet 2004). Large resources are invested in research and development. This provides a good base for new thinking also regarding production and production development. The ongoing consolidation of the automotive industry leads to fewer, but larger, actors on the market. This has been observed also in Sweden, as for example for Saab Automobile in Trollhättan. General Motors, the owner, wanted to centralise the European production of Saab and Opel medium sized cars. The two GM factories, Saab Automobile in Trollhättan and the German Opel factory in Rüsselsheim, were put against each other. The two company boards submitted proposals to GM Europe on which necessary investments were needed, and about transportation costs, personnel costs, quality, and productivity. The respective governments also promised some efforts. The Swedish government promised for example infrastructural investments, competence development, and money for R&D within strategic areas (Näringsdepartementet 2004). A study performed by Statistics Sweden (SCB), on behalf of the newspaper Dagens Industry, showed that about 24,000 jobs in Sweden were threatened if GM at that time had chosen to shut down manufacturing in Trollhättan (DI 2004). The factory in Trollhättan employs 3,000 people in production, but a shutdown would also affect other Saab factories as well as suppliers in several tiers, besides the service sector. Today, in 2008, we see a dramatic shift for the automotive industry in terms of changing product requirements, capacity fluctuations, and consequences of the financial situation. The electronics and telecom businesses have also been exposed to large changes. We have already seen a clear consolidation of the market with price reductions and mergers. Ericsson and Sony announced their merger during spring 2001. Prior to merging with Sony, Ericsson got rid of its production capacity for mobile phones, which was handed over to Flextronics (Ny Teknik, 010407) who, however, soon announced that the volume production was going to be transferred to Flextronics’ factories abroad (Ny Teknik, 010607). Sony Ericsson in 2004 again began investing in its own factories. Today they have production capacity divided into three equal parts: own factories, Flextronics, and other manufacturers, which means that they are now gradually building a considerable amount of own production (Ny Teknik, 041103). A major reason is that they want to be able to better meet market demand through better possibilities to plan and act. Some people at Sony Ericsson would like to see an increased share of own production. More own production would make it easier to make use of increased production competence, without exposing this knowledge to competitors. Another reason is the high product complexity. Pres-

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ently, only Sony Ericsson themselves are capable of manufacturing the new phones (Ny Teknik, 041130).

12.2 What is Required from Future Production Systems? We will probably see an increasing knowledge content also in future production systems (Teknisk Framsyn 2003). Continuous knowledge development within subareas and technologies act together to form more complex production systems that require more knowledge to handle, which also is a prerequisite for producing more and more high-technology products for a market exposed to high competition. Increasing level of knowledge of how to work efficiently in the production system is also required. This includes developing new work methods, to have personnel with the right competence, and to develop methodologies for handling for example structure, creativity, and collaboration (Teknisk Framsyn 2003). It is obvious that such a future scenario calls for both industry-related research and development, and specifically more resources for production research at our universities than what we see today.

12.2.1

Key Areas and Success Factors

Teknisk Framsyn (2003) describes five key areas that are believed to be the most crucial for the production system during the next 15–20 years: • • • •

the customer will be able to choose individualised products; individuals and companies may live locally but act globally; production and product development are carried out in networks; functional sales creates new opportunities and contributes to closed resource loops; and • the intellectual capital is the most important competitive mean. The development trend is towards single unit production of customised products, however, in large total volumes. The development trend is also towards a more open structure for labour and production, which enables new ways of working and wider collaboration over local and global borders. The trend towards increased functional sales, which will probably continue, has been discussed for quite some time. Functional sales bring new business modes for producing companies where the physical product is the functional carrier. Functional sales may for example include acquiring functions from machine or equipment suppliers, who accept the total responsibility for the entire life-cycle of the equipment, including operation, maintenance and service. It also allows an improved possibility for continuous updating of new technology in the equipment. In order to enable that, the equipment supplier needs to have full control over the product and for

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example be capable of following the operations through embedded systems or other technical solutions. Chapter 10 presented a number of success factors, or “best procedures”, for achieving world-class production. The strongest explanation of the strength of the production and company success is the ability to take care of the production environment and to continuously improve its production resources (Roth and Miller 1992). Another important factor is the attitude to the personnel as a resource. It is not only about maintaining the existing competence of the production personnel, but also to develop it. Unfortunately, it is however easier to motivate maintenance and upgrading of machinery and equipment than to upgrade the humans in the system. The most successful producing companies are also much more experienced when it comes to advanced process technology (Roth and Miller 1992). The main reason is probably their focus on production resources and quality. Or the other way around, without a proactive resource and quality focus it is hard to implement advanced technology successfully. “Manufacturing success requires matching management and process innovation. Emphasising advanced technology without supporting infrastructure portends certain disaster, which Superstars [successful companies] appear to be avoiding.” (Roth and Miller 1992, p. 79)

Another relevant conclusion, drawn from early American studies at the beginning of the 1990s, is that superior production performance is based on concurrence and not on sequence. The development of the strategic production capability is very dynamic and requires attention to the continuous change of the production environment (Roth and Miller 1992). Nothing is for free; in order to be good at producing, production has to be prioritised and considered to be a competitive weapon (Skinner 1969). This is also very clear in today’s dominating philosophy of lean production. Development may take time and is to a great extent about changing mindsets, i.e. to change the entire operations both in mind and in action.

12.2.2

Lean Production as an Objective

Today there is no comparative production concept that in such a radical way utilises and develops production into a company’s strongest competitive mean as lean production. Lean production has its starting point in fundamental values and mindsets and not in concrete technologies and methods; see the press cutting (Flinchbaugh 2003). Many companies in Sweden, not least the large companies, were occupied over a long period by introducing lean production. As mentioned earlier, Scania is a Swedish company which has been focused on introducing lean. Another company, which has commenced a similar journey, is Kongsberg Automotive in Mullsjö, Sweden (Ny Teknik 040929).

