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APPENDIX B CIM TODAY This appendix provides supplementary information on what has been accomplished in computer-integrated manufacturing and the directions it can be expected to take. SHOP FLOOR INTEGRATION TODAY Integration across the CAD/CAM interface is in a rudimentary state today. Flexible manufacturing systems (FMS) represent the current state of hardware integration. The most advanced of these FMS's consist of automated machines, equipment, and work- and tool-transport apparatus, all operating under computer control with minimal manual intervention. They contain all the production equipment and production process modules of the CIM system represented in Figure 1 of Chapter 1, as well as production control software and even a modicum of production planning software. Experience with FMS provides some actual performance data on the benefits of integrating part of the total system of manufacturing. An example will illustrate the striking benefits achieved. A flexible manufacturing system, described by Dronsek,1 has been operating for several years at Messerschmitt-Boelkow-Blohm (MBB) in Augsburg, West Germany. The basic elements of this system are: (1) 25 numerically controlled (NC) machining centers and multispindle gantry and traveling-column machines, (2) fully automated systems for tool transport and tool changing, (3) an automatic guided vehicle workpiece-transfer system, and (4) integrated hierarchical computer control of all these elements. The automatic workpiece-transfer system brings workplaces to and from each machine tool, for operator setup, by means of computer- controlled carts. The automatic tool-transport-and-tool-changing system brings tools to each machine via an overhead transport system. It then transfers the tools to a continuous elevator tool-e forage system, which in turn provides them to the automatic tool-changing mechanism of the machine tool. All three of these subsystems--the machine tools, the workpiece-transfer system, and the tool-transfer system--are coordinated, controlled, and automated by a hierarchical 49

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so distributed computer system. The system is controlled by computer numerical control (CNC) and operated by direct numerical control (DNC). Recently MBB compared the performance of this integrated system with the projected performance of unintegrated (stand-alone) NC machine tools doing the same type and quantity of work. The integration had reduced the number of NC machines required by 52.6 percent, personnel required by 52.6 percent, floor space required by 42 percent, part throughput time by 25 percent, total production time by 52.6 percent, tooling cost by 30 percent, total annual costs by 24 percent, and capital investment costs (including all the additional supporting and peripheral equipment and software required to accomplish full integration) by 10 percent. This last fact alone illustrates that CIM can free large amounts of the idle capital associated with machines that are normally underutilized. - MBB also has experienced nonquantifiable benefits as a result of this level of integration. Improvement in product quality has been realized in the form of higher accuracy and reproducibility, lower rework costs, and lower scrap rates. This quality improvement in turn has resulted in lower quality-assurance costs. Production schedules are more predictable, and the typical level of paper flow has decreased. Furthermore, working conditions have improved owing to the decreased risk of accidents, the relief from heavy physical labor, and the more challenging nature of the work. Finally, and most importantly, increased flexibility has made the manufacturing operation essentially independent of batch size, of the types of parts, and of production quantities: sets of parts can more easily be produced just in time for assembly, thus reducing the inventory of parts in process. The FMS, as an element of the computer-integrated factory of the future, demonstrates that automation can be essentially free if properly designed and utilized. First, a much smaller number of automated workstations is required because of higher utilization. capital saving more than pays for the additional integrating facilities, including software. Secondly, the ability of these systems to produce parts as required for immediate assembly reduces work-in-process inventory, freeing capital and reducing interest costs. The just-in-time production made possible by flexible automation allows a plant to turn its total inventory more times per year than is normal in a conventional factory. None of these advantages, however, may be realized in the absence of another set of factors: the foresight, courage, and commitment on the part of management to recognize the opportunity, to accept the risks of a new production method, and to stick with the planned course of action until the goal is achieved.

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51 BENEFITS OF SELECTED APPLICATIONS One large conglomerated made a special study of the results achieved by a diverse group of independent companies through the modernization of production management systems. Production management systems are narrower than integrated CAD/CAM, but the data indicate that significant savings have already resulted from the application of this portion of CIM technology. Product/ Industry Application Result Manufacturer of Components for Computer Peripherals3 Manufacturer of Machine Tools4 Material Requirements Planning Material Requirements Planning Manufacturer of Material Industrial Requirements Maintenance Planning Equipments Manufacturer of Material o Attachments for Requirements Caterpillar Planning o Equipment6 o 25% Reduction in Production Time o 50% Reduction in Work in Process Inventory o 30% Reduction in Parts Inventory Value o On-Time Shipments went from 77% to 93% o On-Time Production Schedule Completion from 85% (Measured Monthly ~ to 100% (Measured Wkly o Productivity from 62% to 68% o Manufacturing Pas t Due Hours from 11,000 to 1,900 0 Overtime from 4,000 Hours to 600 Hours o Improved Inventory Accuracy from 45% to 95% 0 Reduced Part Shortages from 300/wk to 5/wk o Has not missed a Quarterly Production Goal for Last Three Years - Used to Meet Monthly Goals 1/3 of the Time Inventory Accuracy from 43% to 99% Bill of Material Accuracy from 50% to 99% 0 Master Schedule Performance from 63% to 95% 0 Delivery Performance from 55: to 95% 0 Shortages/Week from 150 to 0

