Pulling together

So-called demand-driven manufacturing – making, assembling, configuring and/or engineering only to the beat of the customers' drum – has been with us as a cyclically popular ambition in various guises for decades. Lean manufacturing itself is rooted in the notion, citing two of its seven wastes as over-production and holding excessive inventory, whether raw materials, WIP or finished goods. And indeed, straw polls show that most self-respecting manufacturers pride themselves on running at least part of their production on demand pull principles – albeit often still with some forecast element alongside common assembly level stocking to minimise lead times and retain economic batch quantities. Mostly, they will have harnessed the philosophy and methodologies of lean to guide developments, and achievements reported in this journal have frequently been impressive. However, lean started in the repetitive manufacturing world of automotive in the 1970s. So for the majority of manufacturers in the UK, which need to run mixed-mode production, lean has had its limits. Quite simply, attaining the promised cost saving and efficiencies of near-inventory-free production is not quite so easy here. And it shows. That's why many organisations decide to go so far, but no further. Variability in demand, sheer variety of product, dependencies in preferred production routes, unpredictability of supply chains, issues with sequencing ever smaller batches – all get in the way of doing better. Or do they? Actually, it depends. Some manufacturers – typically those configuring and engineering to order, for whom the issues of competition have sharpened minds – have gone much further. For the rest of us, it pays to look at their stories and consider how much we might be able to transfer, and how that might tear down some of our apparent limitations. Take Rotherham-based AESSEAL. The organisation makes mechanical seals here and at factories in China and India for use on rotating machines, including pumps, motors and agitators. These are precision engineered assemblies made not only from stainless steel, but also a range of specialist alloys for use in hazardous areas or on extremely arduous duties. Plainly, that means extreme variety, and what this organisation did to tackle that most thorny of problems was to take a multi-faceted approach involving several areas of the business, production and beyond. Stuart Welsh, head of IT, explains. "There were a number of factors we needed to address before we could get to point where our computer systems and business systems were working as well as they should. The first thing we did was to look at the way our products are designed. How could we streamline an infinitely variable seal format that ranges in size from 20-600mm diameter, has to handle different environments, and can be made with an almost unlimited number of metals and face combinations?" With millions of potential product variants, the company focused on redefining the range in terms of modules, with the emphasis on rapid customisation to gain the benefit of re-use. The result: stock items minimised. Because there are two critical dimensions for most seals – the shaft sleeve and the aperture – AESSEAL now stocks standard sizes for the sleeves and internals, ready for customising in terms of gland size and shape, size and position of the bolt holes. "After that, the policy is to shift product quicker than our competitors and we have two tacks. The first is a huge stockholding at that component level, and the second is accurate and fast inventory visibility and management. A lot of our work over the last two years has been achieving that. So, for example, rather than traditional racking, we implemented automated paternoster-style carousels that have recently been integrated with our ERP system. Now, when the pick list for production of sales orders comes up, the carousels spin around, operatives confirm their picks and then move onto the next." This improves accuracy and speed, as well as reducing accidental damage to stock. "If a customer orders something we don't stock, we can make the only configurable items [the sleeve and gland] to order, and we run this production with no minimum batch size." That has also been streamlined, through AESSEAL's investment in CAM and PLM (product lifecycle management) software. "We now use a combination of Siemens PLM, SolidEdge 3D CAD and NX CAM, as well as PLM Admit [for workflow and document management] on the design into production side – and all of that has been integrated into our Sage Line 500 ERP system. That allows us to load demand onto the engineering designers and manage progress from configuration, through inspection and then to the shopfloor via CAM for the machine tools. At that point it's matched with new product information for our ERP system, which generates the manufacturing bill. Production scheduling is then managed within ERP." How did AESSEAL achieve that level of integration? Welsh describes a suite of generalised APIs (application programming interfaces) and a custom front end, so that everyone can see the information they need in a format that makes sense, regardless of the system they use. "The power of these APIs is that we can plug into several applications. So whether we're looking at a works order release from ERP, or hand-held scanners used by operatives inspecting goods, data can flow more or less automatically. That means, for example, that machinists can see production information but also call up the 3D model, the 2D drawing if that's what they prefer, or even information on issues faced previously by other machinists with similar products," he says. And the difference? "Before we linked CAD, CAM and ERP, it was taking two or three weeks to generate the drawings and CAM programs. Now the two or three hours of machine cutting time on the shopfloor is the most significant time component. What's more, our charge hands are empowered to make decisions over which machines and routes to use, depending on workload," explains Welsh. Equally, work by Sage partner Datel to integrate the paternoster stock management system with its Sage ERP system now means the company has accurate visibility of all stock movements – from goods receipt, through inspection to availability for production. It may