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Liker (2004), who has visited hundreds of companies and trained employees from over a thousand companies in lean production, finds a steady trend where companies show an inability in implementing the Toyota production system and lean production. Only a limited part of the meaning of the Toyota production system has been spread. There is a “lean production cell” here and a pull system there, according to Liker (2004), who like Flinchbaugh (2003) also believes that American companies have adopted the different tools without understanding why they work together. The comprehension is about seeing the power behind the Toyota Production System; the culture of continuous improvements to maintain the principles of Toyota’s philosophy (which were described in Chap. 1). Liker (2004) considers most “lean enterprises” to be focusing on eliminating waste, which represents the Process category in Liker’s 4P-model, see Table 1.2 in Chap. 1. However, it is also necessary to work with the other three Ps (Philosophy, People and partners, Problem solving) since improvements otherwise tend not to become sustainable. It is all about adopting the very core or culture behind continuous improvements in order to succeed (Liker 2004). INDUSTRIAL EXAMPLE: LEAN PRODUCTION AT KONGSBERG AUTOMOTIVE A couple of years ago, a group from Kongsberg visited Japan in order to be trained in the Toyota Production System at one of Toyota’s subcontractors. This was not caused by any crisis, but it has been described as something that had to be done. After this course, the company has gradually started to implement parts of lean production. As a first step they introduced 5S: Sifting (Seiri) – Sorting (Seiton) - Sweeping (Seiso) – Standardise (Seiketsu) – Sustain (Shitsuke). They are trying to minimise distances and come closer, all in order to shorten transport distances that do not add value. The aim is to be capable of producing as well and cost efficiently as anybody anywhere in the world. In order to accomplish that, the personnel cost in a finished shift gear system must be as small as possible. This could be done by introducing robots and different kinds of automated machinery. The cost for material is also high, which makes it even more important to reduce personnel cost. It is, however, not always easy to introduce a new way of thinking and working, and not all people are fond of being videotaped in order to work smarter. Source: Ny Teknik, Wednesday September 29, 2004

It is unclear how far Swedish companies have reached according to the 4P model, but a qualified estimation would be that Swedish companies, similar to American companies, focus on Process to eliminate waste. We will probably in the

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future see that lean production begins to be applied also at small- and mediumsized companies, hopefully with good results: “The Toyota Way is a lesson, a vision, and inspiration for any organisations that want to be successful in the long-term.” (Liker 2004, p. 14)

12.2.3

Right Automation

Automation is regarded as a mean to rationalise and to make production more efficient. This is fundamental also in the future. Automation of manufacturing with high flexibility at a reasonable cost will, however, probably be hard to achieve through automation also in the future (Teknisk Framsyn 2003). No pioneering technology development that can solve this is expected during the next 15–20 years. Clearer concentration on standardisation of manufacturing equipment is however detectable. Through creating modules with clear functionality, also more flexible manufacturing systems may be created to a reasonable cost. There is certain evidence of a future weakening trend regarding level of automation in future production systems. This is mostly due to the need for flexibility. Many continuous product changes cause changes of tools and fixtures, as well as of the automated equipment, which is time consuming and costly. The production volume of specific variants will thus be one of the guiding conditions for choosing to automate or not. Automation should be considered to be a means, not a goal in itself, for achieving efficient production. Too many very advanced, but not suitable, automated systems have been developed. The issue of right automation has therefore started to be discussed. The purpose of right automation is to allocate tasks between man and machine in the most suitable way in each situation. FURTHER STUDIES: DYNAMIC LEVEL OF AUTOMATION FOR ROBUST PRODUCTION SYSTEMS The research project DYNAMO focused on establishing strategies and developing tools for varying levels of automation, LoA, of tasks in industrial production systems. The level of automation may vary from entirely manual to fully automatic. The purpose is to improve robustness of a production system during all life-cycle phases (e.g. during ramp-up, changeover, and full production). The project was financed by the Swedish Foundation for Strategic Research (SSF) and its research program ProViking. DYNAMO was a collaborative project involving Chalmers Institute of Technology in Gothenburg, School of Engineering in Jönköping, and Swerea IVF AB together with nine partner companies.

A production system may be studied according to its life-cycle phases. In this approach, right automation means that it is possible to adjust the level of automation depending on the present life-cycle phase of the production system. During for example running-in and ramp-up to full production, it is possible to gradually increase the level of automation for certain critical operations. The possibility to

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alter the level of automation makes it less sensitive to disturbances, thus leading to a more robust production system. The same thing applies for changeovers prior to for example new product variants. In these situations, it may be preferred to carry out some operations manually, while running-in the automated equipment.

12.3 Future Production from an International Perspective A number of programs and declarations have been made during recent years regarding future production from an international perspective. Threats have been detected and driving forces for change have been identified. Long-term strategies and different action plans have been formulated. The proposed actions are different. Some are more political and focus on how to create conditions for competitive production. Other are more focused on how the manufacturing companies may act in order to improve. It is of course necessary to combine these two sets of actions. Through creating good conditions for companies, research, education, development of networks and cooperation, together with well-defined strategies and offensive actions on for example product and production development, the negative trend for the western world may be changed.

