Taking the hit-or-miss out of make-to-order
Whether you build custom products only when orders are in house or customize finished goods to customer specs, you need to plan how to get it done.
By Staff -- Modern Materials Handling, 5/15/1999
By any measure, manufacturing isn't what it used to be when it comes to emerging supply chain practices."The line between factories and warehouses is rapidly blurring," said Jim Allred of Eskay Corp. in his keynote address at ProMat '99.
In fact, Jim Tompkins of Tompkins & Associates recently went one step further. "I don't even know where the line is between manufacturing and warehousing today."
Even as those two speak, certain manufacturing steps are being moved into the warehouse while certain warehousing steps are migrating into manufacturing. To make this point, Tompkins offered an example-processing of apple sauce.
It was once processed, jarred, labeled, and palletized in one building before being sent over to the warehouse for storage prior to shipment.
But with the advent of postponement strategies, only processing, jarring, and palletizing are done before the warehouse receives the apple sauce. The labeling step now occurs in the warehouse after a customer places an order and details jar label requirements.
Handling product this new way requires some changes in materials handling.
Automatic labeling machines are now in the warehouse. In addition, there will have to be case packing equipment and palletizers in both locations (not to mention depalletizers in the warehouse) to accommodate the new double handling needed to make the postponement system work.
Getting to this point also means that planning of materials handling operations in manufacturing requires some changes too. Or as Tompkins says, managers have to start thinking out of their traditional silos.
Emphasis on agility
The end game of leading manufacturers today is to find a way to adapt to the needs of customers.
"Agility is the new watchword. Suppliers will be judged on their ability to respond quickly to their customers' changing requirements," says Allred.
And when it comes to planning for agile manufacturing operations, companies must keep in mind the need to maximize synchronization and collaboration between trading partners.
For instance, determining the availability of a product with specific features to the customer's schedule is now the first order of business. In the past, a customer may have done this on the phone, with a fax, or face-to-face. Now customers can get the information from the Web, which tends to condense time and raise expectations.
Simultaneously, companies are planning new materials handling and information networks between manufacturers and their suppliers to synchronize parts availability with manufacturing capacity. Often, the parts need to be at the production line within a very few hours of order placement.
Meanwhile, the manufacturer must be able to innovatively use software, layout design, and materials handling technology on the shop floor to ensure cost-effective production of finished goods at a profit.
One of the leaders in this area is in an industry long known for its lack of responsiveness-furniture. In fact, office furniture supplier Miller SQA really made its mark by rethinking the flow of materials and information on its shop floor.
"We decided to become extremely agile by ridding ourselves of non-value-added expenses and better utilizing our space and labor," says Bill Bundy, vice president of operations.
The furniture maker replaced its sequential assembly workstation layout with 19 work cells. Each specializes in a product or product line that is built entirely in the cell, eliminating wasted time manually moving work-in-process between the various assembly cells.
The next step was to bring in a manufacturing execution system (MES), bar codes, and radio frequency data communications (RFDC). Nothing moves in the plant without a customer order. The MES ensures that all orders are dispatched in the sequence they need to be executed. The bar codes and RFDC system track materials at key steps. The chart on this page shows the powerful effect of these changes.
Dynamic not static
"Everyone (in manufacturing) needs to understand that the supply chain is a dynamic process not a static process," says Tompkins.
Leading companies in the apparel business and high-tech industries have already made plans to adapt to changing conditions.
In the case of apparel manufacturers, various activities that once were done by retailers at their stores have been pushed back up to the warehouse. The value-added service centers that have been created feature manufacturing workstations that dynamically perform various functions for retailers.
Some want their suppliers to attach pre-printed price tags with the retailer's name on them. Other retailers want certain seasonal clothes packed in special display cases that simply have to be opened upon arrival at the store.
To make this happen, apparel suppliers had to plan for new flow rack to feed inventory to the workstations. Additional use of lift trucks and guided vehicles to make the extra pickups and deposits of work-in-process are typical. New conveyor spurs are often used.
As an adaptable manufacturer, telephone network controller supplier Ascend Communications has developed its own materials handling and information scheme to begin final assembly only when a customer's order is in hand.
To initiate production to exact customer specifications, the company's order management system downloads the day's orders to the manufacturing control system (see layout drawing). "Our U-shaped conveyor line feeds work-in-process to multiple workstations. In addition, workers direct pallet loads of work-in-process from station to station. This maximizes our flexibility to pace production and meet customer requirements at the same time," explains Jack Russitano, senior manufacturing engineer.
No cookie cutters
As Gary Heil of the Center for Innovative Leadership recently put it, "Every company finds its own way to adapt to supply chain challenges-there is no cookie cutter approach."
Consider three different plans to meet quite similar challenges in the production of trucks, sport utility vehicles, and motorcycles.
At its Arlington, Texas, truck plant, General Motors requires that components for each vehicle be delivered in the same sequence as the trucks that come down the line.
As the artwork shows, GM stages truck bodies in an automated storage and retrieval system (AS/RS). After the automaker determines the sequence of its production run for the day, GM notifies suppliers of the parts needed and the sequence that they must be received in totes and other containers. This allows assembly workers to simply pick parts sequentially and assemble them into the truck.
In England, Rover Group manages materials flow to its sport utility vehicle assembly line quite differently. The company built a $17 million integrated logistics center adjacent to manufacturing, trimming the time from parts request to parts delivery from 4 hours to 1.
Still a different type of vehicle manufacturer, Harley-Davidson, took its own approach to ensure agility and synchronization.
A 346-ft towline conveyor allows for complete motorcycle assembly in Kansas City, Missouri. Parts are delivered to the designated assembly line work station. A paper work order is attached to each bike frame to guide assembly.
As you already realize, you're going to have to think out of your silo to plan supply chain efficiencies into your manufacturing operations from now on.
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