sound like detail but, as Welsh points out, the moment management starts making assumptions is the moment everything starts to go wrong. And when things go wrong, managers start building protective stock – and you just lost your grip on demand-driven manufacturing. "Our next project is to automate much of the design process. The plan is to get experienced design engineers working on the jobs that only they can do – as opposed to simply changing, for example, a seal's porting and sizing. Currently, one of our designers could take two hours to configure a seal, but a web application might take 20 seconds. We've piloted this already, using Solid Edge as the brains, and we're just finalising the code around it." That latter approach is certainly catching on, particularly with configure-to-order manufacturers, as they realise the potential for stripping out cost and time at the front end of demand, and its positive impact on customer service. Web technology offers a great deal to manufacturers wanting responsive operations. Specialist centrifugal pumps manufacturer Amarinth recently launched an online service giving direct access to its 3D CAD models to enable better understanding and collaborative working. The company is a Solidworks CAD user and it uses the software's eDrawings online model viewing technology to enable customers and others to gain access via web browser, without needing the CAD software on their machines. Elsewhere, Kevin van Kessel, who manages model data and reporting for steel giant Corus, paints a picture of multiple specialist systems for the organisation's various plants and processes. But he also points to an intranet system, developed with Information Builders over the last three years, that has delivered universal data visibility, regardless of system provenance. "All our systems have a two-way automatic connection to our RAPID intranet reporting system. So, for example, I can instantly see yesterday's shift and summary reports for manufacturing throughout the UK, and I can slice and dice data to compare information. That gives us major benefits and loads of flexibility, in terms of managing stock and production throughout our supply chain. For example, it provides on-site wagon tracking, which used to be on Excel spreadsheets that we couldn't share. Now it's all on one page of RAPID, so everybody knows what materials we have and where they are. We used to spend time arguing about data, but now we have complete visibility so it's far easier to fulfil demand without excess inventory." Granted, few manufacturers are in this bracket, but intranet or similar technologies may be more useful than you think. Paul Farrell, vice president of worldwide R&D for ERP software developer Epicor suggests that next-generation ERP systems are extending web working with so-called Web 2.0 so that "ERP becomes part of pulling down the barriers that still exist within most manufacturing businesses". For him, systems built on an SOA (services orientated architecture) that allow full Web 2.0 working are key to enabling "adaptability and collaboration among real people in real businesses". His view: "Facebook and Twitter are no longer just younger generation things, because so many people of every age have found them useful. It's about bringing business information and insights to the right people, not just the IT team... to whatever roles you need in whatever format you want." Meanwhile, it's worth noting that for many manufacturers wanting to rev up their demand-driven credentials, spending huge sums on a specialist ERP system may not be a prerequisite. AESSEAL is doing great things ostensibly with Sage Line 500; Amarinth uses Rent IT's 123mrp system; and Staveley, Derbyshire-based AGW, which makes electronic wound components for the military, automotive and other industrial sectors, was, until recently, using an ageing Infor Swan system, but has now also gone live on 123mrp. Nigel Godwin, joint MD of AGW, says his 80-strong, £3.5m turnover company has always been a make-to-order house. The most important criterion for him is getting detailed visibility whenever it's needed. "Most good systems today will let you link stock, works orders and sales orders, but they'll also let you configure reports and drill down, for example, into the data on a manufacturing cell." For him, that's enough. Instead of big budget ERP licences, consultancy days and the rest, he's shelling out just £1,000 per month, with minimal training days on top. "That's less than the support and maintenance cost of a traditional ERP system," he says. And with CRM software geared to manufacturing now added into the mix, he says Rent IT's system is delivering everything he needs – making the most of sales opportunities and pulling them through the system. For AGW, this works. For others, where there's more complexity or variability, more sophisticated ERP functionality will be important, as it can provide more of the options around modern 'electronic lean'. So, too, will be work with the supply chain, particularly where successful JIT involves orchestrating large numbers of suppliers. As IFS R&D director PŠr Hammarstršm puts it: "They need a good technical infrastructure – whether it's server to server, with EDI, or web-based with facilities for supplies and customers to review requirements – and the business logic to make communication secure." Meanwhile, for those struggling to make small-batch sequencing more efficient, if you haven't already got an advanced planning and scheduling (APS) system, that should probably be your next step. Without that support, detailed scheduling is going to be an expensive nightmare, with the ever-present risk of a return to safety stock. By the way, Mike Novels, chairman and CEO of APS specialist Preactor, suggests that when you do implement APS, you're likely to find some unexpected benefits that will further contribute to a demand-driven manufacturing initiative. "If your BoM and routing data is in any way inaccurate, Preactor will show you immediately: it's much easier to see an excessively long bar on a Gantt chart than in a whole mass of numbers on a spreadsheet." Finding such errors – usually due to failures in production to report process improvements back into ERP – is another positive step to enabling and sustaining better responsiveness.