12.3.1

Production in Europe

The future role of the European manufacturing industry has been discussed by many experts, from industry as well as from research, and reported by Manufuture (2003). The purpose was to generate long-term visions for production development in Europe as an action to fight the negative trend for production. European manufacturing industry represents about 22% of the gross domestic product (GDP), but is more and more challenged by global competition and especially by the Asian countries (Manufuture 2003). In East Asia, the production share of GDP increased from 28% in 1990 to 32% in 20011. The number of people employed in the manufacturing industry is also diminishing and was 18% in 2003. Western Europe has more than 20 million companies, which employ 122 million people. In the new candidate countries, there are another 6 million companies. Out of all European companies, about 10% (2.5 million) are manufacturing companies. The majority of the European companies are so-called Smalland Medium-sized Enterprises, SME 2 (93% micro companies, 6% small, 1% medium sized, and only 0.2% are large companies). The average size of a manufacturing company is 16 employees. This fact affects factors such as flexibility, 1

World Bank, World Development Indicators, 2003. The European Commission makes the following recommended definitions (see e.g. www.nutek.se): SMEs have less than 250 employees, small companies less than 50, and micro companies have less than ten employees. 2

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innovativeness, export share, and not least interest in own research and development as well as collaboration with academic research (Manufuture 2003). The report also states that if the manufacturing industry is to survive the coming two decades, it has to change drastically and develop from resource-based to knowledge-based manufacturing: “A critical step to prepare for the future is to adapt an underlying sociotechnical base, through integrated activities research, education, and innovation to be carried out by industry, academy, and public institutions. Decision makers must also be guided by a clear vision on manufacturing for the next decades and understand the fundamental challenges that must be met to realise the vision.” (Manufuture 2003, p. 18)

Manufuture (2003) gives five driving areas for future efforts: • • • • •

increased research and technological development; international cooperation in production research; key role of education and training; the need for a stimulating operative environment for industrial innovation; and an improved competitiveness for European research. FURTHER STUDIES: PRODUCTION YEAR 2020 Planning, coordination, operations, and maintenance of manufacturing operations in the year 2020 will keep and enforce the need for skilled human capital. Integration of human and technical resources will become critical in order to improve productivity and work satisfaction in Europe. R&D, product development, production, marketing, and customer support will be more and more integrated, and they will eventually work together as a virtual unity that links customers to product innovators. New enterprise architectures will be developed. The assets of an innovative company are moved away from physical equipment towards more immaterial assets. The form and identity of companies are developed more towards virtual structures that come together and dissolve as a response to a dynamic marketplace. The integrated company cannot exist without material suppliers – although they are becoming fewer – that produce raw material and reuse material into finished components and products. Source: Manufuture (2003)

Another study, called FuTMaN, developed a number of scenarios for the future European manufacturing industry in 2015–2020 (Futman 2003). The FuTMaN project aimed at assisting the European Commission in investigating which technological, knowledge related, and organisational abilities are needed in order to allow European manufacturing to maintain its competitiveness and sustainability. Three multidisciplinary approaches were chosen for the project: (1) development of scenarios with the purpose to highlight possible threats and opportunities that manufacturing may face in the year 2020, (2) in-depth studies of three manufacturing areas: material, transformation process, and industrial structure, and (3) carrying out of four case studies in the automotive industry. An addition was made in the form of an integrating study that investigated the influence that power, social

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attitudes, and politics may have on the industrial transformation. FuTMaN gave six general recommendations: 1. 2. 3. 4. 5.

manufacturing needs to attract and retain people; continue building European innovation systems; networking takes time, be patient; from specialisation to integration of new materials; sustainability requires champions both from manufacturing and from management, manufacturing should be proactive but cannot do that alone; and 6. transition management can lead to improved management. The first issue was initiated by the fact that in many situations, there was significant concern that the lack of qualified and skilled personnel is growing. The demographic trends with an aging population were the first concern. It was an even greater apprehension that manufacturing industry is not believed to provide attractive advancement opportunities. Solutions to this problem require collective actions from all parties (Futman 2003). The study discusses four scenarios: global economy, local standard, sustainability, and focus Europe. The study states for example that a key issue to success is how well the technical, organisational, and societal factors are tied together in order to enable system changes. This means that it is necessary to have a comprehensive view on production systems in order to be successful. It is not feasible to suboptimise different parts of the system. This requires an awareness and understanding of the need to consider all parts of the production system and how they interact. The development towards knowledge-based manufacturing is thus extremely important (Futman 2003).

12.3.2

Production in USA

A large national program was carried out in USA during 1998–2000 as a part of the International Manufacturing Technology Initiative (IMTI), see IMTI (2000). The purpose was to gather industry, academia, and politicians around future production and industrial engineering in USA. The vision of IMTI included the following areas: • integrated management ensures that all decisions are made considering the possible effects by the entire company and supply chain; • science-based manufacturing based on the progress of the fundamental understanding of material, processes, and their interactions on micro and macro level; • intelligent processes and equipment that automatically respond to changes that affect manufacturing process, the company, or the supply chain; • plug-and-play for technical systems, manufacturing systems, and business systems enables integration of new capabilities;

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• flexible, distributed operations based on self-integrating systems, common knowledge base, and a robust infrastructure for communication; and • fully integrated and optimised development and manufacturing leads to the right product, in terms of shape, cost, quality, and right the first time and right every time. The program was run in a series of four, so-called Roadmaps: Information system for manufacturing; modelling, and simulation; manufacturing process and equipment; and technologies for enterprise integration. The more extensive program was carried out in a structured process with contributions from more than 150 companies and organisations. The final outcome was presented as a structured framework that defined and integrated about 274 top level objectives, 700 demands, and 570 tasks. This supported the vision of IMTI for future manufacturing companies (www.IMTI21.org). These programs are just a few examples of all the programs that have been initiated worldwide with the purpose to strengthen the manufacturing industry. This short summary of activities in Europe and USA show however that the issue of future manufacturing is taken seriously and that many people are concerned about the situation. Emergency awareness provides, however, often the best potential for development.

12.3.3

China: The Factory of the World?

It is interesting to study what is happening in China. Jon Sigurdson3 writes in SvD (Svenska Dagbladet, 040220, Swedish newspaper) that the old super power China for 200 years has been lagging in terms of development. He also writes that development during the past 20 years is unique. The country may within a decade catch up with Japan or Germany, according to Sigurdson, who is not modest in judging the prospects of China: “China has visions, ambitions, and intellectual resources to once again become a big power and in the longer term a leading knowledge nation.” (SvD 040220, translated from Swedish)

Imported technology and cooperation with companies abroad has been very important. The creative entrepreneurial spirit in many companies is considered to be even more important, as well as the ability to attract good engineers and a highly trained workforce. These are the main characteristics of successful companies. The Chinese challenge is not only based on low cost and low prices, but also on a quality consciousness that is approaching international top standard. During the past years, Chinese companies have also begun to take over high-tech companies in South Korea and Japan in order to catch up more quickly with the surrounding world. 3

Jon Sigurdson is an Asia researcher at the Japan Institute at Stockholm School of Economics.