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52 Product/ Industry Application Result Manufacturer of Aircraft Electrical Equipment7 Machine Tool Manufacturers Kitchen Equipment Manufacturers Electronics Computer Manufacturers 75 Businesses Internal to one Conglomerate9 Material Requirements Planning Manufacturing Resource Planning (MRP II) Master Scheduling Manufacturing Resource Planning (MRP II) Factory Data Collection/ Production Scheduling & Control Production Control Systems o Consumer Products o Light Industrial Products o Heavy Industrial Products o High Technology Products o Reduced Inventory Levels o Doubled Inventory Turns 0 Increased Orders Delivered on Time o Reduced Obsolete Material by 80% o Inventory Reduced - 29% o Inventory Accuracy Improved from 30% to 98% o Promises Kept Improved from less than 10% to 60% o Schedule Performance - 97% o Customer Service up from 89: to 96% 0 Finished Goods Inventory Reduced 13% 0 Work in Process Reduced 50% o Manufacturing Cycles Reduced 50% o Inventory Accuracy Improved from 68% to 90% Note: CEO uses System to run Business 0 Labor Reduced 38% o Output Doubled 0 Inventory Turns went from 2.5 to 6.0 0 Inventory Accuracy Better than 98% o Work in Process Reduced by 6% 0 80% Increase in Customer Service Levels o Output Cycle Time Reduced from 35 to 12 days 0 20-25% Inventory Reduction 0 $80-90 Million Productivity Improvement

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53 WHAT LEVEL OF CIM WILL BE ACHIEVED? A recent survey of the ultimate technological potential of CIM for improvement of manufacturing performance was done by a team of eight of the world's leading manufacturing research experts, from five different countries. The International Institution for Production Engineering Research (CIRP)10 asked these experts to estimate, for the metalworking manufacturing industry, the ultimate potential relative to the state of the art today. The range and average of their estimates are shown in the following table. It can be seen that they expect large improvements in manufacturing performance. While the range of estimates is large and the number is small, the averages provide a not unreasonable projection. Forecast of Ultimate Technological Potential of CIM ABBREVIATED QUESTIONS ESTIMATES OF RESPONDEES RANGE AVERAGE What do you estimate to be the ultimate percentage change, compared to today, that computer-based automation, optimization, and integration in the metalworking manufacturing industry can achieve in the following: Increase in manufacturing productivity? 20-200% 120% Increase in product quality? Decrease in lead time from design of product to initial production for sale? Decrease in lead time from receipt of order to shipment? Increase in utilization of capital equipment? Decrease in inventory of work in progress? 60-200% 140Z 30-100% 60% 30-50% 45% 20-1500% 340% 30-100% 75%

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54 NOTES 1. M. Dronsek, "Technische und Wirtechaftliche Probleme der Pertigung im Flugzeugbau." Proceedings, Produktionatechnisches Kolloquium Berlin 1977 (Munich: Carl Hanser Verlag, 1979) pp. 107-115. 2. Richard H. Fabiano, General Electric Co ., Bridgeport, CT. 3 . "Computerized MAP Pays Off," American Machinist, June, 1979. 4. Oliver Wright, Production Management Systems Case Study by Video Productions 5 . "The Trick of Material Requirements Planning," Business Week, June 4, 1979. 6. David W. Buker, 1982 News Letter, David W. Buker, Inc. 7. "The Right Stuff: How Managers are Attacking Their Material Problems With MAP," Material Handling Engineering, May, 1982. 8. Selected results from a General Electric Company study of companies that have applied production management systems. 9. Selected results from internal General Electric Company applications of production management systems. 10. M. Eugene Merchant, "Current status of, and potential for, automation in the mete [working menu fac tur ing incus try . " Annals of the CIRP (Vol. 32, No. 2, 1983), pp. 519-523.