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China is not just a factory for the surrounding world, which is easy to believe considering today’s discussion. China is also becoming a knowledge nation, even if they still have some catching-up to do. The development towards becoming a knowledge nation is also the reason why so many foreign companies have established new research laboratories in Shanghai and Beijing. The contribution by the employees in research and development today constitute a much larger share of added value than the industrial production and today this provides an attractive competitive advantage. China also shows a considerable growth in scientific research, which is shown by their share of the world’s total production of scientific articles, increasing from 0.7% in 1986 to 3.6% in 2001, and it continues to grow (SvD 040220). It is also notable that the growing middle classes in China include almost 300 million people, out of which 1/3 belong to a sophisticated customer segment. There is, however, another side of China. We can note that the enormous transformation creates the same pattern as in the rest of the industrialised world, i.e. a change from agriculture to industry and thus an increased urbanisation and increased unemployment. This mobile population can be numbered in the hundreds of millions of people, which creates gigantic social problems, according to Sigurdson. The political dimension is thus crucial for the continued development of China and concerns fundamental questions about market, economy, environment, and the political system. The description of the China of today is a reality that we have to relate to. Other countries are undergoing similar large changes, both nearby and on other continents. The changes in the surrounding world lead naturally to changes of the conditions for manufacturing companies also in Sweden and other Western countries. How we can adapt to the new conditions is thus important.

12.4 Make or Buy? The trend has for a long period of time been to focus more on the company’s core competence. Companies have thus decided on what their core competencies are and to concentrate on related activities. Other companies have been involved in taking care of the more peripheral operations. These peripheral operations need, however, to be well-defined and possible to easily separate from the core activities. Handing over to an external party to carry out or produce what has earlier been done within the company is called outsourcing. The common meaning is that entire activities are transferred, rather than small parts. It is a relationship based on contracts between a supplier and a customer company (Greaver 1999). It can be distinguished from the activity when a company locates their own factories at different locations or in different countries, i.e. relocation.

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Fig. 12.2 As companies focus more on a limited part of their core activity, more and more of their other activities will be outsourced

“Outsourcing is the action to hand over some of the company’s recurrent activities and right of decision to external suppliers, which is regulated through a contract. Since the activities are recurrent and a contract is used, outsourcing goes beyond hiring consultants. In real life not only the activities but also the production factors and rights of decision are also often transferred. The production factors are the resources that make the activities happen and include humans, facilities, equipment, technology, and other resources. The rights of decision provide the authority to make decisions about certain parts of the transferred activities.” (Greaver 1999, p. 3)

Outsourcing was first used as a concept at the end of the 1980s in connection with large companies that started to hand over their information systems to suppliers. Since then, more and more activities have been outsourced, such as administration, cleaning, maintenance, and distribution. Companies have during a long period of time outsourced functions far away from the core. Outsourcing has however over the years come closer and closer to the core, see Fig. 12.2. If companies, that provide products as their core business, outsource for example component manufacturing and subassembly they are very close to the company core. The financial benefits of outsourcing have often been taken for granted. Focus has often been on how it should be done, rather than if, which is expressed by Berggren and Bengtsson (2004): “The fundamental issue ‘to outsource or not to outsource’ has been beyond the analysis, in spite of new conditions and the collected experience during the recent years”. (Berggren and Bengtsson 2004, p. 221, translated from Swedish)

Studies have, however, proven that outsourcing is not necessarily the best solution (Berggren and Bengtsson 2004). A well-considered decision on outsourcing may be resource efficient for a manufacturing company. Companies should be aware that recovering from an unsuccessful outsourcing can take some time. Personnel that have been transferred do not want to return, competence has been lost, equipment needs to be acquired, and shop floor space is being used for other purposes.

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Insourcing is a concept that has occurred when companies for one or another reason have been forced to take back previously outsourced parts of their business. A concept that focuses on making the right decisions concerning in- or outsourcing is rightsourcing. A current phenomenon is what is called the outsourcing boomerang, which can be illustrated by the following example. Companies in USA and Europe have for several years outsourced software programming to India. After some time, these Indian subcontractors started to establish their own businesses in USA and Europe to come closer to their customers (Ny Teknik 040922).

12.4.1

Basis of Decisions and Carrying Through

The driving force for outsourcing may be problems with competence, equipment, or high costs, which also historically have been reasons for outsourcing (Greaver 1999). Today outsourcing is being used for restructuring organisations and focusing on core competence and customer service. Everything that distracts from this may be taken into consideration and outsourced. Examples are subassembly or component manufacturing within a manufacturing section. The most important factors when making these decisions could be of different categories (Greaver 1999): • tactical and problem solving issues; or • strategic issues where it is about visions of the future, core competence, structure, cost, performance, or competitive advantages. Outsourcing has become a common phenomenon. This may be illustrated through the range of new notions for describing different types of outsourcing (Ny Teknik 040922): • near-shore outsourcing: shorter physical distances to the countries where the activities are transferred, which related to Sweden could mean contracting partners in for example Hungary or the Czech Republic; • off-shore outsourcing: contracting partners in other time zones; and • business process outsourcing: handing over entire business processes, for example when software providers accept larger responsibility for operations and maintenance. The arguments that companies use to justify handing over production to suppliers or establish new own factories abroad are exemplified by Ferdows (1989): • geographic proximity to market which leads to faster delivery of new products to the market, better customer service, and better conditions for customer adaptation; • lower cost, especially labour cost, but also for example cost for material, energy, or capital;

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• use of local, specific resources such as research centres, universities, suppliers, and customers, i.e. availability to expertise, resources, and experience is important; and • competition can be avoided by establishment in an underdeveloped market. Other affecting factors, which are linked to where production of products or services can be located, could be supplier strategies, transport costs, how to industrialise and plan for future products and production systems, and currency rates. There are different external signs that indicate if a certain production operation is in danger of being relocated, outsourced, or shut down. New large investments in a factory could be a positive sign showing that the owners want to expand the existing operations. The owners’ will to invest is in other terms a guiding factor and could be noted for example early in expensive businesses such as steel, paper, and the pulp industry. A number of factors could portend a factory shut down (Affärsvärlden, 040505): 1. the company has established a factory in Eastern Europe or in Asia and has started to compare profitability; 2. the factory has for a longer period of time sustained losses; 3. there are too many production plants within the company group; 4. the customers and competitors have relocated production to low-cost countries; 5. contractors, such as Lear and Flextronics, will sooner or later relocate their production; and 6. recurrent cutbacks. The risk for changes will thus increase if several, or all, factors are fulfilled for one and the same production factory. When a company has decided to relocate production, other questions occur regarding the actual carrying through of this decision. Which is the best share of a production that could be handed over to a single supplier? Which is the best level of cooperation with a supplier? Is it necessary to make clear borders between production of different subsystems of a product in order to minimise the risk that the supplier will gain knowledge of the whole and thus become capable of starting their own product development? The production system at the chosen supplier also needs to be quality assessed prior to making a final decision on outsourcing. This includes the system development process, system status and manufacturing efficiency, production follow-up, quality, delivery precision etc. The quality assessment needs to provide answers on if the supplier’s production system really can provide the intentioned result. The base for decisions on any kind of relocation and/or contracting of activities can be found at the company owners. If a company has a larger number of production plants, perhaps spread over the world, there are many factors to consider in order to make the right strategic decisions regarding location of production. From Chap. 3 we know that these are important manufacturing strategy decisions. To a

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small company with perhaps one or a few production units, the conditions may be different for making decisions on where to locate production.

12.4.2

Consequences of Outsourcing and Relocation

The trend that led to relocating production (nationally, but above all to a low-cost country or OECD country) has increased considerably during the past years. This type of decisions needs to be regarded as extremely strategic since they may lead to large consequences for a company’s business, not least in the long run. Decisions on where to locate production has consequences both for the own company and for Sweden. A company with its own product development but without own production will probably sooner or later develop problems with the interface between product development and production. They miss the direct and quick feedback from production, which is extremely important for product development. To design a product in order to make it suitable for production requires active cooperation between product developers and industrial engineers. It is necessary to have access to the production environment in order to get fast feedback from production about new concepts, new technology, and ability to create efficient manufacturing. The geographical distance between product development, design, and production is thus a factor that could be of greatest strategic importance. The strength relationship between the own company and the supplier is important to consider. It could sometimes be difficult to fulfil all own product demands from the outsourced subsystem when the activities are handed over to a large supplier with many customers. The position for negotiations vs. the supplier may influence significantly the possibilities for efficient product development. Another risk is that the core competence could be hidden in an activity that is handed over to a supplier. The customer could thus hand over core competence to a supplier unintentionally or knowledge could be handed over that could be the very foundation for future core competence just because the customer does not recognise this (Greaver 1999). As mentioned, it is important to distinguish between outsourcing when activities are being transferred between plants within the company or when the company starts new own plants. From a company perspective the whole world could be regarded as a potential plant. To relocate production to own factories in Poland or Malaysia is thus one of many manufacturing strategy decisions. For a country, however, every relocation of production to other countries has negative consequences on a national basis. When companies relocate production abroad to own factories it can be regarded by the country in the same way as when activities are being outsourced – a new factory in Malaysia will probably not create many new job opportunities in Kumla. The consequences for Sweden and also for the local company will be similar in terms of loss of competence, losing closeness between product development and production etc.

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12.5 Production in Focus After decades of comparatively vague interest, production all of a sudden appeared to be in focus, both in industry and academia, as well as in political establishments. The question is why this happened. Today, we can see the consequences of the relocation of production activities that has been going on for a number of years. Companies sell one or several parts of their production chain, even if they still are in need of this operation for manufacturing or as a service. The consequences become obvious to single companies and to employment at places where entire plants are shut down. It is no longer only single individuals or organisations with insight into the problem that react to relocation decisions. We also begin to see more and more clearly the industrial restructuring that is going on in the entire country. The same trend can be noted all over the western world. The increasing competition from low-cost countries is being discussed everywhere.

12.5.1

Snap Shots

Outsourcing will for obvious reasons be one of the most important factors for industrial production also in a ten to twenty year perspective. Outsourcing is to be regarded as an advanced form of organisational change at a company, but an organisational change that is not only local but also has significant consequences at national and international level. It is actually a substantial industrial structural change that is going on at a global level. The engineering industry is often compared with the shipbuilding industry and the textile and clothing industry that existed earlier in Sweden. Since society could handle the structural change that was caused by shutting down these industrial sectors, it is also assumed that we can handle the new structural change when parts of the Swedish engineering industry are relocated abroad. The production of engineering products is however crucial to Sweden, since they constitute such a large share of Swedish exports and employment (directly or indirectly). In 2002 engineering products had 50.9% share of the total export. This can be compared with the music business which in the same year had less than 1% of the export (IVA 2004). An interesting notable trend is that it should be possible to make a product at all production plants of a company (Ny Teknik, 040819). This affects product as well as production system. General Motors declared that they have a similar strategy for product development through inter alia a common technology platform. Based on this underpinning philosophy, General Motors also introduces a global production system at all its plants, which enables easy relocation of production to other parts of the world (Ny Teknik, 041103). This is also what Scania has been doing for several years. The Scania Production System is identical all over the world. It is thus about clear strategies for conformity in products and production

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systems in order to enable transfer of products between the production plants all over the world. Is it possible to predict future trends based on today’s situation? If the picture presented by published research results is enhanced by the fast information from the media during above all the last year, some interesting trends can be seen. FURTHER STUDIES: SNAP SHOTS 2004 The Swedish increase in production is at its maximum. Is this a false impression or an illustration of the new industrial development, which the Americans call “jobless growth”, i.e. growth without creating more jobs in Sweden? The jobs are created abroad. Not just the larger but also smaller companies relocate some of their activities from Sweden and even more have established activities abroad. Earlier mostly less qualified jobs were moved, but today relocation also affects more qualified tasks. Outsourcing reduces the demand for low-wage jobs and increases the demand for qualified personnel. This increases the wage spread in Sweden. Manufacturing is beginning to be located near development centres. Companies with lower profit margins are more interested in outsourcing their activities. The reasons are the usual ones, i.e. to focus on core activities, reduce investment costs and risk exposure, reduce costs, and to put more pressure on the activities that they still are doing themselves by introducing competition. Scania tries to keep 40–50% of the value added in the own company. The average in the Swedish engineering industry is about 25%. The reason for Scania’s strategy is that it is considered to be more difficult and more expensive to develop products if production and product development are separated geographically. With a price drop in a dropping market it is also easier to manage the cost adaptation with a larger share of own value added. If a large share of the value added activities is handed over to suppliers, the customer is pushed by their demand for profit margins. The amount of foreign owners is increasing in Sweden. In 1990, about 200,000 were employed by companies with foreign owners, today this figure is about 530,000. Foreign ownership implies that activities are more easily relocated if selling drops. The advantages with foreign ownership are inter alia the possibilities to attract investments and production increase. In USA, 40% of all high-tech manufactured products are produced abroad. The so-called new countries are building their production capacity rapidly. They are also creating national strategies for how to develop their outsourcing industry. Sources: DI (041115; 041117), SvD (011227), Fölster (2004)

The picture, described above, illustrates how quickly the conditions for producing companies in Sweden are changing. We can regard this as a dramatic global structural change. Through strategic thinking and hard work, it is possible for Sweden and Swedish technology companies to manage the possibilities that are created during larger system shifts.

12.6 Go for Survival: Create Competitive Advantages As noted earlier, one of the present major problems is that companies and countries do not have the same interests. Companies regard the entire world as a poten-

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tial factory, within which the company can locate production as they judge is most suitable. There is no value on its own to a company to produce in Sweden, as long as the production is not competitive. This requires good conditions for entrepreneurship and good knowledge of production. Now, as a substantial number of companies follow the same pattern regarding outsourcing, the consequences become very obvious at a national level. To make the pattern even clearer, it is necessary to look at other similar countries. The previously discussed European vision on production (in Sect. 12.3) deals with this problem at a European level. Cooperation in different areas is needed in order to strengthen manufacturing industry in Europe. One of the studies pointed out that European manufacturing industry needs to make drastic changes if they are to survive the next two decades. It is also necessary to go from resource-based to knowledge-based manufacturing. Production does not necessarily have to be carried out in Sweden if there are strong reasons for doing it elsewhere. The only reasonable ambition must therefore be that Swedish companies should be the best at production. There are now other alternatives if we are to have production in the country in 10–20 years. This requires hard work and focus. Production development needs to be put on the agenda and become a natural part of the manufacturing company’s activities. Together with offensive manufacturing strategies and an efficient and innovative product development, production development will most certainly be conclusive for how well we will be able to maintain a successful industrial production in Sweden. One possible way is through lean production, provided that it is thoroughly implemented and is allowed to permeate the entire organisation. The right mindset, efficient working procedures and a number of basic and sustainable principles constitutes the basis (or could be considered as “order-qualifiers”) for world-class production. The next task is to find one’s own niche that makes the company an order-winner. In conclusion we will present four areas which we believe are important and effort should be put into to achieve competitive industrial production in Sweden. 1. National and regional conditions for production: Create competitive conditions through investment in research, higher education, and development of product and production development. Combine with business independent production research. Create strong national and regional networks and clusters, both as centres and company clusters, which could be non-traditional and virtual. Strengthen conditions for entrepreneurship through infrastructure, efficient support systems, and laws and guidelines for taxes and labour market issues that give us the lead compared with other countries. Create conditions for innovations based on production technology, not only for product innovations! 2. The society and company view on production: The companies reflect society’s values in their view on production, production therefore needs to become attractive for possible students and the workforce. Basic values for company personnel, especially among management and owners, guide how production is

12.6 Go for Survival: Create Competitive Advantages

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handled internally at every company. Therefore, the competence profiles of boards should be assessed, perspectives should be widened, and it should be guaranteed that competence on design and production disciplines really are represented. Consider production to be the core competence of the company. Separate production development from industrial engineering and provide both with resources. Adapt a holistic view and process thinking to development and operation of production systems and integrate production development in the entire chain of product realisation. Regard production efficiency from a life-cycle perspective. Develop an efficient way of working with development and operation, put resources into the chain early, prioritise structure and methods as support for the work. 3. Fundamental production concept as base: Develop lean production, based on all parts of the 4P-model, but developed to an even greater extent! Try to create a lead compared to the Toyota Production System through doing what they did: study, identify shortages, learn, and develop your own system. Combine a genius business idea with a matching and long-term manufacturing strategy. 4. Prioritise basis for decision: This concerns all questions, from location decisions, struggle for investments, and choice of manufacturing strategy to design a single production system. Badly developed bases for decisions reduce the conditions for carrying out production in Sweden. A well-developed basis for decisions should treat both quantitative and qualitative factors equally. The factors that are impossible to calculate today will cause financial consequences tomorrow. Good bases for decisions lead to better decisions that emphasise production’s importance from a long-term perspective. Sweden has a long tradition of being a strong manufacturing nation, with many internationally successful companies. A strategic effort in the production development area provides good conditions for this tradition to continue.

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Index

5 5S, 309 A Acquisition, 121 Active environment, 39 Analytical thinking, 164 Apprentice, 143 Assembly line, 16 Assembly system, 43, 304 − design process, 77 Assembly To Order, 61 ATO, 61 Attitude, 36, 149 Automation, 58 Automotive industry, 40, 108, 305 Autonomation, 26, 211 B Background analysis, 172 Background study, 171 Balance losses, 92 Batch flow, 58, 204 Batch production, 242 Bazaar-economy, 4 Benchmarking, 121, 173, 175, 254, 292 Best way, 15 Black-box principle, 39 BPR, 285 Brainstorming, 89 Bureaucratic school, 19 Business process, 114 Business-to-business products, 6

C Capability, 280 Capacity, 56, 58, 270 Cell, 58 Champions, 102, 162 Change, 80 Change agents, 163 Checklist − system aspects, 170 China, 315 CIM, 122 Codification, 143 CODP, 61 Communication, 243 Company culture, 36, 99, 100 Competition, 65 Competitive advantages, 53 Competitive conditions, 322 Competitive factors, 54, 179 Competitive means, 3 Complex − production start-up, 236 Concept-driven, 188, 248 Concept-driven approach, 123 Concept-generating, 188, 248 Concept-generating approach, 123 Conceptual solutions, 83 Concurrent engineering, 131 Context, 8, 9 Contextual aspects, 82, 148 Continuous improvement, 174 Continuous process, 57, 204 Conveyors, 15, 228 Cooperation, 299 Core business, 180

335

336 Core competence, 180, 315 Corporate network, 236 Cost, 54 Coupled flow, 57 Craftsman like production, 9 Creative thinking, 164 Crystal Palace, 15 Customer need, 5 Customer order de-coupling point, 61 Cycle time, 177 D Decentralisation, 25 Decision, 56 Decision categories, 55, 179 Decision process, 116 Dependability, 278 Dependent design activities, 134 Design, 111 Design by philosophy, 122 Design cycle, 116 Design for assembly, 295 Design framework, 119 Design methodology, 109 Design process, 86, 110, 118 − complex, 91 − internal logic, 107 − iterative, 131 − sequential, 131 Design space, 67 Design specification, 191 Detailed planning, 61 Determinism, 68 Development − definition, 111 Development process, 110, 118, 138 − evaluation of, 250 Development project, 138 Development time, 159 Disturbance elimination, 288 Disturbance handling, 277 Domestic systems, 9 Double task, 116, 145 Downstream, 59 E Effectiveness, 261, 273 Efficiency, 260, 261, 273 EFQM, 174 Emery, Fred, 25 Empty hangers, 242 Engineer, 26 Engineer to order, 61

Index Engineering deployment, 242 Entrepreneur, 14 Equipment − reuse, 173 ETO, 61 Evaluand, 126 Evaluation, 83, 112, 248 − after change, 96 − definition, 112 − existing production system, 174 − factors affecting, 98 − in practice, 88 − industrial model, 93 − measures, 97 − of supplier, 237 − process, 126 − supplier, 95 − use of the result, 127 Evaluator, 128 Event tree analysis, 219 Experiment, 107 F Facilitator, 161 Facility, 56, 59 Fault tree analysis, 219 Fayol, Henri, 19 Finality, 43 Fixed position, 58, 203 Flexibility, 54 Flow − converging, 196 − diverging, 196 FMEA, 90, 218 Follow-up, 269 − definition, 113 Ford Motor Company, 13 Ford, Henry, 12, 13 Fordism, 12, 22 Formative evaluation, 126 Full speed, 242 Functional layout, 58, 203 Functional sale, 307 G General Motors, 17, 29 Global economy, 313 Greenfield plants, 29 Group technology, 209 H Hawthorne effect, 23 Hayes, Robert, 52

Index Hierarchy of needs, 24 Highland Park, 12 Hill, Terry, 52 Holistic perspective, 37 Human Relation Movement, 19, 31 Human resources, 56, 60 Human system, 39 Hygiene factors, 24 I IDEF, 195 Implementation − production system, 231 Improvement teams, 286 IMTI, 313 Individualised products, 307 Industrial development, 9, 19, 109, 321 Industrial engineering, 209 Industrial practice, 83 Industrialisation, 233, 236, 243 Information, 142 Information exchange, 301 Innovation, 273 Input, 40 Insourcing, 317 Installation, 238 Integrated product development, 132 Intellectual capital, 307 Interdependent design activities, 134 Intermittent process, 57, 204 Investment, 153 Investment request, 156, 165 Involvement, 134 J Japan, 52 Jidoka, 26 Just-in-time, 27, 122 K Kaizen, 28 Kalmar, 25 Kanban, 201 Knowledge, 142 Knowledge content, 307 Knowledge transfer, 291 L Layout, 57 Layout flow, 197 Lean production, 9, 29, 56, 107, 123, 303, 308, 322, 323 Learning, 140

337 Learning curve, 247 Learning strategy, 143 Length of life, 183 Lesjöfors AB, 71 Level of automation, 58, 311 Level of technology, 58, 292 Life-cycle − perspective, 183, 283 − product, 46, 159 − production system, 47, 88, 244 − profit, 245 Line, 43 Line-based flow, 58 Line-based flow layout, 204 Line-based layout − pros and cons, 92 Long-term perspective, 2 Long-term strategy, 183 Losses, 280 M Machine supplier, 301 MAE, 265 Maintainability, 278 Maintenance department, 294 Maintenance organisation, 299 Maintenance support system, 278 Make To Order, 61 Make To Stock, 61 Manning of project, 243 Manufacturing, 44 − knowledge based, 313 Manufacturing strategy − content, 53 − process, 53, 63 Manufacturing system, 43 Market-based, 52, 66 Maslow, 24 Mass production, 9, 13, 18, 32, 207, 303 − elements of, 16 Master planning, 61 Material flow, 196, 197 Materials handling, 258 Mayo, Elton, 19, 23 Measurement madness, 260 Methods planning, 234 Midvale Steel Company, 20 Mismatch, 70 Model T, 15 Modelling, 195 Motivation factors, 24 MTM, 32, 227 MTO, 61

338 MTS, 61 Muda, 29 O OEE, 263 Ohno, Taiichi, 27, 28 One-piece flow, 28 Operand, 39 Operating time, 242 Operation pattern, 240 Operations management, 209 Operator, 39 Operator involvement, 298 Orderer competence, 291 Order-qualifier, 73 Order-winner, 54, 73 Organisation, 60 Organisational support, 242 Organisational theory, 22 Output, 40 Outsourcing, 35, 316 P Partial productivity, 262 PDCA-cycle, 28 Performance measurement, 259 Performance measurement system, 175, 271 Performance measures, 273 Performance objectives, 266 Performance requirement, 279 Personalisation, 143 Personnel, 162 Pilot production, 235 Planning and control, 35 Plant, 43 Plug-and-play, 313 Preconditions, 152 Preparatory design, 171 Preparatory work, 295 Pre-series production, 234 Pre-study, 171, 179 Problem-solving, 116 Process − business, 114 − definition, 114 − main, 114 Process choice, 202 Process flow analysis, 197 Process focus, 59 Process maturity, 139, 252 Process perspective, 136 Process types, 202

Index Process-FMEA, 300 Product complexity, 192 Product development, 132 Product focus, 59 Product introduction, 233 Product profiling, 68 Product realisation, 5, 109, 114, 130 Product realisation networks, 307 Production, 44 − core competence, 50 − role of, 50, 66 Production development, 2, 4, 7, 157 Production disturbance, 280 Production economics, 209 Production efficiency, 282 Production engineering, 2, 157 Production for competitiveness, 4 Production logistics, 209 Production planning, 56, 61 Production process, 56, 114 Production ramp-up, 234 Production start-up, 234 − planning for, 239 − problems during, 246 Production system − development, 82 − development of, 110 − future, 307 − successful, 2 Production system complexity, 193 Production system design, 121 Production system performance, 259 Productivity, 260 Product-process matrix, 57 Profitability, 49, 260, 273 Project leader, 102, 161, 298 Project management, 156 Project team, 161 Prototype, 233 Pull system, 177, 201 Purchasing, 237 Push system, 201 Q Quality, 54, 56, 60, 273 Quality assurance, 301 R Ramp-up curve, 240 Rapid Plant Assessment, 174 Raw material, 3 Reflective production, 33, 105 Reliability, 54, 278

Index Reliability technique, 277 Relocation, 315 Requirement planning, 61 Requirement specification, 84, 185, 296 Resource allocation, 153, 157 Resource-based, 52, 67 Re-Taylorism, 304 Retrospective studies, 85 Return on investment, 259 Right automation, 310 Rightsourcing, 317 S Sand-cone model, 54 Scania, 50 Scania Production System, 30, 124, 125 Science of design, 109 Scientific Management, 19, 31 Semi-automatic, 58 Sensei, 28, 162 sequential flow, 5, 206 Serial flow, 32 Set-up time, 177, 187 Shingo, Shiego, 174 Shut down, 240 Simulation tools, 299 Simultaneous engineering, 132 Single item process, 204 Single-purpose tools, 16 Skinner, Wickham, 51 Sloanism, 17 SME, 311 Socio-technical organisational theory, 25 Socio-technique, 25 Sorensen, Charles, 15 Speed, 54 Start-up, 231 Start-up model, 239 Strategic choice, 67 Strategy, 36 − business, 51 − corporate, 51 − functional, 51 − manufacturing, 51 Subsystems, 45 Successful − assembly system, 258 Summative evaluation, 126 Supplier-driven, 188, 248 Supply chain, 301 Sustainability, 313 System, 37 − closed, 42

339 − conceptual, 41 − continuous, 41 − deterministic, 41 − discrete, 41 − functional perspective, 40 − hierarchical, 40 − models of, 41 − open, 42 − physical, 41 − real, 41 − structural perspective, 40 System designer, 161, 298 − selection of, 102 System development, 3 − starting point, 173 Systems perspective, 37 Systems thinking, 37 T Take-over test, 238 Task allocation, 212 Taylor, Fredrick Winslow, 20 Taylorism, 18 Technical system, 39 Technology, 35 Technology level, 209 Telecom businesses, 306 Temporary organisation, 137, 242 Temporary workforce, 241 Theory-X, 24 Theory-Y, 24 Time- and motion-studies, 22 Time to customer, 244 Time to market, 244 TMU, 227 Total productivity, 262 Total-factor productivity, 262 Toyoda Automatic Loom Works, 26 Toyoda, Eiji, 27 Toyoda, Sakichi, 26 Toyota Production System, 26, 122, 124 Toyota Way − 14 principles, 31 TPM, 122, 175, 263, 285 TQM, 285 Trade-off, 55 Transfer − engineering design to production, 234 − experiences, 140 Transformation system, 39 Transition, 10, 38, 248 Transition management, 313 Trial-and-error, 121

340 Trist, Eric, 25 Trouble-shoot, 299 U Uddevalla, 25, 105 Uncertainty, 181 Upstream, 59 USA, 313 V Validation, 113 Value flow analysis, 90 Variable workforce, 241 Verification, 113 Vertical integration, 56, 59

Index W Waste, 29 Way of working, 86 − structured, 146, 165 Weber, Max, 19 Wheelwright, Steven, 52 Whitney, Eli, 11 WIP, 197 Work design, 131 Work environment, 35, 273 Work organisation, 35, 211 Work pace, 247 Work team, 160 Workforce policy, 240 Working environment, 168 Workshop, 43 World-class, 74 World-class manufacturing, 255